<SEC-DOCUMENT>0001144204-16-132216.txt : 20161108
<SEC-HEADER>0001144204-16-132216.hdr.sgml : 20161108
<ACCEPTANCE-DATETIME>20161107201214
ACCESSION NUMBER:		0001144204-16-132216
CONFORMED SUBMISSION TYPE:	F-1/A
PUBLIC DOCUMENT COUNT:		7
FILED AS OF DATE:		20161108
DATE AS OF CHANGE:		20161107

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			XTL BIOPHARMACEUTICALS LTD
		CENTRAL INDEX KEY:			0001023549
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		F-1/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-208817
		FILM NUMBER:		161979748

	BUSINESS ADDRESS:	
		STREET 1:		XTL BIOPHARMACEUTICALS LTD
		STREET 2:		C/O ALSTON & BIRD LLP, 90 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10016
		BUSINESS PHONE:		972 9 955 7080

	MAIL ADDRESS:	
		STREET 1:		5 HACHAROSHET ST.
		CITY:			RAANANA
		STATE:			L3
		ZIP:			4365603
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-1/A
<SEQUENCE>1
<FILENAME>v452377_f1a.htm
<DESCRIPTION>F-1/A
<TEXT>
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<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <B>As filed with
the Securities and Exchange Commission on November 7, 2016.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>Registration No. 333-208817</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> WASHINGTON, D.C.
20549 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 30%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <B>Amendment No.
1 to </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM F-1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 30%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>XTL Biopharmaceuticals Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><I>(Exact name of registrant as specified
in its charter)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 35%; text-align: center; font-size: 10pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Israel</b></font></td>
    <TD STYLE="width: 30%; text-align: center; font-size: 10pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2834</b></font></td>
    <TD STYLE="width: 35%; text-align: center; font-size: 10pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Not Applicable</b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><i>(State or other jurisdiction of</i></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><i>incorporation or organization)</i></P></td>
    <TD STYLE="text-align: center">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><i>(Primary Standard Industrial</i></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><i>Classification Code Number)</i></P></td>
    <TD STYLE="text-align: center; font-size: 10pt"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i>(I.R.S. Employer Identification No.)</i></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 30%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>5 HaCharoshet St.,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Raanana, Israel 43656</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Tel: 972-9-955 7080</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><I>(Address, including
zip code, and telephone number, including area code, of registrant&rsquo;s principal executive offices)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>c/o Corporation Trust Company</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Corporation Trust Center</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>1209 N. Orange Street</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Wilmington, DE 19801</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>800-677-3394</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><I>(Name, Address, including zip code, and
telephone number, including area code, of agent for service)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Copies of all correspondence to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Gregory
    Sichenzia, Esq.</B></FONT> </TD>
    <TD STYLE="width: 32%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Ronen
    Kantor, Adv.</B></FONT> </TD>
    <TD STYLE="width: 34%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Robert
    Charron, Esq.</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Avital Even-Shoshan,
    Esq.</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Doron
    Tikotzky Kantor Gutman Cederboum &amp; Co.</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Ellenoff
    Grossman &amp; Schole LLP</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Sichenzia Ross
    Ference Kesner LLP</B></FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>12 Abba Hillel
    Silver Rd.</B></FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>1345 Avenue
    of the Americas</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>61 Broadway</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Ramat
    Gan, Israel 52506</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>New
    York, NY 10105-0302</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>New York, NY
    10006</B></FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Tel: 972-3-6133371</B></FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Tel: (212)
    370-1300</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Tel: (212)
    930 9700</B></FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fax: 972-3-6133372</B></FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fax: (212)
    370-7889</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fax: (212)
    930-9725</B></FONT> </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Approximate date of commencement of proposed sale to the
public:</B> From time to time after this Registration Statement becomes effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif">If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif">If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the
same offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif">If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif">If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CALCULATION OF REGISTRATION FEE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center"> Title of each class of securities to be registered </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Proposed
    </B></FONT><BR><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B> maximum </B></FONT><BR><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>
    aggregate </B></FONT><BR><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B> offering </B></FONT><BR>
    <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>price<SUP>(1)(2)(3)</SUP> </B></FONT> </TD><TD STYLE="font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount
    of </B></FONT><BR><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B> registration</B></FONT><BR>
    <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>fee<SUP>(4)</SUP> </B></FONT> </TD><TD STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; padding-bottom: 1pt"> Ordinary shares, par value NIS 0. 1 per share,
    represented by American Depositary Shares </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt"> Series A American Depositary Shares Purchase Warrant </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &mdash; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &mdash; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary
    shares underlying the American Depositary Shares issuable upon exercise of the Series A American Depositary Shares Purchase
    Warrant <SUP>&nbsp;</SUP></FONT> </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt"> Series B American Depositary Shares Purchase Warrant </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &mdash; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &mdash; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary
    shares underlying the American Depositary Shares issuable upon exercise of the Series B American Depositary Shares Purchase
    Warrant <SUP>&nbsp;</SUP></FONT> </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Placement
    Agent&rsquo;s American Depositary Shares Purchase Warrant<SUP>(5)</SUP> </FONT> </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &mdash; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &mdash; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary
    shares underlying the American Depositary Shares issuable upon exercise of the Placement Agent&rsquo;s American Depositary
    Shares Purchase Warrant<SUP>(6)</SUP> </FONT> </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; text-align: left; padding-bottom: 2.5pt; text-indent: -10pt; padding-left: 10pt"> Total Registration
    Fee </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> $ </TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right"> 15,000,000 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> $ </TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right"> 1,738.50 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> (1) </TD><TD STYLE="text-align: justify"> Estimated solely
                                         for the purpose of calculating the registration fee pursuant to Rule 457(o) under the
                                         Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;). </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"> <FONT STYLE="text-transform: uppercase">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="text-transform: uppercase">(2)</FONT> </TD><TD STYLE="text-align: justify"> American
                                         Depositary Shares, or ADSs, issuable upon deposit of ordinary shares registered hereby
                                         are registered under a separate registration statement on Form F-6 (Registration No.
                                         333- 147677). Each ADS represents twenty (20) ordinary shares. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"> <FONT STYLE="text-transform: uppercase">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="text-transform: uppercase">(3)</FONT> </TD><TD STYLE="text-align: justify"> Pursuant
                                         to Rule 416 under the Securities Act, the ordinary shares registered hereby also include
                                         an indeterminate number of additional ordinary shares as may from time to time become
                                         issuable by reason of stock splits, stock dividends, recapitalizations or other similar
                                         transactions. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"> <FONT STYLE="text-transform: uppercase">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="text-transform: uppercase">(4)</FONT> </TD><TD STYLE="text-align: justify"> The
                                         Registrant previously paid an aggregate of $1,737.08 in the initial filing of this Registration
                                         Statement on December 31, 2015. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"> <FONT STYLE="text-transform: uppercase">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="text-transform: uppercase">(5)</FONT> </TD><TD STYLE="text-align: justify"> No
                                         registration fee required pursuant to Rule 457(g) under the Securities Act. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24pt; text-align: justify; text-indent: -24pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> (6) </TD><TD STYLE="text-align: justify"> Estimated solely
                                         for the purpose of calculating the registration fee in accordance with Rule 457(g). </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"> The information in this
prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are
not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 19.8pt; color: red"> <B>SUBJECT
TO COMPLETION, DATED NOVEMBER 7, 2016</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 19.8pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>_______ American Depositary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Series A Warrants to purchase _________
American Depositary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>(___________American Depositary Shares
underlying the Series A Warrants)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Pre-Funded Series B Warrants to purchase
_________ American Depositary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>(___________American Depositary Shares
underlying the Pre-Funded Series B Warrants)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Each American Depositary Share Represents
Twenty (20) Ordinary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="logo.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We are offering up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;American
Depositary Shares, or ADSs, together with warrants, or the Series A warrants, to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs
(and the ADSs issuable upon exercise of the Series A warrants). Each ADS we sell in this offering will be accompanied by a Series
A warrant to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADS. The Series A warrants will have an exercise price
of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ADS, will be exercisable upon
issuance and have an exercise term of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT STYLE="text-underline-style: double">five
</FONT>years. Each ADS and accompanying Series A warrant will be sold together at a negotiated price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
.. The ADSs and Series A warrants will be issued separately but can only be purchased together in this offering. Each ADS represents
twenty (20) of our ordinary shares, par value NIS 0.1 per share, or the ordinary shares. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We are also offering pre-funded warrants,
or the Series B warrants, to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ADSs (and the ADSs issuable upon exercise of the Series B warrants) together with Series A warrants to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ADSs (and the ADSs issuable upon exercise of the Series A warrants), in lieu of ADSs to the extent that the purchase of ADSs would
cause the beneficial ownership of a purchaser, together with its affiliates and certain related parties, to exceed 4.99% <FONT STYLE="text-underline-style: double">(or,
at the election of the purchaser, 9.99%) </FONT>of our ordinary shares. The Series B warrants will have an exercise price of $0.01
per ADS and will be exercisable upon issuance until exercised in full. Each Series B warrant to purchase one ADS we sell in this
offering will be accompanied by a Series A warrant to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs.
Each Series B warrant and accompanying Series A warrant will be sold together at a negotiated price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
.. The Series B warrants and Series A warrants will be issued separately but can only be purchased together in this offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The ADSs are traded on the NASDAQ Capital
Market, or Nasdaq, and our ordinary shares are listed on the Tel-Aviv Stock Exchange, or TASE, under the symbol &ldquo;XTLB&rdquo;.
The last reported sale price of the ADSs on Nasdaq was $0.80 per share on November 4, 2016 and the last reported sale price of
our ordinary shares on the TASE on November 4, 2016 was NIS 0.16, or $0.04, per share (based on the exchange rate reported by
the Bank of Israel on that date, which was NIS 3.807 = $1.00<FONT STYLE="font-weight: normal; font-style: normal">). &nbsp;We
have applied to list the Series A warrants on the NASDAQ Capital Market under the symbol &ldquo;_____.&rdquo; There is no assurance
that our application to list the Series A warrants will be approved</FONT> .&nbsp; We have not applied and do not intend
to apply to list the Series B warrants on any securities exchange or quotation system, and we do not expect that such warrants
will be quoted on the NASDAQ Capital Market. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>Investing in our securities involves
certain significant risks. See &ldquo;Risk Factors&rdquo; beginning on page ___ of this prospectus. You should carefully consider
these risk factors, as well as the information contained in this prospectus, before you invest.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>None of the Securities and Exchange
Commission, the Israeli Securities Authority or any other state or foreign regulatory body has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We have engaged H.C. Wainwright &amp;
Co., LLC (&ldquo;Wainwright&rdquo; or the &ldquo;Placement Agent&rdquo;) to act as our exclusive placement agent in connection
with this offering. Wainwright is not purchasing or selling the securities offered by us, and is not required to sell any specific
number or dollar amount of securities, but will use its <FONT STYLE="text-underline-style: double">&ldquo;</FONT>reasonable best
efforts<FONT STYLE="text-underline-style: double">&rdquo;</FONT> to arrange for the sale of the securities offered. We have agreed
to pay Wainwright a cash commission fee equal to 7% of the aggregate gross proceeds to us from the sale of the securities in the
offering, except that Wainwright shall receive a cash commission fee of 3.5% for proceeds raised from certain investors previously
identified to <FONT STYLE="text-underline-style: double">Wainwright</FONT>. Wainwright shall also receive a<STRIKE> </STRIKE>management
fee equal to 1% of the aggregate gross proceeds <FONT STYLE="text-underline-style: double">to us </FONT>from all investors. Wainwright
may engage one or more sub-agents or selected dealers in connection with this offering. We estimate total expenses of this offering,
excluding the Placement Agent&rsquo;s fees, will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
Because there is no minimum offering amount required as a condition to closing this offering, the actual public offering amount,
the Placement Agent&rsquo;s fees, and proceeds to us, if any, are not presently determinable and may be substantially less than
the total maximum offering amounts set forth below. This offering will terminate on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
, 2016, unless the offering is fully subscribed before that date or we decide to terminate the offering prior to that date. In
either event, the offering may be closed without further notice to you. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Per ADS and<BR> Series
    A Warrant </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Per Series B<BR> Warrant
    and<BR> Series A<BR>
    Warrant </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 61%"> Offering Price </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> $ </TD><TD STYLE="text-align: right; width: 10%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> $ </TD><TD STYLE="text-align: right; width: 10%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> $ </TD><TD STYLE="text-align: right; width: 10%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Placement Agent&rsquo;s Fees (1) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Proceeds to Us (Before Expenses) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp;&nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp;&nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> (1) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have agreed to reimburse the Placement Agent for certain of its expenses <FONT STYLE="text-underline-style: double">in connection
with this offering </FONT>and to <FONT STYLE="text-underline-style: double">grant to the Placement Agent</FONT> ADS purchase warrants
to <FONT STYLE="text-underline-style: double">purchase up to an aggregate of 5% of the ADSs sold in the offering, including the
ADSs underlying the Series B warrants but excluding the ADSs underlying the Series A warrants</FONT>. See &ldquo;Plan of Distribution&rdquo;
on page ___ of this prospectus for a description of the compensation payable to the Placement Agent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <I>Delivery of
the shares will take place on or about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
, 2016.</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <I>Sole Book-Running
Manager</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <FONT STYLE="font-size: 12pt"><B>Rodman
&amp; Renshaw</B></FONT><BR>
<FONT STYLE="font-size: 12pt"><B>a unit of H.C. Wainwright &amp; Co.</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> <FONT STYLE="font-size: 12pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> Prospectus dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 90%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_001">Glossary of Certain Terms</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_002">Prospectus Summary</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_003">Selected Financial Data</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_004">Risk Factors</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_005">Special Note Regarding Forward-Looking Statements</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">27</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_006">Exchange Rate Information</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">28</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_007">Price Range of Our Ordinary Shares</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">29</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_008">Price Range of The ADSs</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">31</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_009">Use of Proceeds</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">33</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_010">Dividend Policy</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">34</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_011">Capitalization</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_012">Dilution</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">37</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_013">Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: blue">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_014">Business</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_015">Management</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">59</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_016">Certain Relationships and Related Party Transactions</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">67</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_017">Security Ownership of Certain Beneficial Owners and Management</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">68</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_018">Description of Share Capital</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">70</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_019">Taxation</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">83</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_020">Plan of Distribution</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">89</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_021">Experts</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">90</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_022">Legal Matters</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">90</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_023">Enforceability of Foreign Judgments</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">91</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_024">Available Information</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">92</FONT> </td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_025">Index To Consolidated Financial Statements</A></FONT> </td>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-1</FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"> <B>Neither
we nor the Placement Agent have authorized anyone to provide you with information that is different from that contained in this
prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. When you make a decision
about whether to invest in our securities, you should not rely upon any information other than the information in this prospectus
or in any free writing prospectus that we may authorize to be delivered or made available to you. Neither the delivery of this
prospectus nor the sale of our securities means that the information contained in this prospectus or any free writing prospectus
is correct after the date of this prospectus or such free writing prospectus. This prospectus is not an offer to sell or the solicitation
of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful. Persons outside the
United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating
to, the offering of our securities and the distribution of this prospectus outside the United States.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><B>Unless
otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including
our general expectations and market position, market opportunity and market share, is based on information from our own management
estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third
parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based
on such information and knowledge, which we believe to be reasonable. Our management estimates have not been verified by any independent
source, and we have not independently verified any third-party information. In addition, assumptions and estimates of our and our
industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including
those described in &quot;Risk Factors&quot;. These and other factors could cause our future performance to differ materially from
our assumptions and estimates. See &quot;Special Note Regarding Forward-Looking Statements&quot;.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <B>We are a &ldquo;foreign
private issuer&rdquo; as defined in Rule 3b-4 under the Securities Exchange Act of 1934, or the Exchange Act. As a result, our
proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act and
transactions in our equity securities by our officers and directors are exempt from Section 16 of the Exchange Act. In addition,
we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S.
companies whose securities are registered under the Exchange Act.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>This prospectus
contains trademarks and trade names of XTL Biopharmaceuticals Ltd., including our name and</B> <B>logo. Other service marks, trademarks
and trade names referred to in this document are the property of their respective owners.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_001"></A>GLOSSARY OF CERTAIN
TERMS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In this prospectus, unless the context otherwise
requires:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">references
to the American Depositary Shares, which are ordinary shares that have been deposited with the Bank of New York Mellon, or the
&ldquo;Depositary&rdquo;;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to the &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;our&rdquo; and &ldquo;XTL&rdquo; refer to XTL Biopharmaceuticals, Ltd., an Israeli company and its consolidated subsidiaries;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to the &ldquo;Companies Law&rdquo; or &ldquo;Israeli Companies Law&rdquo; are to Israel&rsquo;s Companies Law, 5759-1999, as amended;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to &ldquo;dollars,&rdquo; &ldquo;U.S. dollars&rdquo; and &ldquo;$&rdquo; are to United States Dollars;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to &ldquo;ordinary shares,&rdquo; &ldquo;our shares&rdquo; and similar expressions refer to our Ordinary Shares, NIS 0.1 nominal (par) value per share;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to &ldquo;Securities Law&rdquo; or &ldquo;Israeli Securities Law&rdquo; are to Israel Securities Law, 5728-1968, as amended;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to &ldquo;shekels&rdquo; and &ldquo;NIS&rdquo; are to New Israeli Shekels, the Israeli currency; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">references to the &ldquo;SEC&rdquo; are to the United States Securities and Exchange Commission.</font></td></tr>
</table>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_002"></A>PROSPECTUS SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>This summary
highlights selected information presented in greater detail elsewhere in this prospectus. This summary does not include all the
information you should consider before investing in our securities. Before investing in our securities, you should read this entire
prospectus carefully for a more complete understanding of our business and this offering, including our audited and unaudited
financial statements and related notes and the sections titled &ldquo;Risk Factors&rdquo; and &ldquo;Management&rsquo;s Discussion
and Analysis of Financial Condition and Results of Operations.&rdquo;</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Business Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We are a biopharmaceutical
company engaged in the acquisition and development of pharmaceutical drugs for the treatment of autoimmune diseases. Our current
drug development program is focused on hCDR1 for the treatment of systemic lupus erythematosus, or SLE. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our lead drug candidate
is hCDR1, a Phase II-ready asset for the treatment of SLE, the most prominent type of lupus. There is currently no known cure for
SLE. Only one new treatment, Benlysta, has been approved by the U.S. Food and Drug Administration, or FDA, in the last 50 years
for SLE. Lupus is a chronic autoimmune disease involving many systems in the human body, including joints, kidneys, the central
nervous system, heart, the hematological system and others. The biologic basis of the disease is a defect in the immune (defense)
system, leading to production of self (auto) antibodies, attacking healthy organs and causing irreversible damage. According to
research estimates of the Lupus Foundation of America, at least 1.5 million Americans have the disease (more than 5 million worldwide)
with more than 16,000 new cases diagnosed each year in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> hCDR1 is a peptide
that is administered subcutaneously and acts as a disease-specific treatment to modify the SLE-related autoimmune process. It
does so by specific upstream immunomodulation through the generation of regulatory T cells, reducing inflammation and resuming
immune balance. More than 40 peer-reviewed papers have been published on hCDR1. Two placebo controlled Phase I trials and a placebo
controlled Phase 2 trial, or the PRELUDE trial, were conducted by Teva Pharmaceutical Industries, Ltd., or Teva, which had previously
in-licensed hCDR1 from Yeda Research and Development, or Yeda. The studies consisted of over 400 patients and demonstrated that
hCDR1 is well tolerated by patients and has a favorable safety profile. The PRELUDE trial did not achieve its primary efficacy
endpoint based on the SLE Disease Activity Index, or SLEDAI scale, resulting in Teva returning the asset to Yeda. However, the
PRELUDE trial showed encouraging results in its secondary clinical endpoint, the British Isles Lupus Activity Group index, or
BILAG index, and, in fact, the 0.5 mg weekly dose showed a substantial effect. Multiple post-hoc analyses also showed impressive
results for this dose using the BILAG index. Such dose will be the focus of the clinical development plan moving forward. Subsequent
to Teva&rsquo;s return of the program to Yeda, the FDA directed that the primary endpoint in future trials for Lupus therapies,
including those for hCDR1, should be based on either the BILAG index or the SLE Responder Index (&ldquo;SRI&rdquo;). The FDA has
provided the Company with written guidance confirming the acceptability of BILAG as the primary endpoint in our planned study.
Given the FDA&rsquo;s recommendation and the positive findings from the PRELUDE trial (which showed a substantial effect in the
BILAG index), we intend to initiate a new advanced clinical trial, which will include the 0.5 mg dose.. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify; text-indent: 0.45in"> Our
second drug candidate is recombinant human erythropoietin, or rHuEPO, which we have licensed from Yeda, and Mor Research Applications,
or Mor, for the extension of survival of patients with advanced/end-stage multiple myeloma. Multiple myeloma is a severe and incurable
malignant hematological cancer of plasma cells. A clinical observation confirmed the high success rate of rHuEPO in treating the
anemia in patients with multiple myeloma. Six patients with very poor prognostic features of multiple myeloma, whose expected
survival was less than six months continued treatment with rHuEPO beyond the initial designed 12 week period, and they lived for
45&ndash;133 months cumulatively with the multiple myeloma diagnosis and 38&ndash;94 months with rHuEPO (with a good quality of
life). We were granted an Orphan-drug designation from the FDA in May 2011, for rHuEPO. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As our focus is currently
on the development of our lead drug candidate, we do not anticipate conducting material research and development activities for
rHuEPO before 2017 and are exploring opportunities to sell or license rHuEPO or collaborate with partners in its development.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Our Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our objective is
to be a leading biopharmaceutical company engaged in the acquisition and development of pharmaceutical products for the treatment
of autoimmune diseases. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under our current near-term
strategy with respect to our pharmaceutical and biopharmaceutical products, we plan to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">initiate
an international, prospective advanced clinical study intended to assess the safety and efficacy of hCDR1 when given to patients
with SLE;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.25in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">continually build our pipeline of therapeutic candidates; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.25in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">develop collaborations with large pharmaceutical companies to sublicense/develop, and market our hCDR1 and rHuEPO drug development programs.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Registered Direct
Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In April 2015, we entered
into security purchase agreements providing for the issuance of an aggregate of 1,777,778 ADSs representing 35,555,560 ordinary
shares in a registered direct offering at $2.25 per ADS for aggregate gross proceeds of $4,000,000. In addition, we issued unregistered
warrants to purchase 888,889 ADSs representing 17,777,778 ordinary shares in a private placement. At the closing, we also issued
placement agent warrants to purchase up to 89,888 ADSs representing 1,797,760 ordinary shares. The warrants may be exercised at
any time for a period of five and one-half years from issuance and have an exercise price of $2.25 per ADS, subject to adjustment
as set forth therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>InterCure Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In July 2012, we
acquired control of InterCure Ltd, or InterCure, a public company whose shares are traded on the TASE and which develops a home
therapeutic device for non-medicinal and non-invasive treatment of various diseases such as hypertension, heart failure, sleeplessness
and mental stress and markets and sells a home therapeutic device for hypertension. As a result of a series of transactions including
a transaction, that closed in February 2015, between InterCure and Green Forest Global Ltd., or Green Forest, a company wholly
owned by Mr. Alexander Rabinovitch (a greater than 5% shareholder of ours), our holdings in InterCure were diluted to approximately
5%. See &ldquo;Certain Relationships and Related Party Transactions&rdquo; on page 55. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risk Factors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our business is
subject to numerous risks, as more fully described in the section titled &ldquo;Risk Factors&rdquo; immediately following this
prospectus summary. You should read and carefully consider these risks and all of the other information in this prospectus, including
the financial statements and the related notes included elsewhere in this prospectus, before deciding whether to invest in our
securities. In particular, such risks include, but are not limited to, the following: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We have incurred substantial operating losses since our inception and expect to continue to incur losses in the future in our drug development activity and may never become profitable.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We have not yet commercialized any products or technologies, and we may never become profitable.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">We have limited experience in conducting and managing clinical trials necessary to obtain regulatory approvals. If our drug candidates and technologies do not receive the necessary regulatory approvals, we will be unable to commercialize our products.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Even if we or our collaborative/strategic partners or potential collaborative/strategic partners receive approval to market our drug candidates, if our products fail to achieve market acceptance, we will never record meaningful revenues. We might be unable to develop product candidates that will achieve commercial success in a timely and cost-effective manner, or ever.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any acquisitions or in-licensing transactions we make may dilute your equity or require a significant amount of our available cash and may not be scientifically or commercially successful.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because all of our proprietary drug candidates and technologies are licensed to us by third parties, termination of these license agreements could prevent us from developing our drug candidates.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our U.S. shareholders may suffer adverse tax consequences if we are characterized as a passive foreign investment company, or PFIC.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Implications of being a Foreign Private Issuer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to the
information reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act, that are applicable to &ldquo;foreign
private issuers,&rdquo; and under those requirements we file reports with the SEC. As a foreign private issuer, we are not subject
to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting
obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For
example, although we report our financial results on a quarterly basis, we will not be required to issue quarterly reports, proxy
statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation
information that is as detailed as that required of U.S. domestic reporting companies. We also have four months after the end of
each fiscal year to file our annual reports with the SEC and will not be required to file current reports as frequently or promptly
as U.S. domestic reporting companies. We may also present financial statements pursuant to IFRS instead of pursuant to U.S. generally
accepted accounting principles, or U.S. GAAP. Furthermore, although the members of our management and supervisory boards will be
required to notify the Israeli Securities Authority of certain transactions they may undertake, including with respect to our ordinary
shares, our officers, directors and principal shareholders will be exempt from the requirements to report transactions in our equity
securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private
issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These
exemptions and leniencies reduce the frequency and scope of information and protections available to you in comparison to those
applicable to a U.S. domestic reporting companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Our Corporate Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our legal and commercial
name is XTL Biopharmaceuticals Ltd. We are incorporated in the State of Israel. Our principal offices are located at 5 HaCharoshet
St., Raanana 4365603, Israel, and our telephone number is +972-9-955-7080. Our primary internet address is <I>www.xtlbio.com</I>
.. None of the information on our website is part of this prospectus or the registration statement of which they are a part and
no portion of such information is incorporated herein. For further information regarding us and our financial information, you
should refer to our recent filings with the SEC. See &ldquo;Where You Can Find More Information&rdquo; and &ldquo;Incorporation
of Certain Information by Reference.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>THE OFFERING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 38%; text-align: justify; padding-right: 5.4pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
    offered by us</FONT> </td>
    <TD STYLE="width: 62%; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Up
    to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs, pre-funded Series B warrants to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs<FONT STYLE="text-underline-style: double">,
    </FONT>and Series A warrants to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs.</FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 38%; text-align: justify; padding-right: 5.4pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description
    of Series A Warrants</FONT> </td>
    <TD STYLE="width: 62%; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    ADSs or Series B warrants, as applicable, and Series A warrants will be sold together as one ADS or a Series B warrant to
    purchase one ADS, as applicable, and one Series A warrant to purchase one ADS. The ADSs or Series B warrants, as applicable,
    and the Series A warrants are immediately separable upon issuance. Each Series A warrant will have an exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share, will be exercisable upon issuance and will expire &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;years from the date of issuance.</FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 38%; text-align: justify; padding-right: 5.4pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description
    of Pre-funded Series B Warrants</FONT> </td>
    <TD STYLE="width: 62%; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    pre-funded Series B warrants are being issued to prevent the beneficial ownership of a purchaser in this offering (together
    with its affiliates and certain related parties) of our ordinary shares from exceeding 4.99%<FONT STYLE="text-underline-style: double">
    (or, at the election of the purchaser, 9.99%)</FONT>. Each Series B warrant will have an exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;per
    ADS, will be exercisable upon issuance and will expire only when exercised in full. As stated above, purchasers of Series
    B warrants will also receive Series A warrants as if such purchasers were buying ADSs in this offering.</FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 38%; text-align: justify; padding-right: 5.4pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ordinary
    shares outstanding immediately after this offering</FONT> </td>
    <TD STYLE="width: 62%; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
    shares&nbsp;&nbsp;(including ordinary shares represented by the ADSs issuable upon exercise of the Series A warrants, Series
    B warrants and warrant issued to the Placement Agent) </FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 38%; text-align: justify; padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depositary</FONT></td>
    <TD STYLE="width: 62%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Bank of New York Mellon, Depositary</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; padding-right: 5.4pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Use
    of proceeds</FONT> </td>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We intend to
    use the net proceeds from this offering to continue the development of hCDR1, our leading drug candidate and for working capital
    and other general corporate purposes. See &ldquo;Use of Proceeds&rdquo;.</FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 38%; text-align: justify; padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NASDAQ
    Capital Market Symbol for ADSs</FONT></td>
    <TD STYLE="width: 62%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">XTLB</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; padding-right: 5.4pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-underline-style: double">Proposed
    NASDAQ Capital Market Symbol for Series A warrants</FONT> </td>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-underline-style: double">_______</FONT> </td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></td>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; padding-right: 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risk
    Factors</FONT></td>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">You should read
    the &ldquo;Risk Factors&rdquo; section starting on page ___ of this prospectus for a discussion of factors to consider before
    deciding to invest in our securities.</FONT></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The number of ordinary
shares that will be outstanding immediately after this offering is based on 274,205,799 ordinary shares outstanding as of November
4, 2016. This number excludes, as of such date: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19,222,220
                                         ordinary shares represented by 961,111 ADSs issuable upon the exercise of warrants at
                                         a weighted average exercise price of $2.29;</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,390,000
                                         ordinary shares issuable upon the exercise of stock options at a weighted average exercise
                                         price of $0.56 per share;</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.25in"> &nbsp; </td>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </td>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,280,000 ordinary
    shares reserved for future issuances under our stock option and incentive plans; &nbsp;</FONT> </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </td>
    <TD> &nbsp; </td>
    <TD STYLE="text-align: justify"> &nbsp; </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </td>
    <TD> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </td>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
    shares represented by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ADSs issuable
    upon the exercise of Series A warrants issued in this offering at an exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    ADS; </FONT> </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </td>
    <TD> &nbsp; </td>
    <TD STYLE="text-align: justify"> &nbsp; </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </td>
    <TD> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </td>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary
    shares represented by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ADSs issuable
    upon the exercise of Series B warrants issued in this offering at an exercise price of $0.01 per ADS; and</FONT> </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ordinary
                                         shares underlying the ADS purchase warrant to be issued to the Placement Agent in connection
                                         with this offering, at an exercise price of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
                                         ADS.</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Unless otherwise
indicated, all information in this prospectus assumes or gives effect to no exercise of outstanding options or warrants described
above, including the Placement Agent&rsquo;s ADS purchase warrant. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_003"></A>SELECTED FINANCIAL DATA</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The following tables
summarize our financial data. We have derived the following selected consolidated operating data for the years ended December
31, 2015, 2014 and 2013 and the selected consolidated balance sheet data as of December 31, 2015 and 2014, from our audited consolidated
financial statements, included elsewhere in this prospectus. We have derived the summary consolidated operating data for the years
ended December 31, 2012 and 2011 and the selected consolidated balance sheet data as of December 31, 2013, 2012 and 2011 from
our audited consolidated financial statements not included in this prospectus. The selected financial data as of June 30, 2016
and for the six months ended June 30, 2016 and 2015 are derived from our unaudited interim financial statements that are included
elsewhere in this prospectus. In the opinion of management, these unaudited interim financial statements include all adjustments,
consisting of normal recurring adjustments, necessary for a fair statement of our financial position and operating results for
these periods. Results from interim periods are not necessarily indicative of results that may be expected for the entire year.
Our historical results are not necessarily indicative of the results that may be expected in the future. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our consolidated financial
statements included in this prospectus were prepared in United States dollars in accordance with IFRS, as issued by the International
Accounting Standards Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following summary
financial data should be read in conjunction with &ldquo;Management's Discussion and Analysis of Financial Condition and Results
of Operations&rdquo; and our financial statements and related notes included elsewhere in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Operating Data:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-size: 10pt; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Unaudited
                                         </B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Six
                                         months ended</B></FONT><br><FONT STYLE="font-size: 8pt"> <B>June 30,</B></FONT> </P></TD><TD NOWRAP STYLE="font-size: 10pt"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-size: 10pt; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Audited</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Year
                                         ended December 31,</B></FONT> </P></TD><TD NOWRAP STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="26" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S Dollars in thousands,
    except share and per share data </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 44%; text-align: left"> Research and development expenses </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (355 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (111 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (578 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (278 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (82 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (92 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> (158 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> General and administrative expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (713 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (746 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,419 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,744 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,329 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,448 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,078 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Impairment of intangible assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,604 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Other gains (loss), net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (10 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,059 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 802 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 12 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Operating loss </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,068 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (857 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (3,611 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,022 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (352 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,738 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,224 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Finance income </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 19 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 19 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 41 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 114 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 55 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 24 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Finance expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (205 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (15 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (138 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (55 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (7 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Financial income (expenses), net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 14 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (186 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (11 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (97 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 59 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 50 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (17 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Earnings (losses) from investment in associate </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (845 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 569 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Loss from continuing operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,054 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,043 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,622 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Loss from discontinued operation </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (460 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (689 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"> Total loss for the period </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,054 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,119 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,138 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,119 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,207 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Other comprehensive income (loss): </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Change in fair value of marketable securities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 111 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Items that might be classified to profit or loss: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Foreign currency translation adjustments </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 108 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 114 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Reclassification of foreign currency translation adjustments to other
    gains, net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (221 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Total other comprehensive income </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 111 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (113 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 114 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Total comprehensive loss from continuing operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (943 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,043 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,622 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,119 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,251 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,005 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,207 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Total loss from discontinued operations </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (460 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (689 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (746 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,575 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (623 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Total comprehensive loss for the period </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (943 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,503 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (4,311 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,865 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,826 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,628 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,207 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Loss for the period attributable to: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Equity holders of the Company </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,054 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,505 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (4,313 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,527 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,476 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,390 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,207 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Non-controlling interests </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (338 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,237 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (352 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,054 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (3,713 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,742 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,207 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Total comprehensive loss for the period attributable to: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Equity holders of the Company </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (943 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,505 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (4,313 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,527 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,589 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,276 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,207 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Non-controlling interests </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (338 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,237 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (352 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (943 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (3,826 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,628 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (1,207 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Basic and diluted loss from continuing and discontinued operations (in U.S. dollars) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> From continuing operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.004 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.004 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.014 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.009 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.005 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.005 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.006 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> From discontinued operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.002 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.003 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.002 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.006 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.001 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"> Basic and diluted loss per share (in U.S. dollars) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.004 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.006 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.017 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.011 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.011 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.006 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.006 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt"> Weighted average number of issued ordinary shares </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 273,862,042 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 253,717,462 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 263,730,467 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 231,224,512 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 223,605,181 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 217,689,926 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 201,825,645 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Balance Sheet Data:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> As of June 30, </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center"> As of December 31, </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S Dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 34%; text-align: left"> Cash, cash equivalents and bank deposits </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 2,605 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 3,817 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 2,159 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 4,165 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 3,312 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 1,495 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Total assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,337 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5,323 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5,644 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8,015 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 11,086 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,073 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Long term liabilities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 11 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 13 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Total shareholders&rsquo; equity </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,079 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,887 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,660 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,265 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7,353 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,444 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Non-controlling interests </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 19 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 520 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,071 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Working capital* </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,959 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,829 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,102 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,870 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,143 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 955 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Working capital means total current assets
minus total current liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_004"></A>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Before you invest
in our securities, you should understand the high degree of risk involved. You should carefully consider the risks described below
and other information in this prospectus, including our financial statements and related notes included elsewhere in this prospectus,
before you decide to purchase our securities. If any of the following risks actually occur, our business, financial condition
and operating results could be adversely affected. As a result, the trading price of our ordinary shares or ADSs could decline
and you could lose part or all of your investment.</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Risks Related to Our Financial Position
and Capital Requirements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We have incurred substantial operating
losses since our inception. We expect to continue to incur losses in the future in our drug development activity and may never
become profitable.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You should consider
our prospects in light of the risks and difficulties frequently encountered by development stage companies. We have incurred operating
losses since our inception and expect to continue to incur operating losses for the foreseeable future. We have not yet commercialized
any of our drug candidates or technologies and cannot be sure we will ever be able to do so. Even if we commercialize one or more
of our drug candidates or technologies, we may not become profitable. Our ability to achieve profitability depends on a number
of factors, including our ability to complete our development efforts, consummate out-licensing agreements, obtain regulatory approval
for our drug candidates and technologies and successfully commercialize them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We expect to continue
to incur losses for the foreseeable future, and these losses will likely increase as we:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">initiate and manage pre-clinical development and clinical trials for our current and new product candidates;</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">seek regulatory approvals for our product candidates;</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">implement internal systems and infrastructures;</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">seek to license additional technologies to develop;</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">hire management and other personnel; and</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td></tr>
<tr style="vertical-align: top">
    <TD><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">progress product candidates towards commercialization.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our product candidates
fail in clinical trials or do not gain regulatory clearance or approval, or if our product candidates do not achieve market acceptance,
we may never become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on
a quarterly or annual basis. Our inability to achieve and then maintain profitability would negatively affect our business, financial
condition, results of operations and cash flows. Moreover, our prospects must be considered in light of the risks and uncertainties
encountered by an early-stage company and in highly regulated and competitive markets, such as the biopharmaceutical market, where
regulatory approval and market acceptance of our products are uncertain. There can be no assurance that our efforts will ultimately
be successful or result in revenues or profits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will require substantial additional
financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce
or terminate our product development or commercialization efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of June 30,
2016, we had approximately $2,605,000 in cash, cash equivalents and bank deposits, working capital of approximately $2,959,000
and an accumulated deficit of approximately $153,460,000. We have incurred continuing losses and depend on outside financing resources
to continue our activities. Based on existing business plans, we estimate that our outstanding cash and cash equivalent balances,
as of November 4, 2016, will allow us to finance our activities for an additional period of at least 12 months from the date of
this prospectus. In order to perform clinical trials aimed at developing our product until obtaining its marketing approval, we
will need to raise additional financing by issuing securities. Should we fail to raise additional capital under terms acceptable
to us, we will be required to reduce our development activities or sell or grant a sublicense to third parties to use all or part
of our technologies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have expended and
believe that we will continue to expend significant operating and capital expenditures for the foreseeable future developing our
product candidates. These expenditures will include, but are not limited to, costs associated with research and development, manufacturing,
conducting preclinical experiments and clinical trials, contracting CMOs and CROs, hiring additional management and other personnel
and obtaining regulatory approvals, as well as commercializing any products approved for sale. Because the outcome of our planned
and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully
complete the development and commercialization of our product candidates and any other future product. In addition, other unanticipated
costs may arise. As a result of these and other factors currently unknown to us, upon closing of this offering we will require
additional funds, through public or private equity or debt financings or other sources, such as strategic partnerships and alliances
and licensing arrangements. In addition, we may seek additional capital due to favorable market conditions or strategic considerations
even if we believe we have sufficient funds for our current or future operating plans. A failure to fund these activities may harm
our growth strategy, competitive position, quality compliance and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our future capital
requirements depend on many factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the number and characteristics of products we develop;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the scope, progress, results and costs of researching and developing our product candidates and conducting preclinical and clinical trials;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the timing of, and the costs involved in, obtaining regulatory approvals;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the cost of commercialization activities if any are approved for sale, including marketing, sales and distribution costs;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the cost of manufacturing any product candidate we successfully commercialize;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our ability to establish and maintain strategic partnerships, licensing, supply or other arrangements and the financial terms of such agreements;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">hCDR1 patent expiration in 2024 and failure to obtain patent term extension, expand patent protection or obtain data exclusivity in the U.S. and Europe;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">rHuEPO patent expiration in 2019 and failure to retain orphan drug designation in the U.S. or obtain orphan drug designation in Europe;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the costs of in-licensing further patents and technologies.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the cost of development of in-licensed technologies</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the timing, receipt and amount of sales of, or royalties on, any future products;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the expenses needed to attract and retain skilled personnel; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any product liability or other lawsuits related to existing and/or any future products.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additional funds may
not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on
a timely basis, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other research
and development activities for our product candidates or delay, limit, reduce or terminate our establishment of sales and marketing
capabilities or other activities that may be necessary to commercialize our product candidates or any future products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Raising additional capital may cause
dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product
candidates.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may seek additional
capital through a combination of private and public equity offerings, debt financings, strategic partnerships and alliances and
licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities,
the ownership interests of existing shareholders will be diluted, and the terms may include liquidation or other preferences that
adversely affect shareholder rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting
our ability to take certain actions, such as incurring debt, making capital expenditures or declaring dividends. If we raise additional
funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable
rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. If we are unable to
raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our
product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise
prefer to develop and market ourselves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Risks Related to our Drug Development
Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We have not yet commercialized any
products or technologies, and we may never become profitable.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not yet commercialized
any products or technologies, and we may never be able to do so. We do not know when or if we will complete any of our product
development efforts, obtain regulatory approval for any product candidates incorporating our technologies or successfully commercialize
any approved products. Even if we are successful in developing products that are approved for marketing, we will not be successful
unless these products gain market acceptance for appropriate indications at favorable reimbursement rates. The degree of market
acceptance of these products will depend on a number of factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
timing of regulatory approvals in the countries, and for the uses, we seek;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the competitive environment;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the establishment and demonstration in the medical community of the safety and clinical efficacy of our products and their potential advantages over existing therapeutic products;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our ability to enter into strategic agreements with pharmaceutical and biotechnology companies with strong marketing and sales capabilities;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the adequacy and success of distribution, sales and marketing efforts; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="width: 0.5in; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the pricing and reimbursement policies of government and third-party payors, such as insurance companies, health maintenance organizations and other plan administrators.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Physicians, patients,
third-party payors or the medical community in general may be unwilling to accept, utilize or recommend, and in the case of third-party
payors, cover any of our products or products incorporating our technologies. As a result, we are unable to predict the extent
of future losses or the time required to achieve profitability, if at all. Even if we successfully develop one or more products
that incorporate our technologies, we may not become profitable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we are unable to successfully
complete our clinical trial programs for our drug candidates, or if such clinical trials take longer to complete than we project,
our ability to execute our current business strategy will be adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Whether or not and
how quickly we complete clinical trials depends in part upon the rate at which we are able to engage clinical trial sites and,
thereafter, the rate of enrollment of patients, and the rate at which we are able to collect, clean, lock and analyze the clinical
trial database. Patient enrollment is a function of many factors, including the size of the patient population, the proximity of
patients to clinical sites, the eligibility criteria for the study, the existence of competitive clinical trials, and whether existing
or new drugs are approved for the indication we are studying. We are aware that other companies are planning clinical trials that
will seek to enroll patients with the same diseases and stages as we are studying. If we experience delays in identifying and contracting
with sites and/or in patient enrollment in our clinical trial programs, we may incur additional costs and delays in our development
programs, and may not be able to complete our clinical trials on a cost-effective or timely basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We have limited experience in conducting
and managing clinical trials necessary to obtain regulatory approvals. If our drug candidates and technologies do not receive the
necessary regulatory approvals, we will be unable to commercialize our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not received,
and may never receive, regulatory approval for commercial sale for hCDR1 or rHuEPO. We currently do not have any drug candidates
pending approval with the Food and Drug Administration, or FDA or with regulatory authorities of other countries. We will need
to conduct significant additional research and human testing before we can apply for product approval with the FDA or with regulatory
authorities of other countries. In order to obtain FDA approval to market a new drug product, we or our potential partners must
demonstrate proof of safety and efficacy in humans. To meet these requirements, we and/or our potential partners will have to conduct
&ldquo;adequate and well-controlled&rdquo; clinical trials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Clinical development
is a long, expensive and uncertain process. Clinical trials are very difficult to design and implement, in part because they are
subject to rigorous regulatory requirements. Satisfaction of regulatory requirements typically depends on the nature, complexity
and novelty of the product and requires the expenditure of substantial resources. The commencement and rate of completion of clinical
trials may be delayed by many factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">obtaining regulatory approvals to commence a clinical trial;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reaching agreement on acceptable terms with prospective CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">slower than expected rates of patient recruitment due to narrow screening requirements and competing clinical studies;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the inability of patients to meet protocol requirements imposed by the FDA or other regulatory authorities;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the need or desire to modify our manufacturing process;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">delays, suspension, or termination of the clinical trials due to the institutional review board responsible for overseeing the study at a particular study site; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">governmental or regulatory delays or &ldquo;clinical holds&rdquo; requiring suspension or termination of the trials.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the completion
of a clinical trial, regulators may not interpret data obtained from pre-clinical and clinical tests of our drug candidates and
technologies the same way that we do, which could delay, limit or prevent our receipt of regulatory approval. In addition, the
designs of any clinical trials may not be reviewed or approved by the FDA prior to their commencement, and consequently the FDA
could determine that the parameters of any studies are insufficient to demonstrate proof of safety and efficacy in humans. Failure
to approve a completed study could also result from several other factors, including unforeseen safety issues, the determination
of dosing, low rates of patient recruitment, the inability to monitor patients adequately during or after treatment, the inability
or unwillingness of medical investigators to follow our clinical protocols, and the lack of effectiveness of the trials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, the regulators
could determine that the studies indicate the drugs may have serious side effects. In the U.S., this is called a black box warning,
which is a type of warning that appears on the package insert for prescription drugs indicating that they may cause serious adverse
effects. A black box warning means that medical studies indicate that the drug carries a significant risk of serious or even life-threatening
adverse effects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the clinical trials
fail to satisfy the criteria required, the FDA and/or other regulatory agencies/authorities may request additional information,
including additional clinical data, before approval of marketing a product. Negative or inconclusive results or medical events
during a clinical trial could also cause us to delay or terminate our development efforts. If we experience delays in the testing
or approval process, or if we need to perform more or larger clinical trials than originally planned, our financial results and
the commercial prospects for our drug candidates and technologies may be materially impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Clinical trials have
a high risk of failure. A number of companies in the pharmaceutical industry, including biotechnology companies, have suffered
significant setbacks in clinical trials, even after achieving promising results in earlier trials. It may take us many years to
complete the testing of our drug candidates and technologies, and failure can occur at any stage of this process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Even if regulatory
approval is obtained, our products and their manufacture will be subject to continual review, and there can be no assurance that
such approval will not be subsequently withdrawn or restricted. Changes in applicable legislation or regulatory policies, or discovery
of problems with the products or their manufacture, may result in the imposition of regulatory restrictions, including withdrawal
of the product from the market, or result in increased costs to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If third parties on which we will
have to rely for clinical trials do not perform as contractually required or as we expect, we may not be able to obtain regulatory
approval for or commercialize our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will have to depend
on independent clinical investigators, and other third-party service providers to conduct the clinical trials of our drug candidates
and technologies. We also may, from time to time, engage a clinical research organization for the execution of our clinical trials.
We will rely heavily on these parties for successful execution of our clinical trials, but we will not control many aspects of
their activities. Nonetheless, we are responsible for confirming that each of our clinical trials is conducted in accordance with
the general investigational plan and protocol. Our reliance on these third parties that we do not control does not relieve us of
our responsibility to comply with the regulations and standards of the FDA and/or other foreign regulatory agencies/authorities
relating to good clinical practices. Third parties may not complete activities on schedule or may not conduct our clinical trials
in accordance with regulatory requirements or the applicable trial&rsquo;s plans and protocols. The failure of these third parties
to carry out their obligations could delay or prevent the development, approval and commercialization of our products, or could
result in enforcement action against us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our international clinical trials
may be delayed or otherwise adversely impacted by social, political and economic factors affecting the particular foreign country.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may conduct clinical
trials in different geographical locations. Our ability to successfully initiate, enroll and complete a clinical trial in any of
these countries, or in any future foreign country in which we may initiate a clinical trial, are subject to numerous risks unique
to conducting business in foreign countries, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulty in establishing or managing relationships with clinical research organizations and physicians;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">different standards for the conduct of clinical trials and/or health care reimbursement;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our inability to locate qualified local consultants, physicians, and partners;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical products and treatment; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">general geopolitical risks, such as political and economic instability, and changes in diplomatic and trade relations.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any disruption to our
international clinical trial program could significantly delay our product development efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If the clinical data related to our
drug candidates and technologies do not confirm positive early clinical data or preclinical data, our corporate strategy and financial
results will be adversely impacted.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our drug candidates
and technologies are in clinical stages. Specifically, our product candidates, hCDR1 and rHuEPO are each planned for and/or ready
for advanced clinical studies. In order for our candidates to proceed to later stage clinical testing or marketing approval, they
must show positive clinical results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Preliminary results
of pre-clinical, clinical observations or clinical tests do not necessarily predict the final results, and promising results in
pre-clinical, clinical observations or early clinical testing might not be obtained in later clinical trials. Drug candidates in
the later stages of clinical development may fail to show the desired safety and efficacy traits despite having progressed through
initial clinical testing. Any negative results from future tests may prevent us from proceeding to later stage clinical testing
or marketing approval, which would materially impact our corporate strategy, and our financial results may be adversely impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we do not establish or maintain
drug development and marketing arrangements with third parties, we may be unable to commercialize our drug candidates and technologies
into products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">We do not possess
all of the capabilities to fully commercialize our drug candidates and technologies on our own. From time to time, we may need
to contract with third parties to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">assist us in developing, testing and obtaining regulatory approval for some of our compounds and technologies;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">manufacture our drug candidates; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">market and distribute our products.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We can provide no assurance
that we will be able to successfully enter into agreements with such third-parties on terms that are acceptable to us. If we are
unable to successfully contract with third parties for these services when needed, or if existing arrangements for these services
are terminated, whether or not through our actions, or if such third parties do not fully perform under these arrangements, we
may have to delay, scale back or end one or more of our drug development programs or seek to develop or commercialize our drug
candidates and technologies independently, which could result in delays. Further, such failure could result in the termination
of license rights to one or more of our drug candidates and technologies. Moreover, if these development or marketing agreements
take the form of a partnership or strategic alliance, such arrangements may provide our collaborators with significant discretion
in determining the efforts and resources that they will apply to the development and commercialization of our products. Accordingly,
to the extent that we rely on third parties to research, develop or commercialize our products, we may be unable to control whether
such products will be scientifically or commercially successful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Even if we or our collaborative/strategic
partners or potential collaborative/strategic partners receive approval to market our drug candidates, if our products fail to
achieve market acceptance, we will never record meaningful revenues.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">Even if our products
are approved for sale, they may not be commercially successful in the marketplace. Market acceptance of our product candidates
will depend on a number of factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">perceptions by members of the health care community, including physicians, of the safety and efficacy of our products;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the rates of adoption of our products by medical practitioners and the target populations for our products;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the potential advantages that our products offer over existing treatment methods or other products that may be developed;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the cost-effectiveness of our products relative to competing products including potential generic competition;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the availability of government or third-party pay or reimbursement for our products;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the side effects of our products which may lead to unfavorable publicity concerning our products or similar products; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the effectiveness of our and/or our partners&rsquo; sales, marketing and distribution efforts.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Specifically, each
of hCDR1 or rHuEPO, if successfully developed and commercially launched for the treatment of SLE or multiple myeloma, respectively,
will compete with both currently marketed and new products marketed by other companies. Health care providers may not accept or
utilize any of our product candidates. Physicians and other prescribers may not be inclined to prescribe our products unless our
products bring clear and demonstrable advantages over other products currently marketed for the same indications. Because we expect
sales of our products to generate substantially all of our revenues in the long-term, the failure of our products to find market
acceptance would harm our business and could require us to seek additional financing or other sources of revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If the third parties upon whom we
rely to manufacture our products do not successfully manufacture our products, our business will be harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">We do not currently
have the ability to manufacture the compounds that we need to conduct our clinical trials and, therefore, rely upon, and intend
to continue to rely upon, certain manufacturers to produce and supply our drug candidates for use in clinical trials and for future
sales. In order to commercialize our products, such products will need to be manufactured in commercial quantities while adhering
to all regulatory and other local requirements, all at an acceptable cost. We may not be able to enter into future third-party
contract manufacturing agreements on acceptable terms, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">If our contract manufacturers
or other third parties fail to deliver our product candidates for clinical use on a timely basis, with sufficient quality, and
at commercially reasonable prices, and we fail to find replacement manufacturers or sources, we may be required to delay or suspend
clinical trials or otherwise discontinue development and production of our drug candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">Our contract manufacturers
will be required to produce our clinical drug candidates under strict compliance with current Good Manufacturing Practices, or
cGMP, in order to meet acceptable regulatory standards for our clinical trials. If such standards change, the ability of contract
manufacturers to produce our drug candidates on the schedule we require for our clinical trials may be affected. In addition, contract
manufacturers may not perform their obligations under their agreements with us or may discontinue their business before the time
required by us to successfully produce and market our drug candidates. Any difficulties or delays in our contractors&rsquo; manufacturing
and supply of drug candidates could increase our costs, cause us to lose revenue or make us postpone or cancel clinical trials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">In addition, our
contract manufacturers will be subject to ongoing periodic, unannounced inspections by the FDA and corresponding foreign or local
governmental agencies to ensure strict compliance with, among other things, cGMP, in addition to other governmental regulations
and corresponding foreign standards. We will not have control over, other than by contract, third-party manufacturers&rsquo; compliance
with these regulations and standards. No assurance can be given that our third-party manufacturers will comply with these regulations
or other regulatory requirements now or in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">In the event that
we are unable to obtain or retain third-party manufacturers, we will not be able to commercialize our products as planned. If third-party
manufacturers fail to deliver the required quantities of our products on a timely basis and at commercially reasonable prices,
our ability to develop and deliver products on a timely and competitive basis may be adversely impacted and our business, financial
condition or results of operations will be materially harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If our competitors develop and market
products that are less expensive, more effective or safer than our products, our revenues and results may be harmed and our commercial
opportunities may be reduced or eliminated.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The pharmaceutical
industry is highly competitive. Our commercial opportunities may be reduced or eliminated if our competitors develop and market
products that are less expensive, more effective or safer than our products. Other companies have drug candidates in various stages
of pre-clinical or clinical development to treat diseases for which we are also seeking to discover and develop drug candidates.
Some of these potential competing drugs are already commercialized or are further advanced in development than our drug candidates
and may be commercialized earlier. Even if we are successful in developing safe, effective drugs, our products may not compete
successfully with products produced by our competitors, who may be able to market their drugs more effectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our competitors include
pharmaceutical companies and biotechnology companies, as well as universities and public and private research institutions. In
addition, companies that are active in different but related fields present substantial competition for us. Many of our competitors
have significantly greater capital resources, larger research and development staffs and facilities and greater experience in drug
development, regulation, manufacturing and marketing than we do. These organizations also compete with us to recruit qualified
personnel, attract partners for joint ventures or other collaborations, and license technologies that are competitive with ours.
As a result, our competitors may be able to more easily develop products that could render our technologies or our drug candidates
obsolete or noncompetitive. Development of new drugs, medical technologies and competitive medical devices may damage the demand
for our products without any certainty that we will successfully and effectively contend with those competitors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we lose our key personnel or are
unable to attract and retain additional personnel, our business could be harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of November
4, 2016, we have two full-time employees, including our officers, and four part-time service providers. To successfully develop
our drug candidates and technologies, we must be able to attract and retain highly skilled personnel, including consultants and
employees. The retention of their services cannot be guaranteed. Our failure to retain and/or recruit such professionals might
impair our performance and materially affect our technological and product development capabilities and our product marketing
ability. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Any acquisitions or in-licensing
transactions we make may dilute your equity or require a significant amount of our available cash and may not be scientifically
or commercially successful.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As part of our business
strategy, we may effect acquisitions or in-licensing transactions to obtain additional businesses, products, technologies, capabilities
and personnel. If we complete one or more such transactions in which the consideration includes our ordinary shares or other securities,
your equity may be significantly diluted. If we complete one or more such transactions in which the consideration includes cash,
we may be required to use a substantial portion of our available cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Acquisitions and in-licensing
transactions also involve a number of operational risks, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">difficulty
and expense of assimilating the operations, technology or personnel of the business;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our inability to attract and retain management, key personnel and other employees necessary to conduct the business;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">our inability to maintain relationships with key third parties, such as alliance partners, associated with the business;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">exposure to legal claims for activities of the business prior to the acquisition;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the diversion of our management&rsquo;s attention from our other drug development businesses; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the potential impairment of goodwill and write-off of in-process research and development costs, adversely affecting our reported results of operations.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the basis
for completing the acquisition or in-licensing could prove to be unsuccessful as the drugs or processes involved could fail to
be scientifically or commercially viable. We may also be required to pay third parties substantial transaction fees, in the form
of cash or ordinary shares, in connection with such transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any of these risks
occur, it could have an adverse effect on both the business we acquire or in-license and our existing operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>We face product liability risks and
may not be able to obtain adequate insurance.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The use of our drug
candidates and technologies in clinical trials, and the sale of any approved products, exposes us to liability claims. If we cannot
successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to cease clinical
trials of our drug candidates and technologies or limit commercialization of any approved products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that we
will be able to obtain sufficient product liability insurance coverage for our planned clinical trials. We intend to expand our
insurance coverage to include the commercial sale of any approved products if marketing approval is obtained; however, insurance
coverage is becoming increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost. We may not
be able to obtain additional insurance coverage that will be adequate to cover product liability risks that may arise. Regardless
of merit or eventual outcome, product liability claims may result in:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">decreased demand for a product;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">damage to our reputation;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">inability to continue to develop a drug candidate or technology;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">withdrawal of clinical trial volunteers; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">loss of revenues.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Consequently, a product
liability claim or product recall may result in material losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Risks Related to Our Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Because all of our proprietary drug
candidates and technologies are licensed to us by third parties, termination of these license agreements could prevent us from
developing our drug candidates.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do not own any of
our drug candidates and technologies. We have licensed the rights, patent or otherwise, to our drug candidates from third parties.
We have licensed hCDR1 from Yeda Research and Development Company Ltd., or Yeda. We licensed a use patent for the use of rHuEPO
from Yeda and Mor Research Applications Ltd., or Mor which we acquired from Bio-Gal Limited, or Bio-Gal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These license agreements
require us to meet development or financing milestones and impose development and commercialization due diligence requirements
on us. In addition, under these agreements, we must pay royalties on sales of products resulting from licensed drugs and technologies
and pay the patent filing, prosecution and maintenance costs related to the licenses. While we have the right to defend patent
rights related to our licensed drug candidates and technologies, we are not obligated to do so. In the event that we decide to
defend our licensed patent rights, we will be obligated to cover all of the expenses associated with that effort. If we do not
meet our obligations in a timely manner, or if we otherwise breach the terms of our agreements, our licensors could terminate the
agreements, and we would lose the rights to our drug candidates and technologies. From time to time, in the ordinary course of
business, we may have disagreements with our licensors or collaborators regarding the terms of our agreements or ownership of proprietary
rights, which could lead to delays in the research, development, collaboration and commercialization of our drug candidates, or
could require or result in litigation or arbitration, which could be time-consuming and expensive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>If we are unable to adequately protect
our intellectual property, third parties may be able to use our technology, which could adversely affect our ability to compete
in the market.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our commercial success
will depend in part on our ability and the ability of our licensors to obtain and maintain patent protection on our drug products
and technologies and successfully defend these patents and technologies against third-party challenges. As part of our business
strategy, our policy is to actively file patent applications in the U.S. and internationally to cover methods of use, new chemical
compounds, pharmaceutical compositions and dosing of the compounds and composition and improvements in each of these. Because of
the extensive time required for development, testing and regulatory review of a potential product, it is possible that before we
commercialize any of our products, any related patent may expire or remain in force for only a short period following commercialization,
thus reducing any advantage of the patent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The patent positions
of pharmaceutical and biotechnology companies can be highly uncertain and involve complex legal and factual questions. No consistent
policy regarding the breadth of claims allowed in biotechnology patents has emerged to date. Accordingly, the patents we use may
not be sufficiently broad to prevent others from practicing our technologies or from developing competing products. Furthermore,
others may independently develop similar or alternative technologies or design around our patented technologies. The patents we
use may be challenged or invalidated or may fail to provide us with any competitive advantage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, patent applications
in the U.S. are maintained in secrecy for a period of at least 18 months. Since publication of discoveries in the scientific or
patent literature often lag behind actual discoveries, we are not certain that we were the first to make the inventions covered
by each of our pending patent applications or that we were the first to file those patent applications. We cannot predict the breadth
of claims allowed in biotechnology and pharmaceutical patents, or their enforceability. Third parties or competitors may challenge
or circumvent our patents or patent applications, if issued. If our competitors prepare and file patent applications in the U.S.
that claim compounds or technology also claimed by us, we may be required to challenge competing patent rights, which could result
in substantial cost, even if the eventual outcome is favorable to us. While we have the right to defend patent rights related to
the licensed drug candidates and technologies, we are not obligated to do so. In the event that we decide to defend our licensed
patent rights, we will be obligated to cover all of the expenses associated with that effort.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We also rely on trade
secrets to protect technology where we believe patent protection is not appropriate or obtainable. Trade secrets are difficult
to protect. While we require our employees, collaborators and consultants to enter into confidentiality agreements, this may not
be sufficient to protect our trade secrets or other proprietary information adequately. In addition, we share ownership and publication
rights to data relating to some of our drug candidates and technologies with our research collaborators and scientific advisors.
If we cannot maintain the confidentiality of this information, our ability to protect our proprietary information will be at risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Litigation or third-party claims
of intellectual property infringement could require us to spend substantial time, money and other resources defending such claims
and adversely affect our ability to develop and commercialize our products.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Third parties may assert
that we are using their proprietary technology without authorization. In addition, third parties may have or obtain patents in
the future and claim that our products infringe their patents. If we are required to defend against patent suits brought by third
parties, or if we sue third parties to protect our patent rights, we may be required to pay substantial litigation costs, and our
management&rsquo;s attention may be diverted from operating our business. In addition, any legal action against our licensors or
us that seeks damages or an injunction of our commercial activities relating to the affected products could subject us to monetary
liability and require our licensors or us to obtain a license to continue to use the affected technologies. We cannot predict whether
our licensors or we would prevail in any of these types of actions or that any required license would be made available on commercially
acceptable terms, if at all. In addition, any legal action against us that seeks damages or an injunction relating to the affected
activities could subject us to monetary liability and/or require us to discontinue the affected technologies or obtain a license
to continue use thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, there
can be no assurance that our patents or patent applications or those licensed to us will not become involved in opposition or revocation
proceedings instituted by third parties. If such proceedings were initiated against one or more of our patents, or those licensed
to us, the defense of such rights could involve substantial costs and the outcome could not be predicted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Competitors or potential
competitors may have filed applications for, may have been granted patents for, or may obtain additional patents and proprietary
rights that may relate to compounds or technologies competitive with ours. If patents are granted to other parties that contain
claims having a scope that is interpreted to cover any of our products (including the manufacture thereof), there can be no assurance
that we will be able to obtain licenses to such patents at reasonable cost, if at all, or be able to develop or obtain alternative
technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><I>Risks Related to the ADSs and the
Offering</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>The offering may not be fully
subscribed, and, even if the offering is fully subscribed, we will need additional capital in the future. If additional capital
is not available, we may not be able to continue to operate our business pursuant to our business plan or we may have to discontinue
our operations entirely.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"> The Placement Agent in this offering
will offer the securities on a &ldquo;best-efforts&rdquo; basis, meaning that we may raise substantially less than the total maximum
offering amounts. We will not provide any refund to investors if less than all of the securities are sold. We have incurred losses
in each year since our inception. Our net cash used in operating activities for the year ended December 31, 2015 was $ 1,861,000.
If we continue to use cash at this rate we will need significant additional financing, which we may seek to raise through, among
other things, public and private equity offerings and debt financing. Any equity financings will likely be dilutive to existing
stockholders, and any debt financings will likely involve covenants restricting our business activities. Additional financing
may not be available on acceptable terms, or at all. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>The ADSs are traded in small volumes,
limiting your ability to sell your ADSs that represent ordinary shares at a desirable price, if at all.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trading volume
of the ADSs has historically been low. Even if the trading volume of the ADSs increases, we can give no assurance that it will
be maintained or will result in a desirable stock price. As a result of this low trading volume, it may be difficult to identify
buyers to whom you can sell your ADSs in desirable volume and you may be unable to sell your ADSs at an established market price,
at a price that is favorable to you, or at all. A low volume market also limits your ability to sell large blocks of the ADSs at
a desirable or stable price at any one time. You should be prepared to own the ADSs indefinitely.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our stock price can be volatile,
which increases the risk of litigation and may result in a significant decline in the value of your investment.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trading price of
the ADSs representing our ordinary shares is likely to be highly volatile and subject to wide fluctuations in price in response
to various factors, many of which are beyond our control. These factors include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">developments
concerning our drug candidates;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">announcements of technological innovations by us or our competitors;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">introductions or announcements of new products by us or our competitors;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">developments in the markets of the field of activities and changes in customer attributes;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">announcements by us of significant acquisitions, in/out license transactions, strategic partnerships, joint ventures or capital commitments;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes in financial estimates by securities analysts;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">actual or anticipated variations in interim operating results and near-term working capital as well as failure to raise required funds for the continued development and operations of the company;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">expiration or termination of licenses, patents, research contracts or other collaboration agreements;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">conditions or trends in the regulatory climate and the biotechnology and pharmaceutical industries;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure to obtain orphan drug designation status for the relevant drug candidates in the relevant regions;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">increase in costs and lengthy timing of the clinical trials according to regulatory requirements;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">failure to increase awareness of our products;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes in reimbursement policy by governments or insurers in markets we operate or may operate in the future;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">any changes in the regulatory environment relating to our drug candidates;</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes in the market valuations of similar companies; and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">additions or departures of key personnel.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, equity
markets in general, and the market for biotechnology and life sciences companies in particular, have experienced extreme price
and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies traded in
those markets. These broad market and industry factors may materially affect the market price of the ADSs, regardless of our development
and operating performance. In the past, following periods of volatility in the market price of a company&rsquo;s securities, securities
class-action litigation has often been instituted against that company. Such litigation, if instituted against us, could cause
us to incur substantial costs to defend such claims and divert management&rsquo;s attention and resources even if we prevail in
the litigation, all of which could seriously harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Future issuances or sales of the
ADSs could depress the market for the ADSs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Future issuances of
a substantial number of the ADSs, or the perception by the market that those issuances could occur, could cause the market price
of our ordinary shares or ADSs to decline or could make it more difficult for us to raise funds through the sale of equity in the
future. Also, if we make one or more significant acquisitions in which the consideration includes ordinary shares or other securities,
your portion of shareholders&rsquo; equity in us may be significantly diluted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Concentration of ownership of our
ordinary shares among our principal stockholders may prevent new investors from influencing significant corporate decisions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> There are three
shareholders (Mr. Alexander Rabinovitch, Sabby Management LLC and Mr. David Bassa), who each beneficially hold more than 5% of
our outstanding ordinary shares (approximately 34% cumulative, as of November 4, 2016). As a result, these persons, either acting
alone or together, may have the ability to significantly influence the outcome of all matters submitted to our shareholders for
approval, including the election and removal of directors and any merger, consolidation or sale of all or substantially all of
our assets. In addition, such persons, acting alone or together, may have the ability to effectively control our management and
affairs. Accordingly, this concentration of ownership may depress the market price of our ordinary shares or ADSs. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding the
aforesaid, in connection with Section 239 of the Israeli Companies Law that focuses on the number of votes required to appoint
external directors, and in connection with Section 121(c) of the Israeli Companies Law that focuses on the number of votes required
to authorize the Chairman of the Board in a company to act also as the Chief Executive Officer of such company, we will deem these
three shareholders as controlling shareholders, for as long as such individuals are interested parties. In addition, any contractual
arrangement as detailed in Section 270 (4) of the Israeli Companies Law with any of these three shareholders and/or their relatives
will be presented for approval in accordance with the provisions of Section 275 of the Israeli Companies Law. In all of these situations,
we will consider any of these three parties, who are not part of the transaction presented for approval, as individual interested
parties in such transaction so that their vote will not be included in the quorum comprising a majority (50%) of the votes who
are not interested parties in such transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our ordinary shares and ADSs trade
on two different markets, and this may result in price variations and regulatory compliance issues.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ADSs representing our
