Purple Biotech Ltd.

Quarterly Report • Aug 22, 2023

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

For the month of August 2023

Commission File Number: 001-37643

PURPLE BIOTECH LTD. (Translation of registrant's name into English)

4 Oppenheimer Street, Science Park, Rehovot 7670104, Israel (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

On August 22, 2023, Purple Biotech Ltd. (the "Company" or the "Registrant") issued a press release, "Purple Biotech Reports Second Quarter 2023 Financial Results", which is attached hereto as Exhibit 99.1.

Exhibit
99.1	Purple Biotech Reports Second Quarter 2023 Financial Results
99.2	Purple Biotech Ltd. Condensed Consolidated Unaudited Interim Financial Statements As of June 30, 2023

Incorporation by Reference

This Report on Form 6-K, including all exhibits attached hereto, is hereby incorporated by reference into each of the Registrant's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on May 20, 2016 (Registration file number 333-211478), the Registrant's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 6, 2017 (Registration file number 333-218538), the Registrant's Registration Statement on Form F-3, as amended, originally filed with the Securities and Exchange Commission on July 16, 2018 (Registration file number 333-226195), the Registrant's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on March 28, 2019 (Registration file number 333-230584), the Registrant's Registration Statement on Form F-3 filed with the Securities and Exchange Commission on September 16, 2019 (Registration file number 333-233795), the Registrant's Registration Statement on Form F-3 filed with the Securities and Exchange Commission on December 2, 2019 (Registration file number 333-235327), the Registrant's Registration Statement on Form F-1 filed with the Securities and Exchange Commission on December 27, 2019 (Registration file number 333-235729), the Registrant's Registration Statement on Form F-3 filed with the Securities and Exchange Commission on May 13, 2020 (Registration file number 333- 238229), the Registrant's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on May 18, 2020 (Registration file number 333-238481), each of the Registrant's Registration Statements on Form F-3 filed with the Securities and Exchange Commission on July 10, 2020 (Registration file numbers 333-239807 and 333-233793), the Registrant's Registration Statement on Form S-8 filed with the Securities and Exchange Commission on April 4, 2022 (Registration file number 333-264107) and the Registrant's Registration Statement on Form F-3 filed with the Securities and Exchange Commission on March 23, 2023 (Registration file number 333-270769) and the Registrant's Registration Statement on Form F-3, as amended, originally filed with the Securities and Exchange Commission on December 8, 2022 (Registration file number 333-268710), to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

August 22, 2023 PURPLE BIOTECH LTD.

By: /s/ Lior Fhima

Lior Fhima Chief Financial Officer

Purple Biotech Reports Second Quarter 2023 Financial Results

Financial results represent clinical trials progress with recruitment at a pace faster than expected in CM24 Phase 2 study Clinical data from both studies expected in the coming months Cash runway extended into H1 2025

REHOVOT, Israel, August 22, 2023 -- Purple Biotech Ltd. ("Purple Biotech" or "the Company") (NASDAQ/TASE: PPBT), a clinical-stage company developing first-in-class therapies that harness the power of the tumor microenvironment to overcome tumor immune evasion and drug resistance, today announced financial results for the second quarter and six months ended June 30, 2023.

"During the second quarter of 2023 we continued to advance our lead clinical programs, CM24 in the treatment of pancreatic cancer and NT219 for head and neck cancer, while prudently managing our development and operating expenses. Our financial results in the first half of 2023 represent our clinical trials' progress with recruitment at a pace faster than expected in our CM24 study. As we reprioritize our objectives from time to time, we have extended our cash runway into the first half of 2025," stated Purple Biotech CEO, Gil Efron.

"In the coming months, we look forward to announcing milestones including interim data from our randomized Phase 2 CM24 study as well as results from our Phase 1 NT219 dose escalation study. In addition, we are excited to commence work on IM1240, our newly acquired tri-specific antibody."

"I am excited to return to working with our dedicated team after my medical leave. I would like to thank Isaac Israel, the management, and our employees for their great work during my absence," Gil Efron added.

Financial Results for the three Months Ended June 30, 2023

Research and Development Expenses were \$3.7 million, an increase of \$1.7 million or 85%, compared to \$2 million in the same period of 2022 mainly due to higher enrollment rate to our clinical trials.

