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. Intec's 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 Company's operations will generate positive cash flows. As of March 31, 2020, the cumulative losses of the Company were approximately $193.3 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, without further fund raising, it will not have sufficient working capital to enable it to continue advancing its activities, including the research and development of its product candidates and the manufacturing activities of the AP-CD/LD in the foreseeable future. The Company's ability 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. In addition, the COVID-19 pandemic ("Coronavirus"), that was reported in Wuhan, China in late 2019, has resulted in significant financial market volatility and uncertainty in recent weeks. The continued spread of the Coronavirus globally could materially adversely impact the Company's operations and workforce, including its research and development, partnering efforts, and its ability to raise capital. If the Company is unsuccessful in securing sufficient financing, it may need to curtail or cease operations. As a result of these uncertainties, there is substantial doubt about the Company's 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 Capital Market. 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. Failure to meet these requirements could result in a delisting of the Company's ordinary shares which could negatively impact the Company's ability to raise capital. 4) On March 1, 2019, the Company entered into a Sales Agreement (the "Sales Agreement") with Cowen and Company, LLC ("Cowen"). During January 2020, the Company sold 831,371 ordinary shares under the Sales Agreement raising a total of approximately $421 thousand (net of issuance expenses of $15 thousand). For more details see note 5a(1). On February 3, 2020, the Company completed an underwritten public offering and raised a total of approximately $5.7 million (net of underwriting discounts, commissions and other offering expenses in the amount of approximately $800 thousand). For more details see note 5a(2). In addition, on May 6, 2020, the Company completed a registered direct offering and concurrent private placement raising a total of approximately $4.5 million (net of placement agent and other offering expenses in the amount of approximately $500 thousand). For more details see note 7. 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 Company's consolidated financial position as of March 31, 2020, the consolidated results of operations, changes in equity and cash flows for the three-month periods ended March 31, 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 Company's 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 three-month period ended March 31, 2020 are not necessarily indicative of the results expected for the year ending December 31, 2020.