ordinary shares are listed for trading on the Nasdaq Capital Market and our ordinary shares are traded on the TASE. Trading in
our securities on these markets is made in different currencies and at different times, including as a result of different time
zones, different trading days and different public holidays in the U.S. and Israel. Consequently, the effective trading prices
of our securities on these two markets may differ. Any decrease in the trading price of our securities on one of these markets
could cause a decrease in the trading price of our securities on the other market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Holders of our ordinary shares or
ADSs who are U.S. citizens or residents may be required to pay additional income taxes.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> There is a risk
that we will be classified as a passive foreign investment company, or PFIC, for certain tax years. If we are classified as a
PFIC, a U.S. holder of our ordinary shares or ADSs representing our ordinary shares will be subject to special federal income
tax rules that determine the amount of federal income tax imposed on income derived with respect to the PFIC shares. We will be
a PFIC if either 75% or more of our gross income in a tax year is passive income or the average percentage of our assets (by value)
that produce or are held for the production of passive income in a tax year is at least 50%. The risk that we will be classified
as a PFIC arises because cash balances, even if held as working capital, are considered to be assets that produce passive income.
Therefore, any determination of PFIC status will depend upon the sources of our income and the relative values of passive and
non-passive assets, including goodwill. A determination as to a corporation&rsquo;s status as a PFIC must be made annually. We
believe we may be a PFIC during 2015 and although we have not determined whether we will be a PFIC in 2016, or in any subsequent
year, our operating results for any such years may cause us to be a PFIC. Although we may not be a PFIC in any one year, the PFIC
taint remains with respect to those years in which we were or are a PFIC and the special PFIC taxation regime will continue to
apply. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In view of the complexity
of the issues regarding our treatment as a PFIC, U.S. shareholders are urged to consult their own tax advisors for guidance as
to our status as a PFIC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>As a foreign private issuer, we are
permitted to follow certain home country corporate governance practices instead of applicable SEC and Nasdaq requirements, which
may result in less protection than is accorded to investors under rules applicable to domestic issuers.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As a foreign private
issuer, we will be permitted to follow certain home country corporate governance practices instead of those otherwise required
under Nasdaq for domestic issuers. For instance, we may follow home country practice in Israel with regard to, among other things,
composition and function of the audit committee and other committees of our Board of Directors and certain general corporate governance
matters. In addition, in certain instances we will follow our home country law, instead of the Nasdaq, which requires that we
obtain shareholder approval for certain dilutive events, such as an issuance that will result in a change of control of the company,
certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions
of the stock or assets of another company. We comply with the director independence requirements of the Nasdaq, including the
requirement that a majority of the Board of Directors be independent. Following our home country governance practices as opposed
to the requirements that would otherwise apply to a United States company listed on Nasdaq may provide less protection than is
accorded to investors under Nasdaq applicable to domestic issuers. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In addition, as
a foreign private issuer, we are exempt from the rules and regulations under the U.S. Securities Exchange Act of 1934, as amended,
or the Exchange Act, related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders
are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition,
we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC
as frequently or as promptly as domestic companies whose securities are registered under the Exchange Act. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>ADS holders are not shareholders
and do not have shareholder rights.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Bank of New York
Mellon, as depositary, executes and delivers the ADSs on our behalf. Each ADS is a certificate evidencing a specific number of
ADSs. The ADS holders will not be treated as shareholders and do not have the rights of shareholders. The depositary will be the
holder of the shares underlying the ADSs. Holders of the ADSs will have ADS holder rights. A deposit agreement among us, the depositary
and the ADS holders, and the beneficial owners of ADSs, sets out ADS holder rights as well as the rights and obligations of the
depositary. New York law governs the deposit agreement and the ADSs. Our shareholders have shareholder rights prescribed by Israeli
law. Israeli law and our Articles of Association, or Articles, govern such shareholder rights. The ADS holders do not have the
same voting rights as our shareholders. Shareholders are entitled to our notices of general meetings and to attend and vote at
our general meetings of shareholders. At a general meeting, every shareholder present (in person or by proxy, attorney or representative)
and entitled to vote has one vote on a show of hands. Every shareholder present (in person or by proxy, attorney or representative)
and entitled to vote has one vote per fully paid ordinary share on a poll. This is subject to any other rights or restrictions
which may be attached to any shares. The ADS holders may instruct the depositary to vote the ordinary shares underlying their ADSs,
but only if we ask the depositary to ask for their instructions. If we do not ask the depositary to ask for their instructions,
the ADS holders are not entitled to receive our notices of general meeting or instruct the depositary how to vote. The ADS holders
will not be entitled to attend and vote at a general meeting unless they withdraw the ordinary shares from the depository. However,
the ADS holders may not know about the meeting far enough in advance to withdraw the ordinary shares. If we ask for the ADS holders&rsquo;
instructions, the depositary will notify the ADS holders of the upcoming vote and arrange to deliver our voting materials and form
of notice to them. The depositary will try, as far as is practical, subject to the provisions of the deposit agreement, to vote
the shares as the ADS holders instruct. The depositary will not vote or attempt to exercise the right to vote other than in accordance
with the instructions of the ADS holders. We cannot assure the ADS holders that they will receive the voting materials in time
to ensure that they can instruct the depositary to vote their shares. In addition, there may be other circumstances in which the
ADS holders may not be able to exercise voting rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ADS holders do
not have the same rights to receive dividends or other distributions as our shareholders. Subject to any special rights or restrictions
attached to a share, the directors may determine that a dividend will be payable on a share and fix the amount, the time for payment
and the method for payment (although we have never declared or paid any cash dividends on our ordinary stock and we do not anticipate
paying any cash dividends in the foreseeable future). Dividends and other distributions payable to our shareholders with respect
to our ordinary shares generally will be payable directly to them. Any dividends or distributions payable with respect to ordinary
shares will be paid to the depositary, which has agreed to pay to the ADS holders the cash dividends or other distributions it
or the custodian receives on shares or other deposited securities, after deducting its fees and expenses. The ADS holders will
receive these distributions in proportion to the number of shares their ADSs represent. In addition, there may be certain circumstances
in which the depositary may not pay to the ADS holders amounts distributed by us as a dividend or distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>There are circumstances where it
may be unlawful or impractical to make distributions to the holders of the ADSs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The deposit agreement
with the depositary allows the depositary to distribute foreign currency only to those ADS holders to whom it is possible to do
so. If a distribution is payable by us in New Israeli Shekels, the depositary will hold the foreign currency it cannot convert
for the account of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for
any interest. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, the ADS holders
may lose some of the value of the distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The depositary is not
responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. This means that
the ADS holders may not receive the distributions we make on our shares or any value for them if it is illegal or impractical for
the depository to make such distributions available to them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Your percentage ownership in us may
be diluted by future issuances of share capital, which could reduce your influence over matters on which shareholders vote.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the completion
of this offering, our board of directors will have the authority, in most cases without action or vote of our shareholders, to
issue all or any part of our authorized but unissued shares, including ordinary shares issuable upon the exercise of outstanding
warrants and options. Issuances of additional shares would reduce your influence over matters on which our shareholders vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>You will experience immediate dilution
in book value of any ADSs you purchase.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Because the price
per ADS being offered is substantially higher than our net tangible book value per ADS, you will suffer substantial dilution in
the net tangible book value of any ADS you purchase in this offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Management will have broad discretion
as to the use of the proceeds from this offering, and we may not use the proceeds effectively.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our management will
have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that you do
not agree with or that do not improve our results of operations or enhance the value of ADSs (see &ldquo;Use of Proceeds&rdquo;).
Our failure to apply these funds effectively could have a material adverse effect on our business and cause the price of the ADSs
to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>The Series B warrants are new
issues of securities with no established trading market.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Series B warrants
are each a new issue of securities with no established trading market. The Series B warrants will not be listed on any securities
exchange and we do not expect them to be quoted on any quotation system. A trading market for the Series B warrants is not expected
to develop, and even if a market develops it may not provide meaningful liquidity. The absence of a trading market or liquidity
for the Series B warrants may adversely affect their value. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>If all Series B Warrants were
immediately exercised, you would experience immediate dilution in the net-tangible book value per ADS you purchase or the ADSs
you receive upon exercise of the Series B warrants </I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The assumed public
offering price per share of our ADSs in this offering is substantially higher than the book value per share of our ADSs. However,
the offering also includes pre-funded Series B warrants with an aggregate purchase price together with the accompanying series
A warrants of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, which effectively will
increase the net-tangible book value per ADS. As a result, while investors purchasing ADSs in this offering will experience an
immediate increase of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share in the net tangible book value of the ADSs purchased,
based on an assumed public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share, if all of the series
B warrants are exercised in full today, investors in the offering would suffer immediate and substantial dilution per share in
the net-tangible book value of the ADSs purchased or received upon exercise of the Series B warrants. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Risks Relating to Operations in Israel</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Conditions in the Middle East and
in Israel may harm our operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> Our head executive
office, our research and development facilities, as well as some of our planned clinical sites are or will be located in Israel.
Our officers and most of our directors are residents of Israel. Accordingly, political, economic and military conditions in Israel
and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in
1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel
or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and
results of operations. In recent years, the hostilities involved missile strikes against civilian targets in various parts of
Israel, including areas in which our employees and some of our consultants are located, and negatively affected business conditions
in Israel. Our offices, located in Raanana, Israel, are within the range of the missiles and rockets that have been fired sporadically
at Israeli cities and towns from Gaza and South Lebanon since 2006, with escalations in violence during which there were a substantially
larger number of rocket and missile attacks aimed at Israel. In addition, since February 2011, Egypt has experienced political
turbulence and an increase in terrorist activity in the Sinai Peninsula. Such political turbulence and violence may damage peaceful
and diplomatic relations between Israel and Egypt, and could affect the region as a whole. Similar civil unrest and political
turbulence has occurred in other countries in the region, including Syria, Lebanon and Jordan which share common borders with
Israel, and is affecting the political stability of those countries. This instability and any outside intervention may lead to
deterioration of the political and economic relationships that exist between the State of Israel and some of these countries,
and may have the potential for causing additional conflicts in the region. In addition, Iran has threatened to attack Israel and
is widely believed to be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in
the region, such as Hamas in Gaza, Hezbollah in Lebanon, and various rebel militia groups in Syria. Additionally, a violent jihadist
group named Islamic State of Iraq and Levant (IS or ISIL or ISIS) is involved in hostilities in Iraq, Syria and other countries
and has been growing in influence. Although ISIL&rsquo;s activities have not directly affected the political and economic conditions
in Israel, ISIL&rsquo;s stated purpose is to take control of the Middle East, including Israel. Since September 2015, there has
been an increase in terrorist attacks on Israeli civilians including shootings, stabbings and car rammings which has impacted
the general feeling of personal safety in the country. These situations may potentially escalate in the future to more violent
events which may affect Israel and us. Any armed conflicts, terrorist activities or political instability in the region could
adversely affect business conditions, could harm our results of operations and could make it more difficult for us to raise capital.
Parties with whom we do business may decline to travel to Israel during periods of heightened unrest or tension, forcing us to
make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and
security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that
they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.
Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still
restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse
impact on our operating results, financial condition or the expansion of our business. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our commercial insurance
does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Although
the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts
of war, we cannot assure you that this government coverage will be maintained. Any losses or damages incurred by us could have
a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect
business conditions and could harm our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, the State
of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict business with the
State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results,
financial condition or the expansion of our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Our results of operations may be
adversely affected by inflation and foreign currency fluctuations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We hold most of our
cash, cash equivalents and bank deposits in U.S. dollars. As we are located in Israel, a significant portion of our expenses are
in New Israeli Shekels, or NIS, mainly due to payment to Israeli employees and suppliers. As a result, we could be exposed to the
risk that the U.S. dollar will be devalued against the NIS or other currencies, and consequentially our financial results could
be harmed. To protect against currency fluctuations we may decide to hold a significant portion of our cash, cash equivalents,
bank deposits and marketable securities in NIS, as well as to enter into currency hedging transactions. These measures, however,
may not adequately protect us from the adverse effects of inflation in Israel. In addition, we are exposed to the risk that the
rate of inflation in Israel will exceed the rate of devaluation of the New Israeli Shekel in relation to the U.S. dollar or that
the timing of any devaluation may lag behind inflation in Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Provisions of Israeli law may delay,
prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when
the terms of such a transaction are favorable to us and our shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Israeli corporate law
regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for
transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these
types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date that a merger
proposal was filed by each merging company with the Israel Registrar of Companies and at least 30 days from the date that the shareholders
of both merging companies approved the merger. In addition, the holder of a majority of each class of securities of the target
company must approve a merger. Moreover, a full tender offer can only be completed if the acquirer receives at least 95% of the
issued share capital (provided that a majority of the offerees that do not have a personal interest in such tender offer shall
have approved the tender offer, except that if the total votes to reject the tender offer represent less than 2% of the company&rsquo;s
issued and outstanding share capital, in the aggregate, approval by a majority of the offerees that do not have a personal interest
in such tender offer is not required to complete the tender offer), and the shareholders, including those who indicated their acceptance
of the tender offer, may, at any time within six months following the completion of the tender offer, petition the court to alter
the consideration for the acquisition (unless the acquirer stipulated in the tender offer that a shareholder that accepts the offer
may not seek appraisal rights).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, Israeli
tax considerations may make potential transactions unappealing to us or to those of our shareholders whose country of residence
does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, Israeli tax law does not recognize
tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in
certain circumstances but makes the deferral contingent on the fulfillment of numerous conditions, including a holding period of
two years from the date of the transaction during which sales and dispositions of shares of the participating companies are restricted.
Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the
tax becomes payable even if no actual disposition of the shares has occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These and other similar
provisions could delay, prevent or impede an acquisition of us or our merger with another company, even if such an acquisition
or merger would be beneficial to us or to our shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>It may be difficult to enforce a
U.S. judgment against us, our officers or our directors or to assert U.S. securities law claims in Israel.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Service of process
upon us, since we are incorporated in Israel, and upon our directors and officers, who reside outside the U.S., may be difficult
to obtain within the U.S. In addition, because substantially all of our assets and most of our directors and officers are located
outside the U.S., any judgment obtained in the U.S. against us or any of our directors and officers may not be collectible within
the U.S. There is a doubt as to the enforceability of civil liabilities under the Securities Act or the Exchange Act pursuant to
original actions instituted in Israel. Subject to particular time limitations and provided certain conditions are met, executory
judgments of a U.S. court for monetary damages in civil matters may be enforced by an Israeli court.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Under applicable
U.S. and Israeli law, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors
from benefiting from the expertise of some of our former employees. In addition, employees may be entitled to seek compensation
for their inventions irrespective of their agreements with us, which in turn could impact our future profitability.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We generally enter
into non-competition agreements with our employees and key consultants. These agreements prohibit our employees and key consultants,
if they cease working for us, from competing directly with us or working for our competitors or clients for a limited period of
time. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be
difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed
while working for us. For example, Israeli courts have required employers seeking to enforce non-compete undertakings of a former
employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests
of the employer which have been recognized by the courts, such as the secrecy of a company&rsquo;s confidential commercial information
or the protection of its intellectual property. If we cannot demonstrate that such interests will be harmed, we may be unable to
prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive
may be diminished.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, Chapter
8 to the Israeli Patents Law, 5727-1967, or the Patents Law, deals with inventions made in the course of an employee&rsquo;s service
and during his or her term of employment, whether or not the invention is patentable, or service inventions. Section 134 of the
Patents Law, sets forth that if there is no agreement which explicitly determines whether the employee is entitled to compensation
for the service inventions and the extent and terms of such compensation, such determination will be made by the Compensation and
Rewards Committee, a statutory committee of the Israeli Patents Office. As a result, it is unclear if, and to what extent, our
research and development employees may be able to claim compensation with respect to our future revenue. As a result, we may receive
less revenue from future products if such claims are successful, which in turn could impact our future profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Your rights and
responsibilities as a shareholder will be governed by Israeli law which may differ in some respects from the rights and responsibilities
of shareholders of U.S. companies.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are incorporated
under Israeli law. The rights and responsibilities of the holders of our ordinary shares and ADSs are governed by our Articles
of Association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities
of shareholders in typical U.S.-based corporations. In particular, a shareholder of an Israeli company has a duty to act in good
faith toward the company and other shareholders and to refrain from abusing its power in the company, including, among other things,
in voting at the general meeting of shareholders on matters such as amendments to a company&rsquo;s articles of association, increases
in a company&rsquo;s authorized share capital, mergers and acquisitions and interested party transactions requiring shareholder
approval. In addition, a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or to
appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company.
There is limited case law available to assist us in understanding the implications of these provisions that govern shareholders&rsquo;
actions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares
and ADSs that are not typically imposed on shareholders of U.S. corporations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B><A NAME="a_005"></A>SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain matters discussed
in this prospectus, including matters discussed under the caption &ldquo;Management&rsquo;s Discussion and Analysis of Financial
Condition and Results of Operations,&rdquo; may constitute forward-looking statements for purposes of the Securities Act of 1933,
as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act, and involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially
different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words
&ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;estimate,&rdquo; &ldquo;may,&rdquo; &ldquo;expect&rdquo; and similar expressions
are generally intended to identify forward-looking statements. Our actual results may differ materially from the results anticipated
in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions
&ldquo;Risk Factors,&rdquo; &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
in this prospectus, and any documents incorporated by reference herein, as well as other factors which may be identified from time
to time in our other filings with the Securities and Exchange Commission, or the SEC, or in the documents where such forward-looking
statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety
by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</td>
    <TD STYLE="width: 0.5in"><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">fluctuations in the market price of our securities;</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the possibility that our securities could be delisted from Nasdaq or the Tel-Aviv Stock Exchange, or TASE;</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">potential dilution to the holders of our securities as a result of future issuances of our securities;</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">fluctuations in our results of operations;</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the accuracy of our financial forecasts in our drug development activity and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives;</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the timing and cost of the in-licensing, partnering and acquisition of new product opportunities;</font></td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </td>
    <TD> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </td>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the timing of
    expenses associated with product development and manufacturing of the proprietary drug candidates that we have acquired &mdash;
    hCDR1 for the treatment of SLE and rHuEPO for the treatment of multiple myeloma, and those that may be in-licensed, partnered
    or acquired;</FONT> </td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and</font></td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD><font style="font-family: Symbol; font-size: 10pt">&middot;</font></td>
    <TD STYLE="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">other risks and uncertainties described in this prospectus.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The forward-looking
statements contained in this prospectus reflect our views and assumptions only as of the date of this prospectus. Except as required
by law, we assume no responsibility for updating any forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We qualify all of our
forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements,
we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_006"></A>EXCHANGE RATE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of November
4, 2016, the daily representative exchange rate of NIS per U.S. dollars was 3.807. The following table sets forth information
regarding the exchange rates of NIS per U.S. dollars for the periods indicated. Average rates are calculated by using the daily
representative rates as reported by the Bank of Israel on the last day of each month during the periods presented. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> NIS per U.S. $ </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Year Ended December 31, </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Average </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Period End </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: justify"> 2015 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 4.053 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.761 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.884 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.902 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.994 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.402 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.578 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.889 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.791 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.471 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.609 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.471 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2012 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.084 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.700 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.858 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.733 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> 2011 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.821 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.363 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.579 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.821 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> NIS per U.S. $ </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid"> Six months Ended June 30, </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Average </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Period End </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: justify"> 2016 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.983 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.746 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.864 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.846 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.053 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.761 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.908 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.769 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> NIS per U.S. $ </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Month Ended </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Average </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Period End </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: justify"> November 2016 (through November 4, 2016) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.827 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.807 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.815 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.807 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> October 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.856 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.788 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.822 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.849 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> September 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.786 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.746 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.765 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.758 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> August 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.829 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.754 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.795 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.786 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> July 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.895 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.828 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.857 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.828 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> June 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.900 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.818 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.857 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.846 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> May 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.879 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.746 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.814 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.850 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_007"></A>PRICE RANGE OF OUR
ORDINARY SHARES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our ordinary shares
have been trading on the Tel Aviv Stock Exchange, or TASE, since July 2005. Our ordinary shares currently trade on the TASE under
the symbol &ldquo;XTLB&rdquo;. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The following table
sets forth, for the periods indicated, the high and low closing prices of our ordinary shares on the TASE. For comparative purposes
only, we have also provided such figures translated into U.S. Dollars at an exchange rate of 3.807 NIS per U.S. Dollar, as of
November 4, 2016 according to the Bank of Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> NIS </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> U.S. dollar ($) </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Price Per Ordinary
    Share </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Price Per Ordinary
    Share </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify"> Annual: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 48%; text-align: justify"> 2015 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.484 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.291 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.120 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.075 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.750 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.315 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.193 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.081 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.348 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.383 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.346 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.098 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> 2012 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.675 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.521 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.430 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.134 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2011 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.950 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.414 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.244 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.106 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> Quarterly: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Fourth Quarter of 2016 (through November 4, 2016) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.181 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.162 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.048 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.043 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Third Quarter of 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.250 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.194 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.065 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.056 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Second Quarter 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.241 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.196 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.064 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.050 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> First Quarter 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.324 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.230 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.082 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.059 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Fourth Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.358 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.291 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.092 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.075 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Third Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.388 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.301 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.100 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.077 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Second Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.470 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.369 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.121 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.095 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> First Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.484 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.369 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.124 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.095 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Fourth Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.523 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.315 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.134 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.081 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Third Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.580 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.338 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.149 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.087 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Second Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.750 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.473 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.193 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.121 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> First Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.733 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.469 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.188 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.120 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> Most Recent Six Months: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> November 2016 (through November 4, 2016) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.166 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.162 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.043 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.043 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> October 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.181 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.164 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.048 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.043 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> September 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.209 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.194 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.051 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.056 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> August 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.245 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.201 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.064 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.053 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> July 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.250 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.197 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.065 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.050 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> June 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.215 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.196 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.055 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.050 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> May 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.223 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.200 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.059 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.051 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> November 4, 2016,
the last reported sales price of our ordinary shares on the TASE was NIS 0.163 per share, or $ 0.043 per share. On November 4,
2016, the exchange rate of the NIS to the dollar was $1.00 = NIS 3.807 as reported by the Bank of Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_008"></A>PRICE RANGE OF ADSs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On June 1, 2012,
we filed an application for relisting its ADSs on the Nasdaq Stock Exchange. On July 10, 2013, we received a notice from Nasdaq
stating that the admission committee had approved our application to relist its ADSs for trading on the Nasdaq Capital Market.
Accordingly, on July 15, 2013, the ADSs began trading on the Nasdaq Capital Market under the ticker symbol &ldquo;XTLB&rdquo;. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The following table
presents, for the periods indicated, the high and low market closing prices for the ADSs as reported on the Pink Sheets from 2011
until July 14, 2013, and on Nasdaq from July 15, 2013 to the present. For convenience of the readers of this <I>prospectus</I>,
the data below was adjusted so that all the quotes of the ADS price would represent the current ADS-NIS 0.1 par value ordinary
share ratio, meaning 1:20. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S.$ </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Price Per ADS </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; width: 74%; text-align: justify"> Annual: </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 10%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 10%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.60 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.41 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.95 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.59 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7.42 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.24 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> 2012 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8.50 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.00 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> 2011 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5.40 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.00 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> Quarterly: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Fourth Quarter 2016 (through November 4, 2016) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.97 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.75 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Third Quarter 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.29 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.91 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Second Quarter 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.28 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.87 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> First Quarter 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.50 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.03 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Fourth Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.96 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.45 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Third Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.00 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.60 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Second Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.44 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.90 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> First Quarter 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.60 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.88 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Fourth Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.38 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.59 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Third Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.50 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.70 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Second Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.95 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.48 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> First Quarter 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.30 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.73 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> Most Recent Six Months: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> November 2016 (through November 4, 2016) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.81 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.75 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> October 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.97 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.82 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> September 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.04 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.91 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> August 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.27 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.97 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> July 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.21 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.05 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> June 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.28 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.00 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> May 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.06 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.87 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> April 2016 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.15 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.01 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On November 4,
2016, the last reported sales price of the ADSs on the Nasdaq Capital Market was $0.81 per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of November
4, 2016, we had 4,481,203 ADSs outstanding. One ADS represents twenty ordinary shares. See &ldquo;Description of Share Capital&rdquo;
for a description of the rights attaching to the ADSs. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_009"></A>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We estimate that
the net proceeds to us from this offering will be approximately $ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, from the sale of
$_____ million of the securities offered by us in this offering, after deducting estimated Placement Agent&rsquo;s fees and commissions
and estimated offering expenses payable by us. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We intend to use the
net proceeds from this offering to continue the development of hCDR1, and also for working capital and general corporate purposes.
The amounts and schedule of our actual expenditures will depend on multiple factors including the progress of our clinical development
and regulatory efforts, the status and results of the clinical trials, the pace of our partnering efforts in regards to manufacturing
and commercialization and the overall regulatory environment. Therefore, our management will retain broad discretion over the use
of the proceeds from this offering. We may ultimately use the proceeds for different purposes than what we currently intend. Pending
any ultimate use of any portion of the proceeds from this offering, if the anticipated proceeds will not be sufficient to fund
all the proposed purposes, our management will determine the order of priority for using the proceeds, as well as the amount and
sources of other funds needed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_010"></A>DIVIDEND POLICY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have never declared
or paid cash dividends to our shareholders. Currently we do not intend to pay cash dividends. We intend to reinvest any earnings
in developing and expanding our business. Any future determination relating to our dividend policy will be at the discretion of
our board of directors and will depend on a number of factors, including future earnings, our financial condition, operating results,
contractual restrictions, capital requirements, business prospects, applicable Israeli law and other factors our board of directors
may deem relevant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_011"></A>CAPITALIZATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The following table
sets forth our cash and cash equivalents and capitalization as of June 30, 2016: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">on
an actual basis; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.75in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">on
                                         an as adjusted basis to also give effect to: our sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs
                                         in this offering (assuming for this purpose, a sale of only ADSs with accompanying Series
                                         A warrants to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs) at an assumed public
                                         offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per ADS, which was the last reported
                                         sale price of the ADSs on the NASDAQ Capital Market on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
                                         2016.</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">You should
read this table in conjunction with &ldquo;Selected Financial Data,&rdquo; &ldquo;Management&rsquo;s Discussion and Analysis of
Financial Condition and Results of Operations&rdquo; and our financial statements and related notes included elsewhere in this
prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
    30, 2016 (unaudited)</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(in thousands,
    except share data)</B></FONT> </TD><TD NOWRAP STYLE="font-weight: bold; text-align: center"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> Actual </TD><TD NOWRAP STYLE="font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; text-align: center"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> As Adjusted </TD><TD NOWRAP STYLE="font-weight: bold; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; text-align: left"> Cash and cash equivalents </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 2,605 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Stockholders&rsquo; equity: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> Ordinary shares, NIS 0.1 par value per share, 700,000,000 shares authorized; 274,205,799 shares actual and ____________
    shares as adjusted, issued and outstanding </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,624 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Additional paid-in capital </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 150,784 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Reserve for AFS financial assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 111 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Reserve from transactions with non-controlling interests </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Accumulated deficit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (153,460 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Total stockholders&rsquo; equity </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,079 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Total capitalization </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,337 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif">A
$1.00 increase (decrease) in the assumed public offering price of $[______] per ADS, would increase (decrease) the as adjusted
amount of each of cash and cash equivalents and total shareholders' equity by approximately $ [______] million, assuming that
the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated
Placement Agent&rsquo;s fees and commissions and estimated offering expenses payable by us. A [100,000] ADS increase in the number
of ADSs offered by us together with a concomitant $1.00 increase in the assumed public offering price of $[______] per ADS would
increase our as adjusted cash and cash equivalents by approximately $[______] million after deducting estimated Placement Agent&rsquo;s
fees and estimated offering expenses payable by us. Conversely, a [100,000] ADS decrease in the number of ADSs offered by us together
with a concomitant $1.00 decrease in the assumed public offering price of $[______] per ADS would decrease our as adjusted cash
and cash equivalents by approximately $[______] million after deducting estimated Placement Agent fees and estimated offering
expenses payable by us. </FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The number of ordinary
shares that will be outstanding immediately after this offering is based on 274,205,799 ordinary shares outstanding as of November
4, 2016. This number excludes, as of such date: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19,222,220
                                         ordinary shares represented by 961,111 ADSs issuable upon the exercise of warrants at
                                         a weighted average exercise price of $2.29;</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,390,000
                                         ordinary shares issuable upon the exercise of stock options at a weighted average exercise
                                         price of $0.56 per share;</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,280,000
                                         ordinary shares reserved for future issuances under our stock option and incentive plans;</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> ordinary shares represented by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs issuable upon the
    exercise of Series A warrants at an exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;per share issued in this offering; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: justify"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> ordinary shares represented by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs issuable upon the
    exercise of Series B warrants at an exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;per share issued in this offering; and </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: justify"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> ordinary shares underlying the ADS purchase warrant to be issued to the Placement Agent
    in connection with this offering, at an exercise price per share equal to % of the public offering price. </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;<B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_012"></A>DILUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you purchase ADSs
in this offering, your ownership interest in us will be diluted to the extent of the difference between the public offering price
per ADSs you will pay in this offering and the pro forma net tangible book value per ADS after this offering. Dilution results
from the fact that the per public offering price per ordinary shares is substantially in excess of the book value per ordinary
share attributable to the existing shareholders for our presently outstanding ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"> The information below assumes only&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ADSs and Series A warrants to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADSs
are sold in this offering and excludes the proceeds, if any, from the exercise of warrants issued in this offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our historical
net tangible book value as of June 30, 2016, was approximately $2.98 million, corresponding to a net tangible book value of $0.011
per ordinary share or $0.22 per ADS (using the ratio of 20 ordinary shares to one ADS), as of such date. We calculate our historical
net tangible book value per share or per ADS by taking the amount of our total tangible assets, subtracting the amount of our
total liabilities, and then dividing the difference by the actual total number of ordinary shares or ADSs outstanding, as applicable. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The pro forma as
adjusted net tangible book value per share as of June 30, 2016 was $[___] per ordinary share or $[__] per ADS (using the ratio
of 20 ordinary shares to one ADS). The pro forma as adjusted net tangible book value per share gives effect to the sale and issuance
of the ADSs in this offering at an offering price of $[__] per ADS, which reflects the last reported sale price of _____ of our
ordinary shares on the NASDAQ Capital Market on November ____, 2016, after deducting Placement Agent&rsquo;s fees and commissions
and estimated offering expenses payable by us. The pro forma as adjusted net tangible book value per share after the offering
is calculated by dividing the pro forma net tangible book value of $[______], by [_____], which is equal to our pro forma issued
and outstanding ordinary shares. The difference between the public offering price and the pro forma net tangible book value per
share represents an immediate increase in the net tangible book value of $[___] per ordinary share or $[___] per ADS to existing
shareholders and immediate dilution of $[___], per share to new investors purchasing the ADSs in this offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
illustrates this dilution on a per share basis:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; width: 74%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assumed
    public offering price per ADS</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right; width: 10%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NIS</FONT> </TD><TD STYLE="text-align: left; width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT> </TD><TD STYLE="text-align: right; width: 10%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT> </TD><TD STYLE="text-align: left; width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Actual net tangible book value per ADS as
    of June 30, 2016</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Increase
    in net tangible book value per share attributable to purchasers purchasing ADSs in this offering</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pro
    forma net tangible book value per share of ADSs, as adjusted to give effect to this offering</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dilution per ADS
    to purchasers in this offering</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NIS</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> A $1.00 increase
(decrease) in the assumed initial public offering price of $ [___] per ADS would increase (decrease) our pro forma net tangible
book value per ADS after this offering by $ [___] and the dilution per ADS to new investors by $[___], assuming the number of
ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated Placement
Agent&rsquo;s fees and commissions and estimated offering expenses payable by us. We may also increase or decrease the number
of ADSs we are offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To the extent that
any options or warrants are exercised, new options are issued under our equity incentive plans or we otherwise issue additional
ordinary shares of ADSs in the future at a price less than the public offering price, there will be further dilution to new investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_013"></A>MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDITION AND RESULTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>You should read
the following discussion along with our financial statements and the related notes included in this prospectus. The following discussion
contains forward-looking statements that are subject to risks, uncertainties and assumptions, including those discussed under &ldquo;Risk
Factors.&rdquo; Our actual results, performance and achievements may differ materially from those expressed in, or implied by,
these forward-looking statements. See &ldquo;Special Note Regarding Forward-Looking Statements.&rdquo; We have prepared our financial
statements in accordance with IFRS, as issued by the IASB.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We are a biopharmaceutical
company engaged in the acquisition and development of pharmaceutical drugs for the treatment of autoimmune diseases. Our current
drug development program is focused on the development of hCDR1 for the treatment of SLE. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We were established
as a corporation under the laws of Israel in 1993, and commenced operations to use and commercialize technology developed at the
Weizmann Institute, in Rehovot, Israel. Since commencing operations, our activities have been primarily devoted to developing our
technologies and drug candidates, acquiring pre-clinical and clinical-stage compounds, raising capital, purchasing assets for our
facilities, and recruiting personnel. We have had no drug product sales to date. Our major sources of working capital have been
proceeds from various private and public offerings of our securities and option and warrant exercises.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have incurred negative
cash flow from operations each year since our inception and we anticipate incurring negative cash flows from operating activities
for the foreseeable future. We have spent, and expect to continue to spend, substantial amounts in connection with implementing
our business strategy, including our planned product development efforts, our clinical trials, and potential in-licensing and acquisition
opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our research and
development expenses primarily consisted of expenses related to the hCDR1 development plan. As part of the preparations for future
clinical trials of hCDR1, we engaged regulatory and clinical consultants and commenced work on Chemistry, Manufacturing and Control,
or CMC, including production and testing of the drug substance. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our general and administrative
expenses consist primarily of salaries, consultant fees, and related expenses for executive, finance and other administrative personnel,
professional fees, director fees and other corporate expenses, including investor relations, business development costs and facilities
related expenses. We expense our general and administrative expenses as incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our results of operations
include non-cash compensation expense as a result of the grants of XTL stock options. Compensation expense for awards of options
granted to employees and directors represents the fair value of the award (measured using the Black-Scholes valuation model) recorded
over the respective vesting periods of the individual stock options (see details below.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> For awards of options
and warrants to consultants and other third-parties, according to IFRS 2, the treatment of such options and warrants is the same
as employee options compensation expense (see note 17 to the consolidated financial statements for the year ended December 31,
2015). We record compensation expense based on the fair value of the award at the grant date according to the Black-Scholes valuation
model. According to the IFRS 2, in non-performance-based options, we recognize options expenses using the graded vesting method
(accelerated amortization). Graded vesting means that portions of a single option grant will vest on several dates, equal to the
number of tranches. We treat each tranche as a separate share option grant; because each tranche has a different vesting period,
and hence the fair value of each tranche is different. Therefore, under this method the compensation cost amortization is accelerated
to earlier periods in the overall vesting period. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our planned clinical
trials will be lengthy and expensive. Even if these trials show that our drug candidates are effective in treating certain indications,
there is no guarantee that we will be able to record commercial sales of any of our product candidates in the near future or generate
licensing revenues from upfront payments associated with out-licensing transactions. In addition, we expect losses in our drug
development activity to continue as we continue to fund development of our drug candidates. As we continue our development efforts,
we may enter into additional third-party collaborative agreements and may incur additional expenses, such as licensing fees and
milestone payments. As a result, our periodical results may fluctuate and a period-by-period comparison of our operating results
may not be a meaningful indication of our future performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Results of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Six months ended June 30, 2016 compared to the six months
ended June 30, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Research and
development expenses.</I> Research and development expenses for the six months ended June 30, 2016 were $355,000 compared to $111,000
for the same period in 2015. The increase in expenses in 2016 compared to 2015 for this period is mainly due to our focus on preparing
hCDR1 for an upcoming clinical trial including regulatory and consulting services and the completion of production and testing
of the drug product. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>General and
administrative expenses</I> . General and administrative expenses for the six months ended June 30, 2016 were $0.7 million, showing
no change from the general and administrative expenses for the same period in 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Financial income,
net.</I> Financial income, net for the six months ended June 30, 2016 was $14,000 compared to financial expense, net of $(186,000)
in the six months ended June 30, 2015. The increase in financial income, net, was mainly due to changes in fair value in 2015
of marketable securities held in InterCure, a former subsidiary. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Loss from continuing
operations,.</I> Loss from continuing operations for the six months ended June 30, 2016 was $1.1 million, in line with the loss
from continuing operations for the same period last year. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Total loss</I>,
Total loss for the six months ended June 30, 2016 was $1.1 million compared to a total loss of $1.5 million for the six months
ended June 30, 2015. The loss from discontinued operations for the six months ended June 30, 2015 relates to losses from our investment
in InterCure, a former subsidiary. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Year ended December 31, 2015 compared to the year
ended December 31, 2014</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Research and
Development Expenses</I>. Research and development expenses in the years ended December 31, 2015 and 2014 totaled approximately
$578 thousand and $278 thousand, respectively. Research and development expenses are comprised mainly of expenses related to preparations
for initiating the phase 2 clinical trials planned for the hCDR1 drug designed to treat SLE patients. The increase in expenses
in 2015 compared to 2014 is mainly due to expenses related to our hCDR1 drug. Expenses incurred in 2015 include, among other things,
chemistry, manufacturing and control (CMC) costs for production of the drug substance and drug product, as well as clinical and
regulatory consulting fees related to the preparation and submission to the U.S. FDA of our pre-IND meeting package for our planned
clinical study of the hCDR1 drug for the treatment of SLE patients. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>General and
Administrative Expenses</I>. General and administrative expenses for the years ended December 31, 2015 and 2014 totaled approximately
$1,419 thousand and $1,744 thousand, respectively. The decrease in 2015 compared to 2014 is mainly due to the Company's efforts
to reduce overhead costs as well as lower share-based compensation expenses. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Impairment of
intangible assets.</I> The Company is required to determine, on an annual basis and as of year-end, whether the fair value of
its unamortized intangible assets exceeds their book value. As of December 31, 2015, the Company recognized an impairment in the
amount of $1,604 thousand with regard to the rHuEPO intangible asset. For further information, see note 11 of the financial statements
for the year ended December 31, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Finance expenses,
net</I>. Finance expenses, net for the years ended December 31, 2015 and 2014 totaled approximately $11 thousand and $97 thousand,
respectively. The decrease in finance expenses in 2015 compared to 2014 derives mainly from a reduced exposure to NIS/USD exchange
rate fluctuations due to lower NIS cash balances in 2015 compared to 2014. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Total loss from
discontinued operations</I>. Total loss from discontinued operations of approximately $689 thousand and $746 thousand, is derived
from the Company&rsquo;s investment in InterCure, a former subsidiary. Such loss for the year ended December 31, 2015 represents
a loss from the deconsolidation of InterCure. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Income Taxes.
</I>We had no income tax expense for the years ended December 31, 2015 and 2014 due to losses incurred and we did not recognize
any deferred tax benefits, since it is not &ldquo;more likely than not&rdquo; that we will be able to generate profits in the
future to realize the deferred taxes. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Years Ended December 31, 2014 and 2013</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Research and Development
Expenses</I>. Research and development expenses in the years ended December 31, 2014 and 2013 totaled approximately $278,000 and
$82,000, respectively. Research and development expenses are comprised mainly of expenses related to preparations for initiating
the phase 2 clinical trials of the hCDR1 and, to a lesser extent, rHuEPO drugs designed to treat SLE and multiple myeloma patients,
respectively. The increase in expenses in 2014 compared to 2013 is mainly due to expenses related to our hCDR1 drug, in-licensed
in January 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>General and Administrative
Expenses</I>. General and administrative expenses for the years ended December 31, 2014 and 2013 totaled approximately $1,744,000
and $1,329,000, respectively. The increase in 2014 compared to 2013 is mainly due to a $0.5 million reversal of expenses in 2013
due to forfeitures of stock options by a director who resigned from the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Finance income
(expenses), net</I>. Finance income (expenses), net for the years ended December 31, 2014 and 2013 totaled approximately ($97,000)
and $59,000, respectively. The decrease in finance income in 2014 compared to 2013 derives mainly from an increase in the NIS/USD
exchange rate during 2014. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Total loss from
discontinued operations</I>. Total loss from discontinued operations totaled approximately $746,000 and $2,575,000, and represents
InterCure&rsquo;s net results for the years ended December 31, 2014 and 2013, respectively. Such loss in 2013 includes an impairment
of $1.7 million in intangible assets recognized in the acquisition of InterCure in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Income Taxes.</I>
We had no income tax expense for the years ended December 31, 2014 and 2013 due to losses incurred and we did not recognize any
deferred tax benefits, since it is not &ldquo;more likely than not&rdquo; that we will be able to generate profits in the future
to realize the deferred taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Significant Accounting Policies and Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We describe our
significant accounting policies more fully in Note 2 to our consolidated financial statements for the year ended December 31,
2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Basis of presentation
of the financial statements.</I> The financial statements of the Company and its subsidiaries (the &ldquo;<B>Group</B>&rdquo;)
as of December 31, 2015 and 2014, and for each of the three years in the period ended December 31, 2015 have been prepared in
accordance with International Financial Reporting Standards which are standards and interpretations issued by the International
Accounting Standards Board (&ldquo;<B>IFRS</B>&rdquo;). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The significant
accounting policies described below are consistent with those of all periods presented, unless indicated otherwise. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The preparation
of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the
Company&rsquo;s management to exercise its judgment in the process of applying the Group&rsquo;s accounting policies. The areas
that involve judgment which has significant effect or complexity or where assumptions and estimates are significant to the consolidated
financial statements are disclosed in Note 3 to the annual consolidated financial statements. Actual results could significantly
differ from the estimates and assumptions used by the Group&rsquo;s management. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company analyzes
the expenses recognized in the statement of comprehensive loss by classification based on the function of expense. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Subsidiaries consolidation and business
combinations</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The consolidated
financial statements include the accounts of the Company and entities controlled by the Company. Control exists when the Company
has the power over the investee, has exposure, or rights, to variable returns from involvement in the investee, and has the ability
to use its power over the investee to affect its returns. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company examines
whether it controls another entity even when it does not hold more than 50% of the voting rights, but can control the entity&rsquo;s
financial and operating policies by de-facto control. De-facto control can be created under circumstances in which the ratio of
the Company&rsquo;s voting rights in the entity to the percentage and dispersion of the holdings of the other shareholders grants
the Company the power to control the entity&rsquo;s financial and operating policies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Subsidiaries are
fully consolidated starting from the date on which control therein is attained by the Company. Their consolidation ceases when
such control is discontinued. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Intra-group balances
and transactions, including revenues, expenses and dividends in respect of transactions between the Group companies, are eliminated.
Gains and losses arising from intra-group transactions that have been recognized as assets (such as inventories and property,
plant and equipment) are also eliminated. Such intra-group losses may point to the impairment of assets which is tested and accounted
for as specified below. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Transactions with
non-controlling interests in subsidiaries which do not result in loss of control in the subsidiaries are accounted for as transactions
with owners. In these transactions, the difference between the fair value of any consideration paid or received and the amount
of adjustment of the non-controlling interests to reflect the changes in their relative rights in the subsidiaries is directly
recognized in equity and attributed to the equity holders of the parent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Associate</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> An associate is
an entity over which the Group exercises significant influence, but not control, which is usually expressed in holding 20%-50%
of the voting rights. The investment in an associate is presented using the equity method of accounting. According to the equity
method of accounting, the investment is initially recognized at cost and its carrying amount varies to the extent that the Group
recognizes its share of the associate&rsquo;s earnings or losses from the acquisition date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Group&rsquo;s
share in the earnings or losses of associates after the acquisition date is carried to profit or loss and its share in the other
comprehensive income movements after the acquisition date is carried to other comprehensive income against the carrying amount
of the investment. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Intangible assets</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Brand
                                         name and technology:</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"> Brand name and technology
acquired in a business combination are recognized at fair value on the acquisition date. Brand name and technology have a finite
useful life and are presented at cost net of accumulated amortization and impairment losses. The amortization is calculated using
the straight-line method over the expected useful life (9-10 years). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
                                         software:</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"> Acquired licenses to use
computer software are capitalized based on costs incurred in acquiring the specific software and preparing it for use. These costs
are amortized using the straight-line method over the estimated useful life (five years). Costs relating to computer software
upkeep are recognized as expenses as incurred. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unamortized
                                         intangible assets (licenses and patent rights)</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"> The amortization of an asset
on a straight-line basis over its useful life begins when the development procedure is completed and the asset is available for
use. These assets are reviewed for impairment once a year or whenever there are indicators of a possible impairment, in accordance
with the provisions of IAS 36, &ldquo;Impairment of Assets&rdquo;. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
                                         and development</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"> Research expenditures are
recognized as expenses when incurred. Costs arising from development projects are recognized as intangible assets when the following
criteria are met: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">it is technically
    feasible to complete the intangible asset so that it will be available for use;</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">management intends
    to complete the intangible asset and use or sell it;</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">there is an ability
    to use or sell the intangible asset;</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">it can be demonstrated
    how the intangible asset will generate probable future economic benefits;</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">adequate technical,
    financial and other resources to complete the development and to use or sell the intangible asset are available; and</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the expenditure
    attributable to the intangible asset during its development can be reliably measured.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"> Other development expenditures
that do not meet these criteria are recognized as an expense when incurred. Development costs that were previously recognized
as an expense are not recognized as an asset in a later period. During the three years ended December 31, 2015, the Group did
not capitalize development costs to intangible assets. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Impairment of non-financial assets</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Intangible assets
which are not yet available for use are not depreciated and impairment in their respect is tested every year. Depreciable assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset&rsquo;s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset&rsquo;s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Non-financial assets that sustained impairment are reviewed for possible reversal of the impairment at each date of the statement
of financial position. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As for testing
impairment of acquired intangible assets, see <I>intangible assets</I> above. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Share capital</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company&rsquo;s
ordinary shares are classified as share capital. Incremental costs directly attributable to the issuance of new shares or options
are shown in equity as a deduction, net of tax, from the issuance proceeds. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> When Group companies
purchase Company shares (treasury shares), the consideration paid, including incremental costs directly attributable to the purchase
(less the effect of taxes on income), is deducted from the equity attributable to equity holders of the parent until the shares
are eliminated or reissued. When these shares are reissued in subsequent periods, the consideration received, less incremental
costs directly attributable to the transaction and less the effect of taxes on income, is included in equity attributable to equity
holders of the parent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Share-based payment</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Group operates
a number of share-based payment plans to employees and to other service providers who render services that are similar to employees&rsquo;
services that are settled with the Group&rsquo;s equity instruments. In this framework, the Group grants employees, from time
to time, and at its sole discretion, options to purchase shares of the Group companies. The fair value of services received from
employees in consideration of the grant of options is recognized as an expense in the statement of comprehensive income (loss)
and correspondingly carried to equity. The total amount recognized as an expense over the vesting term of the options (the term
over which all pre-established vesting conditions are expected to be satisfied) is determined by reference to the fair value of
the options granted at grant date, except the effect of any non-market vesting conditions. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Non-market vesting
conditions are included in the assumptions used in estimating the number of options that are expected to vest. The total expense
is recognized over the vesting period, which is the period over which all of the specified vesting conditions of the share-based
payment arrangement are to be satisfied. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In each reporting
date, the Company revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions
and recognizes the impact of the revision to original estimates, if any, in the statement of comprehensive income (loss) with
a corresponding adjustment in equity. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> When the options
are exercised, the Company issues new shares. The proceeds net of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Share-based payment
transactions in which the Company acquired assets as consideration for the Company&rsquo;s equity instruments are measured at
the value of the assets acquired. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Provisions</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> A provision in
accordance to IAS 37 is recognized when the Group has a present obligation (legal or constructive) as a result of an event that
occurred in the past, it is probable that the Group will be required to use economic resources to settle the obligation and it
can be reliably estimated. The group recognizes a provision for warranty when the product is sold to the customer or when the
service is provided to the customer. Initial recognition is based on past experience. The estimated provision is re-tested every
year. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Non-current assets (or disposal
groups) held for sale</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Non-current assets
(or disposal groups) are classified as held for sale when their carrying amount will be recovered principally through a sale transaction
rather than through continuing use. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <I>Discontinued operations</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> A discontinued
operation is a component of an entity that either has been disposed of, or is classified as held for sale, and represents a separate
major line of business or geographical area of operations, or is part of a single coordinated plan to dispose of a separate major
line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Revenues and expenses
attributable to discontinued operations are presented in the statement of comprehensive loss under the item &ldquo;<I>Total loss
from discontinued operations</I>&rdquo;, for all years presented. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Critical Accounting Estimates
and Judgments</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Estimates and judgments
are continually evaluated and are based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Critical
                                         accounting estimates and assumptions</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">Accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
                                         assets</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In testing impairment
    of research and development assets, the Company&rsquo;s management is required to estimate, among other things, the probable
    endpoints of trials conducted by the Company, the commercial technical feasibility of the development and the resulting economic
    benefits. Actual results and estimates to be made in the future may significantly differ from current estimates.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Group is
    required to determine at the end of each reporting period whether there is any indication that an asset may be impaired. If
    indicators for impairment are identified, the Group estimates the assets&rsquo; recoverable amount, which is the higher of
    an asset&rsquo;s fair value less costs to sell and its value-in-use. The value-in-use calculations require management to make
    estimates of the projected future cash flows. Determining the estimates of the future cash flows is based on management past
    experience and best estimate for the economic conditions that will exist over the remaining useful economic life of the Cash
    Generating Unit (CGU).</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.75in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share-based payments
    &ndash; in evaluating the fair value and the recognition method of share-based payment, the Company&rsquo;s management is
    required to estimate, among others, different parameters included in the computation of the fair value of the options and
    the Company&rsquo;s results and the number of options that will vest.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Judgments that
    have a critical effect on the adoption of the entity&rsquo;s accounting policies:</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.75in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The existence
    of control over InterCure &ndash; As of December 31, 2014, and effective as of May 16, 2013, the Company held 54.72% of InterCure&rsquo;s
    issued and outstanding share capital, following the conversion of the loan granted to InterCure into 7,620,695 shares of InterCure.
    In the reporting period ended December 31, 2012, the Group&rsquo;s management had estimated the degree of effect it had in
    InterCure and had determined that it was able to govern InterCure&rsquo;s financial and operating policies despite holding
    less than 50% of InterCure&rsquo;s issued and outstanding share capital at the time, through de-facto control, this following
    an examination of InterCure&rsquo;s entire equity instruments. This conclusion was reached mainly since the Company was able
    to convert the aforementioned loan into shares of InterCure, a conversion which will have conferred the Company a stake of
    approximately 54.72% of InterCure&rsquo;s issued and outstanding share capital.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.75in"> &nbsp; </TD>
    <TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During the year
    ended December 31, 2015, events pertaining to the investment in InterCure reduced the Company&rsquo;s stake in InterCure to
    5.82%. Considering the Company&rsquo;s diluted voting rights in InterCure, the Company&rsquo;s management determined that
    a loss of control in InterCure occurred on February 12, 2015.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Impact of Inflation and Currency
Fluctuations</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We generate most
of our revenues and hold most of our cash, cash equivalents and bank deposits in US dollars. While a substantial amount of our
operating expenses are in US dollars, we incur a portion of our expenses in New Israeli Shekels. In addition, we also pay for
some of our services and supplies in the local currencies of our suppliers. As a result, we are exposed to the risk that the US
dollar will be devalued against the New Israeli Shekel or other currencies, and as result our financial results could be harmed
if we are unable to protect against currency fluctuations in Israel or other countries in which services and supplies are obtained
in the future. Accordingly, we may enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations
in the exchange rates of currencies. The Company&rsquo;s treasury&rsquo;s risk management policy is to hold NIS-denominated cash
and cash equivalents and short-term deposits in the amount of the anticipated NIS-denominated liabilities for six consecutive
months from time to time in line with the directives of the Company&rsquo;s Board. These measures, however, may not adequately
protect us from the adverse effects of inflation in Israel. In addition, we are exposed to the risk that the rate of inflation
in Israel will exceed the rate of devaluation of the New Israeli Shekel in relation to the US Dollar or that the timing of any
devaluation may lag behind inflation in Israel. Future activities may lead us to perform a clinical trial in Israel, which may
lead us to reassess our use of the US dollar as our functional currency. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of December
31, 2015, had the Group&rsquo;s functional currency weakened by 10% against the NIS with all other variables remaining constant,
post-tax loss for the year would have been $ 20 thousand lower (2014 &ndash; post-tax loss approximately $ 85 thousand lower;
2013 - post-tax loss approximately $ 157 thousand lower), mainly as a result of exchange rate changes on translation of other
accounts receivable, net and exchange rate changes on NIS-denominated cash and cash equivalents and short-term deposits. Loss
was less sensitive to fluctuations in the exchange rate in relation to the NIS in 2015 than in 2014 mainly because of the decreased
amount of the NIS-denominated balances in the items of cash, receivables and payables of the Group. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B><I>Governmental Economic, Fiscal,
Monetary or Political Policies that Materially Affected or Could Materially Affect Our Operations</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The income of the
Company is subject to corporate tax at the regular rate; the guidance of the amendment to the Israeli Income Tax Ordinance, 2005
from August 2005 prescribes a gradual reduction in the corporate tax rates and the resulting corporate tax rates starting 2009
are as follows: 2009 - 26% and 2010 and thereafter - 25%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On July 14, 2009,
the &ldquo;Knesset&rdquo; (Israeli Parliament) passed the Law for Economic Efficiency (Amended Legislation for Implementing the
Economic Plan for 2009 and 2010), 2009, which prescribes, among other things, an additional gradual reduction in the corporate
tax rates starting 2011 to the following tax rates: 2011 - 24%, 2012 - 23%, 2013 - 22%, 2014 - 21%, 2015 - 20%, 2016 and thereafter
- 18%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In December 2011,
following the enactment of the Law for the Changing the Tax Burden (Legislative Amendments), 2011 (hereafter &ndash; &ldquo;Tax
Burden Distribution Law&rdquo;), the phased reduction in the corporate tax was eliminated, and corporate tax rate in 2012 and
thereafter was set to 25%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On August 5, 2013,
the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013-2014), 2013 (the &ldquo;Law&rdquo;)
was published in the Government&rsquo;s records. The Law prescribes, among other things, from the 2014 tax year and thereafter,
an increase in the Israeli corporate tax rate to 26.5% (instead of 25%). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On January 5, 2016,
the Israeli Parliament officially published the Law for the Amendment of the Israeli Tax Ordinance (Amendment 216), that reduces
the corporate tax rate from 26.5% to 25%, effective for the year beginning January 1, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of December
31, 2015, XTL Biopharmaceuticals Ltd. did not have any taxable income. As of December 31, 2015, our net operating loss carry forwards
for Israeli tax purposes registered on behalf of XTL Biopharmaceuticals Ltd. amounted to approximately $ 28 million. Under Israeli
law, these net-operating losses may be carried forward indefinitely and offset within XTL Biopharmaceuticals Ltd only, against
future taxable income, including capital gains from the sale of assets used in the business, with no expiration date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Since April 7,
2009, we have not had a &ldquo;permanent establishment&rdquo; or activity in the US, and our subsidiaries do not perform any activities
in the US. Our board of directors consists of a majority of Israeli residents and our management is domiciled in Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We have financed
our operations from inception primarily through various private placement transactions, our initial public offering, a placing
and open offer transaction, option and warrant exercises, and private investments in public equities. As of June 30, 2016, we
had received net proceeds of approximately $80.2 million from various public offerings and private placement transactions, including
net proceeds of approximately $45.7 million from our initial public offering in September 2000, net proceeds of approximately
$15.4 million from the 2004 placement and open offer transaction, net proceeds of approximately $1.5 million from the Bio-Gal
transaction in August 2010, net proceeds of approximately $1.75 million from our public offering on TASE in March 2011, net proceeds
of $2.4 million from our private placement in March 2012, net proceeds of approximately $3.4 million from our public offering
on Nasdaq in April 2015, and proceeds of approximately $4.0 million from the exercise of options and warrants. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of June 30,
we had approximately $2.6 million in cash and cash equivalents, a decrease of $1.2 million from December 31, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Cash flows used
in operating activities for the six months ended June 30, 2016 totaled approximately $1.2 million, compared to cash flows used
in operating activities of approximately $0.9 million for the six months ended June 30, 2015. The increase in cash used in operating
activities compared to the corresponding period last year mainly arises from increased research and development expenses for the
development of hCDR1. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Net cash used in
investing activities for the six months ended June 30, 2016 was $0.06 million compared to net cash provided by investing activities
of $0.01 million for the six months ended June 30, 2015. The decrease in net cash provided by investing activities is primarily
due to purchase of intangible assets related to our license agreement for hCDR1. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Net cash provided
by financing activities for the six months ended June 30, 2016 was $0 compared to $3.6 million for the six months ended June 30,
2015. The decrease in net cash provided by financing activities is primarily due to our registered direct offering in April 2015
that resulted in approximately $3.4 million in net proceeds. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company has
incurred continuing losses and depends on outside financing resources to continue its activities. Based on existing business plans,
the Company&rsquo;s management estimates that its outstanding cash and cash equivalent balances, including short-term deposits,
will allow the Company to finance its activities for a period of at least twelve months from the date hereof. However, the amount
of cash which the Company will need in practice to finance its activities depends on numerous factors which include, but are not
limited to, the timing, planning and execution of clinical trials of existing drugs and future projects which the Company might
acquire or other business development activities such as acquiring new technologies and/or changes in circumstances which are
liable to cause significant expenses to the Company in excess of management&rsquo;s current and known expectations as of the date
of these financial statements and which will require the Company to reallocate funds against plans, also due to circumstances
beyond its control. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company expects
to incur additional losses in 2016 arising from research and development activities, testing additional technologies and operating
activities, which will be reflected in negative cash flows from operating activities. In order to perform the clinical trials
aimed at developing a product until obtaining its marketing approval, the Company will be required to raise additional funds in
the future by issuing securities. Should the Company fail to raise additional capital in the future, it will be required to minimize
its activities or sell or grant a sublicense to third parties to use all or part of its technologies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Research and Development, Patents and Licenses, Etc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Research and development
costs in 2015, 2014 and 2013 substantially derived from costs related to the hCDR1 and, to a lesser degree, rHuEPO development
plans. As part of the preparations for a planned clinical study of hCDR1, the Company engaged regulatory and clinical consultants
in 2015 and commenced work on CMC, including production and testing of the drug substance and drug product. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>hCDR1 for the Treatment of SLE</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company intends
to initiate a new Phase II clinical trial, which will include the 0.5 mg dose. We estimate that the trial will take over one year
to enroll patients, 26 weeks for the treatment phase, and additional time to analyze the results for a total of approximately
two years. We intend to include an interim analysis which will provide a read-out of data prior to the end date of the study. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>rHuEPO for the Treatment of Multiple Myeloma</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The clinical trial&rsquo;s
preliminary plan received as part of the Bio-Gal transaction, planned a prospective, multi-center, phase 2 study intended to assess
safety of rHuEPO when given to patients with advanced Multiple Myeloma and demonstrate its effects on survival, biological markers
related to the disease, immune improvements and quality of life. We have not yet submitted the preliminary plan, which may be
updated, to the authorities and/or the applicable IRB. We have decided to concentrate our efforts and resources on the development
of hCDR1 and therefore do not expect to initiate any activities related to rHuEPO before 2017 and are exploring opportunities
to sell or license rHuEPO or collaborate with partners in its development. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The following table
sets forth the research and development costs for the years 2015, 2014 and 2013 and the six months ended June 30, 2016, including
all costs related to the clinical-stage projects, our pre-clinical activities, and all other research and development. We in-licensed
hCDR1 in January 2014 and started preparations for clinical development of this asset during the year. We started preparations
for rHuEPO clinical development in the last quarter of 2010 (after the completion of the Bio-Gal transaction on August 2010).
We in-licensed SAM-101 in November 2011 and in June 2015, the Company terminated the license agreement and all rights in and to
the licensed technology reverted to MinoGuard. Whether or not and how quickly we commence and complete development of our clinical
stage projects is dependent on a variety of factors, including the rate at which we are able to engage clinical trial sites and
the rate of enrollment of patients. As such, the costs associated with the development of our drug candidates will probably increase
significantly. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Research and Development
    Expenses in Thousand $ </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Six
    months ended</B></FONT><BR> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June 30,</B></FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; font-weight: bold"> hCDR1 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 355 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 549 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 206 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 9 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold"> rHuEPO </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 29 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 37 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 57 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold"> SAM-101 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 25 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 16 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt"> Other </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 10 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"> Total Research and Development </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 355 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 578 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 278 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 82 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Trend Information.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are a development
stage company and it is not possible for us to predict with any degree of accuracy the outcome of our research, development or
commercialization efforts. As such, it is not possible for us to predict with any degree of accuracy any significant trends, uncertainties,
demands, commitments or events that are reasonably likely to have a material effect on our net sales or revenues, income from continuing
operations, profitability, liquidity or capital resources, or that would cause financial information to not necessarily be indicative
of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties, demands, commitments
and events are identified in the preceding subsections.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Off-Balance Sheet Arrangements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not entered
into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative
instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other
obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit
risk support.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>Tabular Disclosure of Contractual
Obligations.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of December
31, 2015, we had known contractual obligations, commitments and contingencies of approximately $40 thousand which relate to lease
obligations for our offices, all of which is due within the next year. In April 2015, we signed an operational lease agreement
for our new offices in Ra&rsquo;anana. Under the new lease agreement, we will pay a monthly rent of approximately $2,500. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We entered into
an agreement with subtenants to lease part of the office space in exchange for approximately $ 1,200 per month. The agreement
is in effect until April 2017. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We do not carry
any contractual obligations, commitments or contingencies relates to research and development operations. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="13" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Payment due by period
    as of December 31, 2015 (in thousands of US$) </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Contractual obligations </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Less than 1 year </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> More than 1 year </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 61%; text-align: justify; padding-bottom: 1pt"> Operating lease obligations </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right"> 40 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right"> 30 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right"> 10 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 2.5pt"> Total </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 40 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 30 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 10 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of June 30,
2015 the Company's contractual obligations are for an operating lease of office space for a total of approximately $25,000 (10
months of rent) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Pursuant to our
asset purchase agreement to acquire the rights to develop rHuEPO for the treatment of Multiple Myeloma from Bio-Gal Ltd., we are
obligated to pay 1% royalties on net sales of the product, as well as a fixed royalty payment in the total amount of $350 thousand
upon the successful completion of Phase 2. The payment of $350 thousand is to be made to Yeda upon the earlier of (i) six months
from the successful completion of Phase 2 or (ii) the completion of a successful fundraising by XTL at any time after the completion
of the Phase 2 in an amount of at least $2 million. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> According to the
agreement with MinoGuard we were obligated to pay milestone payments to MinoGuard of up to $2.5 million based on development and
marketing milestones as well as 3.5% royalty of our net sales of the product and 7.5%-20% from our third-party out-license receipts,
depending on the phase of the drug at the time of an out-license transaction. In addition to the above payments, and in accordance
with the above agreement, since as of June 30, 2013, XTL had not commenced a phase 2 clinical trial, we were obligated to pay
MinoGuard an annual license fee representing a value of $45 thousand, for the 12 month period between July 1, 2013 and June 30,
2014. On September 3, 2014, we issued an additional 889,822 ordinary shares, representing a value of $135 thousand, for the 12
month period between July 1, 2014 and June 30, 2015. On May 25, 2015, the Company provided Minoguard with a notice of termination
whereby, as of June 24, 2015, the rights and license granted according to the license agreement were terminated and all rights
in and to the licensed technology reverted to MinoGuard. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> According to our
strategic collaboration master agreement with the Institute and Mor, we are obligated to pay the Institute for the services provided
by them the cost basis related to the Institute&rsquo;s activity in the framework of any project plus an additional 10% of the
total royalties to which Mor is entitled pursuant to its agreements with the Company in connection with each technology for which
rights were granted to the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> According to the
licensing agreement signed with Yeda to develop hCDR1, a Phase II-ready asset for the treatment of SLE. The terms of the licensing
agreement include, among other things, expense reimbursement for patent expenses payable in six installments, certain milestone
payments to Yeda, low single-digit royalties based on net sales, and additional customary royalties to the Office of the Chief
Scientist. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_014"></A>BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Business Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We are a biopharmaceutical
company engaged in the acquisition and development of pharmaceutical drugs for the treatment of autoimmune diseases. Our current
drug development program is focused on the treatment of systemic lupus erythematosus, or SLE. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our lead drug candidate
is hCDR1, a Phase II-ready asset for the treatment of SLE, the most prominent type of lupus. There is currently no known cure for
SLE. Only one new treatment, Benlysta, has been approved by the U.S. Food and Drug Administration, or FDA, in the last 50 years
for SLE. Lupus is a chronic autoimmune disease involving many systems in the human body, including joints, kidneys, the central
nervous system, heart, the hematological system and others. The biologic basis of the disease is a defect in the immune (defense)
system, leading to production of self (auto) antibodies, attacking healthy organs and causing irreversible damage. According to
research estimates of the Lupus Foundation of America, at least 1.5 million Americans have the disease (more than 5 million worldwide)
with more than 16,000 new cases diagnosed each year in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> hCDR1 is a peptide
that is administered subcutaneously and acts as a disease-specific treatment to modify the SLE-related autoimmune process. It
does so by specific upstream immunomodulation through the generation of regulatory T cells, reducing inflammation and resuming
immune balance. More than 40 peer-reviewed papers have been published on hCDR1. Two placebo controlled Phase I trials and a placebo
controlled Phase 2 trial, or the PRELUDE trial, were conducted by Teva Pharmaceutical Industries, Ltd., or Teva, which had previously
in-licensed hCDR1 from Yeda. The studies consisted of over 400 patients, and demonstrated that hCDR1 is well tolerated by patients
and has a favorable safety profile. The PRELUDE trial did not achieve its primary efficacy endpoint based on the SLE Disease Activity
Index, or SLEDAI scale, resulting in Teva returning the asset to Yeda. However, the PRELUDE trial showed encouraging results in
its secondary clinical endpoint, the British Isles Lupus Activity Group index, or BILAG index, and, in fact, the 0.5 mg weekly
dose showed a substantial effect. Multiple post-hoc analyses also showed impressive results for this dose using the BILAG index.
Such dose will be the focus of the clinical development plan moving forward. Subsequent to Teva&rsquo;s return of the program
to Yeda, the FDA directed that the primary endpoint in future trials for Lupus therapies, including those for hCDR1, should be
based on either the BILAG index or the SLE Responder Index (SRI). The FDA has provided the Company with written guidance confirming
the acceptability of BILAG as the primary endpoint in our planned study. Given the FDA&rsquo;s recommendation and the positive
findings from the PRELUDE trial (which showed a substantial effect in the BILAG index), we intend to initiate a new advanced clinical
trial, which will include the 0.5 mg dose. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify; text-indent: 0.45in"> Our
second drug candidate is recombinant human erythropoietin, or rHuEPO, which we have licensed from Yeda Research and Development,
or Yeda, and Mor Research Applications, or Mor, for the extension of survival of patients with advanced/end-stage multiple myeloma.
Multiple myeloma is a severe and incurable malignant hematological cancer of plasma cells. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05in; text-align: justify; text-indent: 0.45in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A clinical observation
confirmed the high success rate of rHuEPO in treating the anemia in patients with multiple myeloma. Six patients with very poor
prognostic features of multiple myeloma, whose expected survival was less than six months continued treatment with rHuEPO beyond
the initial designed 12 week period, and they lived for 45&ndash;133 months cumulatively with the multiple myeloma diagnosis and
38&ndash;94 months with rHuEPO (with a good quality of life). We were granted an Orphan-drug designation from the FDA in May 2011,
for rHuEPO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"> As our focus
is currently on the development of our lead drug candidate, we do not anticipate conducting material research and development
activities for rHuEPO before 2017 and are exploring opportunities to sell or license rHuEPO or collaborate with partners in its
development. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Our Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our objective is
to be a leading biopharmaceutical company engaged in the acquisition and development of pharmaceutical products for the treatment
of autoimmune diseases. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under our current near-term
strategy with respect to our pharmaceutical and biopharmaceutical products, we plan to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">initiate
an international, prospective advanced clinical study intended to assess the safety and efficacy of hCDR1 when given to patients
with SLE;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">continually build our pipeline of therapeutic candidates; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">develop collaborations with large pharmaceutical companies to sublicense/develop, and market our hCDR1 and rHuEPO drug development programs.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B>Registered Direct Offering</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In April 2015, we entered
into security purchase agreements providing for the issuance of an aggregate of 1,777,778 ADSs representing 35,555,560 ordinary
shares in a registered direct offering at $2.25 per ADS for aggregate gross proceeds of $4,000,000. In addition, we issued unregistered
warrants to purchase 888,889 ADSs representing 17,777,778 ordinary shares in a private placement. At the closing, we also issued
placement agent warrants to purchase up to 89,888 ADSs representing 1,797,760 ordinary shares. The warrants may be exercised at
any time for a period of five and one-half years from issuance and have an exercise price of $2.25 per ADS, subject to adjustment
as set forth therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>InterCure Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2012, we acquired
the control over InterCure Ltd, or InterCure, a public company whose shares are traded on the TASE and which develops a home therapeutic
device for non-medicinal and non-invasive treatment of various diseases such as hypertension, heart failure, sleeplessness and
mental stress and markets and sells a home therapeutic device for hypertension. As a result of a series of transactions including
a transaction, that closed in February 2015, between InterCure and Green Forest Global Ltd., or Green Forest, a company wholly
owned by Mr. Alexander Rabinovitch (a greater than 5% shareholder of ours), our holdings in InterCure were diluted to approximately