Selling, General and Administrative Expenses were \$1.4 million, a decrease of \$0.1 million or 7%, compared to \$1.5 million in the same period of 2022.

Operating Loss was \$5.1 million, an increase of \$1.5 million or 42% compared to \$3.6 million in the same period of 2022 mainly due to higher research and development expenses.

On a non-IFRS basis (as reconciled below), adjusted operating loss was \$4.6 million, an increase of \$1.6 million or 53%, compared to \$3 million in the same period of 2022 mainly due to higher research and development expenses.

Net Loss for the three months ended June 30, 2023 was \$5.2 million, or \$0.25 loss per basic and diluted ADS, compared to a net loss of \$3.6 million, or \$0.2 loss per basic and diluted ADS, in the three months ended June 30, 2022. Adjusted net loss for the three months ended June 30, 2023 was \$4.7 million, an increase of \$1.7 million or 57% compared to \$3 million in the three months ended June 30, 2022.

Financial Results for the Six Months Ended June 30, 2023

Research and Development Expenses were \$7.2 million, a decrease of \$0.8 million, or 10%, compared to \$8 million in the same period of 2022. The decrease was mainly due to a decrease of \$3.4 million in chemistry, manufacturing, and controls (CMC) expenses representing batch manufacturing in 2022, offset by an increase of \$2 million in clinical expenses and \$0.6 million in other research and development expenses in support of our growing clinical and development activities.

Sales, General and Administrative Expenses were \$3.0 million, compared to \$2.9 million in the same period of 2022, an increase of \$0.1 million.

Operating Loss was \$10.3 million, a decrease of \$0.6 million, or 6%, compared to \$10.9 million in the same period of 2022.

On a non-IFRS basis (as reconciled below), adjusted operating loss was \$9 million, a decrease of \$1 million, compared to \$10 million in the same period of 2022, mainly due to a decrease in research and development expenses.

Net Loss for the six months ended June 30, 2023 was \$10.0 million, or \$0.49 loss per basic and diluted ADS, compared to a net loss of \$10.9 million, or \$0.61 loss per basic and diluted ADS, in the same period of 2022. The decrease in net loss was mainly due to a decrease of \$0.6 million in operating expenses. Adjusted net loss for the six months ended June 30, 2023 was \$8.8 million, a decrease from \$10.0 million in the six months ended June 30, 2022.

As of June 30, 2023, Purple Biotech had cash and cash equivalents and short-term deposits of \$18.0 million. This cash position provides a cash runway into the first half of 2025.

During the six months ended June 30, 2023, the Company sold, under the Open Market Sale Agreementsm with Jefferies LLC, approximately 479,000 ADSs, at an average price of \$1.83 per ADS. Net proceeds to the Company were approximately \$0.85 million, net of direct issuance expenses.

Non-IFRS Financial Measures.

This press release includes information about certain financial measures that are not prepared in accordance with International Financial Reporting Standards ("IFRS"), including adjusted operating loss and adjusted net loss. These non-IFRS measures are not based on any standardized methodology prescribed by IFRS and are not necessarily comparable to similar measures presented by other companies. Adjusted operating loss and adjusted net loss adjust for sharebased compensation expenses. The Company's management and board of directors utilize these non-IFRS financial measures to evaluate the Company's performance. The Company provides these non- IFRS measures of the Company's performance to investors because its management believes that these non-IFRS financial measures, when viewed with the Company's results under IFRS and the accompanying reconciliations, are useful in identifying underlying trends in ongoing operations. However, these non- IFRS measures are not measures of financial performance under IFRS and, accordingly, should not be considered as alternatives to IFRS measures as indicators of operating performance. Further, these non-IFRS measures should not be considered measures of the Company's liquidity. A reconciliation of certain IFRS to non-IFRS financial measures has been provided in the tables included in this press release.

