The following is a general summary of certain material U.S. federal income tax consequences relating to the purchase, ownership and disposition of our ordinary shares by U.S. Holders (as defined below). This summary is based on the Code, the regulations of the U.S. Department of the Treasury issued pursuant to the Code, or the Treasury Regulations, the income tax treaty between the United States and Israel, or the U.S.-Israel Tax Treaty, and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or to different interpretation. No ruling has been sought from the IRS with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This summary is no substitute for consultation by prospective investors with their own tax advisors and does not constitute tax advice. This summary applies only to U.S. Holders that hold our ordinary shares as capital assets for U.S. federal income tax purposes (generally, property held for investment) and does not address all of the tax considerations that may be relevant to specific U.S. Holders in light of their particular circumstances or to U.S. Holders subject to special treatment under U.S. federal income tax law (including, without limitation, banks, insurance companies, tax-exempt entities, retirement plans, regulated investment companies, partnerships, dealers in securities, brokers, real estate investment trusts, certain former citizens or residents of the United States, persons who acquire our ordinary shares as part of a straddle, hedge, conversion transaction or other integrated investment, persons who acquire our ordinary shares through the exercise or cancellation of employee stock options or otherwise as compensation for their services, persons that have a “functional currency” other than the U.S. dollar, persons that own (or are deemed to own, indirectly, or by attribution) 10% or more of our shares (by vote or value), or persons that mark their securities to market for U.S. federal income tax purposes). This summary does not address any U.S. state or local or non-U.S. tax considerations, any U.S. federal estate, gift or alternative minimum tax considerations, or any U.S. federal tax consequences other than U.S. federal income tax consequences.

The BMSCs were seeded on the samples (5 × 103 cells/well) and cultured in the basic medium (DMEM supplemented with 10% FBS) for 3 days. Afterwards, the cells were fixed in 4% paraformaldehyde for 30 minutes, incubated with Phalloidin-TRITC (10 mg/mL, sigma) for 2 hours, and counter-stained with Hoechst 33342 (5 mg/mL, Sigma) to identify the nuclei. Image collection and superimposition were processed by LSM 700 (zeiss, German) and Axio Observer. The experiments were repeated at least three times.

DUSA Pharmaceuticals, Inc. (NasdaqGM:DUSA) is an integrated dermatology pharmaceutical company focused primarily on the development and marketing of its Levulan® PDT technology platform, and other dermatology products.  Levulan® Kerastick® for topical solution plus DUSA’s BLU-U® blue light photodynamic therapy illuminator is currently approved for the treatment of minimally to moderately thick actinic keratoses (AKs) of the face or scalp.  DUSA also markets other dermatology products, including ClindaReach®.

(*) Retroactively adjusted to reflect the 729:1 share split, which occurred upon the consummation of the Reorganization (as defined below).

Active Biotech (Stockholm:ACTI.ST) is a biotechnology company with R&D focus on autoimmune/inflammatory diseases and cancer. Projects in pivotal phase are laquinimod, an orally administered small molecule with unique immunomodulatory properties for the treatment of multiple sclerosis, as well as ANYARA for use in cancer targeted therapy, primarily renal cancer. Further key projects in clinical development comprise the three orally administered compounds TASQ for prostate cancer, 57-57 for SLE and RhuDexTM)for RA.

1.        I have reviewed this annual report on Form 20-F of Galmed Pharmaceuticals Ltd. (the “Company”);

The board of directors of a merging company is required pursuant to the Companies Law to discuss and determine whether in its opinion there exists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, taking into account the financial condition of the merging companies. If the board of directors has determined that such a concern exists, it may not approve a proposed merger. Following the approval of the board of directors of each of the merging companies, the boards of directors must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies.

Because 8-Br-ADPR, an antagonistic analog of ADPR, inhibited the degranulation and cytolytic activity of NK cells, we investigated whether ADPR was endogenously produced in tumor cell-stimulated NK cells and if CD38 was the enzyme responsible for ADPR production. The level of ADPR in Cd38+/+ NK cells increased 2.4 fold when stimulated by PME, which was not observed in Cd38−/− NK cells (Fig. 4a). By contrast, the level of cADPR, another Ca2+ signaling second messenger produced by CD38, was not affected by stimulation with the PME of tumor cells (Fig. 4b). These results show that ADPR is specifically induced by CD38 in response to tumor cells.

        We have derived all of our revenue to date from the Merck Agreement. The Merck Agreement is accounted for under ASC 606 since it does not represent a collaborative arrangement as we are not an active participant and are not exposed to significant risks and rewards of the arrangement.

To date, we have funded our operations primarily through proceeds from private placements and public offerings. At December 31, 2018, we had current assets $90.4 million, which is mainly comprised of cash and cash equivalents of $24.2 million, short-term deposits of $6.1 million and short-term investment securities of $60.0 million. This compares with current assets of $19.2 million at December 31, 2017, which is mainly comprised of cash and cash equivalents of $13.0 million and short-term investment securities of $6.0 million. We believe that such existing funds will be sufficient to continue our business and operations as currently conducted for more than 12 months from the date of issuance of this annual report. However, we will continue to incur operating losses, which may be substantial over the next several years, and we will need to obtain additional funds to further develop our research and development programs.

I’m glad that two of the avenues I’m currently investigating have just been mentioned by others – NF2 pathways and increasing subcutaneous fat! I am convinced these are pathways that will sum with both MTOR inhibition and mitophagy and i’m working on solutions to both, although the subcutaneous fat increasing option might have some risk (so I’d be curious how the Sumo wrestlers do it!)

        We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.