5%. See &ldquo;Certain Relationships and Related Party Transactions&rdquo; on page 55.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Products Under Development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B>hCDR1 for the Treatment of Systemic Lupus Erythematosus</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Market Opportunity</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">hCDR1 (edratide) is
a Phase 2-ready asset for the treatment of SLE, the most prominent type of lupus. SLE is a heterogenous, chronic, debilitating
inflammatory autoimmune disease characterized by the production of an array of autoantibodies, including antibodies to double-stranded
DNA, to other nuclear antigens, and to ribonucleoproteins. Although SLE can affect any part of the body, most patients experience
systemic symptoms including fever, fatigue and malaise along with symptoms in one or only a few organs. The most common signs and
symptoms are arthralgia, arthritis, fatigue, fever, skin rashes, including a characteristic butterfly-shaped rash across the cheeks
and nose, anemia and pleurisy. The clinical course of SLE may also include periods in which few, if any, symptoms are evident and
other times when the disease becomes more active.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to research
estimates of the Lupus Foundation of America, at least 1.5 million Americans have the disease (more than 5 million worldwide) with
more than 16,000 new cases diagnosed each year in the United States. The Lupus Foundation of America reports that lupus affects
mostly women of childbearing age (15-44). SLE is one of the most common forms of lupus, affecting over 70% of lupus patients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> SLE treatment is
highly individualized and is based on a patient&rsquo;s disease severity, organ involvement and previous response. Mild forms
of SLE may be treated with antimalarial medications, non-steroidal anti-inflammatory drugs, and topical and/or low-dose glucocorticoids,
although treatment with methotrexate may be needed. In addition, low-dose oral steroids or intramuscular injections of depot steroid
preparations can be used for mild disease. More severe cases of SLE may be treated with high-dose glucocorticoids and immunosuppressive
or cytotoxic drugs to suppress the immune system. GlaxoSmithKline&rsquo;s Benlysta (belimumab), a monoclonal antibody, is a newer
medication that is FDA-approved for patients with mild to moderate SLE currently taking standard therapy who have not yet experienced
an adequate response. Benlysta is the first product to gain marketing approval for patients with SLE in more than 50 years, paving
the way for the introduction of new disease-modifying therapies and reigniting the interest of pharmaceutical developers in this
therapy area. GlaxoSmithKline reported that its 2015 sales of Benlysta were &pound;230 million, up 25% on the prior year. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Decision Resources
estimates the drug sales for SLE in 2012 were approximately $900 million across the markets covered in its forecast. By the end
of the forecast period of 2022, sales are estimated to grow to $4.0 billion with a CAGR of 16.1%. This growth is expected to be
driven by improved uptake of Benlysta, the introduction of new biological therapies and the overall increase in prevalent cases
of SLE, mainly due to the increasing population in these markets. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>hCDR1: General &amp;
Mechanism of Action</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">hCDR1 is a synthetic
peptide composed of 19 amino-acid residues. It was developed by Teva in collaboration with Prof. Edna Mozes of the Weizmann Institute
of Science, Rehovot, Israel. The sequence of the peptide is based on the complementarity determining region 1 (CDR1) of a pathogenic
human anti-dsDNA mAb that bears the 16/6 idiotype. The idiotype was found to have clinical relevance in SLE patients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><IMG SRC="pg85img1.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> Accumulating data
from<I> in vivo</I> and<I> in vitro</I> studies demonstrate that hCDR1 functions by inducing regulatory T cell function through
multiple pathways. Administration of hCDR1 to mice has been shown to induce CD4<SUP> +</SUP> CD25<SUP> +</SUP> cells using regulatory
and suppressor characteristics such as CD45RB<SUP> LOW</SUP>, TGF-, CTLA-4 and Foxp3. This induction suppresses autoreactive CD4
<SUP>+</SUP> cell activation, indicated by the reduced expression of CD69 and Fas ligand; ultimately, resulting in reduced rates
of activation-induced apoptosis. Inhibition by hCDR1-induced CD4<SUP> +</SUP> CD25<SUP> +</SUP> cells is mediated through the
immunosuppressive cytokine TGF-. TGF- secretion is up regulated and activated autoreactive cells are decreased; both are associated
with a decrease of pathogenic cytokines such as interferon gamma (IFN-), interleukin-10 (IL-10), interleukin-1 beta (IL-1), and
tumor necrosis factor-alpha (TNF-). Effects on TGF- and Foxp3 have been shown to correlate with a significant decrease in SLEDAI-2K
and BILAG scores in patients treated with hCDR1 in comparison with patients treated with placebo. Another subset of T cells (CD8
<SUP>+</SUP> CD28<SUP> -</SUP>) expresses Foxp3 and has been shown to be essential for the induction and the optimal suppressive
function of CD4<SUP> +</SUP> CD25<SUP> +</SUP> cells. The function of hCDR1-induced subsets of regulatory T cells result in the
effective suppression, ultimately leading to the modulation of the underlying aberrancy of the immune system, which culminates
in the diminished activity of the disease. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">hCDR1 is currently
under investigation for its ability to down-regulate the autoimmune response elicited by the pathogenic antibodies and autoreactive
T cells in SLE and up-regulate the expression of gene markers, such as TGF-&beta; and FoxP3. hCDR1 may attenuate the general SLE-associated
autoimmune process and provide effective treatment for many clinical manifestations of SLE. The clinical development plan is thus
designed to demonstrate the efficacy of hCDR1 in the systemic disease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Clinical Trial History</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to being licensed
to us by Yeda, hCDR1 was licensed to Teva which performed two placebo controlled Phase I trials and a placebo controlled Phase
2 trial, or the PRELUDE trial. The Phase I and Phase 2 studies consisted of over 400 patients, demonstrating that hCDR1 is well
tolerated by patients and has a favorable safety profile.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The PRELUDE trial
was a 26-week study conducted at 48 centers in 12 countries: Canada, France, Germany, Holland, Hungary, Israel, Italy, Mexico,
Russia, Spain, UK and U.S. enrolling 340 patients with mild to moderate SLE. The PRELUDE trial did not achieve its primary efficacy
endpoint based on the SLEDAI scale, resulting in Teva returning the asset to Yeda in 2009. However, the PRELUDE trial showed encouraging
results in its secondary clinical endpoint, the BILAG index, and, in fact, the 0.5 mg weekly dose showed a substantial effect.
Multiple post-hoc analyses also showed impressive results for this dose using the BILAG index. Such dose will be the focus of
clinical development moving forward. Subsequent to Teva&rsquo;s return of the program to Yeda, in 2010 the FDA directed that the
primary endpoint in future trials for lupus therapies, including those for hCDR1, should be based on either the BILAG index or
the Systemic Lupus Erythematosus Responder Index. The FDA has provided the Company with written guidance confirming the acceptability
of BILAG as the primary endpoint in our planned study. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>Planned Clinical
Trial</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Given the FDA&rsquo;s
recommendation and the positive findings from the PRELUDE trial (which showed a substantial effect in the BILAG index), we intend
to initiate a multinational, randomized, double blind, placebo-controlled, multiple dose, parallel group study to assess the efficacy,
tolerability and safety of hCDR1 administered subcutaneously to patients with active SLE. We estimate that the trial will take
over one year to enroll patients, 26 weeks for the treatment phase, and additional time to analyze the results for a total of
approximately two years. We intend to include an interim analysis which will provide a read-out of data prior to the end date
of the study. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Company submitted
a pre-Investigational New Drug (&ldquo;IND&rdquo;) meeting package, including a draft protocol for our planned clinical trial,
to the FDA in December 2015. In January 2016, the Company received a written response to its pre-IND meeting package in which
the FDA provided guidance on several key aspects of its proposed clinical trial including: acceptance of the primary efficacy
endpoint to be based on the BILAG index, a measure of lupus disease activity which was the secondary efficacy endpoint in the
PRELUDE trial and confirmation of the appropriate patient population and total number of patients required to prove safety for
a new drug application (NDA) for marketing approval. The FDA recommended that the trial be a Phase 2 study and also provided additional
guidance on other aspects of the trial design including doses and study duration. Based on the FDA&rsquo;s response, XTL plans
to file its IND, and in the coming quarters initiate a global clinical trial for hCDR1 in the treatment of systemic lupus erythematosus
(SLE). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>rHuEPO for the Treatment
of Multiple Myeloma</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As our focus is
currently on the development of our lead drug candidate, we do not anticipate conducting material research and development activities
for rHuEPO before 2017 and are exploring opportunities to sell or license rHuEPO or collaborate with partners in its development. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <I>&nbsp;</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Market Opportunity</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently incurable,
multiple myeloma is a severe plasma cell malignancy characterized by the accumulation and proliferation of clonal plasma cells
in the marrow, leading to the gradual replacement of normal hematopoiesis. The course of the disease is progressive, and various
complications occur, until death. This devastating disease affects the bone marrow, bones, kidneys, heart and other vital organs.
It is characterized by pain, recurrent infections, anemia and pathological fractures. In the course of the disease, many patients
become gradually disabled and bed-ridden. The overall survival duration today with chemotherapy and other novel treatments is less
than five years. These treatments have severe side effects, including the suppression of the immune system, susceptibility to infections,
nausea, vomiting and bleeding disorders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> According to the
Multiple Myeloma Research Foundation, in the U.S. alone, there are approximately 90,000 people living with or are in remission
from multiple myeloma and according to the National Cancer Institute, each year in the U.S., more than 20,000 people learn they
have this disease. Most people are diagnosed with multiple myeloma after age 65 and it is more common in men than women and in
African Americans than Caucasians. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>rHuEPO: General
&amp; Mechanism of Action</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">rHuEPO which stands
for recombinant human erythropoietin is a hormone, produced by the kidneys, and is responsible for red blood cell production in
bone marrow. Erythropoietin, or EPO, a glycoprotein hormone produced mainly by the kidney, is the major growth regulator of the
erythroid lineage. EPO stimulates erythropoiesis by binding to its receptor on the surface of erythroid progenitor cells, promoting
their proliferation and differentiation and maintaining their viability. The cloning of the EPO gene led to the introduction of
rHuEPO into clinical practice for the treatment of various anemias including anemia of kidney disease and cancer-related anemia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Clinical Trial History</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A clinical observation
confirmed the high success rate of rHuEPO in treating the anemia in patients with multiple myeloma. Six patients with very poor
prognostic features of multiple myeloma, whose expected survival was less than six months continued treatment with rHuEPO beyond
the initial designed 12 week period, and lived for 45&ndash;133 months cumulatively with the Multiple Myeloma diagnosis and 38&ndash;94
months with rHuEPO (with a good quality of life).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We were granted an
Orphan-drug designation from the FDA in May 2011, for rHuEPO. Orphan-drug designation is granted by the FDA Office of Orphan Drug
Products to novel drugs or biologics that treat a rare disease or condition affecting fewer than 200,000 patients in the U.S..
The designation provides the drug developer with a seven-year period of U.S. marketing exclusivity if the drug is the first of
its type approved for the specified indication or if it demonstrates superior safety, efficacy, or a major contribution to patient
care versus another drug of its type previously granted the designation for the same indication, as well as with tax credits for
clinical research costs, the ability to apply for annual grant funding, clinical research trial design assistance and waiver of
Prescription Drug User Fee Act filing fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B>Patents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><I>General</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Patents and other
proprietary rights are very important to the development of our business. We will be able to protect our proprietary technologies
from unauthorized use by third parties only to the extent that our proprietary rights are covered by valid and enforceable patents
or are effectively maintained as trade secrets. We intend to seek and maintain patent and trade secret protection for our drug
candidates and our proprietary technologies. As part of our business strategy, our policy is to file patent applications in the
U.S. and internationally to cover methods of use, new chemical compounds, pharmaceutical compositions and dosing of the compounds
and compositions and improvements in each of these. We also rely on trade secret information, technical know-how, innovation and
agreements with third parties to continuously expand and protect our competitive position. Because of the extensive time required
for development, testing and regulatory review of a potential product, it is possible that before we commercialize any of our
products, any related patent may expire or remain in existence for only a short period following commercialization, thus reducing
any commercial advantage or financial value attributable to the patent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Generally, patent
applications in the U.S. are maintained in secrecy for a period of at least 18 months. Since publication of discoveries in the
scientific or patent literature often lag behind actual discoveries, we are not certain that we were the first to make the inventions
covered by each of our pending patent applications or that we were the first to file those patent applications. The patent positions
of biotechnology and pharmaceutical companies are highly uncertain and involve complex legal and factual questions. Therefore,
we cannot predict the breadth of claims allowed in biotechnology and pharmaceutical patents, or their enforceability. To date,
there has been no consistent policy regarding the breadth of claims allowed in biotechnology patents. Third parties or competitors
may challenge or circumvent our patents or patent applications, if issued. Granted patents can be challenged and ruled invalid
at any time, therefore the grant of a patent is not of itself sufficient to demonstrate our entitlement to a proprietary right.
The disallowance of a claim or invalidation of a patent in any one territory can have adverse commercial consequences in other
territories. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If our competitors
prepare and file patent applications in the U.S. that claim technology also claimed by us, we may choose to challenge competing
patent rights, which could result in substantial cost, even if the eventual outcome is favorable to us. While we have the right
to defend patent rights related to our licensed drug candidates and technologies, we are not obligated to do so. In the event that
we decide to defend our licensed patent rights, we will be obligated to cover all of the expenses associated with that effort.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a patent is issued
to a third party containing one or more preclusive or conflicting claims, and those claims are ultimately determined to be valid
and enforceable, we may be required to obtain a license under such patent or to develop or obtain alternative technology. In the
event of a litigation involving a third party claim, an adverse outcome in the litigation could subject us to significant liabilities
to such third party, require us to seek a license for the disputed rights from such third party, and/or require us to cease use
of the technology. Further, our breach of an existing license or failure to obtain a license to technology required to commercialize
our products may seriously harm our business. We also may need to commence litigation to enforce any patents issued to us or to
determine the scope, validity and/or enforceability of third-party proprietary rights. Litigation would involve substantial costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><I>hCDR1
for the Treatment of SLE</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have exclusively
licensed from Yeda, two families of patents relating to hCDR1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         basic patent family entitled &ldquo;Synthetic Human Peptides and Pharmaceutical Compositions
                                         Comprising Them&rdquo; for the Treatment of Systemic Lupus Erythematosus&rdquo; that
                                         covers the active pharmaceutical agent, the Edratide peptide. The patent has been granted
                                         in a large number of jurisdictions: U.S., Europe (Austria, Denmark, Finland, France,
                                         Germany, Ireland, Italy, Liechtenstein, Spain, Sweden, Switzerland, The Netherlands and
                                         the UK), Australia, Canada, Hong Kong, India, Israel, Japan, Korea, Mexico, Norway, Hungary
                                         and Russia. The patent expires on February 26, 2022 except in the case of the U.S., which
                                         expires on September 22, 2022.</FONT> </TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT> </TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> A patent family for the formulation
        entitled &ldquo;Parenteral Formulations of Peptides for the Treatment of Systemic Lupus Erythematosus&rdquo; that covers
        a very specific pharmaceutical composition comprising Edratide. It has been granted in the U.S., Europe (Switzerland,
        Germany, Denmark, Spain, Finland, France, Great Britain, Ireland, Italy, Netherlands and Sweden), China, India, Israel,
        Japan, and Mexico, and is under examination in Canada. The patent expires on January 14, 2024. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Two provisional patent applications
        for specific treatment regimens were filed on August 11, 2016. </P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><I>rHuEPO
for the Treatment of Multiple Myeloma</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have exclusively
licensed from Yeda and Mor a family of patents relating to rHuEPO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
main use patent entitled &ldquo;Use of Erythropoietin in the Treatment of Multiple Myeloma that covers the active pharmaceutical
agent, EPO. The main claims of this patent is directed to a method for the treatment of a multiple myeloma patient, comprising
the administration of Erythropoietin or Recombinant Human Erythropoietin, for the inhibition of tumor growth, triggering of tumor
regression or inhibition of multiple myeloma cell metastasis in the said patient. The patent was granted in the United States,
Europe (Austria, Belgium, France, Germany, Great Britain, Ireland, Italy, Netherlands, Spain, Sweden and Switzerland), Israel,
Japan, Hong Kong and Canada. The issued patent will expire on March 30, 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B>Other
Intellectual Property Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We depend upon trademarks,
trade secrets, know-how and continuing technological advances to develop and maintain our competitive position. To maintain the
confidentiality of trade secrets and proprietary information, we require our employees, scientific advisors, consultants and collaborators,
upon commencement of a relationship with us, to execute confidentiality agreements and, in the case of parties other than our research
and development collaborators, to agree to assign their inventions to us. These agreements are designed to protect our proprietary
information and to grant us ownership of technologies that are developed in connection with their relationship with us. These agreements
may not, however, provide protection for our trade secrets in the event of unauthorized disclosure of such information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><I>Licensing
Agreements and Collaborations</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><U>hCDR1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 7, 2014,
we entered into a license agreement with Yeda, as amended on September 6, 2015, which grants us the exclusive worldwide right to
research, develop, and commercialize hCDR1, a Phase 2-ready asset for the treatment of SLE, among other indications. Yeda is the
commercial arm of the Weizmann Institute of Science.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In consideration, we
are responsible for a patent expense reimbursement to Yeda in six installments totaling $382,989. On May 14, 2014, we issued 222,605
of our ordinary shares to Yeda, as the first of six installments, representing a value of approximately $38,000. On January 21,
2015, we issued a further 802,912 of our ordinary shares to Yeda as the second of six installments, representing a value of approximately
$84,000. The remaining installments of approximately $64,000 each, payable in cash, are due every six months commencing on July
1, 2015, with the final payment due on January 1, 2017, provided that if we receive funding of at least $5,000,000 then we shall
be required to promptly pay Yeda any unpaid patent expense reimbursement in one lump-sum cash payment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Under the license
agreement, we are required to make milestone payments of up to $2.2 million: $200,000 upon starting a Phase 3 clinical trial,
$1 million upon FDA approval to market in the U.S., and $250,000 for marketing approval in each of China and three of the European
Union&rsquo;s Group of Five. In addition, we are required to pay 2-3% royalties of annual net sales and sublicense fees of 15-20%
of whatever we receive from any sub-licensee. Under the license agreement, we are also required to meet certain development milestones
including the delivery of a trial protocol to Yeda by January 1, 2016 (which we delivered), receipt of investment of at least
$5 million by August 1, 2016 (of which $4 million was received in April 2015) and commencement of a Phase II clinical trial by
January 1, 2017. In subsequent amendments signed between the Company and Yeda, the parties agreed to postpone the last two installments
of the patent expense reimbursement until April 7, 2017, receipt of the remainder of the required $5 million investment by May
1, 2017 and commencement of a Phase 2 clinical trial in respect of hCDR1 by October 1, 2017. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The term of the
license agreement is the later of the date of expiry of the last of the licensed patents or the expiry of a continuous period
of 11 years after first commercial sale in any country during which there shall not have been a first commercial sale in the U.S.,
EU, Japan, China or any OECD member. The license agreement may be terminated by us without cause upon 60 days prior written notice.
The license agreement may also be terminated by Yeda if either we fail to meet certain development milestones or commercial sale
shall have commenced and there shall be a period of 6 months of no sales, subject to certain exceptions. Yeda shall also be entitled
to terminate the license agreement if we were to commence legal action against Yeda challenging the validity of any of the licensed
patents, and we were unsuccessful in such challenge, in which event we would be required to pay to Yeda liquidated damages of
$8 million. Either party may also terminate the license agreement in the case of a material breach that remains uncured or certain
bankruptcy events. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><U>rHuEPO</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In August 2010
we acquired from Bio-Gal, the rights to develop rHuEPO for the treatment of multiple myeloma under a research and license agreement
with Yeda and Mor. Bio-Gal had previously performed certain research and development studies under the research and license agreement.
Mor is the Israeli corporation and licensing arm of Kupat Holim Clalit, one of the largest HMOs in Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are obligated to
pay 1% royalties on net sales of the product, as well as a fixed royalty payment in the total amount of $350,000 upon the successful
completion of Phase 2. Such payment of $350,000 is payable to Yeda upon the earlier of (i) six months from the successful completion
of Phase 2 or (ii) the completion of a successful fundraising by XTL at any time after the completion of the Phase 2 of at least
$2 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Competition</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Competition in the
pharmaceutical and biotechnology industries is intense. Our competitors include pharmaceutical companies and biotechnology companies,
as well as universities and public and private research institutions. In addition, companies that are active in different but related
fields represent substantial competition for us. Many of our competitors have significantly greater capital resources, larger research
and development staffs and facilities and greater experience in drug development, regulation, manufacturing and marketing than
we do. These organizations also compete with us to recruit qualified personnel, attract partners for joint ventures or other collaborations,
and license technologies that are competitive with ours. To compete successfully in this industry we must identify novel and unique
drugs or methods of treatment and then complete the development of those drugs as treatments in advance of our competitors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The drugs that we are
attempting to develop will have to compete with existing therapies. In addition, a large number of companies are pursuing the development
of pharmaceuticals that target the same diseases and conditions that we are targeting. Other companies have products or drug candidates
in various stages of pre-clinical or clinical development to treat diseases for which we are also seeking to discover and develop
drug candidates. Some of these potential competing drugs are further advanced in development than our drug candidates and may be
commercialized earlier.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.65pt; text-align: justify; text-indent: 28.35pt"><B><I>Competing
Products for Treatment of SLE</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">There
is only one drug that has been approved for SLE in the last 50 years, GlaxoSmithKline&rsquo;s Benlysta (belimumab) which was approved
in 2011. Other current therapies include non-steroidal anti-inflammatory drugs, corticosteroids, anti-malarials and immunosuppressants.
Corticosteroids and immunosuppressants lead to broad, non-selective immunosuppression often associated with significant adverse
events. In addition these therapies are not effective in all SLE patients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> Despite initial
enthusiasm following approval of Benlysta as the first drug approved for SLE with a selective target, efficacy has been tested
only in patients with mild to moderate disease, without active renal or CNS disease, its onset of action is slow and sales have
been lower than expected. Additional drugs are being developed to treat SLE including, among others, anifrolumab developed by
MedImmune, belimumab developed by GlaxoSmithKline, blisibimod developed by Anthera Pharmaceuticals, forigerimod acetate (lupuzor)
developed by Immupharma, abatacept developed by Bristol-Myers Squibb, ACT-334441 developed by Actelion, atacicept developed by
Merck Serono, CC-220 developed by Celgene, and INV-103 being developed by Invion. In the past eighteen months, there have been
two late stage drugs, tabalumab developed by Eli Lilly and epratuzumab developed by UCB/Immunomedics, for the treatment of SLE
which have both failed to meet the primary endpoint in Phase 3 trials. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Seasonality</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business and operations
are generally not affected by seasonal fluctuations or factors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Raw Materials and Suppliers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that the
raw materials that we require to manufacture hCDR1 and rHuEPO are widely available from numerous suppliers and are generally considered
to be generic industrial chemical supplies. We do not rely on a single or unique supplier for the current production of any therapeutic
small molecule in our pipeline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Manufacturing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently have no
manufacturing capabilities and do not intend to establish any such capabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to our
drug candidate, hCDR1, we believe that we will be able to outsource production to a contract manufacturer in order to obtain sufficient
inventory to satisfy the clinical supply needs for our future development for the treatment of SLE. With respect to our drug candidate
rHuEPO, we believe that we will either be able to purchase rHuEPO from existing pharmaceutical companies or to enter into collaborative
agreements with contract manufacturers or other third-parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the time of commercial
sale, to the extent that it is possible and commercially practicable, we plan to engage a back-up supplier for each of our product
candidates. Until such time, we expect that we will rely on a single contract manufacturer to produce each of our product candidates
under cGMP regulations. Our third-party manufacturers have a limited number of facilities in which our product candidates can be
produced and will have limited experience in manufacturing our product candidates in quantities sufficient for conducting clinical
trials or for commercialization. Our third-party manufacturers will have other clients and may have other priorities that could
affect our contractor&rsquo;s ability to perform the work satisfactorily and/or on a timely basis. Both of these occurrences would
be beyond our control. We anticipate that we will similarly rely on contract manufacturers for our future proprietary product candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We expect to similarly
rely on contract manufacturing relationships for any products that we may in-license or acquire in the future. However, there can
be no assurance that we will be able to successfully contract with such manufacturers on terms acceptable to us, or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract manufacturers
are subject to ongoing periodic inspections by the FDA, the U.S. Drug Enforcement Agency and corresponding state and local agencies
to ensure strict compliance with cGMP and other state and federal regulations. We do not have control over third-party manufacturers&rsquo;
compliance with these regulations and standards, other than through contractual obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we need to change
manufacturers, the FDA and corresponding foreign regulatory agencies must approve these new manufacturers in advance, which will
involve testing and additional inspections to ensure compliance with FDA regulations and standards and may require significant
lead times and delay. Furthermore, switching manufacturers may be difficult because the number of potential manufacturers is limited.
It may be difficult or impossible for us to find a replacement manufacturer quickly or on terms acceptable to us, or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Environmental Matters</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may from time to
time be subject to various environmental, health and safety laws and regulations, including those governing air emissions, water
and wastewater discharges, noise emissions, the use, management and disposal of hazardous, radioactive and biological materials
and wastes and the cleanup of contaminated sites. We believe that our business, operations and facilities are being operated in
compliance in all material respects with applicable environmental and health and safety laws and regulations. Based on information
currently available to us, we do not expect environmental costs and contingencies to have a material adverse effect on us. The
operation of our testing facilities, however, entails risks in these areas. Significant expenditures could be required in the future
if these facilities are required to comply with new or more stringent environmental or health and safety laws, regulations or requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Government and Industry Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Numerous governmental
authorities, principally the FDA and corresponding state and foreign regulatory agencies, impose substantial regulations upon the
clinical development, manufacture and marketing of our drug candidates and technologies, as well as our ongoing research and development
activities. None of our drug candidates have been approved for sale in any market in which we have marketing rights. Before marketing
in the U.S., any drug that we develop must undergo rigorous pre-clinical testing and clinical trials and an extensive regulatory
approval process implemented by the FDA, under the Federal Food, Drug and Cosmetic Act of 1938, as amended. The FDA regulates,
among other things, the pre-clinical and clinical testing, safety, efficacy, approval, manufacturing, record keeping, adverse event
reporting, packaging, labeling, storage, advertising, promotion, export, sale and distribution of biopharmaceutical products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The regulatory review
and approval process is lengthy, expensive and uncertain. We are required to submit extensive pre-clinical and clinical data and
supporting information to the FDA for each indication or use to establish a drug candidate&rsquo;s safety and efficacy before we
can secure FDA approval. The approval process takes many years, requires the expenditure of substantial resources and may involve
ongoing requirements for post-marketing studies or surveillance. According to the FDA, before commencing clinical trials in humans,
we must submit an IND to the FDA containing, among other things, pre-clinical data, chemistry, manufacturing and control information,
and an investigative plan. Our submission of an IND may not result in FDA authorization to commence a clinical trial.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We were granted an
Orphan-drug designation from the FDA in May 2011, for rHuEPO. In the U.S., Orphan-drug designation is granted by the FDA Office
of Orphan Drug Products to novel drugs or biologics that treat a rare disease or condition affecting fewer than 200,000 patients
in the U.S.. The designation provides the drug developer with a seven-year period of U.S. marketing exclusivity if the drug is
the first of its type approved for the specified indication or if it demonstrates superior safety, efficacy, or a major contribution
to patient care versus another drug of its type previously granted the designation for the same indication, as well as with tax
credits for clinical research costs, the ability to apply for annual grant funding, clinical research trial design assistance and
waiver of Prescription Drug User Fee Act filing fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may apply to the
European Medicines Agency in order to obtain Orphan-drug designation for its Recombinant Erythropoietin in Europe. Orphan designation
is granted by the European Medicines Agency, following a positive opinion from the Committee for Orphan Medicinal Products, to
a medicinal product that is intended for the diagnosis, prevention or treatment of a life-threatening or a chronically debilitating
condition affecting not more than five in 10,000 persons in the European Community when the application for designation is submitted.
Orphan drug designation provides the sponsor with access to the Centralized Procedure for the application for marketing authorization,
protocol assistance, up to a 100% reduction in fees related to a marketing authorization application, pre-authorization inspection
and post-authorization activities, and could provide ten years of market exclusivity in the EU, once approved for the treatment
of Multiple Myeloma.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The FDA may permit
expedited development, evaluation, and marketing of new therapies intended to treat persons with serious or life-threatening conditions
for which there is an unmet medical need under its fast track drug development programs. A sponsor can apply for fast track designation
at the time of submission of an IND, or at any time prior to receiving marketing approval of the NDA. To receive fast track designation,
an applicant must demonstrate that the drug:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
intended to treat a serious or life-threatening condition;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.75in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">is intended to treat a serious aspect of the condition; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">has the potential to address unmet medical needs, and this potential is being evaluated in the planned drug development program.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Clinical testing must
meet requirements for institutional review board oversight, informed consent and good clinical practices, and must be conducted
pursuant to an IND, unless exempted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of NDA
approval, clinical trials are typically conducted in the following sequential phases:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Phase 1: The drug is administered to a small group of humans, either healthy volunteers or patients, to test for safety, dosage tolerance, absorption, metabolism, excretion, and clinical pharmacology.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Phase 2: Studies are conducted on a larger number of patients to assess the efficacy of the product, to ascertain dose tolerance and the optimal dose range, and to gather additional data relating to safety and potential adverse events.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Phase 3: Studies establish safety and efficacy in an expanded patient population.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Phase 4: The FDA may require Phase 4 post-marketing studies to find out more about the drug&rsquo;s long-term risks, benefits, and optimal use, or to test the drug in different populations, such as children.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The length of time
necessary to complete clinical trials varies significantly and may be difficult to predict. Clinical results are frequently susceptible
to varying interpretations that may delay, limit or prevent regulatory approvals. Additional factors that can cause delay or termination
of our clinical trials, or that may increase the costs of these trials, include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">slow patient enrollment due to the nature of the clinical trial plan, the proximity of patients to clinical sites, the eligibility criteria for participation in the study or other factors, and the number of sites participating in the trial;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">inadequately trained or insufficient personnel at the study site to assist in overseeing and monitoring clinical trials or delays in approvals from a study site&rsquo;s review board;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">longer treatment time required to demonstrate efficacy or determine the appropriate product dose;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">insufficient supply of the drug candidates;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">adverse medical events or side effects in treated patients; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ineffectiveness of the drug candidates.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the FDA
may place a clinical trial on hold or terminate it if it concludes that subjects are being exposed to an unacceptable health risk.
Any drug is likely to produce some toxicity or undesirable side effects when administered at sufficiently high doses and/or for
a sufficiently long period of time. Unacceptable toxicity or side effects may occur at any dose level at any time in the course
of studies designed to identify unacceptable effects of a drug candidate, known as toxicological studies, or clinical trials of
drug candidates. The appearance of any unacceptable toxicity or side effect could bring us or regulatory authorities to interrupt,
limit, delay or abort the development of any of our drug candidates and could ultimately prevent approval by the FDA or foreign
regulatory authorities for any or all targeted indications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Before receiving FDA
approval to market a product, we must demonstrate that the product is safe and effective for its intended use by submitting to
the FDA an NDA containing the pre-clinical and clinical data that have been accumulated, together with chemistry and manufacturing
and controls specifications and information, and proposed labeling, among other things. The FDA may refuse to accept an NDA for
filing if certain content criteria are not met and, even after accepting an NDA, the FDA may often require additional information,
including clinical data, before approval of marketing a product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As part of the approval
process, the FDA must inspect and approve each manufacturing facility. Among the conditions of approval is the requirement that
a manufacturer&rsquo;s quality control and manufacturing procedures conform to cGMP. Manufacturers must expend time, money and
effort to ensure compliance with cGMP, and the FDA conducts periodic inspections to certify compliance. It may be difficult for
our manufacturers or us to comply with the applicable cGMP and other FDA regulatory requirements. If we or our contract manufacturers
fail to comply, then the FDA will not allow us to market products that have been affected by the failure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the FDA grants approval,
the approval will be limited to those disease states, conditions and patient populations for which the product is safe and effective,
as demonstrated through clinical studies. Further, a product may be marketed only in those dosage forms and for those indications
approved in the NDA. Certain changes to an approved NDA, including, with certain exceptions, any changes to labeling, require approval
of a supplemental application before the drug may be marketed as changed. Any products that we manufacture or distribute pursuant
to FDA approvals are subject to continuing regulation by the FDA, including compliance with cGMP and the reporting of adverse experiences
with the drugs. The nature of marketing claims that the FDA will permit us to make in the labeling and advertising of our products
will be limited to those specified in an FDA approval, and the advertising of our products will be subject to comprehensive regulation
by the FDA. Claims exceeding those that are approved will constitute a violation of the Federal Food, Drug, and Cosmetic Act. Violations
of the Federal Food, Drug, and Cosmetic Act or regulatory requirements at any time during the product development process, approval
process, or after approval may result in agency enforcement actions, including withdrawal of approval, recall, seizure of products,
injunctions, fines and/or civil or criminal penalties. Any agency enforcement action could have a material adverse effect on our
business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Should we wish to market
our products in countries other than the U.S., we must receive marketing authorization from the appropriate regulatory authorities.
The requirements governing the conduct of clinical trials, marketing authorization, pricing and reimbursement vary widely from
country to country. At present, companies are typically required to apply for foreign marketing authorizations at a national level.
However, within the EU, registration procedures are available to companies wishing to market a product in more than one EU member
state. Typically, if the regulatory authority is satisfied that a company has presented adequate evidence of safety, quality and
efficacy, then the regulatory authority will grant a marketing authorization. This regulatory approval process, however, involves
risks similar or identical to the risks associated with FDA approval discussed above, and therefore we cannot guarantee that we
will be able to obtain the appropriate marketing authorization for any product in any particular country. Our current development
strategy calls for us to seek marketing authorization for our drug candidates in countries other than the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Failure to comply with
applicable laws and regulations would likely have a material adverse effect on our business. In addition, laws and regulations
regarding the manufacture and sale of new drugs are subject to future changes. We cannot predict the likelihood, nature, effect
or extent of adverse governmental regulation that might arise from future legislative or administrative action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Property, Plant and Equipment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since April 2015 we
lease offices in Ra&rsquo;anana, Israel. The basic lease period is for 24 months with an option for an additional 12-month period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To our knowledge, there
are no environmental issues that affect our use of the properties that we lease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of November
4, 2016 , we have two full-time employees, including our officers, and four part-time service providers. We and our Israeli employees
are subject, by an extension order of the Israeli Ministry of Welfare, to certain provisions of collective bargaining agreements
between the Histadrut, the General Federation of Labor Unions in Israel and the Coordination Bureau of Economic Organizations,
including the Industrialists Associations. These provisions principally address cost of living increases, recreation pay, travel
expenses, vacation pay and other conditions of employment. We provide our employees with benefits and working conditions equal
to or above the required minimum. Other than those provisions, our employees are not represented by a labor union. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Historical Background and Corporate
Structure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our legal and commercial
name is XTL Biopharmaceuticals Ltd. We were established as a private company limited by shares under the laws of the State of Israel
on March 9, 1993, under the name Xenograft Technologies Ltd. We re-registered as a public company on June 7, 1993, in Israel, and
changed our name to XTL Biopharmaceuticals Ltd. on July 3, 1995.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We commenced operations
to use and commercialize technology developed at the Weizmann Institute, in Rehovot, Israel. Since 1993 we pursued therapeutic
and pharmaceutical development programs for the treatment of a variety of indications including hepatitis B, hepatitis C, diabetic
neuropathic pain, schizophrenia, SLE and multiple myeloma, most of which have terminated. Our current drug development program
is currently focused on the treatment of SLE and multiple myeloma.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently have one
subsidiary, Xtepo Ltd., a private company limited by shares under the laws of the State of Israel which holds a license for the
exclusive use of rHuEPO for the treatment of multiple myeloma. As of April 2015, we hold approximately 5% of the issued and outstanding
share capital of InterCure Ltd., a now former subsidiary of ours (See &ldquo;Business &ndash; Recent Developments &ndash; <I>InterCure
Transactions</I> &rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ADSs are listed
for trading on the Nasdaq Capital Market under the symbol &ldquo;XTLB.&rdquo; Our ordinary shares are traded on the TASE under
the symbol &ldquo;XTLB.&rdquo; We operate under the laws of the State of Israel under the Israeli Companies Law, and in the U.S.,
the Securities Act and the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our principal offices
are located at 5 HaCharoshet Street, Raanana 4365603, Israel, and our telephone number is +972-9-955-7080. Our primary internet
address is www.xtlbio.com. None of the information on our website is incorporated by reference herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_015"></A>MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Directors and Senior Management.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth the members of our senior management and board of directors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name</FONT> </TD>
    <TD STYLE="width: 1%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 10%; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Age</FONT> </TD>
    <TD STYLE="width: 1%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 53%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Position</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shlomo Shalev</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">54</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman of the Board of Directors</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Osnat Hillel Fain</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">50</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive and External Director</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oded Nagar</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">48</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive and External Director</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">David Bassa</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">54</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive Director</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Doron Turgeman</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">48</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive Director</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr. Jonathan Schapiro</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">56</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive Director</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dr. Dobroslav Melamed</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-Executive Director</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Josh Levine</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">52</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">David Kestenbaum</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">52</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <B><I>Shlomo Shalev
</I></B>joined our Board of Directors in December 2014 and in August 2015 was appointed to serve as interim Chairman. He most
recently served as Chairman of the Board of Micronet, a TASE listed company. In addition to serving as a board member on a number
of NASDAQ and TASE listed companies, such as OphirOptronics, Arel Communications and PowerDsine, Mr. Shalev was the Senior Vice
President of Investments for Ampal. He has also worked on a number of transactions in mergers and acquisitions and initial public
offerings. With an educational background in economics, Mr. Shalev was Israel&rsquo;s Consul for Economic Affairs and the Economic
Advisor to the Director General, Ministry of Industry and Trade. Mr. Shalev holds an MBA from the University of San Francisco
and a B.A. degree in Economics from the University of Ben Gurion, Beer Sheva, Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Osnat Hillel
Fain</I></B> joined our Board of Directors in March 2015. She most recently served as Founder, Director and Managing Partner of
Newton Propulsion Technologies LTD. In addition to serving as a board member on a number of TASE listed companies, including First
ET View LTD, Priortech LTD, Aran R&amp;D (1982) LTD, LeumiStart Fund and SDS LTD, Ms. Fain was the Business Development Manager
at Giora Eiland Ltd., a representative of The Cheyne Capital Group in Israel, CEO of InterVision, Co-manager of the Aran Medical
Ventures hedge fund, Marketing Manager at Datasphere Ltd. and an independent marketing consultant for TCB. She earned an Executive
MBA and a BA in Humanities at Tel Aviv University and completed a one year course in Management at the Tel Aviv campus of the College
of Management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Oded Nagar</I></B>
joined our Board of Directors in March 2015. He currently serves as CEO and Owner of ABC &ndash; Advance Business Consulting Ltd,
as the CEO of Galaxy Properties and Real Estate LTD and as a board member of Bunkersec Ltd. In addition to serving as a board member
on a number of TASE listed companies, including IDB Development LTD, Gamatronic Electronic Industries LTD and Biri-Barashi Ltd.,
Mr. Nagar was the CEO and Founder of Pretium Group LTD/Pretium Renewable Energy LTD, VP Finance and Operations at Matrix IT (Formula
Group) and the CFO of Bashan Systems (Formula Group). Previously, Oded worked in the Department of the General Controller at the
Ministry of Finance in Israel, as an accountant at KPMG Israel and as an Economist at Bank Leumi. He earned an MBA in Finance and
Banking and Information Systems and a BA in Accounting and Economics from the Hebrew University of Jerusalem. Mr. Nagar is also
a Certified Public Accountant in Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>David Bassa</I></B>
joined our Board of Directors in November 2013 and served as Chairman from June 2014 until August 2015. He is the CEO and co-founder
of Sela Software Ltd., a leading knowledge center and software house for the high-tech and IT industry, since 1990. In 2000, Mr.
Bassa founded Bio-Gal, a biopharmaceuticals company which subsequently merged into XTL, for the purpose of developing Erythropoietin
(EPO) for the treatment of Multiple Myeloma. Mr. Bassa graduated with a B.A in Economics from Bar-Ilan University and an M.Sc in
Computer Science studies (without thesis), also from Bar-Ilan University. Mr. Bassa was twice awarded the President Excellency
Award (1981, 2002) and managed the Israeli branch of the international AIESEC organization, of which he is a Hall of Fame member.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <B><I>Doron Turgeman
</I></B>joined our Board of Directors in December 2014. He has significant public company experience with both NASDAQ and TASE
listed companies. Mr. Turgeman is currently the Chief Executive Officer of B Communications (BCOM) and Internet Gold (IGLD), both
of which are listed on the NASDAQ. He has gained considerable experience in mergers and acquisitions involving both debt and equity,
with, among other things, the purchase of the controlling interest of Bezeq by B Communications. He is knowledgeable in capital
markets in Israel, the U.S. and Europe as well as SEC and TASE reporting standards. Throughout his career, he has proved to be
a strong manager and has developed close relationships with key constituents throughout the industry .Mr. Turgeman holds a B.A.
degree in Economics and Accounting from the Hebrew University of Jerusalem and is a certified public accountant in Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <B><I>Dr. Jonathan
Schapiro</I></B> joined our Board of Directors in December 2014. He is currently an Adjunct Clinical Assistant Professor in the
Department of Medicine, Division of Infectious Diseases and Geographic Medicine at Stanford University School of Medicine and
a Director of HIV/AIDS at the National Hemophilia Center at Sheba Medical Center in Tel-Aviv, Israel. He has served as a committee
member on the United States Food and Drug Administration Antiviral Drugs Advisory Committee and is a member of the World Health
Organization Global HIV Drug Resistance Network Steering Group. Dr. Schapiro is on the organizing and scientific committee of
international conferences on antiviral drug development, clinical pharmacology and resistance, as well as contributing to guidelines
publications. His research has appeared in major journals such as Lancet and Annals of Internal Medicine. He has served on the
scientific advisory boards of major pharmaceutical and molecular diagnostic companies and has been involved in the development
of multiple antiviral drugs over the last 20 years. Dr. Schapiro has devoted his career to HIV clinical care, research and education
since completing his Fellowship in Infectious Diseases and Geographic Medicine at Stanford University School of Medicine, Stanford
CA. He graduated from the Ben Gurion University School of Medicine and completed his Medical Residency at the Rabin Medical Center
in Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <B><I>Dr. Dobroslav
Melamed</I></B> joined our Board of Directors in December 2014. He is a biotech entrepreneur with over 10 years of experience
in the life science industry. He has demonstrated success in taking drugs from the lab to the shelf by identifying target markets,
planning regulatory strategy, raising capital, executing successful clinical trials and scaling up to commercial production. He
is currently establishing two companies involved in the development of a treatment for Ebola and novel drug delivery. Until September
2014, he was the President of SciVac (formerly SciGen IL), a high growth biopharmaceutical company that develops, manufactures
and markets recombinant human health care biotechnology derived products, including vaccines. Dr. Melamed was responsible for
SciVac&rsquo;s operations, clinical trials and new business. Dr. Melamed is the co-founder of Periness LTD, a developer of new
drugs for male infertility and Oshadi LTD, a developer of oral carriers for proteins like insulin. He has also been a researcher
at Bar-Ilan University&rsquo;s Male Fertility clinic, where he assisted in the development of new drugs for male infertility;
and QBI, where he worked in the Pre-clinical and Research Pharmacology Department establishing In-Vivo models for drug discovery
and delivery. Dr. Melamed earned a PhD in Biotechnology and a Bachelor of Arts degree in Biotechnology from the Bar-Ilan University,
Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Josh Levine</I></B>
was appointed our Chief Executive Officer in October 2013. Mr. Levine was the Chief Executive Officer of Proteologics Ltd. (TASE:
PRTL) from January 2011 until October 2013. Previously, from September 2008 until September 2010, he was Chairman of the Board
of Proteologics Ltd. Concurrently, he was Senior Director at Teva Innovative Ventures responsible for, among other things, business
development as well as alliance management for the unit. He had also held several executive positions within venture capital funds
and boutique investment banks. Previously, he was a corporate attorney at a large New York City law firm. Mr. Levine holds a JD
degree from Columbia University Law School and a BA degree in Chemistry from Yeshiva University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>David Kestenbaum</I></B>
was appointed our Chief Financial Officer in January 2014. Before joining XTL, he served as CFO of Zenith Solar Ltd., a start-up
company involved in the development and deployment of innovative solar energy technology from 2010 to 2012. Prior positions include
Finance Director of Colbar Lifescience Ltd., a medical device/biotech company and division of Johnson and Johnson (NYSE:JNJ) from
2007 to 2010, CFO of ZAG Industries Ltd., a division of The Stanleyworks (NYSE:SWK) from 2003 to 2007, and CFO and other senior
financial positions at affiliates of Unilever NV (NYSE: UN) in the U.S. and Israel. He worked in public accounting at PriceWaterhouseCoopers
in NY from 1986 to 1990. Mr. Kestenbaum is a U.S. Certified Public Accountant and holds a BSc in Accounting from Yeshiva University
(NY), and a MBA in Finance and International Business from Columbia University (NY).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The aggregate compensation
paid by us to all persons who served as directors or officers for the year 2015 (11 persons) was approximately $0.6 million. This
amount includes payments of approximately $0.1 million made for social security, pension, disability insurance and health insurance
premiums, severance accruals, payments made in lieu of statutory severance, payments for continuing education plans, and payments
made for the redemption of accrued vacation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> All members of
our Board of Directors who are not our employees are reimbursed for their expenses for each meeting attended, save for Mr. David
Bassa, who is a significant shareholder of our Company. Our directors are eligible to receive stock options under our stock option
plans. With the exception of the Chairman of the Board of Directors who receives monthly compensation, non&mdash;executive directors
do not receive any remuneration from us other than fees for their services as members of the board or committees of the board
and expense reimbursement, save for one director who is eligible for fees for consulting services provided to the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In March 2012,
we granted to each of our former external directors, Jaron Diament and Dafna Cohen, options to purchase 150,000 ordinary shares
exercisable at an exercise price of NIS 0.58633 per share (which is the average of the three-day closing price on TASE prior to
the issuance). 33% of the options are vested and the remaining 67% shall vest and be exercisable on a monthly basis, commencing
from the date of the mentioned shareholders meeting, for the duration of two years. Ms. Cohen and Mr. Diament ceased serving on
the Board of Directors on March 18, 2015 and the 300,000 vested options expired on March 17, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 30, 2014,
we granted to each of four of our directors &ndash; Doron Turgeman, Mr. Shlomo Shalev, Dr. Jonathan Schapiro and Dr. Dobroslav
Melamed &ndash; options to purchase 150,000 ordinary shares exercisable at an exercise price of NIS 0.4325 per share. One third
of the options vest on the twelve month anniversary of the grant date, and the remaining two thirds vest on a quarterly basis over
the following two years provided the respective director provides services to us. The options have a term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 25, 2015,
we granted to each of two of our directors &ndash; Osnat Hillel Fain and Oded Nagar &ndash; options to purchase 150,000 ordinary
shares at an exercise price of NIS 0.40 per share. One third of the options vest on the twelve-month anniversary of the grant date,
and the remaining two thirds vest on a quarterly basis over the following two years provided the respective director provides services
to us. The options have a term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> In March 2015,
we fixed the monetary compensation for non-executive directors as follows: annual consideration of $10,000 (to be paid in 4 equal
quarterly payments), payments of NIS 1,460 for attendance at each board or committee meeting in person, NIS 744 for meetings held
by teleconference, NIS 620 for unanimous written board resolutions and reimbursement of reasonable out-of-pocket expenses. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We previously granted
to each of our three former directors, Mr. Yonay, Mr. Shweiger and Mr. Allouche, options to purchase 150,000 ordinary shares exercisable
at NIS 0.298 per share (which is the average of the three-day closing price on TASE prior to the issuance). 33% of the options
are vested and the remaining 67% vest on a monthly basis from March 2, 2010 over two years. On November 22, 2010, Mr. Shweiger
ceased serving on our Board of Directors and therefore 63,747 of the total options granted to him were forfeited. Upon his departure,
Mr. Shweiger exercised the vested 86,253 options. Mr. Allouche ceased serving on our Board of Directors on May 18, 2014, and during
August 2014 he exercised the 150,000 vested options granted to him. Mr. Yonay ceased serving on our Board of Directors on December
30, 2014 and the 150,000 vested options granted to him expired on December 29, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> For further details
regarding share options granted to our employees, directors and service providers, see &ldquo;Employment and Service Agreements&rdquo;
below and Note 17 to the consolidated financial statements for the year ended December 31, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with
the requirements of Israeli Law, we determine our directors&rsquo; compensation in the following manner:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">first,
our compensation committee reviews the proposal for compensation.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">second,
provided that the compensation committee approves the proposed compensation, the proposal is then submitted to our Board of Directors
for review, except that a director who is the beneficiary of the proposed compensation does not participate in any discussion
or voting with respect to such proposal; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">finally,
if our Board of Directors approves the proposal, it must then submit its recommendation to our shareholders, which is usually
done in connection with our shareholders&rsquo; general meeting.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The approval of a majority
of the shareholders voting at a duly convened shareholders meeting is required to implement any such compensation proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Employment and Service Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Joshua Levine</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into an
employment agreement dated as of September 11, 2013, as amended on January 30, 2014, with Mr. Joshua Levine, our Chief Executive
Officer, or CEO. Mr. Levine commenced his term as CEO on October 15, 2013 and is entitled to a monthly gross base salary of NIS
40,000 (NIS 480,000 annually), paid retroactively, effective from said commencement date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The employment agreement
provides that upon the successful completion of cash fund raising of at least $3 million in a public offering or private placement
of equity securities, including securities convertible or exercisable into equity of the Company or any entity under its control
(which for this purpose means ownership by the Company of greater than 50% of the outstanding voting securities), as long as Mr.
Levine is appointed as such entity&rsquo;s CEO, during the thirty six month period from the date of the agreement, the Company
will pay Mr. Levine a bonus equal to 1% of the above fund raising amount, up to a maximum aggregate amount of $200,000 in any calendar
year. The employment agreement further provides that in the event the Company or any of its wholly-owned subsidiaries or any entity
under its control, as long as Mr. Levine is appointed as such entity&rsquo;s CEO, receives payment in connection with any collaboration
or other transaction relating to their respective products or technologies, excluding payments made to finance specific research
and development activity and royalty payments, Mr. Levine shall be entitled to payment of 1% of the cash actually received by the
Company in such transaction, up to an aggregate maximum amount of $200,000 in any calendar year. Furthermore, the employment agreement
provides that in the event the Company or any of its wholly-owned subsidiaries or any entity under its control, as long as Mr.
Levine is appointed as such entity&rsquo;s CEO, receives payment in connection with payments made to finance specific research
and development activity, Mr. Levine shall be entitled to receive payment of 0.5% of such funding actually received by the Company
up to an aggregate maximum of $200,000 in any calendar year and per single research and development funding. The aggregate of all
such bonuses payable to Mr. Levine in any calendar year cannot exceed $300,000. In addition, the employment agreement provides
that Mr. Levine shall be entitled to an annual bonus of NIS 66,000 upon meeting goals set by the Board of Directors. The employment
agreement also provides that Mr. Levine will be entitled to benefits such as convalescence pay, managers&rsquo; insurance, a study
fund and a company car.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In consideration for
his service as our CEO, under the employment agreement, on March 17, 2014, Mr. Levine was granted options to purchase 1,500,000
ordinary shares. 600,000 of the options are exercisable at NIS 0.60 each and 900,000 of the options are exercisable at NIS 0.90
each. The options vest over 36 months from October 20, 2013 in 12 equal installments at the end of each calendar quarter for as
long as Mr. Levine&rsquo;s employment with us has not terminated. The options have a term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The employment agreement
is in effect as of the date of approval at our general meeting of shareholders on March 17, 2014, and continues for a three-year
term as of that date. Either party may terminate the employment agreement without cause upon three months&rsquo; advance written
notice during the first year of the agreement and four months&rsquo; advance written notice thereafter. In the case of death or
disability, as such terms are defined in the employment agreement, Mr. Levine or his heirs shall be entitled to four months&rsquo;
salary in addition to any severance pay under applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 25, 2015,
a special meeting of shareholders approved a grant to Mr. Levine of an additional bonus of 0.5% of any funds raised by us from
any non-existing shareholder of ours up to $36,000 as well as options to purchase 100,000 ordinary shares exercisable at NIS 0.40
per share. Half the options vest upon grant and half vest in equal quarterly installments over 36 months provided Mr. Levine remains
employed or provides services to us. The options have a term of ten years. Such grant was made in consideration of Mr. Levine&rsquo;s
consent to waive 10% of his monthly compensation until the later of a qualified financing and December 31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On March 31, 2016,
a general meeting of shareholders of the Company approved the allocation of 1,000,000 stock options to the Company&rsquo;s Chief
Executive Officer, exercisable into 1,000,000 ordinary shares of NIS 0.1 par value each of the Company, for an exercise price
of NIS 0.6 per stock option. The exercise period of the stock options is a maximum of ten years from the grant date. 33.33% of
the stock options vest following the lapse of 12 months from the grant date, and the remaining 66.67% vest in eight equal portions
each quarter over a period of two years from the first anniversary. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>David Kestenbaum</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into an
employment agreement dated as of January 9, 2014 with Mr. David Kestenbaum, our Chief Financial Officer, or CFO. Mr. Kestenbaum
is entitled to a monthly gross base salary of NIS 33,000 (NIS 396,000 annually).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The employment agreement
provides that upon the successful completion of fund raising of at least $3 million in a public offering or private placement of
equity securities, including securities convertible or exercisable into equity by the Company within a period of three years as
of the effective date and, as long as Mr. Kestenbaum is employed by us as CFO, Mr. Kestenbaum shall be entitled to a one-time bonus
payment equal to 0.6% of the funds raised, and up to maximum aggregate payment of $120,000 per year. The employment agreement further
provides that upon the successful completion of a transaction made by the Company or any of its fully owned subsidiaries or any
entity in its controls receives payment in connection with any collaboration or other transaction relating to their respective
products or technologies, excluding payments made to finance specific research and development activity and royalty payment, as
long as the Mr. Kestenbaum is employed by us as CFO, Mr. Kestenbaum shall be entitled to a one-time payment equal to 0.5% of the
transaction amount actually received by us in such transaction, whether as upfront payments, milestone payments or payments of
any other form, and up to maximum aggregate payment of $100,000 per year. Furthermore, the employment agreement provides that upon
the successful completion of a research and development funding in the Company, Mr. Kestenbaum shall be entitled to a one-time
bonus payment equal to 0.4% of the funding amount, and up to a maximum aggregate payment of $75,000 per year. The aggregate of
all such bonuses payable to Mr. Kestenbaum in any calendar year cannot exceed $150,000. The employment agreement also provides
that Mr. Kestenbaum will be entitled to pension and severance benefits, managers&rsquo; insurance as commonly acceptable for office
holders and a company car.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In consideration for
his service as our CFO, under the employment agreement, on December 30, 2013, Mr. Kestenbaum was granted options to purchase 750,000
ordinary shares at an exercise price of NIS 0.5328 per share. The options vest over 36 months in 12 equal installments at the end
of each calendar quarter following the grant date for as long as Mr. Kestenbaum&rsquo;s employment with us has not terminated.
The options have a term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The employment agreement
has a three-year term from the effective date of January 5, 2014. Either party may terminate the employment agreement without cause
upon 60 days&rsquo; advance written notice. In the case of death or disability, as such terms are defined in the employment agreement,
Mr. Kestenbaum or his heirs shall be entitled to four months&rsquo; salary in addition to any severance pay under applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 25, 2015,
we granted to Mr. Kestenbaum options to purchase 100,000 ordinary shares at an exercise price of NIS 0.40 per share. Half the options
vest upon grant and half vest in equal quarterly installments over 36 months provided Mr. Kestenbaum remains employed or provides
services to us. The options have a term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 1, 2015, we
granted to Mr. Kestenbaum options to purchase 200,000 ordinary shares at an exercise price of NIS 0.4283 per share. One third of
the options vest on the twelve month anniversary of the grant date, and the remaining two thirds vest on a quarterly basis over
the following two years provided Mr. Kestenbaum remains employed or provides services to us. The options have a term of ten years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> On May 31, 2016,
we granted to Mr. Kestenbaum options to purchase 400,000 ordinary shares at an exercise price of NIS 0.60 per share. One third
of the options vest on the twelve month anniversary of the grant date, and the remaining two thirds vest on a quarterly basis
over the following 2 years provided Mr. Kestenbaum remains employed or provides services to us. The options have a term of ten
years. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Shlomo Shalev</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> On December 28,
2015, our Board of Directors approved the terms upon which Shlomo Shalev shall serve as Chairman, subject to shareholder approval.
Commencing September 1, 2015, Mr. Shalev shall be entitled to a monthly fee of NIS 20,000 for at least 65 hours per month. In
addition, Mr. Shalev shall be entitled to options to purchase 1,500,000 ordinary shares at an exercise price of NIS 0.60 per share.
One third of the options vest on the twelve month anniversary of the grant date, and the remaining two thirds vest on a quarterly
basis over the following two years provided Mr. Shalev provides services to us. The options have a term of ten years. On March
31, 2016, Mr. Shalev&rsquo;s remuneration as Chairman was approved by an annual general meeting of the Company&rsquo;s shareholders. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Jonathan Schapiro</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We entered into a consulting
agreement dated January 1, 2015 with Dr. Jonathan Schapiro, a director. Commencing on such date, Dr. Schapiro shall serve as a
consultant to us for a monthly fee of $1,500 increasing to $3,000 upon the successful completion of a cash fund raising of at least
$3 million in a public offering or private placement of equity securities, including securities convertible or exercisable into
equity by us or any entity in our control. In addition under the consulting agreement, on December 30, 2014, Dr. Schapiro was granted
options to purchase 150,000 ordinary shares at an exercise price of NIS 0.4915 per share (in addition to the options granted to
him as a director on the same day as described above). One third of the options vest on the twelve month anniversary of the grant
date, and the remaining two thirds vest on a quarterly basis over the following two years provided Dr. Schapiro provides services
to us. The options have a term of ten years. The consulting agreement continues in force unless terminated without cause upon 30
days&rsquo; advance written notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Practices</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Election of Directors and Terms of Office</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our Board of Directors
currently consists of seven members, including our non-executive Chairman. Other than our two external directors, our directors
are elected by an ordinary resolution at the annual general meeting of our shareholders. The nomination of our directors is proposed
by a nomination committee of our Board of Directors, whose proposal is then approved by the board. The current members of the
nomination committee are David Bassa, Osnat Hillel Fain and Oded Nagar. Our board, following receipt of a proposal of the nomination
committee, has the authority to add additional directors up to the maximum number of 12 directors allowed under our Articles.
Such directors appointed by the board serve until the next annual general meeting of the shareholders. Unless they resign before
the end of their term or are removed in accordance with our Articles, all of our directors, other than our external directors,
will serve as directors until our next annual general meeting of shareholders. On December 30, 2014, the annual general meeting
of our shareholders appointed four new members to the Company&rsquo;s board of directors &ndash; Dr. Jonathan Schapiro, Dr. Dobroslav
Melamed, Doron Turgeman and Shlomo Shalev. At the same annual general meeting, Mr. David Bassa was re-elected to serve as a director
of the Company. On March 25, 2015, Osnat Hillel Fain and Oded Nagar were elected as external directors to serve for a three-year
term until March 24, 2018. On August 31, 2015, David Bassa resigned as Chairman of the Board of Directors (though he remains as
a director) and Shlomo Shalev was appointed to serve as interim Chairman of the Board of Directors on such date. On March 31,
2016, shareholders at the annual general meeting of the Company&rsquo;s shareholders approved the appointment of Shlomo Shalev
as Chairman of the Board of Directors. At the same general meeting, Dr. Jonathan Schapiro, Dr. Dobroslav Melamed, Doron Turgeman
and David Bassa were re-elected to serve as directors of the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">None of our directors
or officers has any family relationship with any other director or officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Articles permit
us to maintain directors&rsquo; and officers&rsquo; liability insurance and to indemnify our directors and officers for actions
performed on behalf of us, subject to specified limitations. We maintain a directors and officers insurance policy which covers
the liability of our directors and officers as allowed under Israeli Companies Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are no service
contracts or similar arrangements with any director that provide for benefits upon termination of a directorship.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>External and Independent Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law requires Israeli companies with shares that have been offered to the public either in or outside of Israel to appoint two external
directors. No person may be appointed as an external director if that person or that person&rsquo;s relative, partner, employer
or any entity under the person&rsquo;s control, has or had, on or within the two years preceding the date of that person&rsquo;s
appointment to serve as an external director, any affiliation with the company or any entity controlling, controlled by or under
common control with the company. The term affiliation includes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
employment relationship;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
business or professional relationship maintained on a regular basis;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">control;
and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">service
as an office holder, other than service as an officer for a period of not more than three months, during which the company first
offered shares to the public.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No person may serve
as an external director if that person&rsquo;s position or business activities create, or may create, a conflict of interest with
that person&rsquo;s responsibilities as an external director or may otherwise interfere with his/her ability to serve as an external
director. If, at the time external directors are to be appointed, all current members of the Board of Directors are of the same
gender, then at least one external director must be of the other gender. A director in one company shall not be appointed as an
external director in another company if at that time a director of the other company serves as an external director in the first
company. In addition, no person may be appointed as an external director if he/she is a member or employee of the Israeli Security
Authority, and also not if he/she is a member of the Board of Directors or an employee of a stock exchange in Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">External directors
are to be elected by a majority vote at a shareholders&rsquo; meeting, provided that either:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
majority of shares voted at the meeting, including at least one-half of the shares held by non-controlling shareholders or other
shareholders who have a personal interest in such election voted at the meeting, vote in favor of election of the director, with
abstaining votes not being counted in this vote; or</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
total number of shares held by non-controlling shareholders voted against the election of the director does not exceed two percent
of the aggregate voting rights in the company.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The initial term of
an external director is three years and may be extended for two additional three-year terms. An external director may be removed
only by the same percentage of shareholders as is required for their election, or by a court, and then only if such external director
ceases to meet the statutory qualifications for their appointment or violates his or her duty of loyalty to the company. Both external
directors must serve on every committee that is empowered to exercise one of the functions of the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An external director
is entitled to compensation as provided in regulations adopted under the Israeli Companies Law and is otherwise prohibited from
receiving any other compensation, directly or indirectly, in connection with service provided as an external director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Osnat Hillel Fain and
Oded Nagar serve as external directors pursuant to the provisions of the Israeli Companies Law. They both serve on our audit committee,
our committee for the approval of financial statements, our nomination committee and our compensation committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Audit Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law requires public companies to appoint an audit committee. The responsibilities of the audit committee include identifying irregularities
in the management of the company&rsquo;s business and approving related party transactions as required by law. An audit committee
must consist of at least three directors, including all of its external directors. The chairman of the Board of Directors, any
director employed by or otherwise providing services to the company, and a controlling shareholder or any relative of a controlling
shareholder, may not serve as members of the audit committee. An audit committee may not approve an action or a transaction with
a controlling shareholder, or with an office holder, unless at the time of approval two external directors are serving as members
of the audit committee and at least one of the external directors was present at the meeting in which an approval was granted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Our audit committee
is currently comprised of three independent non-executive directors. The audit committee is chaired by Osnat Hillel Fain, with
Doron Turgeman, who serves as the audit committee financial expert, and Oded Nagar as members. The audit committee meets at least
four times a year and monitors the adequacy of our internal controls, accounting policies and financial reporting. It regularly
reviews the results of the ongoing risk self-assessment process, which we undertake, and our interim and annual reports prior
to their submission for approval by the full Board of Directors. The audit committee oversees the activities of the internal auditor,
sets its annual tasks and goals and reviews its reports. The audit committee reviews the objectivity and independence of the external
auditors and also considers the scope of their work and fees. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have adopted a written
charter for our audit committee, setting forth its responsibilities as outlined by the regulations of the SEC. In addition, our
audit committee has adopted procedures for the receipt, retention and treatment of complaints we may receive regarding accounting,
internal accounting controls, or auditing matters and the submission by our employees of concerns regarding questionable accounting
or auditing matters. In addition, SEC rules mandate that the audit committee of a listed issuer consist of at least three members,
all of whom must be independent, as such term is defined by rules and regulations promulgated by the SEC. We are in compliance
with the independence requirements of the SEC rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Financial Statement Examination Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law regulations require each public company to appoint a committee that examines the financial statements (the &ldquo;Committee&rdquo;)
which shall be compounded from at least three (3) members, of which the majority among them shall be independent directors and
the Committee&rsquo;s Chairman shall be an external director. The Committee&rsquo;s duties are, among other things, to examine
the Company&rsquo;s financial statements and to recommend and report to the board of directors of the Company regarding any problem
or defect found in such financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the
above-said, all of the Committee&rsquo;s members must meet the following requirements:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
members shall be members of the board of directors of the Company.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
least one of the Committee&rsquo;s members shall have financial and accounting expertise and the rest of the Committee&rsquo;s
members must have the ability to read and understand financial statements.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is in full
compliance with the requirements outlined above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to a resolution
of our Board of Directors, the Audit Committee has been assigned the responsibilities and duties of a financial statements examination
committee, as permitted under relevant regulations promulgated under the Companies Law. From time to time as necessary and required
to approve our financial statements, the Audit Committee holds separate meetings, prior to the scheduled meetings of the entire
Board of Directors, regarding financial statement approval. The function of a financial statements examination committee is to
discuss and provide recommendations to its board of directors (including the report of any deficiency found) with respect to the
following issues: (i) estimations and assessments made in connection with the preparation of financial statements; (ii) internal
controls related to the financial statements; (iii) completeness and propriety of the disclosure in the financial statements; (iv)
the accounting policies adopted and the accounting treatments implemented in material matters of the Company; (v) value evaluations,
including the assumptions and assessments on which evaluations are based and the supporting data in the financial statements. Our
independent auditors and our internal auditors are invited to attend all meetings of the Audit Committee when it is acting in the
role of the financial statements examination committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Compensation Committee</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Amendment no. 20 to
the Companies Law was published on November 12, 2012 and became effective on December 12, 2012, or Amendment no. 20. In general,
Amendment no. 20 requires public companies to appoint a compensation committee and to adopt a compensation policy with respect
to its officers, or the Compensation Policy. In addition, Amendment no. 20 addresses the corporate approval process required for
a public company&rsquo;s engagement with its officers (with specific reference to a director, a non-director officer, a chief executive
officer and controlling shareholders and their relatives who are employed by the company).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The compensation committee
shall be nominated by the board of directors and be comprised of its members. The compensation committee must consist of at least
three members. All of the external directors must serve on the compensation committee and constitute a majority of its members.
The remaining members of the compensation committee must be directors who qualify to serve as members of the audit committee (including
the fact that they are independent) and their compensation should be identical to the compensation paid to the external directors
of the company. The approval of the compensation committee is required in order to approve terms of office and/or employment of
office holders. The Company&rsquo;s Compensation Policy was duly approved on November 19, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Similar to the rules
that apply to the audit committee, the compensation committee may not include the chairman of the board, or any director employed
by the company, by a controlling shareholder or by any entity controlled by a controlling shareholder, or any director providing
services to the company, to a controlling shareholder or to any entity controlled by a controlling shareholder on a regular basis,
or any director whose primary income is dependent on a controlling shareholder, and may not include a controlling shareholder or
any of its relatives. Individuals who are not permitted to be compensation committee members may not participate in the committee&rsquo;s
meetings other than to present a particular issue; provided, however, that an employee that is not a controlling shareholder or
relative may participate in the committee&rsquo;s discussions, but not in any vote, and the company&rsquo;s legal counsel and corporate
secretary may participate in the committee&rsquo;s discussions and votes if requested by the committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The roles of the compensation
committee are, among other things, to: (i) recommend to the board of directors the Compensation Policy for office holders and recommend
to the board once every three years the extension of a Compensation Policy that had been approved for a period of more than three
years; (ii) recommend to the directors any update of the Compensation Policy, from time to time, and examine its implementation;
(iii) decide whether to approve the terms of office and of employment of office holders that require approval of the compensation
committee; and (iv) decide, in certain circumstances, whether to exempt the approval of terms of office of a chief executive officer
from the requirement of shareholder approval.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation Policy
requires the approval of the general meeting of shareholders with a &ldquo;Special Majority&rdquo;, which requires a majority of
the shareholders of the company who are not either a controlling shareholder or an &ldquo;interested party&rdquo; in the proposed
resolution, or the shareholders holding less than 2% of the voting power in the company voted against the proposed resolution at
such meeting. However, under special circumstances, the board of directors may approve the Compensation Policy without shareholder
approval, if the compensation committee and thereafter the board of directors decided, based on substantiated reasons after they
have reviewed the compensation policy again, that the Compensation Policy is in the best interest of the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Amendment no. 20 details
the considerations that should be taken into account in determining the Compensation Policy and certain issues which the Compensation
Policy should include.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Osnat Hillel Fain
is the chairman of our compensation committee. Doron Turgeman and Oded Nagar serve as the other members of our compensation committee. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Approval of Compensation to Our Officers</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law prescribes that compensation to officers must be approved by a company&rsquo;s board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt"> As detailed above,
our compensation committee consists of three independent directors: Doron Turgeman, Osnat Hillel Fain and Oded Nagar. The responsibilities
of the compensation committee are to set our overall policy on executive remuneration and to decide the specific remuneration,
benefits and terms of employment for directors, officers and the Chief Executive Officer. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The objectives of the
compensation committee&rsquo;s policies are that such individuals should receive compensation which is appropriate given their
performance, level of responsibility and experience. Compensation packages should also allow us to attract and retain executives
of the necessary caliber while, at the same time, motivating them to achieve the highest level of corporate performance in line
with the best interests of shareholders. In order to determine the elements and level of remuneration appropriate to each executive
director, the compensation committee reviews surveys on executive pay, obtains external professional advice and considers individual
performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Internal Auditor</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, the board of directors must appoint an internal auditor, nominated by the audit committee. The role of the internal auditor
is to examine, among other matters, whether the company&rsquo;s actions comply with the law and orderly business procedure. Under
the Israeli Companies Law, an internal auditor may not be:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
person (or a relative of a person) who holds more than 5% of the company&rsquo;s shares;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
person (or a relative of a person) who has the power to appoint a director or the general manager of the company;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
executive officer or director of the company; or</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
member of the company&rsquo;s independent accounting firm.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We comply with
the requirement of the Israeli Companies Law relating to internal auditors. Our internal auditors examine whether our various
activities comply with the law and orderly business procedure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_016"></A>CERTAIN RELATIONSHIPS
AND RELATED PARTY TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a
description of some of the transactions with related parties to which we, or our subsidiaries, are party, and which were in effect
within the past three fiscal years. The descriptions provided below are summaries of the terms of such agreements, do not purport
to be complete and are qualified in their entirety by the complete agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that we
have executed all of our transactions with related parties on terms no less favorable to us than those we could have obtained from
unaffiliated third parties. We are required by Israeli law to ensure that all future transactions between us and our officers,
directors and principal shareholders and their affiliates are approved by a majority of our board of directors, including a majority
of the independent and disinterested members of our board of directors, and that they are on terms no less favorable to us than
those that we could obtain from unaffiliated third parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Employment and Consulting Agreements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have or have had
employment, consulting or related agreements with each member of our senior management. See &ldquo;Management&mdash;Compensation&mdash;Employment
Agreements&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>InterCure</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2012, we acquired
the control over InterCure Ltd, or InterCure, a public company whose shares are traded on the TASE and which develops a home therapeutic
device for non-medicinal and non-invasive treatment of various diseases such as hypertension, heart failure, sleeplessness and
mental stress and markets and sells a home therapeutic device for hypertension. As a result of a series of transactions including
a transaction, that closed in February 2015, between InterCure and Green Forest Global Ltd., or Green Forest, a company wholly
owned by Mr. Alexander Rabinovitch (a greater than 5% shareholder of ours), our holdings in Intercure were diluted to 5.82% of
the issued and outstanding share capital of Intercure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">More specifically,
on November 3, 2014, InterCure announced that on November 2, 2014, its Audit Committee and Board of Directors approved the signing
of an agreement with Green Forest which was then approved by Intercure&rsquo;s shareholders on December 23, 2014. The agreement
closed on February 15, 2015 with the following material events occurring between February 1, 2015 and April 2, 2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 1, 2015, in accordance with a request made by the Israeli Securities Authority to increase public holdings in InterCure
prior to the execution of the agreement, we sold 2,166,667 shares of InterCure to a non-related third party, for an amount of
approximately $17,000.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">On February 8, 2015, InterCure effected a 1 for 10 reverse split.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">On February 15, 2015, an outstanding loan of $50,000 owed by InterCure to us was converted into 569,470 ordinary shares of InterCure. At the same time, Green Forest was issued 2,622,647 ordinary shares of Intercure.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">On March 23, 2015, InterCure issued 37,804,012 ordinary shares as part of a rights offering dated February 22, 2015.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">On March 31, 2015, we and Green Forest mutually agreed to terminate the voting agreement signed by the parties on February 12, 2015. Following said termination, the directors appointed by us resigned from the board of directors of InterCure.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">On April 2, 2015, Green Forest was issued an additional 2,622,647 ordinary shares of Intercure</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The foregoing information is
based on public filings made by InterCure to the Israeli Securities Authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Alexander Rabinovitch</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In April 2015, Alex
Rabinovitch, a holder of more than 5% of our ordinary shares, entered into a security purchase agreement resulting in the issuance
of an aggregate of 155,556 ADSs representing 3,111,120 ordinary shares in a registered direct offering at $2.25 per ADS for a purchase
price of $350,001. In addition, we issued unregistered warrants to purchase 77,778 ADSs representing 1,555,560 ordinary shares
in a private placement. The warrants may be exercised at any time for a period of five and one-half years from issuance and have
an exercise price of $2.25 per ADS, subject to adjustment as set forth therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>David Bassa</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In April 2015, David
Bassa, a holder of more than 5% of our ordinary shares, entered into a security purchase agreement resulting in the issuance of
an aggregate of 71,112 ADSs representing 1,422,240 ordinary shares in a registered direct offering at $2.25 per ADS for a purchase
price of $160,002. In addition, we issued unregistered warrants to purchase 35,556 ADSs representing 711,120 ordinary shares in
a private placement. The warrants may be exercised at any time for a period of five and one-half years from issuance and have an
exercise price of $2.25 per ADS, subject to adjustment as set forth therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Indemnification Agreements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Articles of Association
permit us to exculpate, indemnify and insure our directors and officeholders to the fullest extent permitted by the Israeli Companies
Law. We have obtained directors&rsquo; and officers&rsquo; insurance for each of our officers and directors and have entered into
indemnification agreements with all of our current officers and directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_017"></A>SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The following table
sets forth information regarding the beneficial ownership of our outstanding ordinary shares as of November 4, 2016 by the members
of our senior management, board of directors, individually and as a group, and each person who we know beneficially owns 5% or
more of our outstanding ordinary shares. The beneficial ownership of ordinary shares is based on 274,205,799 ordinary shares outstanding
as of November 4, 2016 and is determined in accordance with the rules of the SEC and generally includes any ordinary shares over
which a person exercises sole or shared voting or investment power. For purposes of the table below, we deem shares subject to
options or warrants that are currently exercisable or exercisable within 60 days of November 4, 2016, to be outstanding and to
be beneficially owned by the person holding the options or warrants for the purposes of computing the percentage ownership of
that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Name
    of Beneficial Owner</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Number
    of<BR> Ordinary Shares</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Percentage
    of<BR> Class*</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: justify; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Senior
    Management and Directors</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shlomo
    Shalev</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Chairman
    of the Board</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">725,000</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(1)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Josh
    Levine</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Chief Executive
    Officer</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,579,167</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(2)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">David
    Kestenbaum</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Chief
    Financial Officer</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">854,167</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(3)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Osnat
    Hillel Fain</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Director</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">87,500&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(4)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oded
    Nagar</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Director</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">87,500</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(4)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="width: 74%; text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">David
    Bassa</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Director</I></FONT></FONT> </TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="width: 10%; text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23,839,347</FONT> </TD><TD NOWRAP STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(5)</FONT> </TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="width: 10%; text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">8.43</FONT> </TD><TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jonathan
    Schapiro</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Director</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">200,000</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(6)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dobroslav
    Melamed</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Director</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100,000&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(7)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Doron
    Turgeman</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif"><BR> <FONT STYLE="font-size: 10pt"><I>Director</I></FONT></FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">645,000</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(8)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Directors
    and Senior Management as a group (9 persons)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">28,067,680</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">9.33</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">5%
    or More Shareholders</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Alexander
    Rabinovitch</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">48,857,076</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(9)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">17.8</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">Sabby
    Management, LLC (10)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">22,239,240</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">8.11</FONT> </TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">David
    Bassa</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23,839,347</FONT> </TD><TD NOWRAP STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(5)</FONT> </TD><TD STYLE="font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT> </TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif">8.43</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT> </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<!-- Field: Page; Sequence: 70; Value: 2 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Denotes
less than 1%</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    100,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.4325 per share exercisable until
    December 29, 2024 (ii) 625,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.6 per share
    exercisable until March 30, 2026. Excludes options to purchase 925,000 ordinary shares that vest in more than 60 days from
    the date hereof.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    600,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.60 per share exercisable until
    October 13, 2023, (ii) 900,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.90 per
    share exercisable until October 13, 2023, and (iii) 79,167 ordinary shares issuable upon the exercise of options at an exercise
    price of NIS 0.40 per share exercisable until March 24, 2025. Excludes 1,020,833 ordinary shares issuable upon the exercise
    of options that vest in more than 60 days from the date hereof.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    687,500 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.5328 per share exercisable until
    December 29, 2023, (ii) 79,167 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.40 per
    share exercisable until March 24, 2025, and (iii) 87,500 ordinary shares issuable upon exercise of options at an exercise
    price of NIS 0.4283 per share until May 31, 2025. Excludes 595,833 ordinary shares issuable upon the exercise of options that
    vest in more than 60 days from the date hereof.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes 87,500
    ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.4 per share exercisable until March 24,
    2025. Excludes options to purchase 62,500 ordinary shares that vest in more than 60 days from the date hereof.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(5)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Includes (i) 21,705,987 ordinary shares, (ii) 71,112 ADSs representing 1,422,240 ordinary shares, and (iii) warrants to purchase 35,556 ADSs representing 711,120 ordinary shares at $2.25 per ADS until October 6, 2020. Pursuant to the terms of the foregoing warrants the holder cannot exercise such warrants if it would beneficially own, after any such exercise, more than 4.99% of the outstanding ordinary shares. The percentage in the table above does not give effect to the blocker.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    100,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.4325 per share exercisable until
    December 29, 2024, and (ii) 100,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.4915
    per share exercisable until December 29, 2024. Excludes options to purchase 100,000 ordinary shares that vest in more than
    60 days from the date hereof.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    100,000 ordinary shares issuable upon the exercise of options at an exercise price of NIS 0.4325 per share exercisable until
    December 29, 2024. Excludes options to purchase 50,000 ordinary shares that vest in more than 60 days from the date hereof.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(8)</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    340,000 ordinary shares represented by 17,000 ADSs, (ii) 230,000 ordinary shares, and (iii) 100,000 ordinary shares issuable
    upon the exercise of options at an exercise price of NIS 0.4325 per share exercisable until December 29, 2024. Excludes options
    to purchase 50,000 ordinary shares that vest in more than 60 days from the date hereof.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify"> &nbsp; </TD>
    <TD STYLE="width: 0.5in"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (9) </P></TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes (i)
    43,409,656 ordinary shares, (ii) 227,926 ADSs representing 4,558,520 ordinary shares, and (iii) warrants to purchase 44,445
    ADSs representing 888,900 ordinary shares at $2.25 per ADS until October 6, 2020. Pursuant to the terms of the foregoing warrants
    the holder cannot exercise such warrants if it would beneficially own, after any such exercise, more than 4.99% of the outstanding
    ordinary shares. The percentage in the table above does not give effect to the blocker.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (10) </P></TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based on information
    in Schedule 13G/A filed with the SEC on January 12, 2016. Sabby Management, LLC and Hal Mintz do not directly own any shares
    of ADRs, but each indirectly owns 1,111,962 shares of ADRs. Sabby Management, LLC, a Delaware limited liability company, indirectly
    owns 1,111,962 shares of ADRs because it serves as the investment manager of Sabby Healthcare Master Fund, Ltd. and Sabby,
    Volatility Warrant Master Fund, Ltd., Cayman Islands companies. Mr. Mintz indirectly owns 1,111,962 shares of ADRs in his
    capacity as manager of Sabby Management, LLC.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Share Option Plans</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We maintain the
following share option plans for our and our subsidiary&rsquo;s employees, directors and consultants. In addition to the discussion
below, see Note 18 of our consolidated financial statements for the year ended December 31, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors
administers our share option plans and has the authority to designate all terms of the options granted under our plans including
the grantees, exercise prices, grant dates, vesting schedules and expiration dates, which may be no more than ten years after the
grant date. Options may not be granted with an exercise price of less than the fair market value of our ordinary shares on the
date of grant, unless otherwise determined by our Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of November
4, 2016, we have granted to employees, directors and consultants options that are outstanding to purchase up to 7,390,000 ordinary
shares under two share option plans. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>2001 Share Option Plan</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under a share option
plan established in 2001, referred to as the 2001 Plan, we granted options between 2001 and 2011, at exercise prices between $0.03
and $1.58 per ordinary share. Up to 2,200,000 ordinary shares were available to be granted under the 2001 Plan. On July 29, 2009,
the option pool was increased by 5,000,000 unissued additional ordinary shares, as well as forfeited and expired options that reverted
to the pool due to departure of employees. Options granted to Israeli employees were made in accordance with section 102 of the
Tax Ordinance, under the capital gains option set out in section 102(b)(2) of the ordinance. The options are non-transferable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As November 4,
2016, options to purchase 700,000 ordinary shares were outstanding, all of which were fully vested. The option term is for a period
of ten years from the grant date. On May 2, 2011, the 2001 Plan expired and no further options may be granted under this plan. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>2011 Share Option Plan</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 29, 2011,
our Board of Directors approved the adoption of an employee stock option scheme for the grant of options exercisable into shares
of the Company according to section 102 to the Israeli Tax Ordinance, or the 2011 Plan, and to reserve up to 10 million ordinary
shares in the framework of the 2011 Plan, for options allocation to employees, directors and consultants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2011 Plan shall
be subject to section 102 of the Israeli Tax Ordinance. According to the Capital Gain Track, which was adopted by us and the abovementioned
section 102, we are not entitled to receive a tax deduction that relates to remuneration paid to our employees, including amounts
recorded as salary benefit in our accounts for options granted to employees in the framework of the 2011 Plan, except the yield
benefit component, if available, that was determined on the grant date. The terms of the options which will be granted according
to the 2011 Plan, including option period, exercise price, vesting period and exercise period, shall be determined by our Board
of Directors on the date of the actual allocation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> As of November
4, 2016, we have granted options to purchase 6,690,000 ordinary shares under the 2011 Plan at exercise prices between $0.40 and
$0.90 per ordinary share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> For further details
regarding share options granted to our employees, directors and service providers, see Note 17 to the consolidated financial statements