About Purple Biotech

Purple Biotech Ltd. (NASDAQ/TASE: PPBT) is a clinical-stage company developing first-in-class therapies that seek to overcome tumor immune evasion and drug resistance. The Company's oncology pipeline includes NT219, CM24 and IM1240. NT219 is a dual inhibitor, novel small molecule that simultaneously targets IRS1/2 and STAT3. In a Phase 1/2 study of NT219, the Company is currently advancing it in a dose escalation as a monotherapy treatment of solid tumors, and in a dose escalation in combination with cetuximab for the treatment of recurrent and metastatic squamous cell carcinoma of the head and neck (SCCHN) or colorectal adenocarcinoma (CRC). These studies will be followed by an expansion phase of NT219 at its recommended Phase 2 level in combination with cetuximab in patients with recurrent and metastatic SCCHN. CM24 is a humanized monoclonal antibody that blocks CEACAM1, an immune checkpoint protein that supports tumor immune evasion and survival through multiple pathways. The Company is advancing CM24 as a combination therapy with anti-PD-1 checkpoint inhibitors in a Phase 2 study for the treatment of pancreatic ductal adenocarcinoma (PDAC). The Company has entered into a clinical collaboration agreement with Bristol Myers Squibb for the Phase 2 clinical trials to evaluate the combination of CM24 with the PD-1 inhibitor nivolumab in addition to chemotherapy. IM1240 is a preclinical, conditionally-activated tri-specific antibody that engages both T cells and NK cells to mount a strong, localized immune response within the tumor microenvironment. The third arm specifically targets the Tumor Associated Antigen (TAA) 5T4 that is expressed in a variety of solid tumors and is correlated with advanced disease, increased invasiveness and poor clinical outcomes. IM1240 has a cleavable capping technology that confines the compound's therapeutic activity to the local tumor microenvironment, and thereby potentially increases the anticipated therapeutic window in patients. The Company's corporate headquarters are located in Rehovot, Israel. For more information, please visit https://purplebiotech.com/.

Forward-Looking Statements and Safe Harbor Statement

Certain statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements that are not statements of historical fact, and may be identified by words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. You should not place undue reliance on these forward-looking statements, which are not guarantees of future performance. Forward-looking statements reflect our current views, expectations, beliefs or intentions with respect to future events, and are subject to a number of assumptions, involve known and unknown risks, many of which are beyond our control, as well as uncertainties and other factors that may cause our actual results, performance or achievements to be significantly different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause or contribute to such differences include, among others, risks relating to: the plans, strategies and objectives of management for future operations; product development for NT219, CM24 and IM1240; the process by which such early stage therapeutic candidates could potentially lead to an approved drug product is long and subject to highly significant risks, particularly with respect to a joint development collaboration; the fact that drug development and commercialization involves a lengthy and expensive process with uncertain outcomes; our ability to successfully develop and commercialize our pharmaceutical products; the expense, length, progress and results of any clinical trials; the impact of any changes in regulation and legislation that could affect the pharmaceutical industry; the difficulty in receiving the regulatory approvals necessary in order to commercialize our products; the difficulty of predicting actions of the U.S. Food and Drug Administration or any other applicable regulator of pharmaceutical products; the regulatory environment and changes in the health policies and regimes in the countries in which we operate; the uncertainty surrounding the actual market reception to our pharmaceutical products once cleared for marketing in a particular market; the introduction of competing products; patents obtained by competitors; dependence on the effectiveness of our patents and other protections for innovative products; our ability to obtain, maintain and defend issued patents; the commencement of any patent interference or infringement action against our patents, and our ability to prevail, obtain a favorable decision or recover damages in any such action; and the exposure to litigation, including patent litigation, and/or regulatory actions, and other factors that are discussed in our Annual Report on Form 20-F for the year ended December 31, 2022 and in our other filings with the U.S. Securities and Exchange Commission ("SEC"), including our cautionary discussion of risks and uncertainties under "Risk Factors" in our Registration Statements and Annual Reports. These are factors that we believe could cause our actual results to differ materially from expected results. Other factors besides those we have listed could also adversely affect us. Any forward-looking statement in this press release speaks only as of the date which it is made. We disclaim any intention or obligation to publicly update or revise any forward-looking statement or other information contained herein, whether as a result of new information, future events or otherwise, except as required by applicable law. You are advised, however, to consult any additional disclosures we make in our reports to the SEC, which are available on the SEC's website, https://www.sec.gov.

CONTACTS:

Company Contact:

Lior Fhima Chief Financial Officer IR@purple-biotech.com

Purple Biotech Ltd.

