NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION: a. Nature of operations 1) Intec Pharma Ltd. ("Intec") is engaged in the development of proprietary technology which enables the gastric retention of certain drugs. The technology is intended to significantly improve the efficiency of the drugs and substantially reduce their side-effects or the effective doses. Intec is a limited liability public company incorporated in Israel. Intecs ordinary shares are traded on the NASDAQ Capital Market ("NASDAQ"). In September 2017, Intec incorporated a wholly-owned subsidiary in the United States of America in the State of Delaware - Intec Pharma Inc. (the "Subsidiary", together with Intec - "the Company"). The Subsidiary was incorporated mainly to provide Intec executive and management services, including business development, medical affairs and investor relationship activities outside of Israel. 2) The Company engages in research and development activities and has not yet generated revenues from operations. On July 22, 2019, the Company announced top-line results according to which its Phase III clinical trial for AP-CD/LD did not achieve its primary and secondary endpoints. Accordingly, there is no assurance that the Companys operations will generate positive cash flows. As of September 30, 2020, the cumulative losses of the Company were approximately $200 million. Management expects that the Company will continue to incur losses from its operations, which will result in negative cash flows from operating activities. The Company believes that it has adequate cash to fund its ongoing activities into the first quarter of 2022. Its ability to continue to execute its operating plan is dependent on its ability to obtain additional capital principally through entering into collaborations, strategic alliances, or license agreements with third parties and/or raising capital from the public and/or private investors and/or institutional investors. The negative outcome of the Phase III clinical trial that was announced on July 22, 2019 and uncertainty regarding the Company's development programs is expected to adversely affect its ability to obtain funding and there is no assurance that it will be successful in obtaining the level of financing needed for its activities. If the Company is unsuccessful in securing sufficient financing, it may need to curtail or cease operations. In addition, the COVID-19 pandemic, that has spread globally, has resulted in significant financial market volatility and uncertainty in recent months. Many countries around the world, including in Israel and the United States, have implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on the conduct of business. The Company has implemented remote working and work place protocols for its employees in accordance with government requirements. The implementation of measures to prevent the spread of coronavirus have resulted in disruptions to the Companys partnering efforts which depend, in part, on attendance at in-person meetings, industry conferences and other events. It is still early to assess the full impact of the coronavirus outbreak and the extent to which the coronavirus impacts the Companys operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Companys financial condition, liquidity, or results of operations is uncertain. Furthermore, the estimation process required to prepare the Companys consolidated financial statements required assumptions to be made about future events and conditions and the impact of COVID-19 on the Companys financial results, and while the Companys management believe such assumptions are reasonable, they are inherently subjective and uncertain. The Companys actual results could differ materially from those estimates. As a result of these uncertainties, there is substantial doubt about the Companys ability to continue as a going concern. These financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. 3) On September 3, 2019, the Company was notified by NASDAQ that it was not in compliance with the minimum bid price requirements for continued listing on the NASDAQ. The notification provided that the Company had 180 calendar days, or until March 2, 2020, to regain compliance. On March 3, 2020, the Company was notified that it is eligible for an additional 180 calendar day period, or until August 31, 2020, to regain compliance. As a result of tolling of compliance periods by NASDAQ, on April 17, 2020, the Company was notified that the term to regain compliance was extended until November 13, 2020. To regain compliance, the bid price of the Companys ordinary shares must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. Accordingly, on July 15, 2020, the Companys shareholders approved amendments to the Companys articles of association to effect a reverse share split of its ordinary shares at a ratio with the range from 1-for-5 to 1-for-25, to be effective at the ratio and on a date to be determined by the board of directors in its sole discretion. The Company subsequently implemented a 1-for-20 reverse share split of its ordinary shares which was effective for NASDAQ marketplace purposes at the open of business on October 30, 2020, for more details see note 6. If the bid price of the Companys ordinary shares is at least $1.00 per share for at least 10 consecutive days following the effectiveness of the reverse share split, then the Company expects to regain compliance with the minimum bid price requirement. Failure to meet these requirements could result in a delisting of the Companys ordinary shares which could negatively impact the Companys ability to raise capital. All share and per share amounts in these unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the reverse share split. For more details see note 6. b. Basis of presentation The unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and S-X Article 10 for interim financial statements. Accordingly, they do not contain all information and notes required by US GAAP 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 Companys consolidated financial position as of September 30, 2020, the consolidated results of operations, changes in equity for the three and nine-month periods ended September 30, 2020 and 2019 and cash flows for the nine-month periods ended September 30, 2020 and 2019. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys annual financial statements for the year ended December 31, 2019, as filed in the 10-K on March 13, 2020. The condensed balance sheet data as of December 31, 2019 included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2019 but does not include all disclosures required by US GAAP for annual financial statements. The results for the nine-month period ended September 30, 2020 are not necessarily indicative of the results expected for the year ending December 31, 2020.