for the year ended December 31, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="a_018"></A>DESCRIPTION OF SHARE
CAPITAL</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following description
of our share capital summarizes certain provisions of our Articles of Association. Such summaries do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all of the provisions of our Articles of Association,
copies of which have been filed as exhibits to the registration statement of which this prospectus forms a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Memorandum and Articles of Association</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Objects and Purposes of the Company</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to Part B, Section 3 of our Articles
of Association, we may undertake any lawful activity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Powers and Obligations of the Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> Pursuant to the
Israeli Companies Law and our Articles of Association, a director is not permitted to vote on a proposal, arrangement or contract
in which he or she has a personal interest. Also, the directors may not vote on compensation to themselves or any members of their
body, as that term is defined under Israeli law, without the approval of our audit committee and our shareholders at a general
meeting. The power of our directors to enter into borrowing arrangements on our behalf is limited to the same extent as any other
transaction by us. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law codifies the fiduciary duties that office holders, including directors and executive officers, owe to a company. An office
holder&rsquo;s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care generally requires an office
holder to act with the same level of care as a reasonable office holder in the same position would employ under the same circumstances.
The duty of loyalty includes avoiding any conflict of interest between the office holder&rsquo;s position in the company and such
person&rsquo;s personal affairs, avoiding any competition with the company, avoiding exploiting any corporate opportunity of the
company in order to receive personal advantage for such person or others, and revealing to the company any information or documents
relating to the company&rsquo;s affairs which the office holder has received due to his or her position as an office holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Indemnification of Directors and
Officers; Limitations on Liability</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Israeli law permits
a company to insure an office holder in respect of liabilities incurred by him or her as a result of an act or omission in the
capacity of an office holder for:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
breach of the office holder&rsquo;s duty of care towards the company or towards another person;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
breach of the office holder&rsquo;s fiduciary duty to the company, provided that he or she acted in good faith and had reasonable
cause to believe that the act would not prejudice the company; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a financial liability imposed upon the office holder in favor of another person.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">A financial liability imposed on the office holder's for all victims of the violation in an Administrative Proceeding.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Expenses incurred by the office holder's in connection with an Administrative Proceeding conducted in his or her case, including litigation expenses and reasonable legal fees.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, a company
can indemnify an office holder for any of the following obligations or expenses incurred in connection with the acts or omissions
of such person in his or her capacity as an office holder:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">monetary liability imposed upon him or her in favor of a third party by a judgment, including a settlement or an arbitral award confirmed by the court; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">reasonable litigation expenses, including legal fees, actually incurred by the office holder or imposed upon him or her by a court, in a proceeding brought against him or her by or on behalf of the company or by a third party, or in a criminal action in which he or she was acquitted, or in a criminal action which does not require criminal intent in which he or she was convicted; furthermore, a company can, with a limited exception, exculpate an office holder in advance, in whole or in part, from liability for damages sustained by a breach of duty of care to the company.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">financial liability imposed on the office holder for all victims of the violation in an Administrative Proceeding.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">expenses incurred by the office holder in connection with an Administrative Proceeding conducted in his or her case, including litigation expenses and reasonable legal fees.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Articles of Association
allow for insurance, exculpation and indemnification of office holders to the fullest extent permitted by law. We have entered
into indemnification, insurance and exculpation agreements with our directors and executive officers, following shareholder approval
of these agreements. We have directors&rsquo; and officers&rsquo; liability insurance covering our officers and directors for a
claim imposed upon them as a result of an action carried out while serving as an officer or director, for (a) the breach of duty
of care towards us or towards another person, (b) the breach of fiduciary duty towards us, provided that the officer or director
acted in good faith and had reasonable grounds to assume that the action would not harm our interests, and (c) a monetary liability
imposed upon him in favor of a third party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Approval of Related Party Transactions
under the Israeli Companies Law</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I>Fiduciary duties
of the office holders</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law imposes a duty of care and a duty of loyalty on all office holders of a company. The duty of care of an office holder is based
on the duty of care set forth in connection with the tort of negligence under the Israeli Torts Ordinance (New Version) 5728-1968.
This duty of care requires an office holder to act with the degree of proficiency with which a reasonable office holder in the
same position would have acted under the same circumstances. The duty of care includes a duty to use reasonable means, in light
of the circumstances, to obtain:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 91%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">information on the advisability of a given action brought for his or her approval or performed by virtue of his or her position; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 91%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">All other important information pertaining to these actions.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The duty of loyalty
requires an office holder to act in good faith and for the benefit of the company, and includes the duty to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 91%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">refrain from any act involving a conflict of interest between the performance of his or her duties in the company and his or her other duties or personal affairs;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">refrain
from any activity that is competitive with the business of the company;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">refrain
from exploiting any business opportunity of the company for the purpose of gaining a personal advantage for himself or herself
or others; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">disclose
to the company any information or documents relating to the company&rsquo;s affairs which the office holder received as a result
of his or her position as an office holder.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">We
may approve an act performed in breach of the duty of loyalty of an office holder provided that the office holder acted in good
faith, the act or its approval does not harm the company, and the office holder discloses his or her personal interest, as described
below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I>Disclosure
of personal interests of an office holder and approval of acts and transactions</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The
Israeli Companies Law requires that an office holder promptly disclose to the company any personal interest that he or she may
have and all related material information or documents relating to any existing or proposed transaction by the company. An interested
office holder&rsquo;s disclosure must be made promptly and in any event no later than the first meeting of the board of directors
at which the transaction is considered. An office holder is not obligated to disclose such information if the personal interest
of the office holder derives solely from the personal interest of his or her relative in a transaction that is not considered as
an extraordinary transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The
term personal interest is defined under the Israeli Companies Law to include the personal interest of a person in an action or
in the business of a company, including the personal interest of such person&rsquo;s relative or the interest of any corporation
in which the person is an interested party, but excluding a personal interest stemming solely from the fact of holding shares in
the company. A personal interest furthermore includes the personal interest of a person for whom the office holder holds a voting
proxy or the interest of the office holder with respect to his or her vote on behalf of the shareholder for whom he or she holds
a proxy even if such shareholder itself has no personal interest in the approval of the matter. An office holder is not, however,
obligated to disclose a personal interest if it derives solely from the personal interest of his or her relative in a transaction
that is not considered an extraordinary transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
the Israeli Companies Law, an extraordinary transaction which requires approval is defined any of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
transaction other than in the ordinary course of business;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
transaction that is not on market terms; or</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
transaction that may have a material impact on the company&rsquo;s profitability, assets or liabilities.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, once an office holder has complied with the disclosure requirement described above, a company may approve a transaction between
the company and the office holder or a third party in which the office holder has a personal interest, or approve an action by
the office holder that would otherwise be deemed a breach of duty of loyalty. However, a company may not approve a transaction
or action that is adverse to the company&rsquo;s interest or that is not performed by the office holder in good faith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
the Companies Law, unless the articles of association of a company provide otherwise, a transaction with an office holder, a transaction
with a third party in which the office holder has a personal interest, and an action of an office holder that would otherwise be
deemed a breach of duty of loyalty requires approval by the board of directors. Our Articles of Association do not provide otherwise.
If the transaction or action considered is (i) an extraordinary transaction, (ii) an action of an office holder that would otherwise
be deemed a breach of duty of loyalty and may have a material impact on a company&rsquo;s profitability, assets or liabilities,
(iii) an undertaking to indemnify or insure an office holder who is not a director, or (iv) for matters considered an undertaking
concerning the terms of compensation of an office holder who is not a director, including, an undertaking to indemnify or insure
such office holder, then approval by the audit committee is required prior to approval by the board of directors. Arrangements
regarding the compensation, indemnification or insurance of a director require the approval of the audit committee, board of directors
and shareholders, in that order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">A
director who has a personal interest in a matter that is considered at a meeting of the board of directors or the audit committee
may generally not be present at the meeting or vote on the matter, unless a majority of the directors or members of the audit committee
have a personal interest in the matter or the chairman of the audit committee or board of directors, as applicable, determines
that he or she should be present to present the transaction that is subject to approval. If a majority of the directors have a
personal interest in the matter, such matter would also require approval of the shareholders of the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I>Disclosure
of personal interests of a controlling shareholder and approval of transactions</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
the Israeli Companies Law and a recent amendment thereto, the disclosure requirements that apply to an office holder also apply
to a controlling shareholder of a public company. See &ldquo;Audit Committee&rdquo; for a definition of controlling shareholder.
Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, including
a private placement in which a controlling shareholder has a personal interest, as well as transactions for the provision of services
whether directly or indirectly by a controlling shareholder or his or her relative, or a company such controlling shareholder controls,
and transactions concerning the terms of engagement of a controlling shareholder or a controlling shareholder&rsquo;s relative,
whether as an office holder or an employee, require the approval of the audit committee, the board of directors and a majority
of the shares voted by the shareholders of the company participating and voting on the matter in a shareholders&rsquo; meeting.
In addition, such shareholder approval must fulfill one of the following requirements:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">at
least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting
must be voted in favor of approving the transaction, excluding abstentions; or</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more
than 2% of the voting rights in the company.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">To
the extent that any such transaction with a controlling shareholder is for a period extending beyond three years, approval is required
once every three years, unless the audit committee determines that the duration of the transaction is reasonable given the circumstances
related thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I>Duties of shareholders</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Under
the Israeli Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and
in an acceptable manner in exercising its rights and performing its obligations to the company and other shareholders, including,
among other things, voting at general meetings of shareholders on the following matters:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
amendment to the articles of association;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
increase in the company&rsquo;s authorized share capital;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
merger;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
increase in the company&rsquo;s authorized share capital; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
approval of related party transactions and acts of office holders that require shareholder approval.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">A
shareholder also has a general duty to refrain from discriminating against other shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">The
remedies generally available upon a breach of contract will also apply to a breach of the above mentioned duties, and in the event
of discrimination against other shareholders, additional remedies are available to the injured shareholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">In
addition, any controlling shareholder, any shareholder that knows that its vote can determine the outcome of a shareholder vote
and any shareholder that, under a company&rsquo;s articles of association, has the power to appoint or prevent the appointment
of an office holder, or has another power with respect to a company, is under a duty to act with fairness towards the company.
The Israeli Companies Law does not describe the substance of this duty except to state that the remedies generally available upon
a breach of contract will also apply in the event of a breach of the duty to act with fairness, taking the shareholder&rsquo;s
position in the company into account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Ordinary Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Rights Attached to Ordinary Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Through March 18, 2009,
our authorized share capital was NIS 10,000,000 consisting of 500,000,000 ordinary shares, par value NIS 0.02 per share. On March
18, 2009, pursuant to a shareholder&rsquo;s meeting, the share capital of our company was consolidated and re-divided so that each
five (5) shares of NIS 0.02 nominal value was consolidated into one (1) share of NIS 0.1 nominal value so that following such consolidation
and re-division, our authorized share capital consisted of 100,000,000 ordinary shares, par value NIS 0.10 per share. In addition,
the authorized share capital of our company was increased from NIS 10,000,000 to NIS 70,000,000 divided into 700,000,000 ordinary
shares, NIS 0.10 nominal value. The share consolidation was effected in June 22, 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of ordinary
shares have one vote per share, and are entitled to participate equally in the payment of dividends and share distributions and,
in the event of our liquidation, in the distribution of assets after satisfaction of liabilities to creditors. No preferred shares
are currently authorized. All outstanding ordinary shares are validly issued and fully paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Transfer of Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Fully paid ordinary
shares are issued in registered form and may be freely transferred under our Articles of Association unless the transfer is restricted
or prohibited by another instrument or applicable securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dividend and Liquidation Rights</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may declare a dividend
to be paid to the holders of ordinary shares according to their rights and interests in our profits. In the event of our liquidation,
after satisfaction of liabilities to creditors, our assets will be distributed to the holders of ordinary shares in proportion
to the nominal value of their holdings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This right may be affected
by the grant of preferential dividend or distribution rights, to the holders of a class of shares with preferential rights that
may be authorized in the future. Under the Israeli Companies Law, the declaration of a dividend does not require the approval of
the shareholders of the company, unless the company&rsquo;s articles of association require otherwise. Our Articles provide that
the Board of Directors may declare and distribute dividends without the approval of the shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Annual and Extraordinary General
Meetings</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We must hold our annual
general meeting of shareholders each year and no later than 15 months from the last annual meeting, at a time and place determined
by the Board of Directors, upon at least 21 days&rsquo; prior notice to our shareholders, to which we need to add an additional
three days for notices sent outside of Israel. A special meeting may be convened by request of two directors, 25% of the directors
then in office, one or more shareholders holding at least 5% of our issued share capital and at least 1% of our issued voting rights,
or one or more shareholders holding at least 5% of our issued voting rights. Notice of a general meeting must set forth the date,
time and place of the meeting. Such notice must be given at least 21 days but not more than 45 days prior to the general meeting.
The quorum required for a meeting of shareholders consists of at least two shareholders present in person or by proxy who hold
or represent between them at least one-third of the voting rights in the company. A meeting adjourned for lack of a quorum generally
is adjourned to the same day in the following week at the same time and place (with no need for any notice to the shareholders)
or until such other later time if such time is specified in the original notice convening the general meeting, or if we serve notice
to the shareholders no less than seven days before the date fixed for the adjourned meeting. If at an adjourned meeting there is
no quorum present half an hour after the time set for the meeting, any number participating in the meeting shall represent a quorum
and shall be entitled to discuss the matters set down on the agenda for the original meeting. All shareholders who are registered
in our registrar on the record date, or who will provide us with proof of ownership on that date as applicable to the relevant
registered shareholder, are entitled to participate in a general meeting and may vote as described in &ldquo;Voting Rights&rdquo;
and &ldquo;Voting by Proxy and in Other Manners,&rdquo; below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Voting Rights</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ordinary shares
do not have cumulative voting rights in the election of directors. As a result, the holders of ordinary shares that represent more
than 50% of the voting power represented at a shareholders meeting in which a quorum is present have the power to elect all of
our directors, except the external directors whose election requires a special majority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of ordinary
shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders. Shareholders may vote in
person or by proxy. These voting rights may be affected by the grant of any special voting rights to the holders of a class of
shares with preferential rights that may be authorized in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, unless otherwise provided in the Articles of Association or by applicable law, all resolutions of the shareholders require
a simple majority. Our Articles of Association provide that all decisions may be made by a simple majority. See &ldquo;&ndash;Approval
of Certain Transactions&rdquo; above for certain duties of shareholders towards the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Voting by Proxy and in Other Manners</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Articles of Association
enable a shareholder to appoint a proxy, who need not be a shareholder, to vote at any shareholders meeting. We require that the
appointment of a proxy be in writing signed by the person making the appointment or by an attorney authorized for this purpose,
and if the person making the appointment is a corporation, by a person or persons authorized to bind the corporation. In the document
appointing a proxy, each shareholder may specify how the proxy should vote on any matter presented at a shareholders meeting. The
document appointing the proxy shall be deposited in our offices or at such other address as shall be specified in the notice of
the meeting not less than 48 hours before the time of the meeting at which the person specified in the appointment is due to vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law and our Articles of Association do not permit resolutions of the shareholders to be adopted by way of written consent, for
as long as our ordinary shares are publicly traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Limitations on the Rights to Own
Securities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ownership or voting
of ordinary shares by non-residents of Israel is not restricted in any way by our Articles of Association or the laws of the State
of Israel, except that nationals of countries which are, or have been, in a state of war with Israel may not be recognized as owners
of ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Anti-Takeover Provisions under Israeli
Law</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law permits merger transactions with the approval of each party&rsquo;s board of directors and shareholders. In accordance with
the Israeli Companies Law, a merger may be approved at a shareholders meeting by a majority of the voting power represented at
the meeting, in person or by proxy, and voting on that resolution. In determining whether the required majority has approved the
merger, shares held by the other party to the merger, any person holding at least 25% of the outstanding voting shares or means
of appointing the board of directors of the other party to the merger, or the relatives or companies controlled by these persons,
are excluded from the vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, a merging company must inform its creditors of the proposed merger. Any creditor of a party to the merger may seek a court
order blocking the merger, if there is a reasonable concern that the surviving company will not be able to satisfy all of the obligations
of the parties to the merger. Moreover, a merger may not be completed until at least 30 days have passed from the time the merger
was approved in a general meeting of each of the merging companies, and at least 50 days have passed from the time that a merger
proposal was filed with the Israeli Registrar of Companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Israeli corporate law
provides that an acquisition of shares in a public company must be made by means of a tender offer if, as a result of such acquisition,
the purchaser would become a 25% or greater shareholder of the company. This rule does not apply if there is already another shareholder
with 25% or greater shares in the company. Similarly, Israeli corporate law provides that an acquisition of shares in a public
company must be made by means of a tender offer if, as a result of the acquisition, the purchaser&rsquo;s shareholdings would entitle
the purchaser to over 45% of the shares in the company, unless there is a shareholder with 45% or more of the shares in the company.
These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received the approval
of the company&rsquo;s shareholders; (2) was from a 25% or greater shareholder of the company which resulted in the purchaser becoming
a 25% or greater shareholder of the company, or (3) was from a 45% or greater shareholder of the company which resulted in the
acquirer becoming a 45% or greater shareholder of the company. These rules do not apply if the acquisition is made by way of a
merger. Regulations promulgated under the Israeli Companies Law provide that these tender offer requirements do not apply to companies
whose shares are listed for trading external of Israel if, according to the law in the country in which the shares are traded,
including the rules and regulations of the stock exchange or which the shares are traded, either:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">there
is a limitation on acquisition of any level of control of the company; or</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
acquisition of any level of control requires the purchaser to do so by means of a tender offer to the public.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law provides specific rules and procedures for the acquisition of shares held by minority shareholders, if the majority shareholder
holds more than 90% of the outstanding shares. If, as a result of an acquisition of shares, the purchaser will hold more than 90%
of a company&rsquo;s outstanding shares, the acquisition must be made by means of a tender offer for all of the outstanding shares.
If less than 5% of the outstanding shares are not tendered in the tender offer, all the shares that the purchaser offered to purchase
will be transferred to it. The Israeli Companies Law provides for appraisal rights if any shareholder files a request in court
within three months following the consummation of a full tender offer. If more than 5% of the outstanding shares are not tendered
in the tender offer, then the purchaser may not acquire shares in the tender offer that will cause his shareholding to exceed 90%
of the outstanding shares of the company. Israeli tax law treats specified acquisitions, including a stock-for-stock swap between
an Israeli company and a foreign company, less favorably than does U.S. tax law. These laws may have the effect of delaying or
deterring a change in control of us, thereby limiting the opportunity for shareholders to receive a premium for their shares and
possibly affecting the price that some investors are willing to pay for our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Rights of Shareholders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Israeli Companies
Law, our shareholders have the right to inspect certain documents and registers including the minutes of general meetings, the
register of shareholders and the register of substantial shareholders, any document held by us that relates to an act or transaction
requiring the consent of the general meeting as stated above under &ldquo;Approval of Certain Transactions,&rdquo; our Articles
of Association and our financial statements, and any other document which we are required to file under the Israeli Companies Law
or under any law with the Registrar of Companies or the Israeli Securities Authority, and is available for public inspection at
the Registrar of Companies or the Securities Authority, as the case may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the document required
for inspection by one of our shareholders relates to an act or transaction requiring the consent of the general meeting as stated
above, we may refuse the request of the shareholder if in our opinion the request was not made in good faith, the documents requested
contain a commercial secret or a patent, or disclosure of the documents could prejudice our good in some other way.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Israeli Companies
Law provides that with the approval of the court any of our shareholders or directors may file a derivative action on our behalf
if the court finds the action is a priori, to our benefit, and the person demanding the action is acting in good faith. The demand
to take action can be filed with the court only after it is serviced to us, and we decline or omit to act in accordance to this
demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Enforceability of Civil Liabilities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We are incorporated
in Israel and most of our directors and officers and the Israeli experts named in this <I>prospectus</I> reside outside the U.S.
Service of process upon them may be difficult to effect within the U.S.. Furthermore, because substantially all of our assets,
and those of our non-U.S. directors and officers and the Israeli experts named herein, are located outside the U.S., any judgment
obtained in the U.S. against us or any of these persons may not be collectible within the U.S.. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have been informed
by our legal counsel in Israel, Doron Tikotsky Kantor Gutman Cederboum &amp; Co., that there is doubt as to the enforceability
of civil liabilities under the Securities Act or the Exchange Act, pursuant to original actions instituted in Israel. However,
subject to particular time limitations, executory judgments of a U.S. court for monetary damages in civil matters may be enforced
by an Israeli court, provided that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the judgment was obtained after due process before a court of competent jurisdiction, that recognizes and enforces similar judgments of Israeli courts, and the court had authority according to the rules of private international law currently prevailing in Israel;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">adequate service of process was effected and the defendant had a reasonable opportunity to be heard;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the judgment is not contrary to the law, public policy, security or sovereignty of the State of Israel and its enforcement is not contrary to the laws governing enforcement of judgments;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the judgment is no longer appealable; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Foreign judgments enforced
by Israeli courts generally will be payable in Israeli currency. The usual practice in an action before an Israeli court to recover
an amount in a non-Israeli currency is for the Israeli court to render judgment for the equivalent amount in Israeli currency at
the rate of exchange in force on the date of the judgment. Under existing Israeli law, a foreign judgment payable in foreign currency
may be paid in Israeli currency at the rate of exchange for the foreign currency published on the day before date of payment. Current
Israeli exchange control regulations also permit a judgment debtor to make payment in foreign currency. Pending collection, the
amount of the judgment of an Israeli court stated in Israeli currency ordinarily may be linked to Israel&rsquo;s consumer price
index plus interest at the annual statutory rate set by Israeli regulations prevailing at that time. Judgment creditors must bear
the risk of unfavorable exchange rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Warrants </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The material terms
and provisions of the warrants being offered pursuant to this prospectus are summarized below. The description of Series A warrant
is subject to and qualified in its entirety by the provisions included in the Warrant Agent Agreement to be entered into by the
Company and the Warrant Agent, which agreement will be filed as an exhibit to the registration statement of which this prospectus
is a part. Prospective investors should carefully review the terms set forth in the Warrant Agent Agreement. The Bank of New York
Mellon will act as Warrant Agent for the Series A warrants. The description of a Series B warrant is subject to and qualified
in its entirety by the form of pre-funded Series B warrant, which will be provided to each investor in this offering and will
be filed as an exhibit to the registration statement of which this prospectus is a part. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"> &nbsp; </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Series A Warrants</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We are offering
Series A warrants to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ADSs to purchasers in this offering. Each Series A warrant has an exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; per share.
The Series A warrants are exercisable upon issuance and have an exercise term equal to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;years.
The exercise of the Series A warrants is subject to certain exercise limitations, such that the holder may not exercise the Series
A warrants if such exercise results in the holder (together with its affiliates and certain related parties) becoming the beneficial
owner of more than 4.99% (or, at the election of the purchaser prior to issuance of any Series A warrants, 9.99%) of the number
of ordinary shares outstanding immediately after giving effect to such exercise, provided that, upon notice to us, the holder
may increase or decrease such limitation up to a maximum of 9.99% of the number of ordinary shares outstanding, provided further,
however, that any increase in such limitation shall not be effective until 61 days following such notice to us. Each Series A
warrant will have a cashless exercise right in the event that the ADSs underlying such warrants are not covered by an effective
registration statement at the time of such exercise. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Series A warrants
will be exercisable, at the option of each holder, in whole or in part by delivering a duly executed exercise notice. No fractional
ADSs will be issued in connection with the exercise of a Series A warrant. Subject to applicable laws, the Series A warrants may
be offered for sale, sold, transferred or assigned without our consent. We have applied to list the Series A warrants on the Nasdaq
Capital Market. Amendments and waivers of the terms of the Series A warrants require the written consent of the holder of such
Series A warrant and us. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Series A warrants will be issued in book-entry form under the Warrant Agent Agreement with The Bank of New York Mellon, as Warrant
Agent. The Series A warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent,
as custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede &amp; Co., a nominee of DTC,
or as otherwise directed by DTC.</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We have applied
to list the Series A warrants on the NASDAQ Capital Market under the symbol of &ldquo;______&rdquo;. There is no assurance that
our application to list the Series A warrants will be approved.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Pre-funded Series B Warrants </I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> We are offering
pre-funded Series B warrants to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ADSs. Each Series B warrant has an exercise price of $0.01 per share. The Series B warrants are exercisable at any time after
their original issuance until exercised in full. The exercise of the Series B warrants is subject to certain exercise limitations,
such that the holder may not exercise the Series B warrants if such exercise results in the holder becoming the beneficial owner
of more than 4.99% (or, at the election of the purchaser, 9.99%) of the ordinary shares outstanding immediately after giving effect
to such exercise, provided that, upon notice to us, the holder may increase or decrease such limitation up to a maximum of 9.99%
of the number of ordinary shares outstanding, provided further, however, that any increase in such limitation shall not be effective
until 61 days following such notice to us. Each Series B warrant will have a cashless exercise right in the event that the ADSs
underlying such warrants are not covered by an effective registration statement at the time of such exercise. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Series B warrants
will be issued in certificated form. The Series B warrants will be exercisable, at the option of each holder, in whole or in part
by delivering to us a duly executed exercise notice. No fractional ADSs will be issued in connection with the exercise of a Series
B warrant. Subject to applicable laws, the Series B warrants may be offered for sale, sold, transferred or assigned without our
consent. We do not plan on applying to list the Series B warrants on the Nasdaq Capital Market, any other national securities
exchange or any other nationally recognized trading system. Amendments and waivers of the terms of the Series B warrants require
the written consent of the holder of such Series B warrant and us. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>American Depositary Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have issued and
deposited ordinary shares with Bank Hapoalim B.M., The Bank of New York&rsquo;s custodian in Tel Aviv, Israel. The Bank of New
York in turn issued American Depositary Shares, or ADSs, representing American Depositary Shares, or ADSs. One ADS represents an
ownership interest in twenty of our ordinary shares. Each ADS also represents securities, cash or other property deposited with
The Bank of New York but not distributed to ADS holders. The Bank of New York&rsquo;s Corporate Trust Office is located at 101
Barclay Street, New York, NY 10286, U.S.A. Their principal executive office is located at One Wall Street, New York, NY 10286,
U.S.A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You may hold ADSs either
directly or indirectly through your broker or other financial institution. If you hold ADSs directly, you are an ADS holder. This
description assumes you hold your ADSs directly. If you hold the ADSs indirectly, you must rely on the procedures of your broker
or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker
or financial institution to find out what those procedures are.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because The Bank of
New York will actually hold the ordinary shares, you must rely on it to exercise the rights of a shareholder. The obligations of
The Bank of New York are set out in a deposit agreement among us, The Bank of New York and you, as an ADS holder. The agreement
and the ADSs are generally governed by New York law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a
summary of the agreement. Because it is a summary, it does not contain all the information that may be important to you. For more
complete information, you should read the entire agreement and the ADS. Directions on how to obtain copies of these are provided
in the section entitled &ldquo;Where You Can Find More Information.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Share Dividends and Other Distributions</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Bank of New York
has agreed to pay to you the cash dividends or other distributions it or the custodian receives on shares or other deposited securities
after deducting its fees and expenses. You will receive these distributions in proportion to the number of shares your ADSs represent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Cash.</I> The Bank
of New York will convert any cash dividend or other cash distribution we pay on the shares into U.S. dollars, if it can do so on
a reasonable basis and can transfer the U.S. dollars to the U.S. If that is not possible or if any approval from any government
or agency thereof is needed and cannot be obtained, the agreement allows The Bank of New York to distribute the foreign currency
only to those ADS holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account
of the ADS holders who have not been paid. It will not invest the foreign currency and it will not be liable for the interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Before making a distribution,
any withholding taxes that must be paid under U.S. law will be deducted. The Bank of New York will distribute only whole U.S. dollars
and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when The Bank
of New York cannot convert the foreign currency, you may lose some or all of the value of the distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Shares.</I> The
Bank of New York may distribute new ADSs representing any shares we may distribute as a dividend or free distribution, if we furnish
it promptly with satisfactory evidence that it is legal to do so. The Bank of New York will only distribute whole ADSs. It will
sell shares which would require it to use a fractional ADS and distribute the net proceeds in the same way as it does with cash.
If The Bank of New York does not distribute additional ADSs, each ADS will also represent the new shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Rights to receive
additional shares</I> . If we offer holders of our ordinary shares any rights to subscribe for additional shares or any other rights,
The Bank of New York may make these rights available to you. We must first instruct The Bank of New York to do so and furnish it
with satisfactory evidence that it is legal to do so. If we do not furnish this evidence and/or give these instructions, and The
Bank of New York decides it is practical to sell the rights, The Bank of New York will sell the rights and distribute the proceeds,
in the same way as it does with cash. The Bank of New York may allow rights that are not distributed or sold to lapse. In that
case, you will receive no value for them. If The Bank of New York makes rights available to you, upon instruction from you, it
will exercise the rights and purchase the shares on your behalf. The Bank of New York will then deposit the shares and issue ADSs
to you. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">U.S. securities laws
may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights. For example, you may not
be able to trade the ADSs freely in the U.S. In this case, The Bank of New York may issue the ADSs under a separate restricted
deposit agreement which will contain the same provisions as the agreement, except for the changes needed to put the restrictions
in place.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Other Distributions</I>
.. The Bank of New York will send to you anything else we distribute on deposited securities by any means it thinks is legal, fair
and practical. If it cannot make the distribution in that way, The Bank of New York has a choice. It may decide to sell what we
distributed and distribute the net proceeds in the same way as it does with cash or it may decide to hold what we distributed,
in which case the ADSs will also represent the newly distributed property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Bank of New York
is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have
no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take
any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders. This means that you may not
receive the distribution we make on our shares or any value for them if it is illegal or impractical for us to make them available
to you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Deposit, Withdrawal and Cancellation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The Bank of New
York will issue ADSs if you or your broker deposits shares or evidence of rights to receive shares with the custodian upon payment
of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees. The Bank of New York
will register the appropriate number of ADSs in the names you request and will deliver the ADSs at its office to the persons you
request. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You may turn in your
ADSs at The Bank of New York&rsquo;s office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes
or stock transfer taxes or fees, The Bank of New York will deliver (1) the underlying shares to an account designated by you and
(2) any other deposited securities underlying the ADS at the office of the custodian; or, at your request, risk and expense, The
Bank of New York will deliver the deposited securities at its office.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Voting Rights</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> You may instruct
The Bank of New York to vote the shares underlying your ADSs but only if we ask The Bank of New York to ask for your instructions.
Otherwise, you will not be able to exercise your right to vote unless you withdraw the shares. However, you may not know about
the meeting enough in advance to withdraw the shares. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we ask for your
instructions, The Bank of New York will notify you of the upcoming vote and arrange to deliver our voting materials to you. The
materials will (1) describe the matters to be voted on and (2) explain how you, on a certain date, may instruct The Bank of New
York to vote the shares or other deposited securities underlying your ADSs as you direct. For instructions to be valid, The Bank
of New York must receive them on or before the date specified. The Bank of New York will try, as far as practical, subject to Israeli
law and the provisions of our Articles of Association, to vote or to have its agents vote the shares or other deposited securities
as you instruct. The Bank of New York will only vote or attempt to vote as you instruct. However, if The Bank of New York does
not receive your voting instructions, it will deem you to have instructed it to give a discretionary proxy to vote the shares underlying
your ADSs to a person designated by us provided that no such instruction shall be deemed given and no such discretionary proxy
shall be given with respect to any matter as to which we inform The Bank of New York that (x) we do not wish such proxy given,
(y) substantial opposition exists, (z) such matter materially affects the rights of the holders of the shares underlying the ADSs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot assure you
that you will receive the voting materials in time to ensure that you can instruct The Bank of New York to vote your shares. In
addition, The Bank of New York and its agents are not responsible for failing to carry out voting instructions or for the manner
of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing
you can do if your shares are not voted as you requested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Rights of Non-Israeli Shareholders
to Vote</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> The ADSs may be
freely held and traded pursuant to the General Permit and the Currency Control Law. The ownership or voting of ADSs by non-residents
of Israel is not restricted in any way by our Articles of Association or by the laws of the State of Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Fees and Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>ADS holders must pay:</I></FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 58%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>For:</I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">$5.00 (or less) per 100 ADSs</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(or portion thereof)</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each issuance of an ADS, including as a
        result of a distribution of shares or rights or other property.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each cancellation of an ADS, including
        if the agreement terminates.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">$0.05 (or less) per ADS</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any cash payment.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Registration or Transfer
Fees</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Transfer
and registration of shares on the share register of the Foreign Registrar from your name to the name of The Bank of New York or
its agent when you deposit or withdraw shares.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Expenses of The Bank of
New York</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Conversion
of foreign currency to U.S. dollars.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cable, telex and facsimile transmission
        expenses.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Servicing of shares or deposited securities.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">$0.02 (or less) per ADS
per calendar year (if the depositary has not collected any cash distribution fee during that year)</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depositary
services.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Taxes
and other governmental charges</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As necessary The Bank of New York
or the Custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding
taxes.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">A fee equivalent to the fee that would be payable if securities distributed to you had been ordinary shares and the ordinary shares had been deposited for issuance of ADSs</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Payment of Taxes</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You will be responsible
for any taxes or other governmental charges payable on your ADSs or on the deposited securities underlying your ADSs. The Bank
of New York may refuse to transfer your ADSs or allow you to withdraw the deposited securities underlying your ADSs until such
taxes or other charges are paid. It may apply payments owed to you or sell deposited securities underlying your ADSs to pay any
taxes owed and you will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the
number of ADSs to reflect the sale and pay to you any proceeds, or send to you any property, remaining after it has paid the taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Reclassifications, Recapitalizations and Mergers</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; border-bottom: black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>If we:</I></FONT></TD>
    <TD STYLE="width: 2%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 63%; border-bottom: black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Then:</I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Change the nominal or par value of our shares;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The cash, shares or other securities received by The Bank of New York will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities. The Bank of New York may, and will if we ask it to, distribute some or all of the cash, shares or other securities it received. It may also issue new ADSs or ask you to surrender your outstanding ADSs in exchange for new ADSs, identifying the new deposited securities.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Reclassify, split up or consolidate any of the deposited
securities;&nbsp;</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Distribute securities on the shares that are not distributed
to you; or&nbsp;</P></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or takes any similar action.</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Amendment and Termination</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may agree with The
Bank of New York to amend the agreement and the ADSs without your consent for any reason. If the amendment adds or increases fees
or charges, except for taxes and other governmental charges or registration fees, cable, telex or facsimile transmission costs,
delivery costs or other such expenses, or prejudices an important right of ADS holders, it will only become effective thirty days
after The Bank of New York notifies you of the amendment. At the time an amendment becomes effective, you are considered, by continuing
to hold your ADS, to agree to the amendment and to be bound by the ADSs and the agreement is amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Bank of New York
will terminate the agreement if we ask it to do so. The Bank of New York may also terminate the agreement if The Bank of New York
has told us that it would like to resign and we have not appointed a new depositary bank within ninety days. In both cases, The
Bank of New York must notify you at least ninety days before termination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">After termination,
The Bank of New York and its agents will be required to do only the following under the agreement: (1) advise you that the agreement
is terminated, and (2) collect distributions on the deposited securities and deliver shares and other deposited securities upon
cancellation of ADSs. After termination, The Bank of New York will, if practical, sell any remaining deposited securities by public
or private sale. After that, The Bank of New York will hold the proceeds of the sale, as well as any other cash it is holding under
the agreement for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and
will have no liability for interest. The Bank of New York&rsquo;s only obligations will be to account for the proceeds of the sale
and other cash. After termination our only obligations will be with respect to indemnification and to pay certain amounts to The
Bank of New York.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Limitations on Obligations and Liability
to ADS Holders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The agreement expressly
limits our obligations and the obligations of The Bank of New York, and it limits our liability and the liability of The Bank of
New York. We and The Bank of New York:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are only obligated to take the actions specifically set forth in the agreement without negligence or bad faith;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are not liable if either is prevented or delayed by law or circumstances beyond their control from performing their obligations under the agreement;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">are not liable if either exercises discretion permitted under the agreement;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the agreement on your behalf or on behalf of any other party; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">may rely upon any documents they believe in good faith to be genuine and to have been signed or presented by the proper party.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the agreement, we
and The Bank of New York agree to indemnify each other under certain circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Requirements for Depositary Actions</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Before The Bank of
New York will issue or register transfer of an ADS, make a distribution on an ADS, or make a withdrawal of shares, The Bank of
New York may require payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged
by third parties for the:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">transfer of any shares or other deposited securities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary, and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">compliance with regulations it may establish, from time to time, consistent with the agreement, including presentation of transfer documents.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Bank of New York
may refuse to deliver, transfer, or register transfers of ADSs generally when the books of The Bank of New York or our books are
closed, or at any time if The Bank of New York or we think it advisable to do so. You have the right to cancel your ADSs and withdraw
the underlying shares at any time except:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">when temporary delays arise because: (1) The Bank of New York or we have closed its transfer books; (2) the transfer of shares is blocked to permit voting at a shareholders&rsquo; meeting; or (3) we are paying a dividend on the shares; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This right of withdrawal
may not be limited by any other provision of the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Pre-Release of ADSs</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In certain circumstances,
subject to the provisions of the agreement, The Bank of New York may issue ADSs before deposit of the underlying shares. This is
called a pre-release of the ADS. The Bank of New York may also deliver shares upon cancellation of pre-released ADSs (even if the
ADSs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying
shares are delivered to The Bank of New York. The Bank of New York may receive ADSs instead of shares to close out a pre-release.
The Bank of New York may pre-release ADSs only under the following conditions: (1) before or at the time of the pre-release, the
person to whom the pre-release is being made must represent to The Bank of New York in writing that it or its customer owns the
shares or ADSs to be deposited; (2) the pre-release must be fully collateralized with cash or other collateral that The Bank of
New York considers appropriate; and (3) The Bank of New York must be able to close out the pre-release on not more than five business
days&rsquo; notice. In addition, The Bank of New York will limit the number of ADSs that may be outstanding at any time as a result
of prerelease, although The Bank of New York may disregard the limit from time to time, if it thinks it is appropriate to do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Inspection of Books of the Depositary</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the terms of
the agreement, holders of ADSs may inspect the transfer books of the depositary at any reasonable time, provided that such inspection
shall not be for the purpose of communicating with holders of ADSs in the interest of a business or object other than either our
business or a matter related to the deposit agreement or ADSs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Book-Entry Only Issuance - The Depository
Trust Company</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Depository Trust
Company, or DTC, New York, New York, will act as securities depository for the ADSs. The ADSs will be represented by one global
security that will be deposited with and registered in the name of Cede &amp; Co. (DTC&rsquo;s partnership nominee), or such other
name as may be requested by an authorized representative of DTC. This means that we will not issue certificates to you for the
ADSs. One global security will be issued to DTC, which will keep a computerized record of its participants (for example, your broker)
whose clients have purchased the ADSs. Each participant will then keep a record of its clients. Unless it is exchanged in whole
or in part for a certificated security, a global security may not be transferred. However, DTC, its nominees, and their successors
may transfer a global security as a whole to one another. Beneficial interests in the global security will be shown on, and transfers
of the global security will be made only through, records maintained by DTC and its participants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DTC is a limited-purpose
trust company organized under the New York Banking Law, a &ldquo;banking organization&rdquo; within the meaning of the New York
Banking Law, a member of the United States Federal Reserve System, a &ldquo;clearing corporation&rdquo; within the meaning of the
New York Uniform Commercial Code and a &ldquo;clearing agency&rdquo; registered under the provisions of Section 17A of the Exchange
Act. DTC holds securities that its participants (direct participants) deposit with DTC. DTC also records the settlement among direct
participants of securities transactions, such as transfers and pledges, in deposited securities through computerized records for
direct participant&rsquo;s accounts. This eliminates the need to exchange certificates. Direct participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DTC&rsquo;s book-entry
system is also used by other organizations such as securities brokers and dealers, banks and trust companies that work through
a direct participant. The rules that apply to DTC and its participants are on file with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DTC is a wholly-owned
subsidiary of The Depository Trust &amp; Clearing Corporation, or DTCC. DTCC is, in turn, owned by a number of DTC&rsquo;s direct
participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">When you purchase ADSs
through the DTC system, the purchases must be made by or through a direct participant, who will receive credit for the ADSs on
DTC&rsquo;s records. Since you actually own the ADSs, you are the beneficial owner and your ownership interest will only be recorded
on the direct (or indirect) participants&rsquo; records. DTC has no knowledge of your individual ownership of the ADSs. DTC&rsquo;s
records only show the identity of the direct participants and the amount of ADSs held by or through them. You will not receive
a written confirmation of your purchase or sale or any periodic account statement directly from DTC. You will receive these from
your direct (or indirect) participant. Thus the direct (or indirect) participants are responsible for keeping accurate account
of the holdings of their customers like you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will wire dividend
payments to DTC&rsquo;s nominee, and we will treat DTC&rsquo;s nominee as the owner of the global security for all purposes. Accordingly,
we will have no direct responsibility or liability to pay amounts due on the global security to you or any other beneficial owners
in the global security.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any redemption notices
will be sent by us directly to DTC, who will in turn inform the direct participants, who will then contact you as a beneficial
holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is DTC&rsquo;s current
practice, upon receipt of any payment of dividends or liquidation amount, to credit direct participants&rsquo; accounts on the
payment date based on their holdings of beneficial interests in the global securities as shown on DTC&rsquo;s records. In addition,
it is DTC&rsquo;s current practice to assign any consenting or voting rights to direct participants whose accounts are credited
with preferred securities on a record date, by using an omnibus proxy. Payments by participants to owners of beneficial interests
in the global securities, and voting by participants, will be based on the customary practices between the participants and owners
of beneficial interests, as is the case with the ADSs held for the account of customers registered in &ldquo;street name.&rdquo;
However, payments will be the responsibility of the participants and not of DTC or us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ADSs represented by
a global security will be exchangeable for certificated securities with the same terms in authorized denominations only if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DTC is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under applicable law and a successor depositary is not appointed by us within 90 days; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">we determine not to require all of the ADSs to be represented by a global security.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the book-entry only
system is discontinued, the transfer agent will keep the registration books for the ADSs at its corporate office.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The information in
this section concerning DTC and DTC&rsquo;s book-entry system has been obtained from sources we believe to be reliable, but we
take no responsibility for the accuracy thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_019"></A>TAXATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following discussion
summarizes certain Israeli and U.S. federal income tax consequences that may be material to our shareholders, but is not intended,
and should not be construed, as legal or professional tax advice and does not exhaust all possible tax considerations that may
be relevant to holders of our ordinary shares. This discussion is based on existing law, judicial authorities and administrative
interpretations, all of which are subject to change or differing interpretations, possibly with retroactive effect. This summary
does not purport to be a complete analysis of all potential tax consequences of owning our ordinary shares. In particular, this
discussion does not take into account the specific circumstances of any particular holder or holders who may be subject to special
rules, such as tax-exempt entities, broker-dealers, shareholders subject to Alternative Minimum Tax, shareholders that actually
or constructively own 10% or more of our voting securities, shareholders that hold ordinary shares or ADSs as part of straddle
or hedging or conversion transaction, traders in securities that elect mark to market, banks and other financial institutions or
partnerships or other passthough entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>We urge shareholders
to consult their own tax advisors as to the potential U.S., Israeli, or other tax consequences of the purchase, ownership and disposition
of ordinary shares and ADSs, including, in particular, the effect of any foreign, state or local taxes. For purposes of the entire
Taxation discussion, we refer to ordinary shares and ADSs collectively as ordinary shares.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Israeli Tax Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The following discussion
refers to the current tax law applicable to companies in Israel, with special reference to its effect on us. This discussion also
includes specified Israeli tax consequences to holders of our ordinary shares and Israeli Government programs benefiting us. This
summary does not discuss all the aspects of Israeli income tax law that may be relevant to a particular investor in light of his
or her personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples
of this kind of investor include residents of Israel or traders in securities who are subject to special tax regimes not covered
in this discussion. To the extent that the discussion is based on new tax legislation that has not yet been subject to judicial
or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the views
expressed in this discussion. This summary is based on laws and regulations in effect as of the date of this prospectus and does
not take into account possible future amendments which may be under consideration.&quot; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Corporate Tax Rate</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The corporate tax
rate in Israel was 26.5%, 26.5% and 25% for the years ended December 31, 2015, 2014 and 2013, respectively. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> On July 14, 2009, the
&ldquo;Knesset&rdquo; (Israeli Parliament) passed the Law for Economic Efficiency (Amended Legislation for Implementing the Economic
Plan for 2009 and 2010), 2009, which prescribes, among other things, an additional gradual reduction in the corporate tax rates
starting 2011 to the following tax rates: 2011 - 24%, 2012 - 23%, 2013 - 22%, 2014 - 21%, 2015 - 20%, 2016 and thereafter - 18%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In December 2011, following
the enactment of the Law for the Changing the Tax Burden (Legislative Amendments), 2011 (hereafter &ndash; &ldquo;Tax Burden Distribution
Law&rdquo;), the phased reduction in the corporate tax was eliminated, and the corporate tax rate in 2012 and thereafter was set
to 25%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 5, 2013, the
Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013-2014), 2013 (the &ldquo;Law&rdquo;)
was published in the Government&rsquo;s records. Among other things, the Law prescribes from the 2014 tax year and thereafter,
an increase in the Israeli corporate tax rate to 26.5% (instead of 25%).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> On January 5, 2016,
the Israeli Parliament officially published the Law for the Amendment of the Israeli Tax Ordinance (Amendment 216), that reduces
the corporate tax rate from 26.5% to 25%, effective for the year beginning January 1, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Capital gains derived
by an Israeli resident company are generally subject to tax at the same rate as the corporate tax rate. Under Israeli tax legislation,
a corporation will be considered as an &ldquo;Israeli Resident&rdquo; if it meets one of the following: (a) it was incorporated
in Israel; or (b) the control and management of its business are exercised in Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Tax Benefits for Research and Development</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Israeli tax law allows,
under specific conditions, a tax deduction in the year incurred for expenditures, including capital expenditures, relating to scientific
research and development projects, if the expenditures are approved by the relevant Israeli government ministry, determined by
the field of research, and the research and development is for the promotion of the company and is carried out by or on behalf
of the company seeking the deduction. Expenditures not so approved are deductible over a three-year period. In the past, expenditures
that were made out of proceeds made available to us through government grants were automatically deducted during a one year period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Israeli Estate and Gift Taxes</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Israel does not currently
impose taxes on inheritance or bona fide gifts. For transfers of assets by inheritance or gift that would normally be subject to
capital gains tax or land appreciation tax, the recipient&rsquo;s tax cost basis and date of purchase are generally deemed to be
the same as those for the transferor of the property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Capital Gains Tax on Sales of our Ordinary Shares by Both
Residents and Non-Residents of Israel</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Israeli law generally imposes
a capital gains tax on the sale of capital assets located in Israel, including shares in Israeli resident companies, by both residents
and non-residents of Israel, unless a specific exemption is available or unless a treaty between Israel and the country of the
non-resident provides otherwise. The law distinguishes between the inflationary surplus and the real gain. The inflationary surplus
is the portion of the total capital gain, which is equivalent to the increase of the relevant asset&rsquo;s purchase price attributable
to the increase in the Israeli consumer price index from the date of purchase to the date of sale. The real gain is the excess
of the total capital gain over the inflationary surplus. A non-resident that invests in taxable assets with foreign currency may
elect to calculate the inflationary amount by using such foreign currency.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Non-Israeli residents
are generally exempt from Israeli capital gains tax on any gains derived from the sale of shares publicly traded on a stock exchange
recognized by the Israeli Ministry of Finance (including the Tel-Aviv Stock Exchange and Nasdaq), provided such shareholders did
not acquire their shares prior to an initial public offering and that such capital gains are not derived by a permanent establishment
of the foreign resident in Israel. Notwithstanding the foregoing, dealers in securities in Israel are taxed at the regular tax
rates applicable to business income. However, Non-Israeli corporations will not be entitled to such exemption if an Israeli resident
(1) has a controlling interest of 25% or more in such non-Israeli corporation, or (2) is the beneficiary of, or is entitled to,
25% or more of the revenue or profits of such non-Israeli corporation, whether directly or indirectly. In such case the sale,
exchange or disposition of ordinary shares would be subject to Israeli tax, to the extant applicable. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition, pursuant to the Convention Between
the Government of the United States of America and the Government of Israel with Respect to Taxes on Income, as amended (the &ldquo;United
States- Israel Tax Treaty&rdquo;), the sale, exchange or disposition of ordinary shares by a person who qualifies as a resident
of the U.S. within the meaning of the United States-Israel Tax Treaty and who is entitled to claim the benefits afforded to such
person by the United States- Israel Tax Treaty (a &ldquo;Treaty United States Resident&rdquo;) generally will not be subject to
the Israeli capital gains tax unless such Treaty United States Resident holds, directly or indirectly, shares representing 10%
or more of our voting power during any part of the twelve- month period preceding such sale, exchange or disposition, subject to
certain conditions or if the capital gains from such sale are considered as business income attributable to a permanent establishment
of the U.S. resident in Israel. However, under the United States-Israel Tax Treaty, such &ldquo;Treaty United States Resident&rdquo;
would be permitted to claim a credit for such taxes against the U.S. federal income tax imposed with respect to such sale, exchange
or disposition, subject to the limitations in U.S. laws applicable to foreign tax credits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> The income tax rate applicable to real capital
gain (capital gain less the effect of inflation) derived by an Israeli individual from the sale of shares which had been purchased
after January 1, 2012, whether listed on a stock exchange or not, is 25%. However, if such shareholder is considered a &ldquo;Substantial
Shareholder&rdquo; (as defined below) at the time of sale or at any time during the preceding 12-month period, such gain will
be taxed at the rate of 30%. As of January 1, 2013, an additional tax at a rate of 2% is imposed on high earners whose annual
income or gains exceed NIS 810,720. Moreover, capital gains derived by a shareholder who is a dealer or trader in securities,
or to whom such income is otherwise taxable as ordinary business income, are taxed in Israel at ordinary income rates (up to 48%
for individuals). A &ldquo;substantial shareholder&rdquo; is defined as someone who alone, or together with another person, holds,
directly or indirectly, at least 10% in one or all of any of the means of control in the corporation. With respect to Israeli
tax resident corporate investors, capital gains tax at the regular corporate rate will be imposed on such taxpayers on the sale
of traded shares. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Taxation of Dividends</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> As of the beginning of 2012 Israeli tax
resident individuals or non-Israeli resident individuals are generally subject to Israeli income tax on the receipt of dividends
paid on our ordinary Shares at the rate of 25% or 30% if such recipient is a &ldquo;substantial shareholders&quot; at the time
receiving the dividend or on any date in the 12 months preceding such date, unless a lower tax rate is provided in a tax treaty
between Israel and the shareholder's country of residence&quot; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Under the U.S.-Israel
Tax Treaty, the maximum Israeli tax and withholding tax on dividends paid to a holder of ordinary shares who is a resident of
the U.S. is generally 25%, but is reduced to 12.5% if the dividends are paid to a corporation that holds in excess of 10% of the
voting rights of a company during the company&rsquo;s taxable year preceding the distribution of the dividend and the portion
of the company&rsquo;s taxable year in which the dividend was distributed. A non-resident of Israel who has dividend income derived
from or accrued in Israel, from which tax was withheld at the source, is generally exempt from the duty to file tax returns in
Israel in respect of such income, provided such income was not derived from a business conducted in Israel by the taxpayer. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>U.S. Federal Income Tax Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> <B>TO ENSURE COMPLIANCE
WITH U.S. TREASURY DEPARTMENT CIRCULAR 230, PROSPECTIVE HOLDERS OF ORDINARY SHARES ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION
OF U.S. FEDERAL TAX ISSUES IN THIS MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS
OF ORDINARY SHARES FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON SUCH HOLDERS UNDER THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE &ldquo;CODE&rdquo;); (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE
TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE HOLDERS OF ORDINARY SHARES SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR
CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following discussion
applies only to a holder of our ordinary shares who qualifies as a &ldquo;U.S. holder&rdquo;. For purposes of this discussion a
&ldquo;U.S. holder&rdquo; is a beneficial owner of our ordinary shares that is for U.S. federal income tax purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">an individual who is a U.S. citizen or
U.S. resident alien;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a corporation (or other entity taxable
as a corporation for U.S. federal income tax purposes) that was created or organized under the laws of the U.S., any state thereof
or the District of Columbia;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">an estate whose income is subject to U.S.
federal income taxation regardless of its source; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Symbol">&middot;</FONT> </TD><TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif">a
                                         trust (i) if a U.S. court is able to exercise primary supervision over the administration
                                         of the trust and one or more &ldquo;United States persons&rdquo; (as defined in the Code)
                                         have the authority to control all substantial decisions of the trust, or (ii) if the
                                         trust has a valid election in effect under applicable Treasury Regulations to be treated
                                         as a &ldquo;United States person.&rdquo;</FONT> </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> This discussion is
based on current provisions of the Internal Revenue Code of 1986, as amended, which we refer to as the Code, current and proposed
Treasury regulations promulgated under the Code, and administrative and judicial decisions as of the date of this <I>prospectus</I>,
all of which are subject to change or differing interpretation, possibly on a retroactive basis. This discussion does not address
any aspect of state, local or non-U.S. tax laws. Except where noted, this discussion addresses only those holders who hold our
shares as capital assets. This discussion does not purport to be a comprehensive description of all of the tax considerations
that may be relevant to U.S. holders entitled to special treatment under U.S. federal income tax laws, for example, financial
institutions, insurance companies, tax-exempt organizations and broker/dealers, and it does not address all aspects of U.S. federal
income taxation that may be relevant to any particular shareholder based on the shareholder&rsquo;s individual circumstances.
In particular, this discussion does not address the potential application of the alternative minimum tax, or the special U.S.
federal income tax rules applicable in special circumstances, including to U.S. holders who: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">have elected mark-to-market accounting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">hold our ordinary shares as part of a
straddle, hedge or conversion transaction with other investments;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">own directly, indirectly or by attribution
at least 10% of our voting power;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">are tax exempt entities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">are persons who acquire shares in connection
with employment or other performance of services; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">have a functional currency that is not
the U.S. dollar.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Additionally, this discussion
does not consider the tax treatment of partnerships or persons who hold ordinary shares through a partnership or other pass-through
entity or the possible application of U.S. federal gift or estate taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">EACH PROSPECTIVE SHAREHOLDER
IS URGED TO CONSULT ITS TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF OWNERSHIP AND DISPOSITION OF OUR
SHARES, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY OTHER RELEVANT FOREIGN, STATE, LOCAL, OR OTHER TAXING
JURISDICTION .</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Taxation of Distributions Paid on Ordinary
Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Subject to the description
of the passive foreign investment company rules below, a U.S. holder will be required to include in gross income as ordinary income
from sources outside of the U.S. the amount of any distribution paid on ordinary shares, including any Israeli taxes withheld from
the amount paid, to the extent the distribution is paid out of our current or accumulated earnings and profits as determined for
U.S. federal income tax purposes. Distributions in excess of these earnings and profits will be applied against and will reduce
the U.S. holder&rsquo;s basis in the ordinary shares and, to the extent in excess of this basis, will be treated as gain from the
sale or exchange of ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Certain dividend income
may be eligible for a reduced rate of taxation. Dividend income will be taxed to a non-corporate holder at the applicable long-term
capital gains rate if the dividend is received from a &ldquo;qualified foreign corporation,&rdquo; and the shareholder of such
foreign corporation holds such stock for more than 60 days during the 121 day period that begins on the date that is 60 days before
the ex-dividend date for the stock. The holding period is tolled for any days on which the shareholder has reduced his risk of
loss with respect to the stock. A &ldquo;qualified foreign corporation&rdquo; is either a corporation that is eligible for the
benefits of a comprehensive income tax treaty with the U.S. or a corporation whose stock, the shares of which are with respect
to any dividend paid by such corporation, is readily tradable on an established securities market in the United States (including,
for this purpose, ADSs traded on a securities market in the United States with respect to the foreign corporation&rsquo;s shares).
However, a foreign corporation will not be treated as a &ldquo;qualified foreign corporation&rdquo; if it is a passive foreign
investment company (as discussed below) for the year in which the dividend was paid or the preceding year. Distributions of current
or accumulated earnings and profits paid in foreign currency to a U.S. holder will be includible in the income of a U.S. holder
in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the distribution is received by the U.S.
holder (or, in the case of ADSs, on the day the distribution is received by the depository). A U.S. holder that receives a foreign
currency distribution and converts the foreign currency into U.S. dollars subsequent to receipt will have foreign exchange gain
or loss based on any appreciation or depreciation in the value of the foreign currency against the U.S. dollar, which will generally
be U.S. source ordinary income or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As described above, we
will generally be required to withhold Israeli income tax from any dividends paid to holders who are not resident in Israel. See
&ldquo;- Israeli Tax Considerations&mdash;Taxation of Dividends&rdquo; above. If a U.S. holder receives a dividend from us that
is subject to Israeli withholding, the following would apply:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">You must include the gross amount of the
dividend, not reduced by the amount of Israeli tax withheld, in your U.S. taxable income.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">You may be able to claim the Israeli tax
withheld as a foreign tax credit against your U.S. income tax liability. However, to the extent that 25% or more of our gross income
from all sources was effectively connected with the conduct of a trade or business in the U.S. (or treated as effectively connected,
with limited exceptions) for a three-year period ending with the close of the taxable year preceding the year in which the dividends
are declared, a portion of this dividend will be treated as U.S. source income, possibly reducing the allowable foreign tax.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The foreign tax credit is subject to significant
and complex limitations. Generally, the credit can offset only the part of your U.S. tax attributable to your net foreign source
passive income. Additionally, if we pay dividends at a time when 50% or more of our stock is owned by U.S. persons, you may be
required to treat the part of the dividend attributable to U.S. source earnings and profits as U.S. source income, possibly reducing
the allowable credit.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A U.S. holder will be denied a foreign
tax credit with respect to Israeli income tax withheld from dividends received on the ordinary shares to the extent the U.S. holder
has not held the ordinary shares for at least 16 days of the 31-day period beginning on the date which is 15 days before the ex-dividend
date or, alternatively, to the extent the U.S. holder is under an obligation to make related payments with respect to substantially
similar or related property. Any days during which a U.S. holder has substantially diminished its risk of loss on the ordinary
shares are not counted toward meeting the 16-day holding period required by the statute.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">If you do not elect to claim foreign taxes
as a credit, you will be entitled to deduct the Israeli income tax withheld from your XTL dividends in determining your taxable
income.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Individuals who do not claim itemized
deductions, but instead utilize the standard deduction, may not claim a deduction for the amount of the Israeli income taxes withheld.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">If you are a U.S. corporation holding
our stock, the general rule is that you cannot claim the dividends-received deduction with respect to our dividends. There is an
exception to this rule if you own at least 10% of our ordinary shares (by vote) and certain conditions are met.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Special rules, described
below, apply if we are a passive foreign investment company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Taxation of the Disposition of Ordinary
Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Subject to the description
of the passive foreign investment company rules below, upon the sale, exchange or other disposition of our ordinary shares, a U.S.
holder will recognize capital gain or loss in an amount equal to the difference between the U.S. holder&rsquo;s basis in the ordinary
shares, which is usually the cost of those shares, and the amount realized on the disposition. Capital gain from the sale, exchange
or other disposition of ordinary shares held more than one year is long-term capital gain and is eligible for a reduced rate of
taxation for non-corporate holders. In general, gain realized by a U.S. holder on a sale, exchange or other disposition of ordinary
shares generally will be treated as U.S. source income for U.S. foreign tax credit purposes. A loss realized by a U.S. holder on
the sale, exchange or other disposition of ordinary shares is generally allocated to U.S. source income. However, regulations require
the loss to be allocated to foreign source income to the extent certain dividends were received by the taxpayer within the 24-month
period preceding the date on which the taxpayer recognized the loss. The deductibility of a loss realized on the sale, exchange
or other disposition of ordinary shares is subject to limitations for both corporate and individual shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A U.S. holder that uses
the cash method of accounting calculates the U.S. dollar value of the proceeds received from a sale of ordinary shares as of the
date that the sale settles, and will generally have no additional foreign currency gain or loss on the sale, while a U.S. holder
that uses the accrual method of accounting is required to calculate the value of the proceeds of the sale as of the trade date
and may therefore realize foreign currency gain or loss, unless the U.S. holder has elected to use the settlement date to determine
its proceeds of sale for purposes of calculating this foreign currency gain or loss. In addition, a U.S. holder that receives foreign
currency upon disposition of our ordinary shares and converts the foreign currency into U.S. dollars subsequent to receipt will
have foreign exchange gain or loss based on any appreciation or depreciation in the value of the foreign currency against the U.S.
dollar, which will generally be U.S. source ordinary income or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Tax Consequences if we are a Passive
Foreign Investment Company</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Special federal income
tax rules apply to the timing and character of income received by a U.S. holder of a PFIC. We will be a PFIC if either 75% or
more of our gross income in a tax year is passive income or the average percentage of our assets (by value) that produce or are
held for the production of passive income in a tax year is at least 50%. The IRS has indicated that cash balances, even if held
as working capital, are considered to be assets that produce passive income. Therefore, any determination of PFIC status will
depend upon the sources of our income, and the relative values of passive and non- passive assets, including goodwill. Furthermore,
because the goodwill of a publicly-traded corporation is largely a function of the trading price of its shares, the valuation
of that goodwill is subject to significant change throughout each year. A determination as to a corporation&rsquo;s status as
a PFIC must be made annually. We believe we may be a PFIC during 2015 and although we have not determined whether we will be a
PFIC in 2016, or in any subsequent year, our operating results for any such years may cause us to be a PFIC. Although we may not
be a PFIC in any one year, the PFIC taint remains with respect to those years in which we were or are a PFIC and the special PFIC
taxation regime will continue to apply. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If we are classified as
a PFIC, a special tax regime would apply to both (a) any &ldquo;excess distribution&rdquo; by us (generally, the U.S. holder&rsquo;s
ratable share of distributions in any year that are greater than 125% of the average annual distributions received by such U.S.
holder in the three preceding years or its holding period, if shorter) and (b) any gain recognized on the sale or other disposition
of your ordinary shares. Under this special regime, any excess distribution and recognized gain would be treated as ordinary income
and the federal income tax on such ordinary income would be determined as follows: (i) the amount of the excess distribution or
gain would be allocated ratably over the U.S. holder&rsquo;s holding period for our ordinary shares; (ii) U.S. federal income tax
would be determined for the amounts allocated to the first year in the holding period in which we were classified as a PFIC and
for all subsequent years (except the year in which the excess distribution was received or the sale occurred) by applying the highest
applicable tax rate in effect in the year to which the income was allocated; (iii) an interest charge would be added to this tax,
calculated by applying the underpayment interest rate to the tax for each year determined under the preceding sentence from the
due date of the income tax return for such year to the due date of the return for the year in which the excess distribution or
sale occurs; and (iv) amounts allocated to a year prior to the first year in the U.S. holder&rsquo;s holding period in which we
were classified as a PFIC or to the year in which the excess distribution or the disposition occurred would be taxed as ordinary
income but without the imposition of an interest charge.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">A U.S. holder may generally
avoid the PFIC &ldquo;excess distribution&rdquo; regime by electing to treat his PFIC shares as a &ldquo;qualified electing fund.&rdquo;
If a U.S. holder elects to treat PFIC shares as a qualified electing fund, also known as a &ldquo;QEF Election,&rdquo; the U.S.
holder must include annually in gross income (for each year in which PFIC status is met) his <I>pro rata</I> share of the PFIC&rsquo;s
ordinary earnings and net capital gains, whether or not such amounts are actually distributed to the U.S. holder. A U.S. holder
may make a QEF Election with respect to a PFIC for any taxable year in which he was a shareholder. A QEF Election is effective
for the year in which the election is made and all subsequent taxable years of the U.S. holder. Procedures exist for both retroactive
elections and the filing of protective statements. A U.S. holder making the QEF Election must make the election on or before the
due date, as extended, for the filing of the U.S. holder&rsquo;s income tax return for the first taxable year to which the election
will apply.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> A QEF Election is made
on a shareholder-by-shareholder basis. A U.S. holder must make a QEF Election by completing Form 8621, Return by a Shareholder
of a Passive Foreign Investment Company or Qualified Electing Fund, and attaching it to the holder&rsquo;s timely filed U.S. federal
income tax return. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Alternatively, a U.S.
holder may also generally avoid the PFIC regime by making a so-called &ldquo;mark-to-market&rdquo; election. Such an election
may be made by a U.S. holder with respect to ordinary shares owned at the close of such holder&rsquo;s taxable year, provided
that we are a PFIC and the ordinary shares are considered &ldquo;marketable stock.&rdquo; The ordinary shares will be marketable
stock if they are regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission,
or the national market system established pursuant to section 11A of the Securities Exchange Act of 1934, or an equivalent regulated
and supervised foreign securities exchange. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If a U.S. holder were to
make a mark-to-market election with respect to ordinary shares, such holder generally will be required to include in its annual
gross income the excess of the fair market value of the PFIC shares at year-end over such shareholder&rsquo;s adjusted tax basis
in the ordinary shares. Such amounts will be taxable to the U.S. holder as ordinary income, and will increase the holder&rsquo;s
tax basis in the ordinary shares. Alternatively, if in any year, a United States holder&rsquo;s tax basis exceeds the fair market
value of the ordinary shares at year-end, then the U.S. holder generally may take an ordinary loss deduction to the extent of the
aggregate amount of ordinary income inclusions for prior years not previously recovered through loss deductions and any loss deductions
taken will reduce the shareholder&rsquo;s tax basis in the ordinary shares. Gains from an actual sale or other disposition of the
ordinary shares with a &ldquo;mark-to-market&rdquo; election will be treated as ordinary income, and any losses incurred on an
actual sale or other disposition of the ordinary shares will be treated as an ordinary loss to the extent of any prior &ldquo;unreversed
inclusions&rdquo; as defined in Section 1296(d) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The mark-to-market election
is made on a shareholder-by-shareholder basis. The mark-to-market election is made by completing Form 8621, Return by a Shareholder
of a Passive Foreign Investment Company or Qualified Electing Fund, and attaching it to the holder&rsquo;s timely filed U.S. federal
income tax return for the year of election. Such election is effective for the taxable year for which made and all subsequent years
until either (a) the ordinary shares cease to be marketable stock or (b) the election is revoked with the consent of the IRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>In view of the complexity
of the issues regarding our treatment as a PFIC, U.S. shareholders are urged to consult their own tax advisors for guidance as
to our status as a PFIC.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Information Reporting and Back-Up Withholding</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">U.S. holders generally
are subject to information reporting requirements with respect to dividends paid in the U.S. on ordinary shares. Existing regulations
impose information reporting and back-up withholding on dividends paid in the U.S. on ordinary shares and on proceeds from the
disposition of ordinary shares unless the U.S. holder provides IRS Form W-9 or otherwise establishes an exemption.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Prospective investors should
consult their tax advisors concerning the effect, if any, of these Treasury regulations on an investment in ordinary shares. Back-up
withholding is not an additional tax. The amount of any back-up withholding will be allowed as a credit against a holder&rsquo;s
U.S. federal income tax liability and may entitle the holder to a refund, provided that specified required information is furnished
to the IRS on a timely basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <A NAME="a_020"></A>PLAN OF DISTRIBUTION </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> We engaged H.C. Wainwright
&amp; Co., LLC (&ldquo;Wainwright&rdquo; or the &ldquo;Placement Agent&rdquo;) to act as our exclusive placement agent to solicit
offers to purchase the securities offered by this prospectus. Wainwright is not purchasing or selling any securities, nor are
they required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use their
&ldquo;reasonable best efforts&rdquo; to arrange for the sale of shares by us. Therefore, we may not sell the entire amount of
units being offered. We may enter into a securities purchase agreement directly with certain institutional investors who purchase
our securities in this offering. We will not enter into securities purchase agreements with all other investors and such investors
shall rely solely on this prospectus in connection with the purchase of our securities in this offering. Wainwright may engage
one or more sub-placement agents or selected dealers to assist with the offering. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The following table
shows the per share and total fees we will pay to the Placement Agent, assuming the sale of all of the securities offered hereby. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; text-align: left"> Per ADS and Series A warrant to purchase one ADS </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 10%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Per Series B warrant to purchase one ADS and Series A warrant to purchase
    one ADS </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> $ </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> Total </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Upon the closing of
this offering, we will pay the Placement Agent a cash commission fee equal to 7% of the aggregate gross proceeds to us from the
sale of the securities in the offering, except that Wainwright shall receive a cash commission fee of 3.5% for proceeds raised
from certain investors previously identified to it, and a management fee equal to 1% of the aggregate gross proceeds to us from
all investors. We shall also issue Wainwright the Placement Agent Warrant as outlined below. We will pay Wainwright an accountable
expense allowance equal to $35,000 for its expenses, other than legal expenses, and a non-accountable expense allowance equal
to the greater of $75,000 and 1% of the aggregate gross proceeds for legal counsel fees and expenses. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> We estimate the total
expenses of this offering, which will be payable by us, excluding the Placement Agent fees, will be approximately $ . After deducting
the fees due to the Placement Agent and our estimated offering expenses, we expect the net proceeds from this offering to be approximately
$ million. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> In addition, we agreed
to grant compensation warrants to the Placement Agent (the &ldquo;Placement Agent Warrant&rdquo;) to purchase a number of ADSs
equal to 5% of the number of ADSs sold in this offering (including ADSs underlying the Series B warrants but excluding any ADSs
underlying the Series A warrants). The compensation warrants will have an exercise price of &nbsp;&nbsp;$___ per ADS and will
terminate on the five year anniversary of the effective date of the registration statement of which this prospectus is a part
and will be issued in certificated form. Pursuant to FINRA Rule 5110(g), the Placement Agent Warrant and any securities issued
upon exercise of the Placement Agent Warrant shall not be sold, transferred, assigned, pledged, or hypothecated, or be the subject
of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the
securities by any person for a period of 180 days immediately following the date of effectiveness or commencement of sales of
this offering, except the transfer of any security: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &bull; </TD><TD STYLE="text-align: justify"> by operation of law or
                                         by reason of reorganization of our company; </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &bull; </TD><TD STYLE="text-align: justify"> to any FINRA member firm
                                         participating in the offering and the officers or partners thereof, if all securities
                                         so transferred remain subject to the lock-up restriction set forth above for the remainder
                                         of the time period; </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &bull; </TD><TD STYLE="text-align: justify"> that is beneficially owned
                                         on a pro-rata basis by all equity owners of an investment fund, provided that no participating
                                         member manages or otherwise directs investments by the fund, and participating members
                                         in the aggregate do not own more than 10% of the equity in the fund; or </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &bull; </TD><TD STYLE="text-align: justify"> the exercise or conversion
                                         of any security, if all securities received remain subject to the lock-up restriction
                                         set forth above for the remainder of the time period. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> In
addition, we have agreed to give the Placement Agent a right of first refusal to act as our exclusive financial advisor or lead
underwriter or placement agent during the 10-month period following consummation of this offering if we or any of our subsidiaries
decides to enter into any merger, acquisition or disposition transaction using a financial advisor or to raise funds by means
of a public offering or a private placement of equity or debt securities using an underwriter or placement agent, other than to
current investors or certain investors previously identified to the Placement Agent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The Placement Agent
may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act and any fees received by it and
any profit realized on the sale of the securities by it while acting as principal might be deemed to be underwriting discounts
or commissions under the Securities Act. The Placement Agent will be required to comply with the requirements of the Exchange
Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit
the timing of purchases and sales of our securities by the Placement Agent. Under these rules and regulations, the Placement Agent
may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase any of our securities
or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they
have completed their participation in the distribution. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>Other Relationships </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The Placement Agent
has performed investment banking services for us in the past, for which it has received customary fees and expenses. The Placement
Agent may, from time to time, engage in transactions with or perform services for us in the ordinary course of its business and
may continue to receive compensation from us for such services, but we have no present agreements with the placement agent to
do so. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>Determination of Offering Price</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The public offering
price of the securities offered hereby has been negotiated between us and the investors, in consultation with the Placement Agent
based on the trading of our ADSs prior to the offering, among other things. Other factors considered in determining the public
offering price of the securities we are offering include the history and prospects of the Company, the stage of development of
our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management,
general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>Lock-up Agreements </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Our officers and directors
have agreed with the Placement Agent to be subject to a lock-up period of 60 days following the date of closing of this offering.
This means that, during the applicable lock-up period, such persons may not offer for sale, contract to sell, sell, distribute,
grant any option, right to warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any shares
of our ordinary shares or ADSs or any securities convertible into, or exercisable or exchangeable for, ADSs or ordinary shares.
Certain limited transfers are permitted during the lock-up period if the transferee agrees to these lock-up restrictions. We have
also agreed, in the securities purchase agreement, to similar lock-up restrictions on the issuance and sale of our securities
for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>days following the date of this prospectus, although we
will be permitted to issue stock options to directors, officers, employees and consultants under our existing plans. The 60 day
lock-up period for our officers and directors is subject to an additional extension to accommodate for our reports of financial
results or material news releases. The Placement Agent may, in its sole discretion and without notice, waive the terms of any
of these lock-up agreements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>Depositary</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The Bank of New York
Mellon, as depositary, executes and delivers the ADSs on our behalf. We have issued and deposited ordinary shares with Bank Hapoalim
B.M., The Bank of New York&rsquo;s custodian in Tel Aviv, Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>Indemnification </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> We have agreed to indemnify
the Placement Agent against certain liabilities, including liabilities under the Securities Act, or to contribute to payments
the Placement Agent may be required to make with respect to any of these liabilities. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_021"></A>EXPERTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The consolidated financial
statements of XTL Biopharmaceuticals Ltd. as of December 31, 2015 and 2014 and for each of the three years in the period ended
December 31, 2015 included in this prospectus have been so included in reliance on the report of Kesselman &amp; Kesselman, Israel
CPAs, a member firm of PricewaterhouseCoopers International Limited, an independent registered accounting firm, given on the authority
of such firm as experts in accounting and auditing. . </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_022"></A>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> The validity of the
ordinary shares represented by ADSs being offered by this prospectus and other legal matters concerning this offering relating
to Israeli law will be passed upon for us by Doron Tikotzky Kantor Gutman Cederboum &amp; Co., Ramat Gan, Israel. Certain legal
matters under United States law relating to this offering will be passed upon for us by Sichenzia Ross Ference Kesner LLP, New
York, New York. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> Certain legal matters
in connection with this offering will be passed upon for the Placement Agent by Ellenoff Grossman &amp; Schole LLP with respect
to U.S. federal law. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been informed that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_023"></A>ENFORCEABILITY OF FOREIGN
JUDGMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We are incorporated under
the laws of the State of Israel. Service of process upon us, our Israeli subsidiaries, our directors and officers and the Israeli
experts, if any, named in this prospectus, substantially all of whom reside outside the United States, may be difficult to obtain
within the United States. Furthermore, because the majority of our assets and investments, and substantially all of our directors,
officers and such Israeli experts, if any, are located outside the United States, any judgment obtained in the United States against
us or any of them may be difficult to collect within the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have been informed by
our legal counsel in Israel that it may also be difficult to assert U.S. securities law claims in original actions instituted in
Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is
not the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine
that Israeli law and not U.S. law is applicable to the claim. There is little binding case law in Israel addressing these matters.
If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming
and costly process. Certain matters of procedure will also be governed by Israeli law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Subject to specified time
limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may
enforce a U.S. judgment in a civil matter, including a judgment based upon the civil liability provisions of the U.S. securities
laws, as well as a monetary or compensatory judgment in a non-civil matter, provided that the following conditions are met:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">subject to limited exceptions, the judgment is final and non-appealable;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the judgment was given by a court competent under the laws of the
state of the court and is otherwise enforceable in such state;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the judgment was rendered by a court competent under the rules of
private international law applicable in Israel;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the laws of the state in which the judgment was given provide for
the enforcement of judgments of Israeli courts;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">adequate service of process has been effected and the defendant has
had a reasonable opportunity to present his arguments and evidence;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the judgment and its enforcement are not contrary to the law, public
policy, security or sovereignty of the State of Israel;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the judgment was not obtained by fraud and does not conflict with
any other valid judgment in the same matter between the same parties; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">an action between the same parties in the same matter was not pending
in any Israeli court at the time the lawsuit was instituted in the U.S. court.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have appointed Corporation
Trust Company as our agent to receive service of process in any action against us in any United States federal or state court arising
out of this offering or any purchase or sale of securities in connection with this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">If a foreign judgment is
enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency
and transferred out of Israel. The usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency
is for the Israeli court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on
the date of the judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment
of an Israeli court stated in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the
annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange
rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_024"></A>AVAILABLE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> We have filed with
the SEC a registration statement on Form F-1, including amendments and relevant exhibits and schedules, under the Securities Act
covering the ordinary shares represented by ADSs to be sold in this offering. This prospectus, which constitutes a part of the
registration statement, summarizes material provisions of contracts and other documents that we refer to in the prospectus. Since
this prospectus does not contain all of the information contained in the registration statement, you should read the registration
statement and its exhibits and schedules for further information with respect to us and our ordinary shares and the ADSs. You
may review and copy the registration statement, reports and other information we file at the SEC's public reference room at 100
F Street, N.E., Washington, D.C. 20549. You may also request copies of these documents upon payment of a duplicating fee by writing
to the SEC. For further information on the public reference facility, please call the SEC at 1-800-SEC-0330. Our SEC filings,
including the registration statement, are also available to you on the SEC's Web site at http://www.sec.gov. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> In addition, since
our ordinary shares are traded on the TASE, in the past we filed Hebrew language periodic and immediate reports with, and furnished
information to, the TASE and the Israel Securities Authority, or the ISA, as required under Chapter Six of the Israel Securities
Law, 1968. Copies of our SEC filings and submissions are submitted to the Israeli Securities Authority and TASE. Such copies can
be retrieved electronically through the MAGNA distribution site of the Israeli Securities Authority (www.magna.isa.gov.il) and
the TASE website (maya.tase.co.il). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> We are subject to the
information reporting requirements of the Exchange Act that are applicable to foreign private issuers, and under those requirements
we file reports with the SEC. Those other reports or other information may be inspected without charge at the locations described
above. As a foreign private issuer, we are exempt from the rules under the Exchange Act related to the furnishing and content
of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit
recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file
annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as United States companies
whose securities are registered under the Exchange Act. However, we anticipate filing with the SEC, within four months after the
end of each fiscal year, an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm.
We also file with the SEC Current Reports on Form 6-K. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We also maintain a website
at <I>http://www.xtlbio.com</I>, but information contained on our website does not constitute a part of this prospectus and is
not incorporated by reference into this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>