Consolidated Unaudited Statements of Financial Position as of:

	June 30, 2023	December 31, 2022
	USD thousand	USD thousand
Assets Cash and cash equivalents	17,202	15,030
Short term deposits	846	16,652
Other investments	352	431
Other current assets	984	1,143
Total current assets	19,384	33,256
Non-current assets
Right of use assets	392	467
Fixed assets, net	179	215
Intangible assets	28,044	20,684
Total non–current assets	28,615	21,366
Total assets	47,999	54,622
Liabilities
Lease liability - short term	184	194
Accounts payable	1,572	2,132
Other payables	3,120	4,732
Total current liabilities	4,876	7,058
Non-current liabilities
Lease liability	237	321
Post-employment benefit liabilities	141	145
Total non-current liabilities	378	466
Equity
Share capital, no par value	-	-
Share premium	132,245	126,407
Receipts on account of warrants	28,017	28,017
Capital reserve for share-based payments	10,032	10,164
Capital reserve from transactions with related parties	761	761
Capital reserves from hedging	(2)	(6)
Capital reserve from transactions with non-controlling interest	(859)	(859)
Accumulated loss	(127,589)	(117,573)
Equity attributable to owners of the Company	42,605	46,911
Non-controlling interests	140	187
Total equity	42,745	47,098
Total liabilities and equity	47,999	54,622

Purple Biotech Ltd.

Consolidated Unaudited Statement of Operations for the six and three months ended June 30, 2023

		For the six months ended June 30,		For the three months ended June 30,
	2023	2022	2023	2022
	USD thousand	USD thousand	USD thousand	USD thousand
Research and development expenses	7,203	8,035	3,705	2,083
Sales, general and administrative expenses	3,054	2,886	1,430	1,507
Operating loss	10,257	10,921	5,135	3,590
Finance expense	207	92	148	51
Finance income	(401)	(145)	(123)	(89)
Finance expense (income), net	(194)	(53)	25	(38)
Loss for the period	10,063	10,868	5,160	3,552
Other Comprehensive Loss:
Items that will be transferred to profit or loss:
Loss (Profit) on cash flow hedges	(4)	21	(5)	21
Total comprehensive loss for the period	10,059	10,889	5,155	3,573
Loss attributable to:
Owners of the Company	10,016	10,833	5,138	3,536
Non-controlling interests	47	35	22	16
	10,063	10,868	5,160	3,552
Total comprehensive loss attributable to
Owners of the Company	10,012	10,854	5,133	3,557
Non-controlling interests	47	35	22	16
	10,059	10,889	5,155	3,573
Loss per share data Basic and diluted loss per ADS - USD	0.49	0.61	0.25	0.2
Number of ADSs used in calculation	20,425,638	17,897,681	21,006,218	17,981,754

Reconciliation of Adjusted Operating Loss

		For the six months ended June 30,		For the three months ended June 30,
	2023	2022	2023	2022
	USD thousand	USD thousand	USD thousand	USD thousand
Operating loss for the period	10,257	10,921	5,135	3,590
Less ESOP expenses	(1,245)	(866)	(493)	(557)
	9,012	10,055	4,642	3,033

Reconciliation of Adjusted Net Loss

		For the six months ended June 30,		For the three months ended June 30,
	2023 USD thousand	2022 USD thousand	2023 USD thousand	2022 USD thousand
Loss for the period	10,063	10,868	5,160	3,552
Less ESOP expenses	(1,245)	(866)	(493)	(557)
	8,818	10,002	4,667	2,995

		For the six months ended June 30,
	2023	2022
	USD thousand	USD thousand
Cash flows from operating activities:
Loss for the period	(10,063)	(10,868)
Adjustments:
Depreciation	99	104
Finance expenses (income), net	(194)	(53)
Share-based payments	1,245	866
	(8,913)	(9,951)
Changes in assets and liabilities:
Changes in other investments and other current assets	(118)	(286)
Changes in accounts payables	(628)	(90)
Changes in other payables	(1,467)	1,427
Changes in post-employment benefit liabilities	(161)	-
	(2,374)	1,051
Net cash used in operating activities	(11,287)	(8,900)
Cash flows from investing activities:
Acquisition of subsidiary, net of cash acquired	(3,549)	-
Acquisition of intangible asset	-	(203)
Interest received	548	143
Decrease in short-term deposits	15,806	14,300
Increase in long-term deposits	-	(2,482)
Acquisition of fixed assets	(4)	(20)
Net cash provided by investing activities	12,801	11,738
Cash flows from financing activities:
Proceeds from issuance ADSs	881	653
ADS issuance expenses paid	(137)	(81)
Repayment of lease liability	(84)	(83)
Interest paid	(29)	(33)
Net cash provided by financing activities	631	456
Net increase (decrease) in cash and cash equivalents	2,145	3,294
Cash and cash equivalents at the beginning of the period	15,030	10,890
Effect of translation adjustments on cash and cash equivalents	27	(178)
Cash and cash equivalents at the end of the period	17,202	14,006

Purple Biotech Ltd.