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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B><A NAME="a_025"></A>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B>CONSOLIDATED FINANCIAL
STATEMENTS</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B>AS OF DECEMBER
31, 2015</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B>INDEX</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>&nbsp;&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 86%; text-align: justify"> &nbsp; </TD>
    <TD STYLE="width: 14%; border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> <B>Page</B> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> <A HREF="#fin_001"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Report of
    Independent Registered Public Accounting Firm</B></FONT></A> </TD>
    <TD STYLE="text-align: center"> <B>F-2</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Consolidated Financial Statements
    - in U.S. dollars:</B></FONT> </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 14.2pt; text-align: justify"> <A HREF="#fin_002"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Statements
    of Financial Position</B></FONT></A> </TD>
    <TD STYLE="text-align: center"> <B>F-3<FONT STYLE="font-family: Times New Roman, Times, Serif"> &ndash; F-4</FONT></B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 14.2pt; text-align: justify"> <A HREF="#fin_003"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Statements
    of Comprehensive loss</B></FONT></A> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-5</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 14.2pt; text-align: justify"> <A HREF="#fin_004"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Statements
    of Changes in Equity </B></FONT></A> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-6 &ndash; F-8</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 14.2pt; text-align: justify"> <A HREF="#fin_005"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Statements
    of Cash Flows</B></FONT></A> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-9 &ndash; F-11</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <B>&nbsp;</B> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 14.2pt; text-align: justify"> <A HREF="#fin_006"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Notes
    to Financial Statements</B></FONT></A> </TD>
    <TD STYLE="text-align: center"> <B>F-12 &ndash;<FONT STYLE="font-family: Times New Roman, Times, Serif"> F-58</FONT></B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> - - - - - - - - - - - - </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> <IMG SRC="finlogo.jpg" ALT="">&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8.25pt; text-align: center"> <A NAME="fin_001"></A><B>Report
of Independent Registered Public Accounting Firm</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8.25pt; text-align: center"> <B>To the shareholders of </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8.25pt; text-align: center"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8.25pt; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <FONT STYLE="font-size: 10pt">We have audited
the accompanying balance sheets of XTL Biopharmaceuticals Ltd and its subsidiaries as of December 31, 2015 and 2014, and the related
consolidated statements of comprehensive loss, changes in equity and cash flows for each of the three years in the period ended
December 31, 2015. These financial statements are the responsibility of the Company&rsquo;s Board of Directors and management.
Our responsibility is to express an opinion on these financial statements based on our audits.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <BR>
<FONT STYLE="font-size: 10pt">We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by the Company&rsquo;s Board of Directors and management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <BR>
<FONT STYLE="font-size: 10pt">In our opinion, the consolidated financial statements referred to above, present fairly, in all
material respects, the financial position of XTL Biopharmaceuticals Ltd. and its subsidiaries at December 31, 2015 and 2014, and
the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015 in conformity
with International Financial Reporting Standards (&ldquo;IFRS&rdquo;) as issued by the International Accounting Standards Board
(&ldquo;IASB&rdquo;).</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; text-align: left"> <FONT STYLE="font-size: 10pt">Tel-Aviv, Israel</FONT> </TD>
    <TD STYLE="width: 60%; text-align: center"> <FONT STYLE="font-size: 10pt">Kesselman &amp; Kesselman</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt">March 31, 2016</FONT> </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">Certified Public Accountants (lsr.)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> <FONT STYLE="font-size: 10pt">A member firm of PricewaterhouseCoopers International Limited</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>&nbsp;</B> </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <A NAME="fin_002"></A><B>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 1pt solid"> CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Note </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 28.35pt"> ASSETS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt; padding-top: 0; padding-right: 0"> CURRENT ASSETS: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Cash and cash equivalents </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: center"> &nbsp; </TD><TD STYLE="width: 10%; text-align: center"> 6 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3,817 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 2,159 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Marketable securities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 251 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -9.95pt; padding-left: 21.3pt"> Other accounts receivable </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> 8 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 197 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 437 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 4,265 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,596 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 2.85pt; padding-left: 11.35pt"> Assets of disposal group classified as held for
    sale </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 505 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 4,265 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 3,101 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> NON-CURRENT ASSETS: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Restricted deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 21 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Property, plant and equipment, net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 11 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 24 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -9.95pt; padding-left: 21.3pt"> Intangible assets, net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> 11 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,037 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,498 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,058 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,543 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total assets </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 5,323 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 5,644 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>