Condensed Consolidated

Unaudited Interim Financial Statements

As of June 30, 2023

Contents

	Page
Condensed Consolidated Unaudited Interim Financial Statements as of June 30, 2023
Condensed Consolidated Unaudited Interim Statements of Financial Position	2
Condensed Consolidated Unaudited Interim Statements of Operations and Other Comprehensive Income	3
Condensed Consolidated Unaudited Interim Statements of Changes in Equity	4
Condensed Consolidated Unaudited Interim Statements of Cash Flows	6
Notes to the Condensed Consolidated Unaudited Interim Financial Statements	7

Condensed Consolidated Unaudited Interim Statements of Financial Position

	Note	June 30, 2023 USD thousand	December 31, 2022 USD thousand
Assets Cash and cash equivalents		17,202	15,030
Short term deposits		846	16,652
Other investments		352	431
Other current assets		984	1,143
Total current assets		19,384	33,256
Non-current assets
Right of use assets		392	467
Fixed assets, net		179	215
Intangible assets	4	28,044	20,684
Total non–current assets		28,615	21,366
Total assets		47,999	54,622
Liabilities
Lease liability - short term		184	194
Accounts payable		1,572	2,132
Other payables		3,120	4,732
Total current liabilities		4,876	7,058
Non-current liabilities
Lease liability		237	321
Post-employment benefit liabilities		141	145
Total non-current liabilities		378	466
Equity
Share capital, no par value		-	-
Share premium	5	132,245	126,407
Receipts on account of warrants		28,017	28,017
Capital reserve for share-based payments	7	10,032	10,164
Capital reserve from transactions with related parties		761	761
Capital reserves from hedging		(2)	(6)
Capital reserve from transactions with non-controlling interest		(859)	(859)
Accumulated loss		(127,589)	(117,573)
Equity attributable to owners of the Company		42,605	46,911
Non-controlling interests		140	187
Total equity		42,745	47,098
Total liabilities and equity		47,999	54,622

Condensed Consolidated Unaudited Interim Statements of Operations and Other Comprehensive Income

For the six months ended		For the three months ended June 30,
			2022
USD thousand	USD thousand	USD thousand	USD thousand
7,203	8,035	3,705	2,083
3,054	2,886	1,430	1,507
10,257	10,921	5,135	3,590
			51
(401)	(145)	(123)	(89)
(194)	(53)	25	(38)
10,063	10,868	5,160	3,552
	21		21
10,059	10,889	5,155	3,573
			3,536
47	35	22	16
10,063	10,868	5,160	3,552
			3,557
47	35	22	16
10,059	10,889	5,155	3,573
0.49	0.61	0.25	0.2
			17,981,754
	2023 207 (4) 10,016 10,012 20,425,638	June 30, 2022 92 10,833 10,854 17,897,681	2023 148 (5) 5,138 5,133 21,006,218

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

Condensed Consolidated Unaudited Interim Statements of Changes in Equity

						Attributable to owners of the Company
For the six months ended	Share capital	Share premium	Receipts on account of warrants	Capitl reserve For share based payments	Hedging reserve	Capital reserve from transactions with related parties USD thousand	Capital reserve from transactions with non- controlling Interest	Accumulated loss	Total	Non controlling interests	Total equity
June 30, 2023: Balance as of
January 1, 2023 (audited)	-	126,407	28,017	10,164	(6)	761	(859)	(117,573)	46,911	187	47,098
Other comprehensive income (loss) for the period,
net of tax Issuance of American Depository Shares (ADSs), net of issuance	-	-	-	-	4	-	-	-	4		4
costs	-	680	-	-	-	-	-		680		680
Share-based payments ADS issued in connection with	-	1,377	-	(132)	-	-	-	-	1,245	-	1,245
the purchase of a subsidiary (see Note 4)		3,781	-	-	-	-	-	-	3,781		3,781
Loss for the period	-	-	-	-	-	-	-		(10,016) (10,016)	(47)	(10,063)
Balance as of June 30, 2023	-	132,245	28,017	10,032	(2)	761	(859)	(127,589)	42,605	140	42,745

The accompanying notes are integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Unaudited Interim Statements of Changes in Equity

							Attributable to owners of the Company
For the six months ended June 30, 2022:	Share	Share capital premium	Receipts on account of warrants	Capital reserve For share based payments reserve	Hedging	Cost of hedge reserve	Capital reserve from transactions with related parties USD thousand	Capital reserve from transactions with non- controlling Interest	Accumulated loss	Total	Non controlling interests	Total equity
Balance as of January 1, 2022 (audited)	-	123,951	28,017	8,862	-	-	761	(859)	(95,905)	64,827	279	65,106
Other comprehensive income (loss) for the period, net of tax	-	-	-	-	(14)	(7)	-	-	-	(21)	-	(21)
Issuance of American Depository Shares (ADSs), net of issuance
costs Share-based	-	572	-	-	-	-	-	-	-	572	-	572
payments	-	428	-	438	-	-	-	-	-	866	-	866
Loss for the period	-	-	-	-	-	-	-	-		(10,833) (10,833)		(35) (10,868)
Balance as of June 30, 2022	-	124,951	28,017	9,300	(14)	(7)	761	(859)	(106,738)	55,411	244	55,655

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

Condensed Consolidated Unaudited Interim Statements of Cash Flows

		For the six months ended June 30,
		2023	2022
	Note	USD thousand	USD thousand
Cash flows from operating activities:
Loss for the period		(10,063)	(10,868)
Adjustments:
Depreciation		99	104
Finance expenses (income), net		(194)	(53)
Share-based payments		1,245	866
		(8,913)	(9,951)
Changes in assets and liabilities:
Changes in other investments and other current assets		(118)	(286)
Changes in accounts payables		(628)	(90)
Changes in other payables		(1,467)	1,427
Changes in post-employment benefit liabilities		(161)	-
		(2,374)	1,051
Net cash used in operating activities		(11,287)	(8,900)
Cash flows from investing activities:
Acquisition of subsidiary, net of cash acquired	4	(3,549)	-
Acquisition of intangible asset		-	(203)
Interest received		548	143
Decrease in short-term deposits		15,806	14,300
Increase in long-term deposits		-	(2,482)
Acquisition of fixed assets		(4)	(20)
Net cash provided by investing activities		12,801	11,738
Cash flows from financing activities:
Proceeds from issuance ADSs		881	653
ADS issuance expenses paid		(137)	(81)
Repayment of lease liability		(84)	(83)
Interest paid		(29)	(33)
Net cash provided by financing activities		631	456
Net increase (decrease) in cash and cash equivalents		2,145	3,294
Cash and cash equivalents at the beginning of the period		15,030	10,890
Effect of translation adjustments on cash and cash equivalents		27	(178)
Cash and cash equivalents at the end of the period		17,202	14,006

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

Note 1 - General

A. Reporting entity

1. Purple Biotech Ltd. (hereinafter: the "Company" or "Purple") is a clinical-stage company developing first-in-class that harness the power of the tumor microenvironment to overcome tumor immune evasion and drug resistance.

The Company was incorporated in Israel as a private company in August 1968, and has been listed for trading on the Tel Aviv Stock Exchange since September 1978. In October 2012, the Company disposed all its previous operations, and in July 2013, the Company acquired shares of Kitov Pharma Ltd. from its shareholders, in exchange for the Company's shares. In December 2020 the Company changed its name from Kitov Pharma Ltd. to Purple Biotech Ltd.

1. The Company's securities (American Depository Shares ("ADS")) were listed for trading on the NASDAQ in November 2015 (including a Series A warrant that expired in November 2020). Each ADS represents 10 ordinary shares with no par value following a reverse split in effect from August 23, 2020 (see Note 10A in the annual financial statements). Each 10 shares enable the purchase of 1 ADS.