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    <!-- Field: /Page -->

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 1pt solid"> CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Note </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 28.35pt"> LIABILITIES AND EQUITY </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -11.35pt; padding-left: 14.2pt"> CURRENT LIABILITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: left; text-indent: -8.5pt; padding-left: 21.3pt"> Trade payables </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 12 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 118 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 217 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 21.3pt"> Other accounts payable </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> 13 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 318 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 298 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 436 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 515 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 21.3pt"> Liabilities of disposal group classified as held
    for sale </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 450 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 21.3pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 21.3pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 436 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 965 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 21.3pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -14.2pt; padding-left: 14.2pt"> NON-CURRENT LIABILITIES </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -11.35pt; padding-left: 14.2pt"> EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
    COMPANY: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 16 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Share capital &ndash; ordinary shares of NIS 0.1
    par value: authorized &ndash; December 31, 2015 and 2014 &ndash; 700,000,000 shares; issued and outstanding: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> December 31, 2015 &ndash;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;273,525,799 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> December 31, 2014 &ndash; ** 232,812,446 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,606 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,198 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Premium on shares, options and warrants </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 150,748 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 148,276 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Reserve from transactions with non-controlling
    interests </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Accumulated deficit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (152,487 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (148,322 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9.95pt; padding-left: 21.3pt"> Treasury shares, at cost: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -9.95pt; padding-left: 21.3pt"> December 31, 2014 &ndash;
    4,354,881 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,501 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,887 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,660 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> NON-CONTROLLING INTERESTS </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 19 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total equity </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 4,887 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 4,679 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total liabilities and equity </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 5,323 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 5,644 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> ** Net of treasury shares </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 34%; border-bottom: Black 1pt solid; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 3%; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 29%; border-bottom: Black 1pt solid; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 3%; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 31%; border-bottom: Black 1pt solid; padding-left: 2.85pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Shlomo Shalev </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Josh Levine </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> David Kestenbaum </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Chairman of the Board </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Chief Executive Officer </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Chief Financial Officer </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> Date of approval of the financial statements
by the Company&rsquo;s Board: March 31, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


<!-- Field: Page; Sequence: 98; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <A NAME="fin_003"></A><B>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 1pt solid"> CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Note </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2.85pt; text-align: center"> <B>U.S.
                                         dollars in thousands </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 2.85pt; text-align: center"> <B>(except
                                         per share data)</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Continuing
    operations: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 48%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Research and development expenses </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: center"> &nbsp; </TD><TD STYLE="width: 10%; text-align: center"> 18 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (578 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (278 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (82 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> General and administrative expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 19 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,419 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,744 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,329 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Impairment of intangible assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 11 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,604 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Other gains (losses), net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> 20 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (10 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,059 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Operating loss </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (3,611 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,022 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (352 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Finance income </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 65 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Finance expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (15 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (107 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (6 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Finance income (expenses),
    net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> 21 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (11 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (97 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 59 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from investment in associate </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> 10 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (845 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from continuing operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,622 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,119 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,138 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from discontinued operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (689 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (746 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,575 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total loss for the year </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (3,713 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Other comprehensive income (loss) from discontinued
    operations: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Items that might be classified to profit or loss: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Foreign currency translation adjustments </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 108 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 14.2pt"> Reclassification of foreign
    currency translation adjustments to Other gains, net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (221 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total other comprehensive
    loss from discontinued operations </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (113 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total comprehensive loss </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (3,826 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Total loss attributable to: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Equity holders of the Company </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (4,313 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,527 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,476 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 14.2pt"> Non-controlling interests
    from discontinued operations </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (338 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,237 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (3,713 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Total comprehensive loss attributable to: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Equity holders of the Company </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (4,313 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,527 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,589 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 14.2pt"> Non-controlling interests
    from discontinued operations </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (338 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,237 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (3,826 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Basic and diluted loss per share: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> From continuing operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.014 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.009 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.005 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> From discontinued operations </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (0.003 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (0.002 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (0.006 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Loss per share for the
    period </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.017 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.011 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (0.011 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Weighted average number
    of issued ordinary shares </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 263,730,467 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 231,224,512 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 223,605,181 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <A NAME="fin_004"></A><B>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="26" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Attributable
    to equity holders of the Company</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Share</B> </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>capital</B> </P></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Premium
    on</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>shares,</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>options and</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>warrants</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Accumulated</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>deficit</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Treasury</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>shares</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Reserve</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>from</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>transactions</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>with non-</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>controlling </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>interests</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Total</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Non-</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>controlling</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>interests</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Total</B> </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>equity</B> </P></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP COLSPAN="30" STYLE="border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>U.S.
    dollars in thousands</B></FONT> </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 28%; padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Balance as of January 1,
    2015</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">6,198</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">148,276</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">(148,322</FONT> </TD>
    <TD STYLE="width: 1%"> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">(1,501</FONT> </TD>
    <TD STYLE="width: 1%"> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">9</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">4,660</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">19</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 10pt">4,679</FONT> </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Total comprehensive loss</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">(4,313</FONT> </TD>
    <TD> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">(4,313</FONT> </TD>
    <TD> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">2</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">(4,311</FONT> </TD>
    <TD> <FONT STYLE="font-size: 10pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Share-based payment to employees and
    others</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">148</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">148</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">148</FONT> </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Purchase of intangible assets through
    issuance of equity</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">8</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">76</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">84</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">84</FONT> </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Issuance of shares and warrants</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">400</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">2,983</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">3,383</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">3,383</FONT> </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Transaction with non-controlling interests
    in InterCure</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">11</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">11</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">5</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">16</FONT> </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 1pt; padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Loss of control
    in InterCure</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">(587</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">1,501</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">914</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">(26</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 1pt solid; text-align: right"> <FONT STYLE="font-size: 10pt">888</FONT> </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 7.1pt; text-indent: -7.1pt"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 7.1pt; text-indent: -7.1pt"> <FONT STYLE="font-size: 10pt">Balance as of
    December 31, 2015</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">6,606</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">150,748</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">(152,487</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 10pt">)</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">20</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">4,887</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double"> &nbsp; </TD>
    <TD STYLE="border-bottom: black 2.25pt double; text-align: right"> <FONT STYLE="font-size: 10pt">4,887</FONT> </TD>
    <TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="26" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Attributable
    to equity holders of the Company</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Share</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>capital</B></FONT> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Premium
    on</FONT><BR><FONT STYLE="font-size: 8pt"> shares,</FONT><BR><FONT STYLE="font-size: 8pt"> options and</FONT><BR><FONT STYLE="font-size: 8pt">
    warrants</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Accumulated</FONT><BR>
    <FONT STYLE="font-size: 8pt">deficit</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Treasury</FONT><BR>
    <FONT STYLE="font-size: 8pt">shares</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Reserve</FONT><BR>
    <FONT STYLE="font-size: 8pt">from</FONT><BR><FONT STYLE="font-size: 8pt"> transactions</FONT><BR><FONT STYLE="font-size: 8pt">
    with non-</FONT><BR><FONT STYLE="font-size: 8pt"> controlling</FONT><BR><FONT STYLE="font-size: 8pt"> interests</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Total</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Non-</FONT><BR>
    <FONT STYLE="font-size: 8pt">controlling </FONT><BR><FONT STYLE="font-size: 8pt"> interests</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Total</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>equity</B></FONT> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="30" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">U.S.
    dollars in thousands</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Balance
    as of January 1, 2014</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">6,093</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">148,327</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">(146,073</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">(2,091</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">9</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">6,265</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">520</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">6,785</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Total comprehensive
    loss</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,527</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,527</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(338</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,865</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Share-based payment
    to employees and others</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">278</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">278</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">278</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Issuance of shares</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">14</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">158</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">172</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">172</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Sale of treasury shares</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(197</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">590</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">393</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(163</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">230</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Exercise
    of options into shares</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">91</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">(12</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">79</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">79</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Balance
    as of December 31, 2014</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">6,198</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">148,276</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">(148,322</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">(1,501</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">9</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">4,660</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">19</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">4,679</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="26" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Attributable
    to equity holders of the Company</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Share</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>capital</B></FONT> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Share</FONT><BR>
    <FONT STYLE="font-size: 8pt">premium</FONT><BR><FONT STYLE="font-size: 8pt"> and options</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Accumulated</FONT><BR>
    <FONT STYLE="font-size: 8pt">deficit</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Treasury</FONT><BR>
    <FONT STYLE="font-size: 8pt">shares</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Foreign</FONT><BR>
    <FONT STYLE="font-size: 8pt">currency</FONT><BR><FONT STYLE="font-size: 8pt"> translation</FONT><BR><FONT STYLE="font-size: 8pt">
    adjustments</FONT><BR><FONT STYLE="font-size: 8pt"> of foreign</FONT><BR><FONT STYLE="font-size: 8pt"> operations</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Reserve</FONT><BR>
    <FONT STYLE="font-size: 8pt">from</FONT><BR><FONT STYLE="font-size: 8pt"> transactions</FONT><BR><FONT STYLE="font-size: 8pt">
    with non-</FONT><BR><FONT STYLE="font-size: 8pt"> controlling</FONT><BR><FONT STYLE="font-size: 8pt"> interests</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Total</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Non-</FONT><BR>
    <FONT STYLE="font-size: 8pt">controlling</FONT><BR><FONT STYLE="font-size: 8pt"> interests</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Total</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>equity</B></FONT> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="34" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">U.S.
    dollars in thousands</FONT> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 19%; text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Balance
    as of January 1, 2013</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">5,997</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">147,475</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">(143,560</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">(2,469</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">114</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">(204</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">7,353</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">2,071</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; text-align: right"> <FONT STYLE="font-size: 8pt">9,424</FONT> </TD><TD STYLE="width: 1%; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Loss for the year</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,476</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,476</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(1,237</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(3,713</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Other
    comprehensive income</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">(113</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">(113</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">(113</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Total comprehensive
    loss</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,476</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(113</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(2,589</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(1,237</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(3,826</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Share-based payment
    to employees and others</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(7</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(7</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(58</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(65</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Issuance of shares
    and warrants</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">90</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">876</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">966</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">966</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Exercise of options
    in associate</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(1</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(1</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(1</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Sale of treasury shares</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(52</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">378</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">326</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(43</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">283</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Conversion of convertible
    loan into capital, in subsidiary</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">213</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">213</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(213</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Other</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(30</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(30</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">(30</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Exercise
    of warrants into shares</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">6</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">28</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">34</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> <FONT STYLE="font-size: 8pt">34</FONT> </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Balance
    as of December 31, 2013</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">6,093</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">148,327</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">(146,073</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">(2,091</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">9</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">6,265</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">520</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> <FONT STYLE="font-size: 8pt">6,785</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <A NAME="fin_005"></A><B>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 1pt solid"> CONSOLIDATED STATEMENTS
OF CASH FLOWS </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Note </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash flows from operating
    activities: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss for the year </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: center"> &nbsp; </TD><TD STYLE="width: 10%; text-align: center"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (4,311 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (2,865 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (3,713 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Adjustments to reconcile
    loss to net cash used&nbsp;in operating activities (a) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,450 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 395 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,214 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Net cash used in operating
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,861 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,470 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,499 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash flows from investing
    activities: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Deconsolidation of subsidiary </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (55 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Proceeds from sale of investment in associate </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 291 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,054 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease in restricted deposit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 21 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Increase in restricted deposit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (10 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 2.85pt"> Decrease (increase) in short-term bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,216 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 366 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 2.85pt"> Purchase of property, plant and equipment </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (8 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (84 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 2.85pt"> Purchase of intangible assets </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> 11 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (64 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Net cash provided by (used)
    in investing activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (110 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,499 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 3,336 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash flows from financing
    activities: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Proceeds from issuance of shares and options </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 16 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,559 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 79 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Exercise of warrants and options into shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> 16 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 34 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Sale of subsidiary shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Sale of treasury shares </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 230 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 283 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Net cash provided by financing
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 3,579 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 309 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 317 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Increase (decrease) in cash and cash equivalents </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,608 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (662 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,154 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Gains (losses) from exchange rate differences
    on cash and cash equivalents </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (14 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 37 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Reclassification of cash in subsidiary to assets
    of disposal group held for sale </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 52 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (52 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Cash and cash equivalents
    at beginning of year </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,159 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,887 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,696 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: center"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Cash and cash equivalents
    at end of year </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 3,817 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,159 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,887 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 1pt solid"> CONSOLIDATED STATEMENT
OF CASH FLOWS </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Note </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> (a) </TD><TD STYLE="text-decoration: none"> &nbsp; </TD>
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Adjustments to reconcile
    loss to net cash provided by (used&nbsp;in) operating activities: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Income and expenses not involving cash flows: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 5%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 42%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Depreciation and amortization </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 12%; text-align: center"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 7 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 53 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 313 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from disposal of property, plant and equipment </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 142 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"></TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from disposal of intangible assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 11 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Share-based payment transactions to employees
    and others </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 17 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 148 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 278 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (65 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Revaluation of short-term deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 62 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (29 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Gains (losses) from exchange rate differences
    on cash and cash equivalents </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 14 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (37 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Disposal of investment in subsidiary </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 5 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 689 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Change in employee benefit liabilities, net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 12 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss (gain) from change in holding rate in associate </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 10 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (10 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Earnings from investment in associate </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 10 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 845 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Impairment of intangible assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 11 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,604 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,729 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Gain from sale of investment in associate </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,051 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Other financial expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 6 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,466 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 561 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,695 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Changes in operating asset and liability items: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease (increase) in trade receivables </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 58 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (50 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease (increase) in other accounts receivable
    and income taxes receivable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 36 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (130 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 30 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease (increase) in inventories </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 5 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 184 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (73 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease in trade payables </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (117 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (210 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (86 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Increase (decrease) in other
    accounts payable </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 65 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (68 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (302 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (16 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (166 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (481 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,450 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 395 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,214 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; border-bottom: Black 1pt solid"> CONSOLIDATED STATEMENT
OF CASH FLOWS </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Note </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> (b) </TD><TD STYLE="text-decoration: none"> &nbsp; </TD>
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Additional information
    on cash flows from operating activities: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 5%; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 42%; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Interest received </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 12%; text-align: center; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right"> 9 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right"> 24 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> (c) </TD><TD STYLE="text-decoration: none"> &nbsp; </TD>
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Non-cash transactions: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Conversion of convertible
    loan into capital in subsidiary </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 377 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"></TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Share-based payment to
    third party </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"></TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 173 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 49 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Allotment of shares to
    Aurum </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 913 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Receivables from sale of
    investment in associate </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 297 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> (d) </TD><TD STYLE="text-decoration: none"> &nbsp; </TD>
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> De-consolidation of
    subsidiary: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> 5 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Non-current assets held for sale </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 507 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Non-current liabilities held for sale </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (449 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Disposal of treasury shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,501 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Negative premium from disposal of treasury shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (587 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Investment in associate at fair value </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (482 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from disposal of subsidiary </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (464 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Non-controlling interests </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (26 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> The accompanying notes are an integral
part of the consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <A NAME="fin_006"></A><B>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 1:</B> </TD><TD STYLE="text-align: justify"> <B>GENERAL</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> a. </TD><TD STYLE="text-align: justify"> A general
                                         description of the Company and its activity: </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> XTL Biopharmaceuticals Ltd.
(the &ldquo;<B>Company</B>&rdquo;) is engaged in the development of therapeutics for the treatment of unmet medical needs. The
Company was incorporated under the Israeli Companies Law on March&nbsp;9, 1993. The registered office of the Company is located
at 5 HaCharoshet Street, Raanana 4365603, Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> The Company&rsquo;s American
Depository Shares (&ldquo;<B>ADSs</B>&rdquo;) are listed for trading on the Nasdaq Capital Market and its ordinary shares are
traded on the Tel-Aviv Stock Exchange (&ldquo;<B>TASE</B>&rdquo;). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> As of December 31, 2015, the
Company has the following subsidiary: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Xtepo Ltd. &ndash; a wholly
owned (100%) private company incorporated in Israel which holds a license for the exclusive use of the patent for rHuEPO drug
for treating Multiple Myeloma patients. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> The Company and Xtepo Ltd.
are heretofore referred to as the Group. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;<B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> NOTE 1: </TD><TD STYLE="text-align: justify"> GENERAL (Cont.) </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> The
                                         Company has incurred continuing losses and depends on outside financing resources to
                                         continue its activities. Based on existing business plans, the Company&rsquo;s management
                                         estimates that its outstanding cash and cash equivalent balances will allow the Company
                                         to finance its activities for an additional period of at least 12 months from the date
                                         of this report. However, the amount of cash which the Company will need in practice to
                                         finance its activities depends on numerous factors which include, but are not limited
                                         to, the timing, planning and execution of clinical trials of existing drugs and future
                                         projects which the Company might acquire or other business development activities such
                                         as acquiring new technologies and/or changes in circumstances which are liable to cause
                                         significant expenses to the Company in excess of management&rsquo;s current and known
                                         expectations as of the date of these financial statements and which will require the
                                         Company to reallocate funds against plans, also due to circumstances beyond its control. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> The Company expects to incur
additional losses in 2016 arising from research and development activities, testing additional technologies and operating activities,
which will be reflected in negative cash flows from operating activities. In order to perform the clinical trials aimed at developing
a product until obtaining its marketing approval, the Company may be required to raise additional funds in the future by issuing
securities. Should the Company fail to raise additional capital in the future under standard terms, it will be required to minimize
its activities or sell or grant a sublicense to third parties to use all or part of its technologies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -56.7pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> NOTE 2: </TD><TD STYLE="text-align: justify"> SIGNIFICANT
                                         ACCOUNTING POLICIES </TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -56.7pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> The following is a discussion
of significant accounting policies relating to continuing operations of the Group. For a discussion of significant accounting
policies with regard to discontinued operations, see note 5 below. </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -56.7pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify; padding-right: 74.75pt"> Basis
                                         of presentation of the financial statements: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The consolidated
financial statements of the Company (the &ldquo;<B>Financial Statements</B>&rdquo;) have been prepared in accordance with International
Financial Reporting Standards (IFRSs), as issued by the International Accounting Standards Board (IASB). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> The consolidated financial
statements have been consistently applied to all the years presented, unless otherwise stated and have been prepared under the
historical cost convention, as adjusted for financial assets presented at fair value. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The preparation
of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the
Group&rsquo;s management to exercise its judgment in the process of applying the Group&rsquo;s accounting policies. The areas
that involve judgment which have significant effect or complexity or where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3. Actual results could significantly differ from the estimates and assumptions used
by the Group&rsquo;s management. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify; padding-right: 74.75pt"> Consolidated
                                         financial statements: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt"> 1. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Subsidiaries
                                         consolidation and business combinations: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The consolidated
financial statements include the accounts of the Company and entities controlled by the Company. Control exists when the Company
has the power over the investee; has exposure, or rights, to variable returns from involvement in the investee; and has the ability
to use its power over the investee to affect its returns. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The Company
examines whether it controls another entity even when it does not hold more than 50% of the voting rights, but can control the
entity&rsquo;s financial and operating policies by de-facto control. De-facto control can be created under circumstances in which
the ratio of the Company&rsquo;s voting rights in the entity to the percentage and dispersion of the holdings of the other shareholders
grants the Company the power to control the entity&rsquo;s financial and operating policies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Subsidiaries
are fully consolidated starting from the date on which control therein is attained by the Company. Their consolidation ceases
when such control is discontinued. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> NOTE 2: </TD><TD STYLE="text-align: justify"> SIGNIFICANT
                                         ACCOUNTING POLICIES (Cont.) </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Intra-group
balances and transactions, including revenues, expenses and dividends in respect of transactions between the Group companies,
are eliminated. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt"> 2. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Transactions
                                         with non-controlling interests which do not result in loss of control: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Transactions
with non-controlling interests in subsidiaries which do not result in loss of control in the subsidiaries are accounted for as
transactions with owners. In these transactions, the difference between the fair value of any consideration paid or received and
the amount of adjustment of the non-controlling interests to reflect the changes in their relative rights in the subsidiaries
is directly recognized in equity and attributed to the equity holders of the parent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt"> 3. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Associate: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> An associate
is an entity over which the Group exercises significant influence, but not control, which is usually expressed in holding 20%-50%
of the voting rights. The investment in an associate is presented using the equity method of accounting. According to the equity
method of accounting, the investment is initially recognized at cost and its carrying amount varies to the extent that the Group
recognizes its share of the associate&rsquo;s earnings or losses from the acquisition date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The Group&rsquo;s
share in the earnings or losses of associates after the acquisition date is carried to profit or loss and its share in the other
comprehensive income movements after the acquisition date is carried to other comprehensive income against the carrying amount
of the investment. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp;&nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> Each reporting date, the Group
determines if there are indicators of impairment in the investment in the associate. In such case, the Group calculates the amount
of the impairment as the difference between the recoverable amount of the investment in the associate (the higher of the value
in use and the fair value less selling costs) and its carrying amount and recognizes the amount of impairment in profit or loss
in the line item of &ldquo;losses from investment in associate&rdquo;. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify; padding-right: 74.75pt"> Translation
                                         of balances and transactions in foreign currency: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt"> 1. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Functional
                                         currency and presentation currency: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Items included
in the financial statements of each of the Group&rsquo;s entities are measured using the currency of the primary economic environment
in which the entity operates (the &ldquo;<B>Functional Currency</B>&rdquo;). The consolidated financial statements are presented
in U.S. dollars, which is the Functional Currency of each of the Group&rsquo;s entities and the Company&rsquo;s presentation currency. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Below are
the changes in the reporting periods in the exchange rate of the U.S. dollar in relation to the NIS: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 113.4pt 0 0; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.58in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> Change in the </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> exchange rate </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Year ended </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> of U.S. $ 1 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> % </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; text-align: justify"> December 31, 2015 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.33 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> December 31, 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 12.04 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> December 31, 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (7.02 </TD><TD STYLE="text-align: left"> ) </TD></TR>
</TABLE>


<P STYLE="margin: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.58in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> Exchange rate </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> As of </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> of U.S. $ 1 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> NIS </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; text-align: justify"> December 31, 2015 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3.902 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> December 31, 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.889 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt"> 2. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Transactions
                                         and balances: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Transactions
in a currency other than the Functional Currency (&ldquo;<B>foreign currency</B>&rdquo;) are translated into the Functional Currency
using the exchange rates at the dates of the transactions. After initial recognition, monetary assets and liabilities denominated
in foreign currency are translated at the end of each reporting period into the Functional Currency at the exchange rate at that
date. Exchange differences are recognized in the statement of comprehensive income in the line item finance income (expenses).
Non-monetary assets and liabilities denominated in foreign currency and measured at cost are translated at the exchange rate at
the date of the transaction. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Exchange
rate differences for the years ended December 31, 2014 and 2013 have been reclassified in these financial statements into line
item &ldquo;gain (loss) from exchange rate differences.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Property,
                                         plant and equipment: </TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> Items of
property, plant and equipment are measured at cost with the addition of direct acquisition costs, less accumulated depreciation
and accumulated impairment losses. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Depreciation of property, plant
and equipment is calculated on a straight-line basis to reduce their cost to their residual value over their useful life as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> % per-year </TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 87%; text-align: left"> Computers </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="width: 10%; text-align: center"> 33 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -11.35pt; padding-left: 11.35pt"> Office furniture and equipment </TD><TD> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="text-align: right"> 6 &ndash; 15 (mainly 6) </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> An asset&rsquo;s
carrying amount is written down immediately to its recoverable amount if the asset&rsquo;s carrying amount is greater than its
estimated recoverable amount (see f below). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> e. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Intangible
                                         assets: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt; text-align: left"> 1. </TD><TD STYLE="text-align: justify"> Unamortized
                                         intangible assets (licenses and patent rights): </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The amortization
of an asset on a straight-line basis over its useful life begins when the development procedure is completed and the asset is
available for use. An intangible asset with an indefinite useful life shall not be amortized. These assets are reviewed for impairment
once a year and whenever there are indicators of a possible impairment, in accordance with the provisions of IAS 36, <I>Impairment
of Assets</I>. See note 11 for further details. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 90pt"></TD><TD STYLE="width: 23.4pt"> 2. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Research
                                         and development: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Research
expenditures are recognized as expenses when incurred. Costs arising from development projects are recognized as intangible assets
when the following criteria are met: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> - </TD><TD STYLE="text-align: justify"> it is technically feasible
                                         to complete the intangible asset so that it will be available for use; </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> - </TD><TD STYLE="text-align: justify"> management intends to complete
                                         the intangible asset and use or sell it; </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> - </TD><TD STYLE="text-align: justify"> there is an ability to use
                                         or sell the intangible asset; </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> - </TD><TD STYLE="text-align: justify"> it can be demonstrated how
                                         the intangible asset will generate probable future economic benefits; </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> - </TD><TD STYLE="text-align: justify"> adequate technical, financial
                                         and other resources to complete the development and to use or sell the intangible asset
                                         are available; and </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> - </TD><TD STYLE="text-align: justify"> the expenditure attributable
                                         to the intangible asset during its development can be reliably measured. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Other development
expenditures that do not meet these criteria are recognized as an expense when incurred. Development costs that were previously
recognized as an expense are not recognized as an asset in a later period. As of December 31, 2015, the Group did not capitalize
development costs to intangible assets. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> f. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Impairment
                                         of non-financial assets: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> Intangible
assets which are not yet available for use are not depreciated and impairment in their respect is tested at least every year.
Depreciable assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognized for the amount by which the asset&rsquo;s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset&rsquo;s fair value less costs to sell and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units). Non-financial assets that sustained impairment are reviewed for possible reversal of the impairment at each date of the
statement of financial position. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> g. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Financial
                                         assets: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 1. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Classification: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The Group
classifies its financial assets into the loans and receivables category. The classification depends on the purpose for which the
financial assets were acquired. The Group&rsquo;s management determines the classification of its financial assets at initial
recognition. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.75pt; text-align: justify; text-indent: 0in"> <I>Loans
and receivables:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Loans and
receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They
are included in current assets, except for maturities greater than 12 months after the date of the statement of financial position.
The Group&rsquo;s loans and receivables are included in the line items: &ldquo;other accounts receivable&rdquo;, &ldquo;cash and
cash equivalents&rdquo;, and &ldquo;restricted deposits&rdquo; in the statement of financial position. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.75pt; text-align: justify"> <I>Financial assets available
for sale:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> Available-for-sale financial
assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They
are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the
end of the reporting period. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 2. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Recognition
                                         and measurement: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Regular purchases
and sales of financial assets are recognized in the books of the Group companies on the transaction settlement date which is the
date on which the asset is transferred to the Group or transferred by the Group. Investments are initially recognized at fair
value plus transaction costs for all financial assets not carried at fair value through profit or loss. Loans and receivables
are subsequently carried at amortized cost using the effective interest method. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 3. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Impairment
                                         of financial assets: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> <I>Financial
assets carried at amortized cost:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The Group
assesses at the date of each statement of financial position whether there is objective evidence that a financial asset or group
of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition
of the asset (a &ldquo;loss event&rdquo;) and that loss event (or events) has an impact on the estimated future cash flows of
the financial asset or group of financial assets that can be reliably estimated. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> h. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Cash
                                         and cash equivalents: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> Cash and
cash equivalents include cash at hand and short-term bank deposits with original maturities of three months or less, that are
not restricted as to withdrawal or use, and are therefore considered to be cash equivalents. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> i. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Share
                                         capital: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> The Company&rsquo;s
ordinary shares are classified as share capital. Incremental costs directly attributable to the issuance of new shares, options
and warrants are shown in equity as a deduction, from the issuance proceeds. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> When Group
companies purchase Company shares (treasury shares), the consideration paid, including incremental costs directly attributable
to the purchase (less the effect of taxes on income), is deducted from the equity attributable to equity holders of the parent
until the shares are eliminated or reissued. When these shares are reissued in subsequent periods, the consideration received,
less incremental costs directly attributable to the transaction and less the effect of taxes on income, is included in equity
attributable to equity holders of the parent. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> j. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Trade
                                         payables: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> Trade payables
are the Group&rsquo;s obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective
interest method. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> k. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Taxes
                                         on income: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 1. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Current
                                         taxes: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The current
tax liability is measured using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 28.35pt; text-align: justify; text-indent: -28.35pt"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 2. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Deferred
                                         taxes: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> Deferred
taxes are computed in respect of temporary differences between the carrying amounts in the financial statements and the amounts
attributed for tax purposes. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> It is not
probable that taxable profit will be available against which the unused tax losses can be utilized, therefore a deferred tax asset
is not recognized. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> l. </TD><TD STYLE="text-align: justify; padding-right: 85.05pt"> Employee
                                         benefits: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 1. </TD><TD STYLE="text-align: justify; padding-right: 113.4pt"> Employment
                                         benefits for retirement compensation/pension: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> The Group
operates various pension plans. The plans are generally funded through payments to insurance companies or trustee-administered
funds. Said pension plans qualify for the criteria of defined contribution plan, as above, based on their terms. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85pt"></TD><TD STYLE="width: 23.4pt"> 2. </TD><TD STYLE="text-align: justify"> Vacation and recreation benefits: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> According to the Law, an employee
is entitled to paid annual leave and sick leave on an annual basis. The entitlement is based on the number of years of service.
The Company recognizes an obligation and expense for paid annual leave and sick leave based on the benefit accumulated for each
employee. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> m. </TD><TD STYLE="text-align: justify"> Share-based payment: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> The Group operates a number
of share-based payment plans to employees and to other service providers who render services that are similar to employees&rsquo;
services that are settled with the Group&rsquo;s equity instruments. In this framework, the Company grants employees, from time
to time, and, at its discretion, options to purchase shares of the Company. The fair value of services received from employees
in consideration of the grant of options is recognized as an expense in the statement of comprehensive income (loss) and correspondingly
carried to equity. The total amount recognized as an expense over the vesting term of the options (the term over which all pre-established
vesting conditions are expected to be satisfied) is determined by reference to the fair value of the options granted at grant
date, except the effect of any non-market vesting conditions. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Non-market vesting conditions
are included in the assumptions used in estimating the number of options that are expected to vest. The total expense is recognized
over the vesting period, which is the period over which all of the specified vesting conditions of the share-based payment arrangement
are to be satisfied. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> At each reporting date, the
Company revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions and
recognizes the impact of the revision to original estimates, if any, in the statement of comprehensive income (loss) with a corresponding
adjustment in equity. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> When options are exercised,
the Company issues new shares. The proceeds net of any directly attributable transaction costs are credited to share capital (nominal
value) and share premium. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Share-based payment transactions
in which the Company acquired assets as consideration for the Company&rsquo;s equity instruments are measured at the value of
the assets acquired. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;<B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 2:</B> </TD><TD STYLE="text-align: justify"> <B>SIGNIFICANT
                                         ACCOUNTING POLICIES<FONT STYLE="font-size: 12pt"><I> </I></FONT>(Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> n. </TD><TD STYLE="text-align: justify"> Leases: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Leases in which a significant
portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under
operating leases are charged to the statement of comprehensive income (loss) on a straight-line basis over the period of the lease. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> o. </TD><TD STYLE="text-align: justify"> Loss per share: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: left; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Basic loss per share is calculated
by dividing the income or loss attributable to equity holders of the Company by the weighted average number of ordinary shares
outstanding during the period, less Company shares held by a subsidiary. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> In calculating diluted loss
per share, in addition to the average of ordinary shares (net of treasury shares) used for calculating basic loss per share, the
weighted average number of shares that will be issued assuming that all the potentially dilutive shares are converted into shares
is also taken into consideration. Potential shares are taken into account as above only when their effect is dilutive (reduces
the earnings or increases the loss per share). For each of the three years ended December 31, 2015, 2014 and 2013, respectively,
the effect of potential shares was anti-dilutive, and therefore were not taken into consideration when calculating loss per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> p. </TD><TD STYLE="text-align: justify"> Non-current assets (or disposal
                                         groups) held for sale: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Non-current assets (or disposal
groups) are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> q. </TD><TD STYLE="text-align: justify"> New and amended IFRS standards: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Certain new accounting standards
and interpretations have been published that are not mandatory for December 31, 2015 reporting periods and have not been early
adopted by the Company: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 28.35pt"> IFRS 9,
&ldquo;<I>Financial Instruments</I>&rdquo; (&ldquo;IFRS 9&rdquo;): </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 74.7pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> IFRS 9 replaces the multiple
classification and measurement models in IAS 39 &ldquo;<I>Financial instruments: Recognition and measurement</I>&rdquo; with a
single model that has initially only two classification categories: amortized cost and fair value. Classification of debt assets
will be driven by the entity&rsquo;s business model for managing the financial assets and the contractual cash flow characteristics
of the financial assets. All fair value movements on financial assets are taken through the statement of profit or loss, except
for equity investments that are not held for trading, which may be recorded in the statement of profit or loss or in reserves
(without subsequent recycling to profit or loss). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 3:</B> </TD><TD STYLE="text-align: justify"> <B>CRITICAL
                                         ACCOUNTING ESTIMATES AND JUDGMENTS</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> Estimates and judgments are
continually evaluated and are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Critical accounting estimates
                                         and assumptions: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 1. </TD><TD STYLE="text-align: justify"> Intangible assets </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 36pt"> (i) </TD><TD STYLE="text-align: justify"> In testing impairment of unamortized
                                         intangible assets (licenses and patent rights), the Company&rsquo;s management is required
                                         to estimate, among other things, the probable endpoints of trials conducted by the Company,
                                         the commercial technical feasibility of the development and the resulting economic benefits.
                                         Actual results and estimates to be made in the future may significantly differ from current
                                         estimates. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 36pt"> (ii) </TD><TD STYLE="text-align: justify"> The Group is required to determine
                                         at the end of each reporting period whether there is any indication that an asset may
                                         be impaired. If indicators for impairment are identified, the Group estimates the assets&rsquo;
                                         recoverable amount, which is the higher of an asset&rsquo;s fair value less costs to
                                         sell and its value-in-use. The value-in-use calculations require management to make estimates
                                         of the projected future cash flows. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> See note 11 below for further
information regarding impairment of intangible assets. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 2. </TD><TD STYLE="text-align: justify"> Share-based payments &ndash;
                                         in evaluating the fair value and the recognition method of share-based payment, the Company&rsquo;s
                                         management is required to estimate, among others, different parameters included in the
                                         computation of the fair value of the options and the Company&rsquo;s results and the
                                         number of options that will vest. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;<B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 4:</B> </TD><TD STYLE="text-align: justify"> <B>FINANCIAL
                                         INSTRUMENTS AND FINANCIAL RISK MANAGEMENT</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Financial risk management: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 1. </TD><TD STYLE="text-align: justify"> Financial risk factors: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> The Group&rsquo;s activities
expose it to a variety of financial risks: market risks (including currency risks and price risk), credit risk and liquidity risk.
The Group&rsquo;s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential
adverse effects on the Group&rsquo;s financial performance. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> Risk management is carried
out by the Group&rsquo;s management under policies approved by the Board. The Group&rsquo;s treasury identifies, evaluates and
defines financial risks. The Board provides written principles for overall risk management, as well as written policies covering
specific areas, such as foreign exchange risk, interest rate risk and investment of excess liquidity. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Market risks: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> <I>Foreign currency exchange
rate risk:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> The Group operates internationally
and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the NIS. Foreign exchange
risk arises from assets and liabilities denominated in currency that is other than the functional currency. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> The Company treasury&rsquo;s
risk management policy is to hold NIS-denominated cash and cash equivalents in the amount of the anticipated NIS-denominated liabilities
for six to twelve consecutive months from time to time and this in line with the directives of the Company&rsquo;s Board. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> As of December 31, 2015, had
the Group&rsquo;s functional currency weakened by 10% against the NIS with all other variables remaining constant, post-tax loss
for the year would have been $&nbsp;20 thousand lower (2014 &ndash; loss approximately $&nbsp;85 thousand lower; 2013 &ndash;
loss approximately $&nbsp;157 thousand lower), mainly as a result of exchange rate changes on translation of other accounts receivable
and exchange rate changes on NIS-denominated cash and cash equivalents. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 4:</B> </TD><TD STYLE="text-align: justify"> <B>FINANCIAL
                                         INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> Liquidity risk: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> Cash flow forecasting is performed
by the Group&rsquo;s management both in the entities of the Group and aggregated by the Group. The Group&rsquo;s management monitors
rolling forecasts of the Group&rsquo;s liquidity requirements to ensure it has sufficient cash to meet operations. The Group does
not use borrowing credit facilities. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> Surplus cash held to finance
operating activities is invested in interest bearing current accounts, time deposits and other solid channels. These channels
were chosen by reference to their appropriate maturities or liquidity to provide sufficient cash balances to the Group as determined
by the abovementioned forecasts. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify"> As of December&nbsp;31, 2015
and 2014, the maturity of the Group&rsquo;s financial liabilities is less than one year from each of the reporting dates. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 2. </TD><TD STYLE="text-align: justify"> Capital management: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> The Group&rsquo;s objectives
when managing capital are to ensure the Group&rsquo;s ability to continue as a going concern in order to provide returns on investments
for shareholders and benefits for other interested parties and to maintain an optimal capital structure to reduce the cost of
capital. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> In order to maintain or adjust
the capital structure, the Group may take a variety of measures such as issue new shares or sell assets to reduce liabilities. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> Financial instruments by category: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> As of December&nbsp;31, 2015
and 2014, all financial assets were classified in one of two categories: (a) loans and receivables, measured at amortized cost,
and (b) financial assets available for sale, measured at fair value. All financial liabilities as of such dates were classified
in the category of other financial liabilities at amortized cost. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;<B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> On June&nbsp;13,
2012, the Company entered into an agreement to acquire the control over InterCure Ltd. (&ldquo;InterCure&rdquo;) for a consideration
of approximately $&nbsp;2.7 million, paid partly in cash and partly by the issuance of Company shares. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> On July&nbsp;25,
2012, the transaction was completed after all the prerequisites had been met and the Company acquired 16,839,532 ordinary shares
of InterCure with no par value, in consideration of a private placement of 7,165,662 ordinary shares of the Company of NIS&nbsp;0.1
par value each, whose value on the date of signing the agreement, measured according to the quoted market price of the Company&rsquo;s
shares on the TASE, was approximately $&nbsp;2.2 million, and which represents a value of InterCure of $&nbsp;1.75 million before
the money, but after all of InterCure&rsquo;s debts were converted as described above (&ldquo;<B>InterCure&rsquo;s Adjusted Value</B>&rdquo;).
The fair value of the Company&rsquo;s shares on the date of consummation of the transaction was approximately&nbsp;$ 2.5 million.
In the year ended December 31, 2013, InterCure sold 1,097,719 shares of the Company for an aggregate amount of approximately $
283 thousand. In addition, the Company provided InterCure an amount of approximately $&nbsp;150 thousand in cash on the basis
of InterCure&rsquo;s Adjusted Value. After affecting the above allocation, the Company held approximately 50.79% of the issued
and outstanding share capital of InterCure. The investment of Medica Fund on the date of closing on the basis of InterCure&rsquo;s
Adjusted Value amounted to approximately $&nbsp;460 thousand. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> On May 16,
2013, the Company informed InterCure of its decision to convert its entire convertible loan which had been extended by the Company
in the context of the acquisition into 7,620,695 ordinary shares of InterCure, as predetermined in the original acquisition agreement.
Upon conversion, the Company held approximately 54.72% of InterCure&rsquo;s issued and outstanding share capital. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> In November
2014, InterCure announced that its Audit Committee and Board of Directors approved the signing of an agreement with Green Forest
Global Ltd. (the &ldquo;<B>Agreement</B>&rdquo; and &ldquo;<B>Green Forest</B>&rdquo;, respectively) a company wholly owned by
Mr. Alexander Rabinovitch, an interested party in the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> Pursuant to
the Agreement, following a reverse split in InterCure shares at a 10:1 ratio, Green Forest will be allotted 2,622,647 ordinary
shares of InterCure (the &ldquo;<B>First Round</B> <B>Allotted Shares</B>&rdquo;) representing 34.23% of the issued and outstanding
shares of InterCure at the time of the allotment for an investment of $ 230 thousand. Further, upon InterCure&rsquo;s shares return
to the main list of the TASE, an additional 2,622,648 ordinary shares of InterCure will be allotted to Green Forest for an additional
investment of $ 230 thousand (the &ldquo;<B>Second Round Allotted Shares</B>&rdquo;). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> In addition,
the Agreement grants Green Forest the following three options: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"> 1. </TD><TD STYLE="text-align: justify; padding-right: 0"> Option to
                                         purchase up to an additional 3,416,818 ordinary shares of InterCure for $ 300 thousand
                                         (representing an exercise price of $ 0.0878 per share), exercisable within 12 months
                                         of the Transaction Completion Date, as defined in the Agreement. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"> 2. </TD><TD STYLE="text-align: justify; padding-right: 0"> Option to
                                         acquire the Company shares held by InterCure at a price of NIS 0.35 per share, exercisable
                                         within 6 months of the Transaction Completion Date. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"> 3. </TD><TD STYLE="text-align: justify; padding-right: 0"> Option to
                                         acquire InterCure&rsquo;s assets, rights and obligations relating to the &ldquo;Resperate&rdquo;
                                         business at the cost of inventory held at the time of the exercise of the option, exercisable
                                         within 6 months of the Transaction Completion Date. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> Under the
Agreement, Green Forest provided InterCure with a qualifying, non-secured, non-guaranteed, non-interest bearing and non-indexed
loan of $ 40 thousand for a period of 60 days. At the time of the completion of the transaction, the loan will be repaid by the
sale of shares of the Company held by InterCure to Green Forest for the value of the loan ($ 40 thousand) at a price of NIS 0.30
per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> InterCure
is granted the right to a Put option to sell all or part of the Company&rsquo;s shares held by InterCure at the Put option exercise
date, for an exercise price of NIS 0.30 per share, exercisable within 6 months of the Transaction Completion Date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> In addition,
at the time of and as a condition for the completion of the transaction, the outstanding loan of $ 50 thousand owed by InterCure
to the Company will be converted to 569,470 ordinary shares of InterCure. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> On December
23, 2014, the extraordinary general meeting of InterCure approved the Agreement. Upon receiving the required approval to the Agreement
from TASE, the Agreement turned effective as of February 12, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> On February 1, 2015, in accordance
with a request made by the Israeli Securities Authority to increase public holdings in InterCure prior to the execution of the
Agreement, the Company sold 2,166,667 shares of InterCure to a non-related third party, for an amount of approximately $ 17 thousand.
As a result, the Company&rsquo;s holding in InterCure&rsquo;s issued and outstanding share capital decreased to approximately
49.87%. The sale of InterCure shares was considered as a transaction with non-controlling interests without loss of control. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: 0in"> After the
issuance of the 2,622,647 First Round Allotted Shares, as well as the conversion of the loan granted to InterCure into 569,470
ordinary shares of InterCure, the Company&rsquo;s holdings in InterCure were diluted to 36.53% of the issued and outstanding share
capital of InterCure. The Company&rsquo;s management then determined that implementation of the Agreement constitutes a loss of
control in InterCure as of the same date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify; text-indent: -56.7pt"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: left"> InterCure&rsquo;s net assets were
reclassified in the Group&rsquo;s financial statements for the year ended December 31, 2014, and grouped into two separate items:
<I>Assets of Disposal Group Classified as Held for Sale</I> and <I>Liabilities of Disposal Group Classified as Held for Sale</I>. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> On March 23, 2015, InterCure
issued 37,804,012 ordinary shares as part of a rights offering, thus diluting the Company&rsquo;s holding in InterCure&rsquo;s
issued and outstanding share capital to approximately 6.16%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> On March 31, 2015, the Company
and Green Forest mutually agreed to terminate the voting agreement signed by the parties on February 12, 2015. Following said
termination, the directors appointed by the Company resigned from the board of directors of InterCure. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> On April 2, 2015, InterCure
issued the Second Round Allotted Shares, thus diluting the Company&rsquo;s holding in InterCure&rsquo;s issued and outstanding
share capital to approximately 5.82%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> As a result of the accounting
treatment of the deconsolidation of InterCure, the Company recorded a loss from discontinued operations of $ 689 thousand. In
addition, the Company recorded its remaining investment in InterCure shares at a fair value of $ 482 thousand, as quoted on the
TASE as of the loss of control date. Following the aforementioned rights offering, the Company recorded a loss from the change
in fair value of InterCure shares in the amount of $225 thousand. For additional information see note 7 below. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> As for intangible
assets recognized for the first time after the completion of the InterCure transaction, as presented above, and due to a significant
decline in InterCure&rsquo;s share price as quoted on the TASE as of December 31, 2013, the Company hired the services of an external
independent expert in order to establish whether or not an impairment exists in connection with the technology and brand name
assets recognized in the purchase price allocation study of InterCure. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.9pt; text-align: justify; text-indent: 0in"> The recoverable
amount was assessed by management with the assistance of a consultant. In light of recent developments in InterCure, namely conclusions
reached by its management and board of directors regarding its ability to continue operating as a going concern, several scenarios
were taken into account by the expert. Each scenario was assigned a different weight in order to accommodate all scenarios into
a weighted-average discounted cash flow. Such scenarios were as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 84.45pt"></TD><TD STYLE="width: 36pt"> (i) </TD><TD STYLE="text-align: justify"> The liquidation scenario, under
                                         which the realizable value of InterCure&rsquo;s net operational assets was estimated,
                                         was assigned a weighting of 60%. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.45pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 84.45pt"></TD><TD STYLE="width: 36pt"> (ii) </TD><TD STYLE="text-align: justify"> The going concern scenario,
                                         establishing the value-in-use of InterCure&rsquo;s operations using the discounted cash
                                         flow method, was assigned a weighting of 40%. The value-in-use calculations use pre-tax
                                         cash flow projections covering an eight-year period and using extrapolation with specific
                                         adjustments expected until 2021, and a pre-tax discount rate of 33.3%. The value-in-use
                                         calculations included all factors in nominal terms. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.45pt; text-align: justify; text-indent: -0.5in"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.45pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 84.95pt; text-align: justify; text-indent: 0in"> The impairment
test was based on assessments of financial performance and future strategies in light of current and expected market and economic
conditions. Trends in the economic and financial environment, competition and regulatory authorities&rsquo; decisions, or changes
in competitors&rsquo; behavior in response to the economic environment may affect the estimate of recoverable amounts in future
periods. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 84.95pt; text-align: justify; text-indent: 0in"> For the purpose
of the impairment test, InterCure was considered the lowest level for which there are separately identifiable cash flows &ndash;
a Cash Generating Unit (&ldquo;<B>CGU</B>&rdquo;). Upon examination, the expert concluded that an impairment exists, and that
InterCure&rsquo;s recoverable amount stands at $ 300 thousand. The impairment loss in the amount of $ 1.8 million was recognized
in loss from operations, and allocated between said intangible assets of the CGU pro rata, based on their respective carrying
amounts (net of amortization), in the following amounts: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 35.45pt"> (a) </TD><TD STYLE="text-align: justify"> Technology &ndash; $ 1.4
                                         million; </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 35.45pt"> (b) </TD><TD STYLE="text-align: justify"> Brand Name &ndash; $ 357
                                         thousand. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> As of December 31, 2014, the
Technology and Brand Name carried net amortized book values of $ 202 thousand and $ 53 thousand, respectively. As of December
31, 2015, and as a result of the de-consolidation of InterCure, no balance remains in the Company&rsquo;s financial statements
with regard to the Technology and Brand Name. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;<B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> The assets and liabilities related
to InterCure are presented as held for sale following the approval of the Agreement with Green Forest, as detailed above, at the
extraordinary shareholders meeting of InterCure held on December 23, 2014. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> Since termination of the
voting agreement between the Company and Green Forest on March 31, 2015, the Company&rsquo;s investment in InterCure is classified
as marketable securities. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp;&nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Assets of disposal group classified
                                         as held for sale: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 82pt">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> December 31, </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in<BR>
    thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; text-align: left"> Cash and cash equivalents </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 52 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Trade receivables </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 69 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Other accounts receivable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 11 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Inventories </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 118 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Property, plant and equipment, net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Intangible assets, net </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 255 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 505 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> Liabilities of disposal group
                                         classified as held for sale: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 82pt">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> December 31, </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in<BR>
    thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; text-align: left"> Trade payables </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 188 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Other accounts payable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 239 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt"> Employee benefit liabilities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 23 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 450 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>


<!-- Field: Page; Sequence: 125; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->31<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> Analysis of the results of
                                         discontinued operations is as follows: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 82pt">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Period from<BR> January
    1 to<BR> February 12, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 61%; text-align: left"> Revenues </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 75 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 1,451 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 2,369 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (72 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,197 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (4,944 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total gain (loss) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 3 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (746 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (2,575 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify"> Analysis of cash flow of discontinued
                                         operations for the years ended December 31, 2014 and 2013, is as follows: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 82pt">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Period from<BR> January
    1 to<BR> February 12, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 61%; text-align: left"> Operating cash flows </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (487 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (955 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Investing cash flows </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 230 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 208 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Financing cash flows </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 40 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total cash flows </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 3 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (217 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (747 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> e. </TD><TD STYLE="text-align: justify"> Significant accounting policies
                                         with regard to Discontinued operations: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> A discontinued operation is
a component of an entity that either has been disposed of, or is classified as held for sale, and represents a separate major
line of business or geographical area of operations, or is part of a single coordinated plan to dispose of a separate major line
of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Revenues and expenses attributable
to discontinued operations are presented in the statement of comprehensive loss under the item &ldquo;<I>Total loss from discontinued
operations</I>&rdquo;, for all years presented. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> &nbsp;<B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> Accounting policies pertaining
solely to discontinued operations include: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 83pt"></TD><TD STYLE="width: 28.35pt"> (i) </TD><TD STYLE="text-align: justify; padding-right: 121.05pt"> Intangible
                                         assets: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 110pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify; padding-right: 139.05pt"> Brand
                                         name and technology: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify; text-indent: 0in"> Brand name
and technology acquired in a business combination are recognized at fair value on the acquisition date. Brand name and technology
have a finite useful life and are presented at cost net of accumulated amortization and impairment losses. The amortization is
calculated using the straight-line method over the expected useful life (9-10 years). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 110pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify; padding-right: 139.05pt"> Computer
                                         software: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 113.4pt; text-align: justify; text-indent: 85.05pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 141.75pt; text-align: justify; text-indent: 0in"> Acquired
licenses to use computer software are capitalized based on costs incurred in acquiring the specific software and preparing it
for use. These costs are amortized using the straight-line method over the estimated useful life (five years). Costs relating
to computer software upkeep are recognized as expenses as incurred. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 36pt"> (ii) </TD><TD STYLE="text-align: justify"> Inventories: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: justify"> Inventories are measured at
the lower of cost and net realizable value. The cost of inventories comprises costs of purchase and costs incurred in bringing
the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course
of business less the estimated costs of completion and the estimated selling costs. The Group periodically evaluates the condition
and age of inventories and makes provisions for slow moving inventories accordingly. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> Cost of inventories is determined
as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> Raw materials &ndash; at cost
of purchase using the &ldquo;first-in, first-out&rdquo; method. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> Purchased merchandise and products
&ndash; using the &ldquo;first-in, first-out&rdquo; method. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 84.5pt"></TD><TD STYLE="width: 36pt"> (iii) </TD><TD STYLE="text-align: justify"> Trade receivables: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: justify"> The balance of trade receivables
relates to amounts receivable from the Group&rsquo;s customers for goods sold or services rendered in the ordinary course of business.
Trade receivables are initially recognized at fair value and subsequently measured at amortized cost based on the effective interest
method, less an allowance for doubtful accounts. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp;<B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 5:</B> </TD><TD STYLE="text-align: justify"> <B>INTERCURE
                                         &ndash; DISCONTINUED OPERATION (Cont.)</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> Allowance for doubtful accounts<I>:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: justify"> The allowance for doubtful
accounts is determined in respect of specific debts whose collection, in the opinion of the Group&rsquo;s management, is doubtful.
The Group also recognizes a provision for groups of customers that are collectively assessed for impairment based on their credit
risk characteristics. Impaired debts are derecognized when they are assessed as uncollectible. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 36pt"> (iv) </TD><TD STYLE="text-align: justify; padding-right: 120.5pt"> Revenue
                                         recognition: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.25pt; text-align: justify; text-indent: 0in"> Revenues
are recognized in profit or loss when the revenues can be measured reliably, it is probable that the economic benefits associated
with the transaction will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured
reliably. Revenues are measured at the fair value of the consideration received less any trade discounts, volume rebates and returns. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.25pt; text-align: justify; text-indent: 0in"> Following
are the specific revenue recognition criteria which must be met before revenue is recognized: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify"> <I>Revenues from sale of goods
to retail customers:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> Revenues
from the sale of goods are recognized when all the significant risks and rewards of ownership of the goods have passed to the
buyer and the seller no longer retains continuing managerial involvement. The delivery date to the customer is usually the date
on which ownership passes. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> <I>Revenues
from sale of goods to distributors:</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> <I>&nbsp;</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> InterCure
sells its products to distributors as well. Revenues from such sales are recognized when InterCure or its subsidiaries deliver
the goods to the distributor, when sales channel and selling price are at the distributor&rsquo;s sole discretion, and when there
are no ongoing obligations to prevent the distributor from receiving the goods. Revenue is only recognized when goods were delivered
to the designated site, risks of loss and damage are transferred to the distributor and distributor had received the goods in
accordance with the sales agreement, conditions for receipt of goods had expired or InterCure holds objective evidence that goods
receipt criteria had been met. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 36pt"> (v) </TD><TD STYLE="text-align: justify"> Employee benefit liabilities: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 121.05pt; text-align: justify; text-indent: 0in"> InterCure
has an obligation to pay severance to an employee, which represents a defined benefit plan. InterCure has severance pay funds
and executive insurance policies in which it deposits funds in respect of this obligation. The amount of accrued severance pay,
net included in the statements of financial position reflects the difference between the accrued severance pay and the severance
pay funds. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 120.5pt; text-align: justify; text-indent: 0in"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> <B>&nbsp;&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; border-bottom: Black 1pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 6:</B> </TD><TD STYLE="text-align: justify"> <B>CASH
                                         AND CASH EQUIVALENTS</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash in banks and on hand </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3,347 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 1,348 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Bank deposits for periods
    of three months or less </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 470 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 811 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 3,817 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,159 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> The currencies in which the
cash and cash equivalents are denominated or linked to are: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> U.S. dollars </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3,683 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 1,266 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> NIS (not linked to the Israeli CPI) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 133 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 892 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Other currencies </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 3,817 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,159 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"> <B>NOTE 7:</B> </TD><TD STYLE="text-align: justify"> <B>MARKETABLE
                                         SECURITIES</B> </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> All marketable securities
                                         held by the Company constitute Level 1 financial instruments, as defined in IFRS 13 &ndash;
                                         &ldquo;<I>Fair Value Measurement</I>&rdquo;. Level 1 inputs are quoted prices (unadjusted)
                                         in active markets for identical assets or liabilities that the entity can access at the
                                         measurement date. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> The Company holds the following
                                         financial instruments: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Financial assets
    available for sale </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right"> 251 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 251 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 56.7pt; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: justify"> <B>NOTES TO CONSOLIDATED
    FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 7:&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MARKETABLE
SECURITIES (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> Changes in marketable securities
                                         for the year ended December 31, 2015, were as follows: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 75%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>U.S.
                                         dollars in </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>thousands
                                         </B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 82%; text-align: left"> Fair value opening balance </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 15%; text-align: right"> 257 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Changes in fair value during the period </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (6 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 251 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 8:&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTHER
ACCOUNTS RECEIVABLE </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> a. </TD><TD STYLE="text-align: justify"> Composition: </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Government authorities </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 137 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 58 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Prepaid expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 60 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 366 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Other receivables </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 13 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 197 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 437 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> The currencies in which other
                                         accounts receivable which are monetary items are denominated or to which they are linked
                                         are as follows: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> NIS </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right"> 137 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right"> 71 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 137 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 71 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"></TD><TD STYLE="text-align: justify"> The carrying amount of other
                                         accounts receivable is a reasonable approximation of the fair value because the effect
                                         of discounting is immaterial. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 9:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADDITIONAL
INFORMATION ABOUT INVESTMENT IN INVESTEES</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 88%; border-collapse: collapse; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid; padding-left: 11.35pt; text-align: center; text-indent: -8.5pt"> <FONT STYLE="font-size: 10pt"><B>Name
    and country of </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>incorporation of subsidiary</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Date</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Equity </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>interests and </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>voting rights</B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Scope of</B><BR>
        <B>investments</B> </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>in investee</B><BR>
        <B>(in $ 000)</B> </P></TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Stock Exchange </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>data </B></FONT> </TD>
    <TD NOWRAP STYLE="text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Dividends </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>received or </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>receivable</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 3%; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 33%; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 11%; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 11%; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 11%; padding-left: 2.85pt; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 1%; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 15%; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; width: 11%; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 8.65pt; text-align: left; text-indent: -8.65pt"> <FONT STYLE="font-size: 10pt">1</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> <FONT STYLE="font-size: 10pt">Xtepo
    Ltd., incorporated in Israel </FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">31.12.2015</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">100</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"> % </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">2,668</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">-</FONT> </TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 8.65pt; text-align: left; text-indent: -8.65pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">31.12.2014</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">100</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"> % </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">3,685</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">-</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">-</FONT> </TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 8.65pt; text-align: left; text-indent: -8.65pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 8.65pt; text-align: left; text-indent: -8.65pt"> <FONT STYLE="font-size: 10pt">2</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> <FONT STYLE="font-size: 10pt">InterCure
    Ltd., incorporated in Israel</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">31.12.2015</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">5.82</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"> % </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">251</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">TASE, value of shares as of 31.12.15
    - $&nbsp;251 thousand</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">-</FONT> </TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 8.65pt; text-align: left; text-indent: -8.65pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; padding-left: 11.35pt; text-align: left; text-indent: -8.5pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">31.12.2014</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: justify"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">54.72</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: justify"> % </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> <FONT STYLE="font-size: 10pt">1,736</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: right"> *)&nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">TASE, value of shares as of 31.12.14
    - $&nbsp;308 thousand</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-size: 10pt">-</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> *) </TD><TD STYLE="text-align: justify"> Includes Treasury Shares in
                                         the amount of $ 1,501 thousand. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> <B>NOTE
10:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INVESTMENT IN ASSOCIATE</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> In November 2012, in an off-market
                                         transaction, the Company acquired from Teva Pharmaceutical Industries Ltd. (&ldquo;Teva&rdquo;)
                                         4,620,356 ordinary shares of Proteologics Ltd. (&ldquo;Proteologics&rdquo;), representing
                                         Teva&rsquo;s entire stake in Proteologics - approximately 31.35% of Proteologics&rsquo;
                                         issued and outstanding share capital &ndash; in consideration of approximately $&nbsp;1.7
                                         million. </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> In September 2013, the
Company signed an agreement with Zmiha Investment House Ltd. (&ldquo;<B>Zmiha</B>&rdquo;) for the sale of its entire investment
in Proteologics, representing 44.95% of Proteologics&rsquo; issued and outstanding share capital as of the date of the agreement,
after having purchased an additional 14.13% of the shares of Proteologics from Aurum Ventures MKI Ltd. (&ldquo;<B>Aurum</B>&rdquo;)
in September 2013, in consideration for the issuance of 3,031,299 shares of NIS&nbsp;0.1 par value each of the Company to Aurum.
Consideration for the sale to Zmiha totaled approximately $ 3.4 million. The Company received an amount of approximately $&nbsp;2.7
million in 2013, with the remaining balance received in 2014. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> The amounts recognized in
                                         the income statement are as follows: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 55%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> Year ended <BR> December 31, 2013 </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in <BR>
    thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 77%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Equity losses </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 20%; text-align: right"> (845 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Gain due to exercise of options in associate </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Capital gain from sale of
    investment </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,051 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 216 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 11:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTANGIBLE
ASSETS</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> a. </TD><TD STYLE="text-align: justify"> On August
                                         3, 2010, the Company completed the share swap transaction with the shareholders of Bio-Gal
                                         Ltd. (the &ldquo;<B>Transaction</B>&rdquo;) in which the Company acquired 100% of the
                                         shares of Xtepo, which for the Transaction purposes held an exclusive license to use
                                         the patented recombinant EPO (rHuEPO) drug for treating Multiple Myeloma and also held
                                         cash totaling approximately $&nbsp;1.5 million on the date of completion of the transaction,
                                         in return for the allocation of 133,063,688 ordinary shares of NIS&nbsp;0.1 par value
                                         each, representing approximately 69.44% of the Company&rsquo;s issued and outstanding
                                         share capital after completion of the Transaction. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> Following the closing of
the Transaction, the Company recognized in its accounts an intangible asset representing the license for the exclusive use of
the patent for the rHuEPO drug for Multiple Myeloma as well as every clinical study and accumulated knowhow underlying the patent
in a total of approximately $&nbsp;2,265 thousand (excluding transaction costs of approximately $&nbsp;187 thousand), based on
its fair value as of the date of closing of the Transaction according to an independent external valuation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> On May 29, 2011, the Company
received the approval of the FDA, a subdivision of the U.S. Health and Human Services, for orphan drug status for the rHuEPO drug
which is patented by the Company until 2019. An &ldquo;orphan drug&rdquo; is defined as a drug for treating diseases that affect
a relatively small number of people. In the U.S., an &ldquo;orphan drug&rdquo; is defined as a disease affecting fewer than 200,000
people a year. To encourage the development of drugs for these diseases, the different regulatory authorities grant benefits and
incentives to developers. The main standard benefit of orphan drugs in the U.S. is receiving seven years marketing exclusivity
from the date of marketing approval by the FDA, once the FDA gives such approval. Other benefits are local U.S. tax credits for
research and development expenses and waiver of FDA filing fees. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> According to the guidance
of IAS 38, this asset is not systematically amortized and the Company reviews the asset for impairment once a year or more frequently
if indicators show that the asset may be impaired. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> In December 2015, the Company
tested the asset for impairment in accordance with the guidance of IAS 36. According to the valuation performed, as of December
31, 2015, the book value ($ 2,452 thousand) of the rHuEPO intangible asset exceeded its recoverable amount by $ 1,604 thousand.
Therefore, a loss from impairment should be recorded regarding the asset. The recoverable amount was determined as fair value
less costs of disposal, which was determined on the basis of the discounted future cash flow method for the years 2016 to 2029
less costs of disposal. The discount period was determined on the basis of the estimated timelines to perform the clinical trials
in order to approve the drug for marketing and under the limitation of the patent years and the orphan drug designation as above. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 11:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTANGIBLE
ASSETS (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The key assumptions used
in measuring the recoverable amount related to the rHuEPO intangible asset as of December 31, 2015 include: duration of phase
2 and 3 clinical trials of 2.5 and 3.5 years, respectively, expected penetration levels from 10% in 2023 to 55% in 2027-2029 out
of an estimate of 67,566 new cases of Multiple Myeloma diagnosed each year, royalties at the rate of 12.5% and (post-tax) discount
rate of 24%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> On September 1, 2010, the
                                         Company and Yeda Research and Development Co. Ltd. (&ldquo;<B>Yeda</B>&rdquo;) entered
                                         into a license agreement of an exclusive right to examine a medical technology in the
                                         field of the immune system, comprising two proteins through which target molecules are
                                         examined and may serve as a basis for the development of therapeutics for diseases relating
                                         to the immune system, such as acute Hepatitis, rheumatoid arthritis, <FONT STYLE="font-size: 10pt">&lrm;</FONT>Crohn&rsquo;s
                                         disease, psoriasis etc. Under the agreement, the Company purchased this exclusive right
                                         to examine the medical technology for a 15-month period in consideration of $&nbsp;120
                                         thousand (the &ldquo;<B>Option Fee</B>&rdquo;) payable by the Company in the following
                                         manner and at the earlier of: (i) in the event of a capital raising by a public prospectus
                                         of more than $&nbsp;2 million, the Company is obligated to settle the payment to Yeda
                                         in cash; or (ii) if 12 months after the date of closing of the agreement an amount of
                                         more than $&nbsp;2 million is not raised, the liability to Yeda can be satisfied, at
                                         the Company&rsquo;s election and after obtaining Yeda&rsquo;s approval to the timing,
                                         in cash or by issuance of Company stock options with an equivalent value. The Company&rsquo;s
                                         option to purchase said technology expired on November&nbsp;30, 2011 and the Company
                                         elected not to exercise the option. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 11:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTANGIBLE
ASSETS (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -27.75pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 57.3pt"></TD><TD STYLE="width: 27.75pt"></TD><TD STYLE="text-align: justify"> On July 11, 2013, the Company
                                         and Yeda entered into an amendment to the license agreement, according to which the Company
                                         shall pay Yeda an amount of $ 120 thousand in the following manner: (a) $ 30 thousand
                                         in cash, payable as of the date of the amendment, and (b) an additional amount of $ 90
                                         thousand shall be paid by the Company to Yeda upon the earlier of: (a) a capital raise
                                         in the amount of $ 2 million and (b) upon the consummation of a transaction relating
                                         to the Company&rsquo;s Erythropoetin technology with any third party, which includes
                                         the receipt by the Company of a consideration of at least $ 2 million. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> On January 7, 2014, the Company
                                         signed a licensing agreement with Yeda to develop hCDR1, a Phase II-ready asset for the
                                         treatment of Systemic Lupus Erythematosus (&ldquo;<B>SLE</B>&rdquo;). The terms of the
                                         licensing agreement include, among other things, expense reimbursement for patent expenses
                                         payable in six installments (see below), certain milestone payments to Yeda, low single-digit
                                         royalties based on net sales, and additional customary royalties to the Office of the
                                         Chief Scientist. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> On May 14, 2014, the Company
issued 222,605 ordinary shares of the Company of NIS 0.1 par value each to Yeda, as the first of six installments for the aforementioned
patent expenses reimbursement, representing a value of approximately $ 38 thousand. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> On January 21, 2015, the
Company issued Yeda 802,912 ordinary shares of the Company of NIS 0.1 par value each, as the second of six installments for the
aforementioned patent expenses reimbursement, representing a value of approximately $ 89 thousand. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> On August 3, 2015, the
Company paid Yeda an amount of approximately $ 64 thousand, as the third of six installments for the aforementioned patent expenses
reimbursement. For additional information see note 25 below. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify"> Composition and movement: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The composition of intangible
assets and accumulated amortization, by major classes, and the movement therein in the three years ended December 31, 2015, 2014
and 2013, are: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> rHuEPO </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> hCDR1 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Other </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD NOWRAP STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Cost: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at January 1, 2015 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 2,452 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 41 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 5 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 2,498 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Additions during the year </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 148 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 148 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Impairment of intangible assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,604 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,604 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Disposal </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at December 31, 2015 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 848 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 189 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,037 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Accumulated amortization: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at January 1, 2015 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Additions during the year </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Disposal </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at December 31, 2015 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 8.5pt"> Amortized cost at December
    31, 2015 </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 848 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 189 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,037 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <B>&nbsp;</B> </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <B>NOTE 11:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTANGIBLE
ASSETS (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> rHuEPO </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> hCDR1 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Other </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Cost: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at January 1, 2014 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 2,452 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 5 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 2,457 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Additions during the year </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 41 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 41 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at December 31, 2014 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,452 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 41 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,498 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Accumulated amortization: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at January 1, 2014 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Additions during the year </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at December 31, 2014 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 8.5pt"> Amortized cost at December
    31, 2014 </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,452 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 41 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 5 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,498 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> rHuEPO </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Other </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Cost: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at January 1, 2013 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 2,452 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 5 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 2,457 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Additions during the year </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at December 31, 2013 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,452 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 2,457 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Accumulated amortization: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at January 1, 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Additions during the year </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 8.5pt"> Balance at December 31, 2013 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 8.5pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 8.5pt"> Amortized cost at December
    31, 2013 </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,452 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 5 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,457 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> <B>NOTE 12:&nbsp;&nbsp;&nbsp;&nbsp;TRADE
PAYABLES </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Composition: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Open accounts </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 84 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 139 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Checks payable </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 34 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 78 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 118 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 217 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The carrying amount of
trade payables is a reasonable approximation of their fair value because the effect of discounting is immaterial. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>


<!-- Field: Page; Sequence: 135; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> <B>NOTE 12:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TRADE
PAYABLES (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> The carrying amount of trade
                                         payables is denominated in the following currencies: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> U.S. dollars </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 80 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 110 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> NIS (not linked to the Israeli
    CPI) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 38 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 107 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 118 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 217 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 13:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTHER
ACCOUNTS PAYABLE</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Composition: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Employees, consultants and payroll
    accruals </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 40 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 29 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Accrued expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 278 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 269 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 318 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 298 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The carrying amount of
other accounts payable is a reasonable approximation of their fair value because the effect of discounting is immaterial. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> The carrying amount of other
                                         accounts payable is denominated in the following currencies: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> U.S. dollars </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 234 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 269 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> NIS (not linked to the Israeli CPI) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 76 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 22 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Other </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 8 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 7 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 318 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 298 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 14:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EMPLOYEE
BENEFIT LIABILITIES</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"> According
to the effective labor laws and employment agreements in Israel, the Company is obligated to pay compensation and/or pension to
employees who are dismissed and, under certain circumstances, to employees who retire. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"> The Company&rsquo;s
obligation for pension payment in Israel and the Company&rsquo;s obligation for compensation payments to employees in Israel for
whom the applicable obligation is pursuant to section 14 to the Severance Pay Law, are covered by fixed contributions into defined
contribution plans. The amounts contributed as above are not reflected in the statements of financial position. Section 14 to
the Severance Pay Law applies to all of the Company&rsquo;s employees. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"> The amounts
recognized as expenses for defined contribution plans for employees of the Company in 2015, 2014 and 2013 was $&nbsp;16 thousand,
$&nbsp;25 thousand and $&nbsp;26 thousand, respectively. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 15:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMMITMENTS</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Royalty and contingent milestone
                                         payments: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 1. </TD><TD STYLE="text-align: justify"> On November 30, 2011, the
                                         Company completed the MinoGuard transaction according to which an exclusive license to
                                         the SAM-101 drug (combined drug to treat mental disorders focusing on schizophrenia)
                                         was transferred to the Company. According to the terms of the agreement with MinoGuard,
                                         the Company will act to conduct clinical trials, develop, register, market, distribute
                                         and sell the drug candidates that will emerge from the technology, with no limitations
                                         to a specific disorder. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"></TD><TD STYLE="text-align: justify"> Under the agreement, if the
                                         Company does not commence a phase 2 clinical trial by June 30, 2013 (the agreement states
                                         that receipt of an approval to commence such trial or continuance of the clinical trials
                                         that were conducted/will be conducted by MinoGuard and/or its researchers, shall be deemed
                                         commencement of phase 2 clinical trial for this matter), the Company will then pay MinoGuard
                                         an annual license fee of $&nbsp;45 thousand for the first payment and its cost will increase
                                         by $&nbsp;90 thousand per year (should the trial not commence) up to $&nbsp;675 thousand
                                         for the eighth year of license. The Company can pay any of the above amounts in cash
                                         or by issuance of securities to MinoGuard, at its sole discretion. In accordance with
                                         the agreement, and since as of June 30, 2013, the Company had not commenced a phase 2
                                         clinical trial, it has paid MinoGuard an annual license fee, by way of issuance of 175,633
                                         ordinary shares of the Company, representing a value of $ 45 thousand, for the 12 month
                                         period between July 1, 2013 and June 30, 2014. On September 3, 2014, the Company issued
                                         an additional 889,822 ordinary shares, representing a value of $ 135 thousand, for the
                                         12 month period between July 1, 2014 and June 30, 2015. On May 25, 2015, the Company
                                         provided MinoGuard with a notice of termination whereby, as of June 24, 2015, the rights
                                         and license granted according to the license agreement were terminated and all rights
                                         in and to the licensed technology reverted to MinoGuard. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 2. </TD><TD STYLE="text-align: justify"> On August&nbsp;3,
                                         2010, the Company closed the Bio-Gal Transaction. According to this agreement, the Company
                                         is obligated to pay 1% royalties on net sales of the product and $&nbsp;350 thousand
                                         upon the successful completion of a phase 2 clinical trial. The payment conditions for
                                         the above amount are at the earlier of occurrence of the following events: </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> (i) </TD><TD STYLE="text-align: justify"> Raising capital of at least
                                         $&nbsp;2 million by the Company or Xtepo after a successful completion of a phase 2 clinical
                                         trial; </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 141.75pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 113.4pt"></TD><TD STYLE="width: 28.35pt"> (ii) </TD><TD STYLE="text-align: justify"> Six months after the successful
                                         completion of a phase 2 clinical trial. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 141.75pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 15:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMMITMENTS
(Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> Operating lease commitments: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.5pt"> 1. </TD><TD STYLE="text-align: justify"> The Company entered into an
                                         operating lease agreement on the offices it uses. The agreement is in effect until April
                                         2017. Under the lease agreement, the Company has the option to extend the lease for an
                                         additional period of two years. The lease fees are stated in NIS and are not linked to
                                         the Israeli CPI. To secure the lease, the Company provided a bank guarantee, which is
                                         secured by a restricted NIS deposit of approximately $&nbsp;10 thousand. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> The expected lease fees
and management fees for subsequent years under the prevailing lease fees as of December&nbsp;31, 2015 are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 45%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.6in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>U.S.
                                         dollars</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>in
                                         thousands</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> 2016 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 2.5pt double; text-align: right"> 30 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> 2017 </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 10 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> The Company entered into
an agreement with subtenants to lease part of the office space in exchange for approximately $&nbsp;1,200 per month. The sublease
agreement is in effect until April 2017. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 16:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARE
CAPITAL, RESERVES AND RETAINED EARNINGS </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Composition: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Number of shares </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Amount </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Authorized </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Issued and <BR>
    outstanding </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Authorized </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Issued and <BR>
    outstanding </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> In thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> NIS in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="width: 36%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 5%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> ordinary shares of NIS&nbsp;0.1
    * </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 700,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 700,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 273,526 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> **237,167 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 70,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 70,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 27,353 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> **23,717 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 141.75pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> * </TD><TD STYLE="text-align: justify"> Traded on the TASE. The Company&rsquo;s
                                         ADSs are listed for trading on the Nasdaq Capital Market in the U.S. The share price
                                         was NIS&nbsp;0.295 as of December 31, 2015. </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> ** </TD><TD STYLE="text-align: justify"> Including 4,354,881 treasury
                                         shares held by InterCure as of December 31, 2014. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> Ordinary shares confer upon
                                         their holders voting rights and right to participate in the shareholders&rsquo; meeting,
                                         right to receive dividends and the right to participate in the excess of assets upon
                                         liquidation of the Company. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> On June 1, 2012, the Company
                                         applied for the relisting of its ADSs on the Nasdaq Capital Market (after the ADSs had
                                         been delisted from trade on the Nasdaq Capital Market in July 2009), subject to compliance
                                         with all the criteria reviewed by the Nasdaq Capital Market admissions committee, including
                                         minimum ADS price (according to the various listing criteria). On September 24, 2012,
                                         the Company&rsquo;s Board approved a change in the number of shares underlying the ADSs
                                         such that 20 ordinary shares of the Company will constitute a single ADS, this in order
                                         to support the Company&rsquo;s compliance with the Nasdaq Capital Market&rsquo;s ADS
                                         listing conditions. The record date of change in the ADS ratio is October 4, 2012. On
                                         July 10, 2013, the Company&rsquo;s management received a notice from Nasdaq Capital Market
                                         representatives stating that the admission committee had approved the Company&rsquo;s
                                         application to relist its ADSs for trading on the Nasdaq Capital Market Capital Market.
                                         Accordingly, on July 15, 2013, the Company&rsquo;s ADSs began trading on Nasdaq Capital
                                         Market. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify"> In April 2015, the Company
                                         raised $ 4.0 million by means of issuing a total of 1,777,778 ADSs to several investors.
                                         In addition, under the share purchase agreements, the investors received unregistered
                                         warrants to purchase 888,889 ADSs. The warrants may be exercised from the six-month anniversary
                                         of the issuance date and for five years thereafter and have an exercise price of $2.25
                                         per ADS, subject to adjustments as set forth therein. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
17:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARE-BASED PAYMENT </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Share-based payment in the
                                         Company: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> On August 29, 2011, the
Company&rsquo;s Board approved the adoption of an employee share option plan for the grant of options exercisable into shares
of the Company in accordance with section 102 to the Israeli Tax Ordinance (the &ldquo;<B>2011 Plan</B>&rdquo;) in lieu of the
option plan established in 2001 (the &ldquo;<B>2001 Plan</B>&rdquo;) which ended after 10 years, and the holding of up to 10 million
shares in the framework of the 2011 Plan, for option allocation to Company employees, directors and consultants. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> In May
2011, after 10 years, the 2001 Plan ended and, accordingly, since that date no new options can be granted under this plan. In
August 2011, the 2011 Plan was approved (see details above). As of December&nbsp;31, 2014, the remaining number of options available
for grant under the 2011 Plan is 4,256,138 options. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The 2011 Plan shall be
subject to the directives determined for this purpose in section 102 to the Income Tax Ordinance. Under the capital track which
was adopted by the Company and the directives, the Company is not entitled to receive a tax deduction that relates to remuneration
paid to employees, including amounts recorded as salary benefit in the Company&rsquo;s accounts for options granted to employees
in the framework of the plan, except the yield benefit component, if available, that was determined on the grant date. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The terms of the options
which will be granted according to the 2011 Plan, including the option period, exercise price, vesting period and exercise period
shall be determined by the Company&rsquo;s Board on the date of the actual allocation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 1. </TD><TD STYLE="text-align: justify"> On September
                                         11, 2013, the Company&rsquo;s Board received notice from the former CEO of the Company
                                         that he wished to terminate his position as CEO, effective as of February 15, 2014. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: 0in"> On May
15, 2014, the Board of the Company resolved to allow the former CEO a pro-rata vesting of 106,945 in addition to the 750,000 already-vested
stock options granted to him on May 29, 2012. Accordingly, 643,055 stock options formerly granted to him, and that had not yet
vested as of the termination of his employment, were forfeited. The Board further resolved to extend the term of the remaining
vested 856,945 stock options by nine months, so that they were exercisable until February 15, 2015, on which date all remaining
options expired. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 2. </TD><TD STYLE="text-align: justify"> On May
                                         15, 2014, the Board of the Company resolved to allow the former CFO a pro-rata vesting
                                         of 131,417 in addition to the 997,500 already-vested stock options granted to him on
                                         April 12, 2012. Accordingly, 581,083 stock options formerly granted to him, and that
                                         had not yet vested as of the termination of his employment, were forfeited. The Board
                                         further resolved to extend the term of the remaining vested 1,128,917 stock options by
                                         nine months, so that they were exercisable until April 5, 2015, on which date all remaining
                                         options expired. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
17:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARE-BASED PAYMENT (Cont.) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 103.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 3. </TD><TD STYLE="text-align: justify"> On December
                                         30, 2013, the Company&rsquo;s Board approved the allocation of 880,000 stock options
                                         to the new CFO and an employee of the Company, exercisable into 880,000 ordinary shares
                                         of NIS 0.1 par value each of the Company, for an exercise price of NIS 0.5328 per stock
                                         option. The fair value of all the stock options according to the Black-Scholes model
                                         pursuant to IFRS 2 as of the date of grant (the date of the Company&rsquo;s Board&rsquo;s
                                         decision) was approximately $&nbsp;120,000. The exercise period of the stock options
                                         is a maximum of ten years from the grant date. The stock options vest in twelve equal
                                         portions each quarter over a period of three years from the grant date. The value of
                                         each stock option is based on the following assumptions: expected dividend rate of 0%,
                                         expected standard deviation of 117.86%, risk-free interest rates of 3.98% and expected
                                         life until exercise of 5-6.5 years. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 4. </TD><TD STYLE="text-align: justify"> On January
                                         30, 2014, the Company&rsquo;s Board approved the allocation of 1,500,000 stock options
                                         to the new CEO of the Company, exercisable into 1,500,000 ordinary shares of NIS 0.1
                                         par value each of the Company, as follows: 600,000 stock options are exercisable into
                                         600,000 ordinary shares of the Company for an exercise price of NIS 0.6 per stock option,
                                         and an additional 900,000 stock options are exercisable into 900,000 ordinary shares
                                         of the Company for an exercise price of NIS 0.9 per stock option. The fair value of all
                                         the stock options according to the Black-Scholes model pursuant to IFRS 2 as of the date
                                         of grant (the date of the Company&rsquo;s Board&rsquo;s decision) was approximately $&nbsp;244
                                         thousand. The exercise period of the stock options is a maximum of ten years from the
                                         grant date. The stock options vest in twelve equal portions each quarter over a period
                                         of three years from the grant date. The value of each stock option is based on the following
                                         assumptions: expected dividend rate of 0%, expected standard deviation of 154.49%, risk-free
                                         interest rates of 2.60%-2.87% and expected life until exercise of 5-6.5 years. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> On March 17, 2014, the
Company&rsquo;s extraordinary general meeting of shareholders of the Company decided to approve the terms of an employment agreement
between the Company and Mr. Joshua Levine, pursuant to which Mr. Levine will serve as the Company&rsquo;s CEO in a fulltime position,
in accordance with the resolution of the Company&rsquo;s Compensation Committee and Board of Directors dated January 30, 2014
and in accordance with the Israeli Companies Law &ndash; 1999. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 5. </TD><TD STYLE="text-align: justify"> On February
                                         26, 2014, the board of directors of the Company approved the allocation of 30,000 stock
                                         options to a consultant, exercisable into 30,000 ordinary shares of NIS 0.1 par value
                                         each of the Company, for an exercise price of NIS 0.644 per stock option. The fair value
                                         of all the stock options according to the Black-Scholes model pursuant to IFRS 2 as of
                                         the date of grant (the date of the Company&rsquo;s Board resolution on the matter) was
                                         approximately $&nbsp;3 thousand. The exercise period of the stock options is a maximum
                                         of approximately four years from the grant date. The stock options vest in twelve equal
                                         portions each month over a period of one year from the grant date. The value of each
                                         stock option is based on the following assumptions: expected dividend rate of 0%, expected
                                         standard deviation of 148.25%, risk-free interest rates of 1.56% and expected life until
                                         exercise of 2.5 years. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
17:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARE-BASED PAYMENT (Cont.) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 6. </TD><TD STYLE="text-align: justify"> On December 30, 2014, the
                                         general meeting of shareholders of the Company approved the appointment of four new directors.
                                         The general meeting also approved the allocation of 150,000 stock options to each of
                                         the four new directors, exercisable into 600,000 ordinary shares of NIS 0.1 par value
                                         each of the Company, for an exercise price of NIS 0.4325 per stock option. The fair value
                                         of all the stock options according to the Black-Scholes model pursuant to IFRS 2 as of
                                         the date of grant (the date of the Company&rsquo;s Board resolution on the matter) was
                                         approximately $&nbsp;47 thousand. The exercise period of the stock options is a maximum
                                         of ten years from the grant date. 33.33% of the stock options vest at the lapse of one
                                         year from the grant date, and the remaining 66.67% vest in eight equal portions each
                                         quarter over a period of two years from the grant date. The value of each stock option
                                         is based on the following assumptions: expected dividend rate of 0%, expected standard
                                         deviation of 75.56%, risk-free interest rates of 2.68% and expected life until exercise
                                         of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 7. </TD><TD STYLE="text-align: justify"> On December 30, 2014, the
                                         general meeting of shareholders of the Company approved the allocation of 150,000 stock
                                         options to a consultant, exercisable into 150,000 ordinary shares of NIS 0.1 par value
                                         each of the Company, for an exercise price of NIS 0.4915 per stock option. The fair value
                                         of all the stock options according to the Black-Scholes model pursuant to IFRS 2 as of
                                         the date of grant (the date of the Company&rsquo;s Board resolution on the matter) was
                                         approximately $&nbsp;12 thousand. The exercise period of the stock options is a maximum
                                         of ten years from the grant date. 33.33% of the stock options vest at the lapse of one
                                         year from the grant date, and the remaining 66.67% vest in eight equal portions each
                                         quarter over a period of two years from the grant date. The value of each stock option
                                         is based on the following assumptions: expected dividend rate of 0%, expected standard
                                         deviation of 75.56%, risk-free interest rates of 2.68% and expected life until exercise
                                         of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 8. </TD><TD STYLE="text-align: justify"> On February 12, 2015, the
                                         Company&rsquo;s Board approved the allocation of 100,000 stock options to the Company&rsquo;s
                                         CFO, exercisable into 100,000 ordinary shares of NIS 0.1 par value each of the Company,
                                         for an exercise price of NIS 0.4 per stock option. The fair value of all the stock options
                                         according to the Black-Scholes model pursuant to IFRS 2 as of the date of grant (the
                                         date of the Company&rsquo;s Board&rsquo;s decision) was approximately $&nbsp;6,000. The
                                         exercise period of the stock options is a maximum of ten years from the grant date. 50%
                                         of the stock options vest at the grant date, and the remaining 50% vest in twelve equal
                                         portions each quarter over a period of three years from the grant date. The value of
                                         each stock option is based on the following assumptions: expected dividend rate of 0%,
                                         expected standard deviation of 80.24%, risk-free interest rates of 2.68% and expected
                                         life until exercise of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>


<!-- Field: Page; Sequence: 143; Value: 1 -->
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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
17:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARE-BASED PAYMENT (Cont.) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 9. </TD><TD STYLE="text-align: justify"> On March 25, 2015, an extraordinary
                                         general meeting of the shareholders of the Company approved the appointment of two new
                                         external directors. The general meeting also approved the allocation of 150,000 stock
                                         options to each of the two new directors, exercisable into 300,000 ordinary shares of
                                         NIS 0.1 par value each of the Company, for an exercise price of NIS 0.4 per stock option.
                                         The fair value of all the stock options according to the Black-Scholes model pursuant
                                         to IFRS 2 as of the date of grant (the date of the extraordinary general meeting) was
                                         approximately $&nbsp;25 thousand. The exercise period of the stock options is a maximum
                                         of ten years from the grant date. 33.33% of the stock options vest at the lapse of one
                                         year from the grant date (the First Anniversary), and the remaining 66.67% vest in eight
                                         equal portions each quarter over a period of two years from the First Anniversary. The
                                         value of each stock option is based on the following assumptions: expected dividend rate
                                         of 0%, expected standard deviation of 79.81%, risk-free interest rates of 2.68% and expected
                                         life until exercise of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> 10. </TD><TD STYLE="text-align: justify"> On March 25, 2015, an extraordinary
                                         general meeting of the shareholders of the Company approved the allocation of 100,000
                                         stock options to the Company&rsquo;s CEO, exercisable into 100,000 ordinary shares of
                                         NIS 0.1 par value each of the Company, for an exercise price of NIS 0.4 per stock option.
                                         The fair value of all the stock options according to the Black-Scholes model pursuant
                                         to IFRS 2 as of the date of grant (the date of the extraordinary general meeting) was
                                         approximately $&nbsp;8 thousand. The exercise period of the stock options is a maximum
                                         of ten years from the grant date. 50% of the stock options vest at the grant date, and
                                         the remaining 50% vest in twelve equal portions each quarter over a period of three years
                                         from the grant date. The value of each stock option is based on the following assumptions:
                                         expected dividend rate of 0%, expected standard deviation of 79.81%, risk-free interest
                                         rates of 2.68% and expected life until exercise of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt; text-align: left"> 11. </TD><TD STYLE="text-align: justify"> On June
                                         1, 2015, the Company&rsquo;s Board approved the allocation of 200,000 stock options to
                                         the Company&rsquo;s CFO, exercisable into 200,000 ordinary shares of NIS 0.1 par value
                                         each of the Company, for an exercise price of NIS 0.4283 per stock option. The fair value
                                         of all the stock options according to the Black-Scholes model pursuant to IFRS 2 as of
                                         the date of grant (the date of the Company&rsquo;s Board&rsquo;s decision) was approximately
                                         $&nbsp;14,000. The exercise period of the stock options is a maximum of ten years from
                                         the grant date. 50,000 stock options shall vest at the expiry of one year from the grant
                                         date. The remaining 150,000 stock options vest in eight equal portions each quarter over
                                         a period of two years from the grant date. The value of each stock option is based on
                                         the following assumptions: expected dividend rate of 0%, expected standard deviation
                                         of 78.72%, risk-free interest rates of 1.39% and expected life until exercise of 5-6.5
                                         years. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 103.05pt; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 103.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 103.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
17:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARE-BASED PAYMENT (Cont.) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"> Movements
in the number of share options and their related weighted average exercise prices (in dollars) are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Number
                                         of </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>options</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Weighted
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>average
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>exercise
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>price</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Number
                                         of </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>options</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Weighted
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>average
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>exercise
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>price</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Number
                                         of </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>options</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Weighted
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>average
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>exercise
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>price</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Outstanding at beginning of year </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 6,683,862 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 0.19 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 8,038,000 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 0.15 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 12,506,000 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 0.18 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Granted </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 700,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.10 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,030,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.16 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 130,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.22 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Exercised </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,160,000 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.02 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (130,000 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.08 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Expired </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,513,862 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.23 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,469,332 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.26 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Forfeited </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,224,138 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> 0.23 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (2,998,668 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> 0.26 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> Outstanding at end of year </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 4,870,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> 0.15 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 6,683,862 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> 0.19 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 8,038,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> 0.15 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> Exercisable at end of year </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,939,168 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> 0.16 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 4,275,525 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> 0.20 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 6,084,845 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> 0.11 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> Below
is information about the exercise price (in dollars) and the remaining contractual life (in years) for options outstanding at
end of year: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December 31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="8" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="8" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Options
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>outstanding
                                         at </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>end
                                         of year</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Range
                                         of</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>exercise
                                         prices</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Weighted
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>average
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>remaining
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>contractual
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>life</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Options
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>outstanding
                                         at </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>end
                                         of year</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Range
                                         of</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>exercise
                                         prices</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Weighted
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>average
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>remaining
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>contractual
                                         </B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>life</B> </P></TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 14%; text-align: right"> 4,810,000 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 16%; text-align: center"> 0 - 0.500 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 14%; text-align: right"> 7.3 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 14%; text-align: right"> 6,623,862 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 16%; text-align: center"> 0 - 0.500 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 13%; text-align: right"> 5.8 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 60,000 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> 1.500 - 2.499 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> 2.0 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 60,000 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"> 1.500 - 2.499 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> 3.0 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 4,870,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: right; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 6,683,862 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: right; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> Net expenses
recognized in the Company&rsquo;s statements of comprehensive loss for the years ended December 31, 2015, 2014 and 2013 for grant
of options to employees were $&nbsp;148 thousand, $&nbsp;278 thousand and $&nbsp;(6) thousand, respectively. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> These
plans are administered in accordance with the principles set forth in this issue in section 102 to the Income Tax Ordinance. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 18:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESEARCH
AND DEVELOPMENT EXPENSES</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.8in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Salaries and expenses relating to
    employees and service providers </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 121 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 25 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 26 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Expenses relating to options to employees and
    service providers </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Professional consulting </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 360 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 165 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 43 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Lab materials </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 75 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 88 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Other </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 14 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 13 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 578 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 278 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 82 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 19:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GENERAL
AND ADMINISTRATIVE EXPENSES</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.8in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Salaries and expenses relating to
    employees and service providers </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 405 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 432 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 524 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Expenses relating to options to employees and
    service providers </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 140 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 278 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (6 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Patents and fees </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 203 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 200 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 131 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Directors&rsquo; fees </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 96 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 77 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 79 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Investor relations and travel </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 145 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 172 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Rent and office maintenance </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 59 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 105 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 79 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Vehicle maintenance </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 17 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 38 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Insurance </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 62 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 72 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 52 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Professional services </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 192 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 282 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 362 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Depreciation, amortization and loss from disposal </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Other </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 110 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 101 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 52 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,419 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,744 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,329 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 20:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTHER
GAINS, NET</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.8in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Gain from sale of investment in associate
    (a) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 1,051 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Loss from disposal of property, plant and equipment </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (5 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Gain (loss) from decrease in holding rate in associate </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Loss from disposal of intangible
    asset </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (5 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (10 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,059 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 17.85pt"> (a) </TD><TD STYLE="text-align: justify"> Gain from sale of investment
                                         in associate: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: left; text-indent: 28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.8in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left"> Consideration </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 3,369 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Balance as of September 17, 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,522 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Transaction-related expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (17 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"> Reclassification to Other gains, net due to sale of investment </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 221 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,051 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 21:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCE
INCOME (EXPENSES), NET</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.8in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Finance expenses: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Exchange rate differences </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 101 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Bank account management fees and commissions </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt; padding-bottom: 1pt"> Other financial expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 6 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> - </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> - </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Total finance expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 15 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 107 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 6 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Finance income: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Interest income on bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Exchange rate differences </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 4 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 55 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Total finance income </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 4 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 10 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 65 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> Finance income (expenses),
    net </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (11 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (97 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 59 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 22:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TAXES
ON INCOME</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> Taxation in Israel: The corporate
                                         tax rate in Israel was 26.5%, 26.5% and 25% for the years ended December 31, 2015, 2014
                                         and 2013, respectively. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> On January
5, 2016, the Israeli Parliament officially published the Law for the Amendment of the Israeli Tax Ordinance (Amendment 216), that
reduces the corporate tax rate from 26.5% to 25%, effective for the year beginning January 1, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> The change
in corporate tax rate in 2016 is not expected to influence the Company&rsquo;s financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> Foreign subsidiaries: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> The tax
rates applicable to the dissolved subsidiaries whose place of incorporation was the U.S. are (progressive) corporate tax of 35%
with the addition of State tax and local tax at rates which vary according to the State and city in which the subsidiaries conduct
their business affairs. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"></TD><TD STYLE="text-align: justify"> As a rule, intragroup transactions
                                         between the Company and the foreign subsidiaries are subject to the guidance and reporting
                                         of the Income Tax Regulations (Determination of Market Conditions), 2006. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right; text-indent: 0.5in"> <B>XTL BIOPHARMACEUTICALS
LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 22:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TAXES
ON INCOME (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> The Company&rsquo;s carryforward
                                         tax losses as of December&nbsp;31, 2015 and 2014, totaled approximately $&nbsp;28 million
                                         and $ 27 million, respectively. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> The Company
did not recognize deferred taxes for carryforward losses, as well as capital losses and real losses, because their utilization
in the foreseeable future is not probable. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify"> Below is the reconciliation
                                         between the &ldquo;theoretical&rdquo; tax expense, assuming that all the income were
                                         taxed at the regular tax rate applicable to companies in Israel and the taxes recorded
                                         in the statements of comprehensive income in the reporting year: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> Loss before
    taxes on income, as reported in the statements of comprehensive loss </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 2.5pt double; text-align: right"> (4,311 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 2.5pt double; text-align: right"> (2,865 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 2.5pt double; text-align: right"> (3,713 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Theoretical tax saving on this loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,142 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (759 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (928 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Increase (decrease) in taxes resulting from different
    tax rates for foreign subsidiaries </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (24 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (154 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Expenses not deductible for tax purposes </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 40 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 74 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 628 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Utilization of taxable losses for which no deferred
    taxes were recognized </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (55 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Effect of lower tax rates on capital gains </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (16 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Increase in taxes resulting
    mainly from taxable losses in the reported year for which no deferred taxes were recognized </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,102 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 725 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 509 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> Tax benefit </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> e. </TD><TD STYLE="text-align: justify"> Tax assessments: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.2pt; text-align: justify; text-indent: -28.1pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The Company filed self-assessments
that are deemed final through the 2008 tax year. The subsidiary, Xtepo, has not received tax assessments since its incorporation
in November 2009. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


<!-- Field: Page; Sequence: 149; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->55<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 23:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TRANSACTIONS
AND BALANCES WITH RELATED PARTIES </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &ldquo;Related party&rdquo;
- as the term is defined in IAS 24, <I>&ldquo;Related Party Disclosures&rdquo;</I> (&ldquo;<B>IAS 24</B>&rdquo;). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> The Company&rsquo;s key
management personnel who are included, along with other factors, in the definition of related party, as above in IAS 24, includes
directors and members of the executive committee. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> Compensation
to key management personnel: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> The compensation to key
management personnel for employee services provided to the Company is shown below: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 1.2in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left; text-indent: -8.65pt; padding-left: 8.65pt"> Salaries, management and consulting
    fees and other short-term benefits *) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 503 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 585 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 698 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt"> Share-based payments, net
    **) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 143 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 247 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (10 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 646 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 832 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 688 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt"> Number of persons </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 11 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 12 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 12 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> *) </TD><TD STYLE="text-align: justify"> In 2013, includes grants
                                         to senior officers based on agreements signed with them in a total amount of approximately
                                         $&nbsp;35 thousand. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.05pt"></TD><TD STYLE="width: 28.35pt"> **) </TD><TD STYLE="text-align: justify"> In 2013 &ndash; includes
                                         share-based payments expenses less a reversal of expenses due to forfeiture of stock
                                         options in the amount of $ 647 thousand. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> As of December 31, 2015
and 2014, the Company&rsquo;s balances with related parties total approximately $&nbsp;58 thousand ($ 37 thousand of which were
linked to the NIS) and $&nbsp;92 thousand (of which $&nbsp;75 thousand were linked to the NIS), respectively. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> For further information
regarding share-based payment to related parties, see note 17 above. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: justify"> <B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    AS OF DECEMBER 31, 2015</B> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 24:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEGMENT
INFORMATION</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> The Group&rsquo;s management
establishes operating segments in accordance with reports reviewed by the Chief Operating Decision Maker (&ldquo;<B>CODM</B>&rdquo;)
and which are used to make strategic decisions. Given the deconsolidation of InterCure and the classification of related results
to discontinued operations, the Company operates in one operating segment. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 25:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EVENTS
AFTER THE REPORTING DATE</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> On February 1, 2016, the Company
                                         paid Yeda an amount of approximately $ 64 thousand, as the fourth of six installments
                                         for the aforementioned patent expenses reimbursement. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> In February 2016, the Company
                                         issued 340,000 ordinary shares, represented by 17,000 ADSs, to a service provider, as
                                         part of the terms of a service agreement signed in January 2016. Shares are restricted
                                         in accordance with Rule 144 of the U.S. Securities and Exchange Commission. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: right"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> On March 4, 2016, the Company
                                         entered into an agreement with its newly appointed Medical Director, Dr. Daphna Paran.
                                         According to the agreement, Dr. Paran&rsquo;s compensation includes an allocation of
                                         50,000 stock options, exercisable into 50,000 ordinary shares of NIS 0.1 par value each
                                         of the Company, for an exercise price of NIS 0.6 per stock option, as previously approved
                                         by the Board of Directors of the Company. The fair value of all the stock options according
                                         to the Black-Scholes model pursuant to IFRS 2 as of the date of grant (the date of the
                                         Company&rsquo;s Board&rsquo;s decision) was approximately $&nbsp;2 thousand. The exercise
                                         period of the stock options is a maximum of ten years from the grant date. The stock
                                         options vest in twelve equal portions each quarter over a period of three years from
                                         the date of grant. The value of each stock option is based on the following assumptions:
                                         expected dividend rate of 0%, expected standard deviation of 78.72%, risk-free interest
                                         rates of 1.31% and expected life until exercise of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-align: right"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify"> On March 31, 2016, a general
                                         meeting of shareholders of the Company approved the remuneration terms of the Chairman
                                         of the Board of Directors of the Company, retroactive to as of September 1, 2015. The
                                         terms include monthly remuneration in the amount of NIS 20,000, as well as the allocation
                                         of 1,500,000 stock options, exercisable into 1,500,000 ordinary shares of NIS 0.1 par
                                         value each of the Company, for an exercise price of NIS 0.6 per stock option. The fair
                                         value of all the stock options according to the Black-Scholes model pursuant to IFRS
                                         2 as of the date of grant (the date of approval by the general meeting) was approximately
                                         $&nbsp;49 thousand. The exercise period of the stock options is a maximum of ten years
                                         from the grant date. The stock options vest in twelve equal portions each quarter over
                                         a period of three years from the date of grant. The value of each stock option is based
                                         on the following assumptions: expected dividend rate of 0%, expected standard deviation
                                         of 78.72%, risk-free interest rates of 1.32% and expected life until exercise of 5-6.5
                                         years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> <B>NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2015</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>NOTE 25:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EVENTS
AFTER THE REPORTING DATE (Cont.)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> e. </TD><TD STYLE="text-align: justify"> On March 31, 2016, a general
                                         meeting of shareholders of the Company approved the allocation of 1,000,000 stock options
                                         to the Company&rsquo;s Chief Executive Officer, exercisable into 1,000,000 ordinary shares
                                         of NIS 0.1 par value each of the Company, for an exercise price of NIS 0.6 per stock
                                         option. The fair value of all the stock options according to the Black-Scholes model
                                         pursuant to IFRS 2 as of the date of grant (the date of approval by the general meeting)
                                         was approximately $&nbsp;33 thousand. The exercise period of the stock options is a maximum
                                         of ten years from the date of grant. 33.33% of the stock options vest following the lapse
                                         of 12 months from the grant date, and the remaining 66.67% vest in eight equal portions
                                         each quarter over a period of two years from the first anniversary. The value of each
                                         stock option is based on the following assumptions: expected dividend rate of 0%, expected
                                         standard deviation of 78.72%, risk-free interest rates of 1.32% and expected life until
                                         exercise of 5-6.5 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> - - - - - - - - - - - - </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp; </P>


<!-- Field: Page; Sequence: 152; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="margin: 0; text-align: right"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>INTERIM FINANCIAL INFORMATION</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>AS OF JUNE 30, 2016</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp;&nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> UNAUDITED </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp;&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>INDEX</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;&nbsp;</B> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 87%; padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="width: 13%; border-bottom: Black 1pt solid; padding-right: 5.35pt; padding-left: 5.35pt; font-weight: bold; text-align: center"> Page </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Condensed
    Consolidated Financial Statements - in U.S. dollars:</B></FONT> </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0; padding-left: 0.125in; text-align: justify; text-indent: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><A HREF="#c_001">Condensed Consolidated Statements of Financial Position</A></B></FONT> </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-60
    - F-61</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0; padding-left: 0.125in; text-align: justify; text-indent: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><A HREF="#c_002">Condensed Consolidated Statements of Comprehensive Loss</A></B></FONT> </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-62</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0; padding-left: 0.125in; text-align: justify; text-indent: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><A HREF="#c_003">Condensed Consolidated Statements of Changes in Equity</A> </B></FONT> </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-63
    - F-65</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0; padding-left: 0.125in; text-align: justify; text-indent: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><A HREF="#c_004">Condensed Consolidated Statements of Cash Flows</A></B></FONT> </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-66
    - F-68</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"> &nbsp; </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 0; padding-left: 0.125in; text-align: justify; text-indent: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B><A HREF="#c_005">Notes to Financial Statements</A></B></FONT> </TD>
    <TD STYLE="padding-right: 5.35pt; padding-left: 5.35pt; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif"><B>F-69
    - F-73</B></FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>- - - - - - - - - - - -</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> &nbsp; </P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B><A NAME="c_001"></A>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 1.5pt solid"> CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> June 30, </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> December
    31, </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 28.35pt"> ASSETS </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> CURRENT ASSETS: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Cash and cash equivalents </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 2,605 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 4,820 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 3,817 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Marketable securities </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 362 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 281 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 251 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> Other accounts
    receivable </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 250 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 124 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 197 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,217 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 5,225 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 4,265 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> NON-CURRENT ASSETS: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Restricted deposits </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 10 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 32 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 10 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Property, plant and equipment,
    net </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 9 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 22 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 11 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> Intangible
    assets, net </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,101 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,582 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,037 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,120 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,636 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,058 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total
    assets </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 4,337 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 7,861 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 5,323 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 1.5pt solid"> CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> June
    30, </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> December
    31, </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> U.S.
    dollars in thousands </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 28.35pt"> LIABILITIES
    AND EQUITY </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> CURRENT
    LIABILITIES: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Trade
    payables </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 68 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 61 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 118 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> Other
    accounts payable </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 190 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 170 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 318 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 258 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 231 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 436 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> NON-CURRENT
    LIABILITIES </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> EQUITY
    ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -8.5pt; padding-left: 19.85pt"> Ordinary share capital </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 6,624 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 6,606 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 6,606 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Premium
    on shares, options and warrants </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 150,784 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 150,748 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 150,748 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Reserve
    for AFS financial assets </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 111 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> - </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> - </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -8.5pt; padding-left: 19.85pt"> Reserve
    from transactions with non-controlling interests </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 20 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 20 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"> 20 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 19.85pt"> Accumulated
    deficit </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> (153,460 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> ) </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> (149,744 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> ) </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> (152,487 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: right; padding-left: 2.85pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> <U>Total
    </U>equity </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 4,079 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 7,630 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right"> 4,887 </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -8.5pt; padding-left: 19.85pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> <U>Total
    </U>liabilities and equity </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"> 4,337 </TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"> 7,861 </TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right"> 5,323 </TD><TD STYLE="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 32%; border-bottom: Black 1pt solid; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 3%; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 31%; border-bottom: Black 1pt solid; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 3%; padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="width: 31%; border-bottom: Black 1pt solid; padding-left: 2.85pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Shlomo Shalev </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Josh Levine </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> David Kestenbaum </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Chairman of the Board </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Chief Executive Officer </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> &nbsp; </TD>
    <TD STYLE="padding-left: 2.85pt; text-align: center"> Chief Financial Officer </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Date of approval of the financial statements
by the Company's Board: September 26, 2016. </P>