The Company's address is 4 Oppenheimer St., Science Park, Rehovot 7670104 Israel.

The Company together with its subsidiaries TyrNovo, FameWave, Purple GmbH and Immunorizon (see Note 4) are referred to, in these consolidated financial statements, as "the Group".

1. Since incorporation through June 30, 2023, the Group has incurred losses and negative cash flows from operations mainly attributed to its development efforts and has an accumulated deficit of USD 127.6 million. The Group has financed its operations mainly through private and public financing rounds.

B. Material events in the reporting period

In February 2023, the Company completed an acquisition of Immunorizon, see Note 4.

Note 2 - Basis of Preparation

A. Statement of compliance with International Financial Reporting Standards

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements. They should be read in conjunction with the financial statements as at and for the year ended December 31, 2022 (hereinafter - "the Annual Financial Statements"). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last Annual Financial Statements.

These condensed consolidated interim financial statements were approved for issue by the Group's Board of Directors on August 21, 2022.

B. Use of judgments and estimates

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgments made by management in applying the Group's accounting policies and the principal assumptions used in the estimation of uncertainty were the same as those that applied to the Annual Financial Statements.

Note 3 - Significant Accounting Policies

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its Annual Financial Statements except as described below.

Contingent considerations transferred for acquisition of subsidiaries are recorded when the terms and conditions for payment of the consideration are met.

Note 4 - Acquisition of Immunorizon

In February 2023 the Company completed the acquisition of 100% of Immunorizon Ltd, a privately held biopharmaceutical Company developing potential multispecific T and NK cell engager oncology therapies that selectively activate the immune response within the tumor microenvironment, ("Immunorizon") from its shareholders in consideration of an aggregate upfront payment of \$3.5 million in cash, an aggregate of \$3.5 million in ADSs (or 2,215,190 ADSs representing ordinary shares at a price per ADS equal to the NASDAQ volume-weighted average price of the Company's ADSs for the 60-day period preceding the execution date of the agreement) with three months lock up period including a price protection mechanism for 12 months. Additional future considerations include future payments when achieving certain long-term milestones set at an aggregate amount of \$94 million, including royalties on net sales. The acquisition closed on February 15, 2023.

The acquisition was recorded based on the fair value of the consideration and accounted for as an asset purchase as it did not meet the definition of a business combination in accordance with IFRS 3.

Identifiable assets acquired and liabilities assumed

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition:

	USD
	thousands
Cash	44
Intangible asset (1)	7,360
Other receivables	1
Trade payables	(28)
Other payables	(2)
Total net identifiable assets	7,375

(1) Intangible asset - In process research and development

The fair value of the intangible asset recognized at the acquisition date was determined according to the fair value of the issued equity (2,215,190 ADSs) and the cash paid.

According to the agreement, the equity issued included a price protection mechanism as well as a lock up period of three months.

The fair value of equity issued was based on the assumptions below:

• a. Share price 1.59
• b. Expected volatility 70.89%
• c. Annual risk-free rate 4.5%
• d. Dividend yield- 0%
• e. DLOM 10.8%

Note 5 - Capital and reserves

During the reported periods, the following shares were issued:

		For the six months ended
	June 30, 2023	June 30, 2022
	Number of ADS in thousands
Opening balance	18,482	17,800
Issuance of ADSs (1)	2,694	179
Vesting of RSUs	235	62
	21,411	18,041

(1) During the period the Company issued under the ATM program, 479 thousand ADSs. In addition, the Company issued for the Immunorizon acquisition 2,215,190 ADSs (see Note 4).

Note 6 - Financial Instruments

Framework for risk management

The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.

The Group's risk management practice was formulated to identify and analyze the risks that the Group faces, to set appropriate limits for the risks and controls, and to monitor the risks and their compliance with the limits. The risk policy and risk management methods are reviewed regularly to reflect changes in market conditions and in the Group's operations. The Group acts to develop an effective control environment in which all employees understand their roles and commitment.

A. Risk management

1. Credit risk

Credit risk is the risk of financial loss to the Group if a debtor or counterparty to a financial instrument fails to meet its contractual obligations, and arises mainly from the Company's receivables. The Group restricts exposure to credit risk by investing only in bank deposits.