<!-- Field: Page; Sequence: 155; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->61<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B><A NAME="c_002"></A>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 1.5pt solid"> CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Six
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Three
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Year
                                         ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>December
                                         31, </B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands (except per share data) </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Research and development
    expenses </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (355 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (111 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (122 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (69 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (578 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> General and administrative expenses </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (713 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (746 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (344 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (412 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,419 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Impairment of intangible assets </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,604 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Other gains
    (losses), net </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (10 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Operating
    loss </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (1,068 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (857 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (466 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (481 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (3,611 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Finance income </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 19 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 19 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 14 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 4 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Finance
    expenses </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (5 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (205 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 11 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 40 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (15 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Finance
    income (expenses), net </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 14 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (186 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (11 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 54 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (11 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from continuing operations </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,043 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (3,622 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from discontinued operations </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (460 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (689 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Total loss
    for the period </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Other comprehensive income from
    continuing operations: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Change in
    fair value of marketable securities </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 111 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Compre<FONT STYLE="font-size: 10pt">hensive
    loss for the period</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (943 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (393 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss for the period attributable
    to: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Equity holders of the Company </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,505 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (4,313 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 14.2pt"> Non-controlling
    interests </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Comprehensive loss for the period
    attributable to: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Equity holders of the Company </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (943 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,505 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (393 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (4,313 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 14.2pt"> Non-controlling
    interests </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 14.2pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (943 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (1,503 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (393 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (4,311 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -7.1pt; padding-left: 14.2pt"> Basic and diluted loss per share
    (in&nbsp;U.S.&nbsp;dollars): </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> From continuing operations </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (0.004 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (0.004 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (0.002 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (0.001 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (0.014 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> From discontinued
    operations </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (0.002 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (0.003 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Loss per
    share for the period </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (0.004 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (0.006 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (0.002 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (0.001 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (0.017 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B><A NAME="c_003"></A>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Six months
    ended June 30, 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Share</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>capital</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Share premium
    and options </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Accumulated
    deficit </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Reserve
    from transactions with non-controlling interests </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Reserve
                                         for AFS financial assets</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Total</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 22%; font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Balance as of January
    1, 2016 </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 6,606 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 150,748 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (152,487 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 4,887 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Loss for the period </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> Other comprehensive
    gain for the period </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 111 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 111 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Total comprehensive loss for
    the period </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 111 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (943 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Share-based&nbsp;payment&nbsp;to
    employees and others </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 81 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 81 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> Share-based
    payment to vendor </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 18 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 36 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 54 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> Balance
    as of June 30, 2016 </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 6,624 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 150,784 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (153,460 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 111 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 4,079 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="30" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Six months
    ended June 30, 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Share</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>capital</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Share premium
    and options </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Accumulated
    deficit </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Treasury
    shares </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Reserve
    from transactions with non-controlling interests </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Non-controlling
    interests </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Total</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>equity</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="30" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Balance as of January
    1, 2015 </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> 6,198 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> 148,276 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> (148,322 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> (1,501 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> 9 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> 4,660 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> 19 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> 4,679 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Loss for the period </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,505 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,505 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,503 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Share-based&nbsp;payment&nbsp;to
    employees and others </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 83 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 83 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 83 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Issuance&nbsp;of&nbsp;shares&nbsp;and
    warrants </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 408 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,059 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,467 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,467 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> Deconsolidation
    of subsidiary </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (587 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,501 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 11 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 925 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (21 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 904 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> Balance
    as of June 30, 2015 </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 6,606 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 150,748 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (149,744 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 7,630 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 7,630 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Three months
    ended June 30, 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Share</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>capital</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Share premium
    and options </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Accumulated
    deficit </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Reserve
    from transactions with non-controlling interests </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>&nbsp;</B> </P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Reserve
                                         for AFS financial assets</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 22%; font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Balance as of April
    1, 2016 </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 6,615 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 150,766 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (153,042 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 27 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 4,386 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Loss for the period </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> Other comprehensive
    gain for the period </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Total comprehensive loss for
    the period </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (393 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Share-based payment to employees
    and others </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 59 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 59 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> Share-based
    payment to vendor </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 9 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 18 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 27 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> Balance
    as of June 30, 2016 </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 6,624 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 150,784 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (153,460 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 111 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 4,079 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Three months
    ended June 30, 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Share</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>capital</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Share premium
    and options </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Accumulated
    deficit </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Reserve
    from transactions with non-controlling interests </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Balance as of April
    1, 2015 </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 6,206 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 147,765 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (149,354 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right"> 20 </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 4,637 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Loss for the period </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> Share-based payment to employees
    and others </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 37 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 37 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> Issuance
    of shares and warrants </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 400 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,983 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,383 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> Balance
    as of June 30, 2015 </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 6,606 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 150,748 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (149,744 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 7,630 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="26" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Year
    ended December 31, 2015</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Share</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>capital</B></FONT> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Premium
    on shares, options and warrants</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Accumulated
    deficit</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Treasury
    shares</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Reserve
    from transactions with non-controlling interests</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Total</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">Non-controlling
    interests</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>Total</B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-size: 8pt"><B>equity</B></FONT> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="30" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> <FONT STYLE="font-size: 8pt">U.S.
    dollars in thousands</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: justify"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Balance
    as of January 1, 2015</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">6,198</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">148,276</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(148,322</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(1,501</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">9</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">4,660</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">19</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="width: 6%; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">4,679</FONT> </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Total
    comprehensive loss</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(4,313</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(4,313</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">2</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(4,311</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Share-based&nbsp;payment&nbsp;to&nbsp;employees
    and others</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">148</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">148</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">148</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Purchase
    of intangible assets through issuance of equity</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">8</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">76</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">84</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">84</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Issuance
    of shares and warrants</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">400</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">2,983</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">3,383</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">3,383</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Transaction&nbsp;with&nbsp;non-controlling
    interests in InterCure</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">11</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">11</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">5</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">16</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Loss
    of control in InterCure</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(587</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">1,501</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">914</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(26</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">888</FONT> </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt; text-indent: -7.1pt; padding-left: 7.1pt"> <FONT STYLE="font-size: 8pt">Balance
    as of December 31, 2015</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">6,606</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">150,748</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">(152,487</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">)</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">20</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">4,887</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">-</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> <FONT STYLE="font-size: 8pt">4,887</FONT> </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> <FONT STYLE="font-size: 8pt">&nbsp;</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B><A NAME="c_004"></A>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 1.5pt solid"> CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 2.55pt 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Six
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Three
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Year
                                         ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>December
                                         31, </B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash
    flows from operating activities: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss for the period </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (1,054 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (1,503 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (477 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (427 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> (4,311 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Adjustments
    to reconcile loss to net cash used&nbsp;in operating&nbsp;activities (a) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (111 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 578 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (31 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (87 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,450 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Net cash
    used in operating activities </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (1,165 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (925 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (508 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (514 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (1,861 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash
    flows from investing activities: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left"> Sale of investment in subsidiary </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Deconsolidation of subsidiary </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (55 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease in restricted deposit </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 21 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Increase in restricted deposit </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (11 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (12 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (10 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Purchase of property, plant and
    equipment </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (2 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (2 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (2 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Purchase of intangible assets </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (64 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (64 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 2.85pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Net cash
    provided by (used in) investing activities </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (64 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 7 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (14 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (110 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Cash
    flows from financing activities: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Proceeds from issuance of shares
    and options </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,559 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,559 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,559 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Sale of
    subsidiary shares </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Net cash
    provided by financing activities </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,559 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,559 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,579 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Increase (decrease) in cash and
    cash equivalents </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1,229 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 2,641 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (507 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,031 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1,608 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Gains (losses) from exchange
    rate differences on cash and cash equivalents </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 17 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 20 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 36 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (2 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Reclassification of cash in subsidiary
    to assets of disposal group held for sale </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 52 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Cash and
    cash equivalents at the beginning of the period </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,817 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,159 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 3,109 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 1,753 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,159 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Cash and
    cash equivalents at the end of the period </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 2,605 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 4,820 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 2,605 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 4,820 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 3,817 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 1.5pt solid"> CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Six
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Three
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Year
                                         ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>December
                                         31, </B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top"> (a) </TD>
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Adjustments
    to reconcile loss to net cash used&nbsp;in operating activities: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Income and expenses not involving
    cash flows: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 2%"> &nbsp; </TD>
    <TD STYLE="width: 38%; font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Depreciation and
    amortization </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 4 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 1 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 7 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from disposal of property,
    plant and equipment </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 5 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from disposal of intangible
    assets </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 5 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Share-based payment transactions
    to employees and others </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 135 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 83 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 86 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 37 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 148 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Exchange rate differences on
    operating activities </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (17 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (20 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (3 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (36 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 2 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Change in marketable securities
    fair value </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 194 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (24 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Disposal of investment in subsidiary </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 464 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 689 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Impairment of intangible assets </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1,604 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Other financial
    expenses </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 6 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 120 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 725 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (21 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 2,466 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Changes in operating asset and
    liability items: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Decrease (increase) in other
    accounts receivable </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (53 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 110 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (1 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 52 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 36 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Increase (decrease) in trade
    payables </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (50 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (174 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (74 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (128 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (117 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Increase
    (decrease) in other accounts payable </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (128 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (83 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (40 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 10 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> 65 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (231 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (147 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (115 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (66 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (16 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (111 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 578 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (31 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> (87 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 2,450 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top"> (b) </TD>
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Additional
    information on cash flows from operating activities: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Interest
    received </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 3 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <B>&nbsp;</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-bottom: Black 1.5pt solid"> CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 2.55pt 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Six
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Three
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Year
                                         ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>December
                                         31, </B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> (c) </TD>
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Non-cash
    activities: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 2%"> &nbsp; </TD>
    <TD STYLE="width: 38%; font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Conversion
    of convertible loan into capital in subsidiary </TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 50 </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Share-based
    payment for intangible assets </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 84 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> Share-based
    payment to vendor </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 54 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> 27 </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Six
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Three
                                         months ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>June
                                         30,</B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>Year
                                         ended</B> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>December
                                         31, </B> </P></TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2016 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2015 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="18" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars
    in thousands </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Disposal
    of consolidated subsidiary: </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Non-current assets
    held for sale </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 507 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right"> 507 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Non-current liabilities held
    for sale </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (449 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (449 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Disposal of treasury shares </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1,501 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1,501 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Negative premium from disposal
    of treasury shares </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (587 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (587 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Investment in associate at fair
    value </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (482 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (482 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> Loss from disposal of subsidiary </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (464 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> (464 </TD><TD STYLE="font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt"> Non-controlling
    interests </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (26 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"> (26 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The accompanying notes are an integral
part of the condensed consolidated financial statements. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B><A NAME="c_005"></A>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: right; text-indent: 2.85pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> <B>NOTES
TO CONSOLIDATED CONSOLIDTED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 (UNAUDITED)</B> </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
1:-&#9;GENERAL </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"> a. </TD><TD STYLE="text-align: justify"> A general description of the Company
                                         and its activity: </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> XTL Biopharmaceuticals
Ltd. (the &ldquo;<B>Company</B>&rdquo;) is engaged in the development of therapeutics for the treatment of unmet medical needs.
The Company was incorporated under the Israeli Companies Law on March&nbsp;9, 1993. The registered office of the Company is located
at 5 HaCharoshet Street, Raanana 4365603, Israel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> The Company&rsquo;s
American Depository Shares (&ldquo;<B>ADSs</B>&rdquo;) are listed for trading on the Nasdaq Capital Market and its ordinary shares
are traded on the Tel-Aviv Stock Exchange (&ldquo;<B>TASE</B>&rdquo;). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> As of
June 30, 2016, the Company has the following subsidiary: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> Xtepo
Ltd. &ndash; a wholly owned (100%) private company incorporated in Israel which holds a license for the exclusive use of the patent
for the rHuEPO drug for the treatment of Multiple Myeloma. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> The Company
and Xtepo Ltd. are heretofore referred to as the Group. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: left"> b. </TD><TD STYLE="text-align: justify"> The Company
                                         has incurred continuing losses and depends on outside financing resources to continue
                                         its activities. Based on existing business plans, the Company&rsquo;s management estimates
                                         that its outstanding cash and cash equivalent balances will allow the Company to finance
                                         its activities for an additional period of at least 12 months from the date of this report.
                                         However, the amount of cash which the Company will need in practice to finance its activities
                                         depends on numerous factors which include, but are not limited to, the timing, planning
                                         and execution of clinical trials of existing drugs and future projects which the Company
                                         might acquire or other business development activities such as acquiring new technologies
                                         and/or changes in circumstances which are liable to cause significant expenses to the
                                         Company in excess of management&rsquo;s current and known expectations as of the date
                                         of these financial statements and which will require the Company to reallocate funds
                                         against plans, also due to circumstances beyond its control. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> The Company
expects to incur additional losses in 2016 arising from research and development activities, testing additional technologies and
operating activities, which will be reflected in negative cash flows from operating activities. In order to perform the clinical
trials aimed at developing a product until obtaining its marketing approval, the Company will need to raise additional funds by
issuing securities. Should the Company fail to raise additional capital under standard terms, it will be required to further reduce
its development activities or sell or grant a sublicense to third parties to use all or part of its technologies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: right; text-indent: 2.85pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> <B>NOTES
TO CONSOLIDATED CONSOLIDTED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 (UNAUDITED)</B> </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
2:-&#9;BASIS OF PREPARATION OF THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: left"> a. </TD><TD STYLE="text-align: justify"> The condensed
                                         consolidated financial information of the Company as of June 30, 2016 and 2015, and for
                                         the respective interim periods of three and six months then ended (&ldquo;interim financial
                                         information&rdquo;) has been prepared in accordance with IAS 34, &ldquo;Interim Financial
                                         Reporting&rdquo; (&ldquo;<B>IAS 34</B>&rdquo;) and includes the additional disclosure
                                         requirements in accordance with Chapter D of the Israeli Securities Regulations (Periodic
                                         and Immediate Reports), 1970. This interim financial information does not contain all
                                         the information and disclosures that are required in the framework of the annual financial
                                         statements. This interim financial information should be read in conjunction with the
                                         annual financial statements for 2015 and the accompanying notes which have been prepared
                                         in accordance with International Financial Reporting Standards (&ldquo;<B>IFRS</B>&rdquo;)
                                         as issued by the International Accounting Standards Board. This interim financial information
                                         does not contain all information and notes required by IFRS for annual financial statements.
                                         In the opinion of management, these unaudited condensed consolidated interim financial
                                         statements reflect all adjustments, which include normal recurring adjustments, necessary
                                         for a fair statement of the Company&rsquo;s financial position and results of operations
                                         and cash flows for the three and six-month periods ended June 30, 2016 and 2015. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: left"> b. </TD><TD STYLE="text-align: justify"> Estimates &ndash;
                                         the preparation of the interim financial statements requires the Company's management
                                         to make judgments and to use accounting estimates and assumptions that have an effect
                                         on the application of the Company's accounting policies and on the reported amounts of
                                         assets, liabilities and expenses. Actual results could differ from those estimates. </TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> In the
preparation of these condensed consolidated interim financial statements, the significant judgment exercised by management in
applying the Company's accounting policies and the uncertainties involved in the key sources of the estimates were identical to
those in the annual consolidated financial statements for the year ended December 31, 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: right; text-indent: 2.85pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> <B>NOTES
TO CONSOLIDATED CONSOLIDTED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 (UNAUDITED)</B> </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
3:&#9;SIGNIFICANT ACCOUNTING POLICIES </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> The Company's
significant accounting policies and methods of computation adopted in the preparation of the interim financial information are
consistent with those followed in the preparation of the annual financial statements for 2015. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: 0pt"> Disposal
of subsidiary </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"> (i) </TD><TD STYLE="text-align: justify"> When the Company ceases to have
                                         control of a subsidiary, any retained interest in the entity is remeasured to its fair
                                         value at the date when control is lost, with the change in carrying amount recognized
                                         in profit or loss. The fair value is the initial carrying amount for the purposes of
                                         subsequently accounting for the retained interest as an associate or financial asset. </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: right; text-indent: 2.85pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> <B>NOTES
TO CONSOLIDATED CONSOLIDTED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 (UNAUDITED)</B> </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
4:&#9;SIGNIFICANT EVENTS DURING THE PERIOD </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> a. </TD><TD STYLE="text-align: justify"> On February 1, 2016, the Company
                                         paid Yeda an amount of approximately $64 thousand, as the fourth of six installments
                                         for the patent expenses reimbursement stipulated in the license agreement for hCDR1 for
                                         the treatment of systemic lupus erythematosus (SLE). </TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> b. </TD><TD STYLE="text-align: justify"> In February 2016, the Company
                                         issued 340,000 ordinary shares, represented by 17,000 ADSs, to a service provider, as
                                         part of the terms of a service agreement signed in January 2016. Shares are restricted
                                         in accordance with Rule 144 of the U.S. Securities and Exchange Commission. </TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> c. </TD><TD STYLE="text-align: justify"> On March 4, 2016, the Company
                                         entered into an agreement with its newly appointed Medical Director, Dr. Daphna Paran.
                                         According to the agreement, Dr. Paran&rsquo;s compensation includes an allocation of
                                         50,000 stock options, exercisable into 50,000 ordinary shares of NIS 0.1 par value each
                                         of the Company, for an exercise price of NIS 0.6 per stock option, as previously approved
                                         by the Board of Directors of the Company. The fair value of all the stock options according
                                         to the Black-Scholes model pursuant to IFRS 2 as of the date of grant (the date of the
                                         Company&rsquo;s Board&rsquo;s decision) was approximately $2 thousand. The exercise period
                                         of the stock options is a maximum of ten years from the grant date. The stock options
                                         vest in twelve equal portions each quarter over a period of three years from the date
                                         of grant. The value of each stock option is based on the following assumptions: expected
                                         dividend rate of 0%, expected standard deviation of 74.40%, risk-free interest rates
                                         of 1.97% and expected life until exercise of 10 years. </TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> d. </TD><TD STYLE="text-align: justify"> On March 31, 2016, a general
                                         meeting of shareholders of the Company approved the remuneration terms of the Chairman
                                         of the Board of Directors of the Company, retroactive to September 1, 2015. The terms
                                         include monthly remuneration in the amount of NIS 20,000, as well as the allocation of
                                         1,500,000 stock options, exercisable into 1,500,000 ordinary shares of NIS 0.1 par value
                                         each of the Company, for an exercise price of NIS 0.6 per stock option. The fair value
                                         of all the stock options according to the Black-Scholes model pursuant to IFRS 2 as of
                                         the date of grant (the date of approval by the general meeting) was approximately $63
                                         thousand. The exercise period of the stock options is a maximum of ten years from the
                                         grant date. The stock options vest in twelve equal portions each quarter over a period
                                         of three years from the date of grant. The value of each stock option is based on the
                                         following assumptions: expected dividend rate of 0%, expected standard deviation of 74.40%,
                                         risk-free interest rates of 1.97% and expected life until exercise of 10 years. </TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>XTL BIOPHARMACEUTICALS LTD.</B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.85pt; text-align: right; text-indent: 2.85pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"> <B>NOTES
TO CONSOLIDATED CONSOLIDTED FINANCIAL STATEMENTS AS OF JUNE 30, 2016 (UNAUDITED)</B> </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
4:&#9;SIGNIFICANT EVENTS DURING THE PERIOD (Cont.) </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> e. </TD><TD STYLE="text-align: justify"> On March 31, 2016, a general
                                         meeting of shareholders of the Company approved the allocation of 1,000,000 stock options
                                         to the Company&rsquo;s Chief Executive Officer, exercisable into 1,000,000 ordinary shares
                                         of NIS 0.1 par value each of the Company, for an exercise price of NIS 0.6 per stock
                                         option. The fair value of all the stock options according to the Black-Scholes model
                                         pursuant to IFRS 2 as of the date of grant (the date of approval by the general meeting)
                                         was approximately $42 thousand. The exercise period of the stock options is a maximum
                                         of ten years from the date of grant. 33.33% of the stock options vest following the lapse
                                         of 12 months from the grant date, and the remaining 66.67% vest in eight equal portions
                                         each quarter over a period of two years from the first anniversary. The value of each
                                         stock option is based on the following assumptions: expected dividend rate of 0%, expected
                                         standard deviation of 74.40%, risk-free interest rates of 1.97% and expected life until
                                         exercise of 10 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> f. </TD><TD STYLE="text-align: justify"> On May 5, 2016, the Company
                                         issued an additional 340,000 ordinary shares, represented by 17,000 ADSs, to a service
                                         provider, as part of the terms of a service agreement signed in January 2016. Shares
                                         are restricted in accordance with Rule 144 of the U.S. Securities and Exchange Commission. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"> g. </TD><TD STYLE="text-align: justify"> On May 31, 2016, the Board
                                         of Directors of the Company approved the allocation of 400,000 stock options to the Company&rsquo;s
                                         Chief Financial Officer, exercisable into 400,000 ordinary shares of NIS 0.1 par value
                                         each of the Company, for an exercise price of NIS 0.6 per stock option. The fair value
                                         of all the stock options according to the Black-Scholes model pursuant to IFRS 2 as of
                                         the date of grant (the date of approval by the general meeting) was approximately $14
                                         thousand. The exercise period of the stock options is a maximum of ten years from the
                                         date of grant. 33.33% of the stock options vest following the lapse of 12 months from
                                         the grant date, and the remaining 66.67% vest in eight equal portions each quarter over
                                         a period of two years from the first anniversary. The value of each stock option is based
                                         on the following assumptions: expected dividend rate of 0%, expected standard deviation
                                         of 74.40%, risk-free interest rates of 1.97% and expected life until exercise of 10 years. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: -56.7pt"> NOTE
5:&#9;EVENTS AFTER THE REPORTING PERIOD </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif">On
July 7, 2016, the Company and Yeda reached an agreement whereby the </FONT>remaining two installments for the patent expenses
reimbursement stipulated in the license agreement for hCDR1 for the treatment of systemic lupus erythematosus (SLE) would be paid
on April 7, 2017 and other development milestones would be postponed by nine months. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"> - - - - - - -
- - - - - </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>_______ American Depositary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>Series A Warrants to Purchase _________
American Depositary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>(___________American Depositary Shares
Underlying the Series A Warrants)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>Pre-Funded Series B Warrants to Purchase
_________ American Depositary Shares</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>(___________American Depositary Shares
Underlying the Pre-Funded Series B Warrants)</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>Each American Depositary Share Represents
Twenty (20) Ordinary Shares</B> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;<IMG SRC="logo.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> <B>PRELIMINARY PROSPECTUS</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <I>Sole Book-Running Manager</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> <FONT STYLE="font-size: 12pt"><B>Rodman
&amp; Renshaw</B><BR>
<B>a unit of H.C. Wainwright &amp; Co.</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> The date of this prospectus is , 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <B>Item 6. Indemnification of Directors, Officers and Employees</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the Companies Law,
a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate
an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of
a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our articles
of association include such a provision. The company may not exculpate in advance a director from liability arising out of a prohibited
dividend or distribution to shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Under the Companies Law, a company may
indemnify an office holder in respect of the following liabilities and expenses incurred for acts performed by him or her as an
office holder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association
include a provision authorizing such indemnification:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">financial liability imposed on him or
her in favor of another person pursuant to a judgment, including a settlement or arbitrator&rsquo;s award approved by a court.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking
must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company&rsquo;s activities
when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable
under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">reasonable litigation expenses, including
attorneys&rsquo; fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or
her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such
office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was
imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such
financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and
(2) in connection with a monetary sanction; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">reasonable litigation expenses, including
attorneys&rsquo; fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the
company, on its behalf, or by a third party, or in connection with criminal proceedings in which the office holder was acquitted,
or as a result of a conviction for an offense that does not require proof of criminal intent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the Companies Law,
a company may insure an office holder against the following liabilities incurred for acts performed by him or her as an office
holder if and to the extent provided in the company&rsquo;s articles of association:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a breach of the duty of loyalty to the
company, provided that the office holder acted in good faith and had a reasonable basis to believe that the act would not harm
the company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a breach of duty of care to the company
or to a third party, to the extent such a breach arises out of the negligent conduct of the office holder; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a financial liability imposed on the office
holder in favor of a third party.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">Under our articles
of association, we may insure an office holder against the aforementioned liabilities as well as the following liabilities:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a breach of duty of care to the company
or to a third party.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any other action which is permitted by
law to insure an office holder against;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">expenses incurred and/or paid by the office
holder in connection with an administrative enforcement procedure under any applicable law including the Efficiency of Enforcement
Procedures in the Securities Authority Law (legislation amendments), 5771-2011 and the Israeli Securities Law, which we refer to
as an Administrative Enforcement Procedure, and including reasonable litigation expenses and attorney fees; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A financial liability in favor or a victim
of a felony pursuant to Section 52ND of the Israeli Securities Law.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the Companies Law,
a company may not indemnify, exculpate or insure an office holder against any of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a breach of the duty of loyalty, except
for indemnification and insurance for a breach of the duty of loyalty to the company to the extent that the office holder acted
in good faith and had a reasonable basis to believe that the act would not harm the company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a breach of duty of care committed intentionally
or recklessly, excluding a breach arising out of the negligent conduct of the office holder;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">an act or omission committed with intent
to derive illegal personal benefit; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">a fine or forfeit levied against the office
holder.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Under the Companies Law,
exculpation, indemnification and insurance of office holders in a public company must be approved by the compensation committee
and the board of directors and, with respect to certain office holders or under certain circumstances, also by the shareholders.
See &ldquo;&mdash;Approval of Related Party Transactions under the Israeli Companies Law.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have entered into indemnification
agreements with our office holders to exculpate, indemnify and insure our office holders to the fullest extent permitted by our
articles of association, the Companies Law and the Israeli Securities Law, including expenses incurred and/or paid by the office
holder in connection with an Administrative Enforcement Procedure. The indemnification thereunder is limited to events determined
as foreseeable by the board of directors based on our activities, and to an amount or according to criteria determined by the board
of directors as reasonable under the circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have entered into agreements
with each of our directors and executive officers exculpating them, to the fullest extent permitted by law and our articles of
association, and undertaking to indemnify them to the fullest extent permitted by law and our articles of association. This indemnification
is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount or according
to criteria determined by the board of directors as reasonable under the circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The maximum indemnification
amount set forth in such agreements is limited to $4 million. Such maximum amount is in addition to any amount paid (if paid) under
insurance and/or by a third-party pursuant to an indemnification arrangement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In the opinion of the Securities
and Exchange Commission, indemnification of directors and office holders for liabilities arising under the Securities Act, however,
is against public policy and therefore unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have obtained directors&rsquo;
and officers&rsquo; liability insurance for the benefit of our office holders and intend to continue to maintain such coverage
and pay all premiums thereunder to the fullest extent permitted by the Companies Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <B>Item 7. Recent Sales of Unregistered
Securities</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Set forth below are the
sales of all securities of ours sold by us within the past three years which were not registered under the Securities Act:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 30, 2013, David
Kestenbaum, our Chief Financial Officer, was granted options to purchase 750,000 ordinary shares at an exercise price of NIS 0.5328
per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> In the year ended December
31, 2013, our warrant (series 2) holders exercised 86,299 warrants (series 2) into 86,299 ordinary shares of NIS 0.1 par value
each for an average exercise increment of approximately NIS 1 per warrant, for the overall proceeds of approximately $25,000. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 17, 2014, Joshua
Levine, our Chief Executive Officers, was granted options to purchase 1,500,000 ordinary shares. 600,000 of the options are exercisable
at NIS 0.60 each and 900,000 of the options are exercisable at NIS 0.90 each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 14, 2014, we issued
to Yeda Research and Development Company Ltd. 222,605 our ordinary shares as the first of six installments for patent expenses
reimbursement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On September 3, 2014, we
issued to Minoguard Ltd. 889,822 ordinary shares as payment in lieu of cash of an annual license fee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 30, 2014,
we granted to each of four of our directors &ndash; Doron Turgeman, Mr. Shlomo Shalev, Dr. Jonathan Schapiro and Dr. Dobroslav
Melamed &ndash; options to purchase 150,000 ordinary shares exercisable at an exercise price of NIS 0.4325 per share. In addition,
on December 30, 2014, Dr. Schapiro was granted options to purchase 150,000 ordinary shares at an exercise price of NIS 0.4915
per share for services as a consultant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 21, 2015, we
issued to Yeda Research and Development Company Ltd. 802,912 ordinary shares as the second of six installments for the patent expenses
reimbursement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 25, 2015, we granted
to each of Osnat Hillel Fain and Oded Nagar options to purchase 150,000 ordinary shares at an exercise price of NIS 0.40 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On March 25, 2015, we granted to each of Mr.
Levine and Mr. Kestenbaum options to purchase 100,000 ordinary shares exercisable at NIS 0.40 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> In April 2015, we entered
into security purchase agreements providing for the issuance of an aggregate of 1,777,778 ADSs representing 35,555,560 ordinary
shares in a registered direct offering at $2.25 per ADS for aggregate gross proceeds of $4,000,000. In addition, we issued unregistered
warrants to purchase 888,889 ADSs representing 17,777,778 ordinary shares in a private placement. At the closing, we also issued
placement agent warrants to purchase up to 89,888 ADSs representing 1,797,760. The warrants may be exercised at any time for a
period of five and one-half years from issuance and have an exercise price of $2.25 per ADS, subject to adjustment as set forth
therein. The warrants and the ADSs underlying the warrants were offered and sold pursuant to an exemption from the registration
requirements under Section 4(a)(2) of the Securities Act. The investors have represented that they are accredited investors, as
that term is defined in Regulation D, or qualified institutional buyers as defined in Rule 144(A)(a), and have acquired the warrants
and the ADSs underlying the warrants as principals for their own account and have no arrangements or understandings for any distribution
thereof. The offer and sale of the foregoing securities was made without any form of general solicitation or advertising. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 1, 2015, we granted
to Mr. Kestenbaum options to purchase 200,000 ordinary shares at an exercise price of NIS 0.4283 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> On March 4, 2016 we
granted our Medical Director, Dr. Paran options to purchase 50,000 ordinary shares at an exercise price of NIS 0.60 per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> On March 31, 2016 we
granted to Mr. Shalev options to purchase 1,500,000 ordinary shares at an exercise price of NIS 0.60 per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> On March 31, 2016 we
granted to Mr. Levine options to purchase 1,000,000 ordinary shares at an exercise price of NIS 0.60 per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> On May 31, 2016 we
granted to Mr. Kestenbaum options to purchase 400,000 ordinary shares at an exercise price of NIS 0.60 per share. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <B>Item 8. Exhibits and Financial Statement Schedules</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Exhibits</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 39.65pt; text-align: justify">See Exhibit Index.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 39.65pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The agreements included
as exhibits to this registration statement contain representations and warranties by each of the parties to the applicable agreement.
These representations and warranties were made solely for the benefit of the other parties to the applicable agreement and (i)
were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties
if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were made to the
other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of &ldquo;materiality&rdquo;
that are different from &ldquo;materiality&rdquo; under the applicable securities laws; and (iv) were made only as of the date
of the applicable agreement or such other date or dates as may be specified in the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The Registrant acknowledges
that, notwithstanding the inclusion of the foregoing cautionary statements, the registrant is responsible for considering whether
additional specific disclosures of material information regarding material contractual provisions are required to make the statements
in this registration statement not misleading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> (b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Financial
Statement Schedules</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">All schedules have been
omitted because either they are not required, are not applicable or the information is otherwise set forth in the consolidated
financial statements and related notes thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <B>Item 9. Undertakings</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned Registrant hereby undertakes: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 6%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="width: 88%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">i.</TD><TD STYLE="text-align: justify">To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">ii.</TD><TD STYLE="text-align: justify">To reflect in the prospectus any facts or events arising after the effective date of the registration
statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">iii.</TD><TD STYLE="text-align: justify">To include any material information with respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such information in the registration statement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: justify"> <I>provided, however,</I> that
paragraphs (a)(1)(i), (a)(1)(ii) and a(l)(iii) do not apply if the registration statement is on Form S-3 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part
of the registration statement. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">That for the purpose of determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered
therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">To remove from registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">To file a post-effective amendment to the registration statement to include any financial statements
required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements
and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes
in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and
other information necessary to ensure that all other information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment
need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this
chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission
by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Form F-3.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">That for purposes of determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared effective.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"> (b) </TD><TD STYLE="text-align: justify"> Insofar as indemnification for liabilities
                                         arising under the Securities Act of 1933 may be permitted to directors, officers and
                                         controlling persons of the Registrant pursuant to the provisions described in Item 6
                                         hereof, or otherwise, the Registrant has been advised that in the opinion of the SEC
                                         such indemnification is against public policy as expressed in the Act and is, therefore,
                                         unenforceable. In the event that a claim for indemnification against such liabilities
                                         (other than the payment by the Registrant of expenses incurred or paid by a director,
                                         officer or controlling person of the Registrant in the successful defense of any action,
                                         suit or proceeding) is asserted by such director, officer or controlling person in connection
                                         with the securities being registered, the registrant will, unless in the opinion of its
                                         counsel the matter has been settled by controlling precedent, submit to a court of appropriate
                                         jurisdiction the question whether such indemnification by it is against public policy
                                         as expressed in the Act and will be governed by the final adjudication of such issue. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 39.65pt"> Pursuant to the requirements
of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Raanana, State of Israel on this 7th day of November 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>XTL Biopharmaceuticals Ltd.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 4%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 26%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 20%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Joshua Levine</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joshua Levine</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: 19.8pt; text-align: justify; text-indent: -19.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>POWER OF ATTORNEY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 39.65pt">Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and
on the dates indicated:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 30%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name</FONT> </TD>
    <TD STYLE="vertical-align: top; width: 2%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; width: 38%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title</FONT> </TD>
    <TD STYLE="vertical-align: top; width: 2%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; width: 28%; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Joshua Levine</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(principal executive officer)</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joshua
    Levine</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    David Kestenbaum</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">David
    Kestenbaum</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(principal financial officer and principal</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">accounting officer)</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman of the Board</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shlomo
    Shalev</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">David
    Bassa</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Osnat
    Hillel Fain</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Oded
    Nagar</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jonathan
    Schapiro</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dobroslav
    Melamed</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; border-bottom: black 1pt solid; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    *</FONT> </TD>
    <TD STYLE="vertical-align: top; padding-left: 9.9pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Doron
    Turgeman</FONT> </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: top; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="vertical-align: bottom; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November
    7, 2016</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SIGNATURE OF AUTHORIZED REPRESENTATIVE IN
THE UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> * By executing his name hereto, Joshua Levine
is signing this document on behalf of the persons indicated above pursuant to the powers of attorney duly executed by such persons
and filed with the Securities and Exchange Commission. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 4%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT> </TD>
    <TD STYLE="width: 21%; border-bottom: black 1pt solid"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Joshua Levine</FONT> </TD>
    <TD STYLE="width: 75%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT> </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Joshua Levine</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT> </TD></TR>
<TR>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November 7, 2016</FONT> </TD>
    <TD> &nbsp; </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> Pursuant
to the Securities Act of 1933, the undersigned, as the duly authorized representative of XTL Biopharmaceuticals Ltd. in the United
States, signed this registration statement on November 7, 2016. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in; background-color: white"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">XTL Biopharmaceuticals Ltd.</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 25%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Joshua Levine</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name: Joshua Levine</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exhibit No.</B></FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 87%; border-bottom: Black 1pt solid; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Placement Agent
    Agreement*</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.1</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Articles of Association (1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Share Certificate (including both Hebrew and English translations) (2)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of American Depositary Receipt (included in Exhibit 10.1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Series
    A Warrant*</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Series B Warrant*</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Placement
    Agent Warrant*</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.1</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Opinion of Doron Tikotzky Kantor Gutman Cederboum &amp; Co., Israeli counsel to the Registrant*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deposit Agreement, dated as of August 31, 2005, by and between XTL Biopharmaceuticals Ltd., The Bank of New York, as Depositary, and each holder and beneficial owner of American Depositary Shares issued thereunder (1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.2</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2001 Share Option Plan dated February 28, 2001 (1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.3</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2011 Share Option
    Plan dated August 29, 2011 (6)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.4</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research and License Agreement Between Yeda Research and Development Company Ltd., Mor Research Applications Ltd., Biogal Ltd. (under its previous name Haverfield Ltd.) and Biogal Advanced Biotechnology Ltd. dated January 7, 2002 (3) &dagger;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.5</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amendment to Research and License Agreement Between Yeda Research and Development Company Ltd., Mor Research Applications Ltd., Haverfield Ltd. and Biogal Advanced Biotechnology Ltd. effective as of April 1, 2008 (3) &dagger;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.6</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Option to License
    Agreement, dated as of September 1, 2010, between XTL Biopharmaceuticals Ltd. and Yeda Research and Development Company Limited
    (4)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.7</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">License Agreement dated January 7, 2014, by and between Yeda Research and Development Company Limited and XTL Biopharmaceuticals Ltd (5)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.8</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of First
    Amendment to License Agreement by and by and between Yeda Research and Development Company Limited and XTL Biopharmaceuticals
    Ltd. (6)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.9</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Employment
    Agreement dated September 11, 2013 between XTL Biopharmaceuticals Ltd. and Joshua Levine (6)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.10</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Employment
    Agreement dated January 9, 2014 between XTL Biopharmaceuticals Ltd. and David Kestenbaum (6)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.11</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Consulting
    Agreement dated January 1, 2015 between XTL Biopharmaceuticals Ltd. and Schapiro Education Ltd. (6)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.12</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interim Financial
    Statements of Proteologics Ltd. for the nine months ended September 30, 2013**</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.13</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Subscription
    Agreement*</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.14</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Warrant
    Agent Agreement*</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">21.1</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">List of Subsidiaries
    (6)</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.1</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of Kesselman
    &amp; Kesselman, a member firm of PricewaterhouseCoopers International Ltd **</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.2</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of Doron Tikotzky Kantor Gutman Cederboum &amp; Co. (included in Exhibit 5.1)*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">24.1</FONT> </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="text-align: justify"> <FONT STYLE="font-size: 10pt">Power of Attorney (6)</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">*</TD><TD STYLE="text-align: justify">To be filed by amendment.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">**</TD><TD STYLE="text-align: justify">Filed herewith.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">&dagger;</TD><TD STYLE="text-align: justify">Certain confidential information contained in this exhibit was omitted.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">Incorporated by reference from the registration statement on F-6 filed with the Securities and
Exchange Commission on November 28, 2007, as it may be amended or restated.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">Incorporated by reference from the annual report on Form 20-F filed by XTL Biopharmaceuticals Ltd.
with the Securities and Exchange Commission on March 23, 2007.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">Incorporated by reference from the annual report on Form 20-F filed by XTL Biopharmaceuticals Ltd.
with the Securities and Exchange Commission on April 6, 2009.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">Incorporated by reference from the annual report on Form 20-F filed by XTL Biopharmaceuticals Ltd.
with the Securities and Exchange Commission on May 30, 2011.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">Incorporated by reference from the annual report on Form 20-F filed by XTL Biopharmaceuticals Ltd.
with the Securities and Exchange Commission on April 2, 2014.</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"> (6) </TD><TD STYLE="text-align: justify"> Incorporated by reference from the
                                         registration statement on F-1 filed with the Securities and Exchange Commission on December
                                         31, 2015. </TD></TR></TABLE>

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<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>2
<FILENAME>v452377_ex10-12.htm
<DESCRIPTION>EXHIBIT 10.12
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Exhibit 10.12</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INTERIM FINANCIAL INFORMATION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3pt; text-align: center"><B>AS OF SEPTEMBER 30, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 85%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-align: center"><B>Page</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><B>Statement of Financial Position&nbsp;&nbsp;</B></TD>
    <TD STYLE="text-align: center"><B>2</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><B>Statements of Operations </B></TD>
    <TD STYLE="text-align: center"><B>3</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><B>Statements of Changes in Equity</B></TD>
    <TD STYLE="text-align: center"><B>4</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><B>Statements of Cash Flows </B></TD>
    <TD STYLE="text-align: center"><B>5 - 6</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><B>Notes to Condensed Financial Statements</B></TD>
    <TD STYLE="text-align: center"><B>7 - 10</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">-<B><I> </I></B>-<B><I> </I></B>-<B><I>
</I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>CONDENSED
STATEMENT OF FINANCIAL POSITION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unaudited</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Audited</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NIS in thousands</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 0.25in">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: justify; padding-left: 0.125in">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">12,049</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">8,335</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">10,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 0.125in">Financial assets at fair value through profit or loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,821</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,644</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,421</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0.125in">Bank deposits - restricted as to use</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">364</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 0.125in">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">820</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">416</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0.125in">Assets held for sale</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">628</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">23,986</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">37,133</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">33,638</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">NON-CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0.125in">Property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,096</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,966</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-left: 0.125in">Intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">210</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">166</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,306</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,132</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">23,986</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">39,439</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">35,770</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.25in">LIABILITIES AND EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">CURRENT LIABILITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Liability for discontinued operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,235</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Trade payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">638</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">517</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Other accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,149</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,314</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,013</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Deferred revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,191</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,068</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,541</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,143</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,598</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">NON-CURRENT LIABILITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Employee benefit liabilities, net</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">118</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">218</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,541</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,261</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,816</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Share capital and premium</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,005</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,056</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Capital reserve</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(95,379</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(83,328</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(85,603</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total equity</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">21,445</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">33,178</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">30,954</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total liabilities and equity</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">23,986</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">39,439</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">35,770</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying notes are an integral
part of the condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%; text-align: center; text-decoration: none">November 25, 2013</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 24%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 24%; border-bottom: Black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 24%; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-top: Black 1pt solid; text-align: center">Date of approval of the<BR>
    financial statements</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; text-align: center">Mordechai Menashe <BR>
Chairman of the Board</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Sagi Ben Ishai <BR>
Chief Executive Officer</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: Black 1pt solid; text-align: center">Eran Mazor <BR>
Director *)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">*)</TD><TD STYLE="text-align: justify">The Company's Board at its meeting held on November&nbsp;25,
2013, empowered this director to sign on these financial statements due to the fact that there is no senior financial officer
in the Company.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>CONDENSED
STATEMENTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine months ended<BR> September 30,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended<BR> September 30,</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Year ended</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>December 31, </B></P></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unaudited</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Audited</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NIS in thousands (except per share data)</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-align: left; padding-left: 0.125in; text-indent: -0.125in">Revenues from rendering of research and development services</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">3,638</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">10,649</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">4,153</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">13,436</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Cost of revenues from rendering of research and development services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,935</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,671</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,836</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,716</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Research and development expenses, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,963</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,399</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,834</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,335</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,946</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,433</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,447</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(180</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,480</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,645</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expenses relating to discontinued operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,253</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,253</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Capital gain</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,942</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,867</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,267</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,498</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,870</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Finance income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">763</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,512</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,464</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Finance expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,241</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(371</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(429</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Finance income (expenses), net</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(478</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,496</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(225</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,035</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loss before taxes on income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,420</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,371</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,492</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,130</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,835</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Taxes on income</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(9,424</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,371</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(4,496</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,130</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(8,835</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loss per share - basic and fully diluted (in&nbsp;NIS)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.63</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.43</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.30</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.08</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.60</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying notes are an integral
part of the condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>CONDENSED
STATEMENTS OF CHANGES IN EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Share <BR>
capital <BR>
and<BR>
 premium</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Capital<BR>
reserve</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Options</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Accumulated<BR>
deficit</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total<BR>
equity</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NIS in thousands</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-align: left">Balance at January 1, 2013 (audited)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">79,056</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">26,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">11,117</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(85,603</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">30,954</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Exercise of options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">267</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(35</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">232</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Comprehensive loss for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,424</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,424</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cost of share-based payment</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(317</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(317</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Balance at September 30, 2013 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">79,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(95,379</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21,445</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Balance at January 1, 2012 (audited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(77,841</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,586</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expiration of options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,283</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,283</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Exercise of options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Comprehensive loss for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,371</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,371</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cost of share-based payment</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">894</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">894</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Balance at September 30, 2012 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">79,005</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(83,328</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">33,178</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Balance at July 1, 2013 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,259</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(90,392</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,368</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Exercise of options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Comprehensive loss for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,496</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,496</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cost of share-based payment</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(483</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(483</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Balance at September 30, 2013 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">79,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(95,379</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21,445</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Balance at July 1, 2012 (audited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,005</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(82,438</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,068</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Comprehensive loss for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,130</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,130</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cost of share-based payment</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">240</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">240</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Balance at September 30, 2012 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">79,005</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(83,328</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">33,178</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Balance at January 1, 2012 (audited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(77,841</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,586</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expiration of options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,283</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,283</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Exercise of options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Comprehensive loss for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,835</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,835</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cost of share-based payment</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,091</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,091</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Balance at December 31, 2012 (audited)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">79,056</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(85,603</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">30,954</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying notes are an integral
part of the condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>CONDENSED
STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Nine
months ended<BR>
September 30,</B></P></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Three
months ended<BR>
September 30,</B></P></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Year
ended<BR>
December 31, </B></P></TD><TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unaudited</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Audited</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NIS in thousands</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-decoration: underline; text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-align: left">Comprehensive loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(9,424</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(6,371</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(4,496</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(1,130</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(8,835</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Adjustments to reconcile comprehensive loss to net
    cash used in operating&nbsp;activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">421</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,419</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,815</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,998</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,458</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash used in operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,003</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,790</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,681</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,128</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,293</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Purchase of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(236</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(356</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Purchase of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(30</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(30</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Proceeds from sale of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Proceeds from sale of financial assets at fair value through profit or loss, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,940</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,937</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,860</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,054</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Investment in deposits restricted as to use, net</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(34</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash provided by investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,913</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,670</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,699</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,825</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,637</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-decoration: underline; text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Proceeds from exercise of options</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">232</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">69</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">56</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">112</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash provided by financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">232</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">69</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">56</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">112</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Increase (decrease) in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,142</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,051</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(926</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(303</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,456</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Cash and cash equivalents at the beginning of the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,192</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,226</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,664</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,192</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Exchange differences on cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(530</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">194</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(251</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(26</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(211</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in; text-indent: -0.125in">Cash and cash equivalents at the end of the period</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,049</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,335</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,049</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8,335</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">10,437</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying notes are an integral
part of the condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>CONDENSED
STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine months ended<BR> September 30,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three months ended<BR> September 30,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Year ended<BR> December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unaudited</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Audited</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">NIS in thousands</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 4%; text-align: left; vertical-align: top">(a)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 30%; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt"><U>Adjustments to reconcile comprehensive
    loss to net cash used in operating&nbsp;activities:</U></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="text-align: right; width: 10%">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Income and expenses not involving cash flows:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Loss (gain) from fair value change in financial assets at fair value through profit or loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">660</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(351</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(277</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(245</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,532</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">619</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,202</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">179</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">794</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Employee benefit liabilities, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(218</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(248</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Decrease (increase) in accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">293</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">368</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(144</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">383</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Exchange differences on cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">530</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(194</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">251</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Capital gain from property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt">Cost of share-based payment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(317</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">894</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(483</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">240</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,091</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">984</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,143</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">31</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,371</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Changes in operating asset and liability items:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Liability for Company's discontinued operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,235</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,235</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Decrease in trade payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(360</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(565</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(208</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(855</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(567</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Decrease in other accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(862</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(254</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(355</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(475</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(555</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt">Decrease in deferred revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,068</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,584</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(699</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,707</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,055</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,403</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">672</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,029</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(7,829</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">421</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(5,419</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,815</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,998</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(5,458</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">(b)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Information on investing and financing activities not involving cash flows:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt">Purchase of property, plant and equipment on credit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">119</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">119</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">(c)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-decoration: underline; text-align: left; text-indent: -8.5pt; padding-left: 11.35pt">Cash paid and received during the period for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt">Taxes paid</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-indent: -8.5pt; padding-left: 11.35pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -8.5pt; padding-left: 11.35pt">Interest received</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">759</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,120</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">146</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">217</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,305</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying notes are an integral
part of the condensed financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>NOTES
TO CONDENSED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"><B>NOTE 1:-</B></TD><TD STYLE="text-align: justify"><B>GENERAL</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">a.</TD><TD STYLE="text-align: justify">These financial statements have been prepared in a condensed format as of September 30, 2013 and
for the nine and three months periods then ended. These financial statements should be read in conjunction with the Company's annual
financial statements as of December 31, 2012 and for the year then ended and accompanying notes.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">b.</TD><TD STYLE="text-align: justify">On August&nbsp;21, 2013, the Company's Board directed the Company's management, among others (a)
to act to locate potential buyers for the Company's activity in the Ubiquitin field which then was the Company's main area of activity;
(b) to form immediately an action plan to the Company which derives from the accepted decision. It was further decided to empower
the Board's sub-committee to examine as soon as possible and to bring before the Board its recommendations regarding alternative
businesses for the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">The above decisions were accepted,
among others, because the products that the Company develops in the Ubiquitin field are in early development stages and the Board
anticipates that the financing sources that are currently available for the Company are no longer sufficient to bring these products
to a significant milestone.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">c.</TD><TD STYLE="text-align: justify">On September 20, 2013, the control over the Company was transferred from a former significant shareholder,
XTL Biopharmaceuticals Ltd., to ZMIHA Investment House Ltd., a public company whose shares are traded on the TASE while all Company's
directors, except outside directors, resigned and other directors were nominated in their place. On October 31, 2013, Mr. Sagi
Ben Ishai was nominated as the Company's CEO (replacing Mr. Joshua Josh Levine who also resigned on September 20, 2013) and on
November&nbsp;3, Mr. Eliyahu Yoresh was appointed as the Company's chairman of the Board.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">In furtherance to the above
decision from August&nbsp;21, 2013, the Company's Board and management accepted at their meetings held during the third quarter
of 2013, decisions the key elements of which are as followed: (a) to discontinue the Company's activity, including the main activity
in the Ubiquitin field; (b) to act to conclude the existing engagements of the Company in connection with its activity, including
termination of all contracts and commitments relating to the Ubiquitin activity; (c) to act to release from the lease agreement
for the Company's offices in Rehovot, among others, through early termination, assignment or lease to a sub-lessee; (d) to dismiss
all of the Company's employees; (e) to continue the search attempts for potential buyers to the IP and the property, plant and
equipment used by the Company's activity; (f) to convene the Board as soon as possible to discuss ways to continue the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">As a result of the above, during
the nine and three months periods ended September&nbsp;30, 2013, the Company recorded expenses relating to discontinued operation
of approximately NIS&nbsp;2,253 thousand (of which an amount of NIS&nbsp;1,046 thousand in respect of depreciation of property,
plant and equipment).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>NOTES
TO CONDENSED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"><B>NOTE 1:-</B></TD><TD STYLE="text-align: justify"><B>GENERAL (Cont.)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">d.</TD><TD STYLE="text-align: justify">As of the date of the issuance of this report, the Company dismissed all of its employees (except
pregnant or postnatal employees in respect of whom the Company addressed the officer in charge of women employment to receive a
permit to dismiss them).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">e.</TD><TD STYLE="text-align: justify">As of the date of the approval of the financial statements, the Company has no significant business
activity, except holding of securities. As a result, since October&nbsp;1, 2013, the Company is a &quot;public shell&quot; without
significant business activity.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">Since its inception, the Company
was engaged in the research and development of therapeutics through knowhow and expertise it possessed in the Ubiquitin system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">f.</TD><TD STYLE="text-align: justify">On November&nbsp;11, 2013, the Company filed with the Tel-Aviv District Court an application for
a creditors' arrangement under section 350 to the Companies Law, 1999 whose purpose is to cause that all of the Company's debts
in respect of the discontinued operation will be paid to its creditors and it will be discharged from all its liabilities, including
contingent liabilities whose cause as of the date of the approval of the creditors' arrangement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"><B>NOTE 2:-</B></TD><TD STYLE="text-align: justify"><B>SIGNIFICANT ACCOUNTING POLICIES</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">a.</TD><TD STYLE="text-align: justify">Preparation format of the interim financial statements:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">The interim financial statements
have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for
interim periods, as prescribed in IAS 34, &quot;Interim Financial Reporting&quot; and in accordance with the disclosure requirements
of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">b.</TD><TD STYLE="text-align: justify">New standards, interpretations and amendments applied for the first time by the company:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">The significant accounting
policies and methods of computation adopted in the preparation of the interim financial statements are consistent with those adopted
in the preparation of the annual financial statements, except as noted below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><I>Non-current asset or group
of assets held for sale:</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">Non-current asset or group
of assets is classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use. For this to be the case, the assets must be available for immediate sale in their present condition,
the Company must be committed to sell, there must be a program to locate a buyer and it is highly probable that a sale will be
completed within one year from the date of classification. From the date of such initial classification, these assets are no longer
depreciated and are presented separately as current assets at the lower of their carrying amount and fair value less costs to sell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>NOTES
TO CONDENSED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"><B>NOTE 2:-</B></TD><TD STYLE="text-align: justify"><B>SIGNIFICANT ACCOUNTING POLICIES (Cont.)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><I>IAS 19 (Revised 2011), &quot;Employee
Benefits&quot;: </I>(&quot;IAS 19(R)&quot;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">In June 2011, the IASB issued
IAS 19 (Revised) which is to be applied commencing January 1, 2013. The key amendments address the accounting treatment of defined
benefit plans. The first-time application of IAS 19(R) did not have a material effect on the Company's financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><I>IFRS 13, &quot;Fair Value
Measurement&quot;:</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">IFRS 13 establishes guidance
for the measurement of fair value, to the extent that such measurement is required according to IFRS. IFRS 13 defines fair value
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Fair value takes into account the market participant's ability to generate economic benefits by using
the asset in its highest and best use. Fair value measurement is based on the assumption that the transaction will take place in
the asset's or the liability's principal market, or in the absence of a principal market, in the most advantageous market. The
provisions of IFRS 13 are applied prospectively as from January&nbsp;1, 2013 and they do not apply to comparative figures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in">The first-time
application of IFRS 13 did not have a material effect on the Company's financial statements<B>. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"><B>NOTE 3:-</B></TD><TD STYLE="text-align: justify"><B>ADDITIONAL SIGNIFICANT EVENTS DURING THE REPORTING PERIOD</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">a.</TD><TD STYLE="text-align: justify">Addressing the Chief Scientist in connection with the agreement between the Company and GlaxoSmithKline
LLC:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">The Company and the Chief Scientist
at the Ministry of Industry and Trade (&quot;the Scientist&quot;) had a dialogue with the purpose of putting an end to a dispute
regarding the Scientist demand to receive royalties from all Company's revenues, including from revenues whose source is the collaboration
with GSK. For the meantime, the parties halted, with no time frame, mutual procedures in order to allow the clarification of the
dispute in the right spirit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">The Company's maximal exposure
varies between 3% and 4% (by periods) of total Company's revenues from GSK ranges between NIS&nbsp;947 thousand and NIS&nbsp;1,262
thousand in respect of the Company's revenues from GSK agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">Currently, the Company can
not assess the potential effects of the above on the Company. Accordingly, no provision was recorded in the Company's financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>PROTEOLOGICS LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border-bottom: Black 1.5pt solid"><B>NOTES
TO CONDENSED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.75in; text-align: left"><B>NOTE 3:-</B></TD><TD STYLE="text-align: justify"><B>ADDITIONAL SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
(Cont.)</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">b.</TD><TD STYLE="text-align: justify">During the nine months period ended September&nbsp;30, 2013, 266,679 options were exercised into
266,679 shares for a cumulative amount of NIS 232 thousand.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">c.</TD><TD STYLE="text-align: justify">On July 30, 2013, the Israeli Parliament (the Knesset) approved the second and third readings of
the Economic Plan for 2013-2014 (&quot;the Budget Law&quot;) which consists, among others, of fiscal changes whose main aim is
to enhance the collection of taxes in those years.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">These changes include, among
others, raising the Israeli corporate tax rate from 25% to 26.5% and taxing revaluation gains effective from January&nbsp;1, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">These changes had no effect
on the Company's financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">-<B><I> </I></B>-<B><I> </I></B>-<B><I>
</I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-<B><I> </I></B>-</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>v452377_ex23-1.htm
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: right"><B>Exhibit
23.1&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B></B><IMG SRC="pg1img1_ex23-1.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We hereby consent to the use in this Registration
Statement on Amendment No. 1 to Form F-1 of XTL Biopharmaceuticals Ltd. of our report dated March 31, 2016 relating to the financial
statements, which appears in such Registration Statement. We also consent to the reference to us under the heading &ldquo;Experts&rdquo;
in such Registration Statement.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tel Aviv, Israel</FONT></TD>
    <TD STYLE="width: 80%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Kesselman &amp; Kesselman </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">November 7, 2016</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certified Public Accountants (Isr.)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A member firm of PricewaterhouseCoopers International Limited</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

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##__9

end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