The Group held cash and cash equivalents and short-term deposits of USD 18,048 thousand at June 30, 2023 (and at December 31, 2022 – USD 31,682 thousand). These are held with banks, which are rated A2, based on Moody's Rating Agency ratings. The short-term deposits, mainly in USD, bear fixed interest ranging between 0.05% - 5.3%.

The carrying amounts of certain financial assets and liabilities, including cash and cash equivalents, short term deposits, other investments, other current assets, accounts payables and other payables are the same or proximate to their fair value.

Note 6 - Financial Instruments (cont'd)

A. Risk management (cont'd)

2. Market risk

Market risk is the risk that changes in market prices, such as foreign currency exchange rates, the CPI, interest rates and the prices of equity instruments, will influence the Group's results or the value of its holdings in financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing returns.

The Group hedges the foreign currency risk exposure that derives from salary expenses by means of foreign currency derivatives.

In the framework of assessing whether the aforesaid hedging relationships qualify for hedge accounting, the Group applies the mandatory reliefs set forth in the amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures, Interest Rate Benchmark Reform.

Therefore, as of June 30, 2023 the Group is of the opinion that these hedging relationships continue to qualify for hedge accounting.

3. Currency risk

The Group is exposed to currency risk mainly for cash and for research and development expenses that are denominated in NIS and EURO. Therefore, the Group is exposed to exchange rate fluctuations in these currencies against the dollars and takes steps to reduce the currency risk by maintaining its liquid resources in accordance with its future needs.

Note 7 - Share-based payments

On March 2, 2023, the board of directors of the Company granted 45 thousand options (to purchase the equivalent of 4,500 ADSs) and 45 thousand RSUs (equivalent to 4,500 ADSs) to an employee. The options have an exercise price of USD 0.198 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 16 thousand.

On April 24, 2023, the board of directors of the Company granted 2,732 thousand options (to purchase the equivalent of 273 thousand ADSs) and 2,732 thousand RSUs (equivalent to 273 thousand ADSs) to the Board members, subject to the approval of the shareholders, and to employees. The options have an exercise price of USD 0.190 per one ordinary share. The options and RSUs will vest over 3 years from the date of grant. The options are exercisable for 5 years from grant date. The fair value of these options and RSUs as of the grant date was measured at USD 729 thousand.

On June 15, 2023, an annual general meeting of the Company's shareholders was held, and the equity grant to the board members was approved.

These options listed above were measured using the binominal model. The following inputs were used in the measurement of the fair value of these share-based payments:

Share Price (ADS-USD)	2.257 - 1.60
Expected Volatility (%)	96.04% - 93.54%
Expected Duration (years)	2-5
Exercise Coefficient	2 - 2.8
Dividend Yield (%)	0%
Risk Free Rate Interest (%)	3.56% - 4.31%

The annual Expected Volatility applied was based on the historical weighted average volatility of the company, for a period corresponding to the share options' contractual term.

The risk-free interest rate for periods within the contractual life of the option is based on the United States Treasury yield curve effective at the time of grant.

During the three and six-month period ended June 30, 2023 the Company recorded an expense of USD 493 thousand and USD 1,245 thousand of which USD 417 thousand and USD 1,095 thousand are to key management personnel, respectively (For the three and six-month period ended June 30, 2022 the Company recorded an expense of USD 557 thousand and USD 866 thousand of which USD 539 thousand and USD 800 thousand are to key management personnel, respectively).

In addition, see note 4 regarding ADS issued as part of the acquisition of Immunorizon.

Note 8 – Commitments and contingent liability

2015 Motion to Approve a Class Action in Israel

Following proceedings described in Note 13B(1) to the annual Financial statements of 2022, on May 21, 2023 the court dismissed the claim and ordered the plaintiffs to pay the Company an amount of 43,000 NIS as legal expenses. Pursuant to the court ruling, the Parties have negotiated and finalized a settlement agreement, according to which the plaintiffs agreed not to file an appeal and the Company agreed to receive payment in 5 equal installments with respect to the legal expense ruled.

Note 9 – Subsequent Events

On July 18, 2023 the Company received USD 500 thousands from Coeptis, representing the first instalment of the convertible note, as part of an amendment to the settlement agreement that was signed on July 14, 2023. According to the amended agreement the outstanding balance up to USD 1,000 thousands plus accrued interest are due until March 2024.