ITEM 7.
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MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
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The following table sets forth information
with respect to the beneficial ownership of Kitov Pharma’s ordinary shares as of March 29, 2020 by each person or entity
known by us to own beneficially more than 5% of Kitov Pharma’s outstanding ordinary shares.
The beneficial ownership of Kitov Pharma’s
ordinary shares in this table is determined in accordance with the rules of the SEC. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting
of the security, or investment power, which includes the power to dispose of or to direct the disposition of the security. For
purposes of the table below, we deem ordinary shares issuable pursuant to options or warrants that are currently exercisable or
exercisable within 60 days of March 29, 2020, if any, 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. The percentage of ordinary shares beneficially owned
is based on 50,485,588 ordinary shares (not including 1 share held in treasury). The data presented is based on information provided
to us by the holders, or disclosed in public regulatory filings in the U.S. or Israel, in accordance with the applicable law.
None of our shareholders has different voting
rights from other shareholders. To the best of our knowledge, we are not owned or controlled, directly or indirectly, by another
corporation or by any foreign government. We are not aware of any arrangement that may, at a subsequent date, result in a change
of control of our company. Unless otherwise noted below, all references to “ordinary shares” refers to ordinary shares
of Kitov Pharma.
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Shares
Beneficially Owned
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Name of Beneficial Owner
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Number
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Percentage
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5% or greater shareholders
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OrbiMed Israel Partners Limited Partnership(1)
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4,718,719
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9.35
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%
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M. Arkin (1999) Ltd.(2)
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4,463,953
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8.80
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%
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Pontifax Group(3)
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4,238,126
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8.39
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%
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(1)
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OrbiMed Israel Partners Limited
Partnership (“OrbiMed”) acquired its holdings in Kitov Pharma in January 2020 upon completion of the FameWave Transaction
in exchange for its holdings in FameWave and a cash investment of $1.167 million. The ADSs were issued on a private placement
basis in Israel pursuant to exemptions from the prospectus requirements under applicable Israeli securities laws and from the
registration requirements of the Securities Act. It owns (i) 3,461,983 restricted ADSs and (ii) warrants to purchase 1,256,736
restricted ADSs representing 1,256,736 restricted ordinary shares, which are all presently exercisable. Pursuant to the terms
of the warrants, OrbiMed cannot exercise the warrants to the extent that OrbiMed would beneficially own, along with any affiliates
after any such exercise, more than 9.99% of our outstanding ordinary shares. To our knowledge these are the only holdings of Orbimed
in Kitov Pharma. Orbimed has signed a Shareholder’s Undertaking in connection with the FameWave Transaction containing,
amongst other matters, certain standstill limitations and an undertaking not to vote its ADSs, subject to certain exceptions relating
to significant corporate transactions, against the recommendation of our board of directors, during an initial transfer lockup
period of between 6-12 months following the closing of the FameWave Transaction, and subsequent to the transfer lock-up period
until the earlier of its holdings being reduced to below 2.5% of our issued and outstanding shares or 24 months following the
closing of the FameWave Transaction. Of the 4,463,953 restricted ADSs beneficially owned by OrbiMed, 2,513,473 restricted ADSs
are being held by Altshuler Shaham as trustee and escrow agent in connection with the closing of the FameWave Transaction. While
such ADSs are held by Altshuler Shaham, the right to vote such ADSs is solely exercisable by OrbiMed.
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(2)
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M. Arkin Ltd. (“Arkin”) acquired its holdings in Kitov Pharma in January 2020 upon completion of the FameWave Transaction in exchange for its holdings in FameWave and a cash investment of $1.167 million. The ADSs were issued on a private placement basis in Israel pursuant to exemptions from the prospectus requirements under applicable Israeli securities laws and from the registration requirements of the Securities Act. These holdings include (i) 3,292,139 restricted ADSs and (ii) warrants to purchase 1,171,814 restricted ADSs representing 1,171,814 restricted, ordinary shares, which are immediately exercisable. To our knowledge these are the only holdings of Arkin in Kitov Pharma. Arkin has signed a Shareholder’s Undertaking in connection with the FameWave Transaction containing, amongst other matters, certain standstill limitations and an undertaking not to vote its ADSs, subject to certain exceptions relating to significant corporate transactions, against the recommendation of our board of directors, during an initial transfer lockup period of between 6-12 months following the closing of the FameWave Transaction, and subsequent to the transfer lock-up period until the earlier of its holdings being reduced to below 2.5% of our issued and outstanding shares or 24 months following the closing of the FameWave Transaction. Of the 3,292,139 restricted ADSs beneficially owned by Arkin, 2,343,629 restricted ADSs are being held by Altshuler Shaham Trust Co. Ltd. (“Altshuler Shaham”) as trustee and escrow agent in connection with the closing of the FameWave Transaction. While such ADSs are held by Altshuler Shaham, the right to vote such ADSs is solely exercisable by Arkin.
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(3)
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Includes (i) (A) 1,156,797
restricted ADSs and (B) warrants to purchase 403,759 restricted ADSs held by Pontifax (Israel) II LP (“Pontifax Israel”),
(ii) (A) 449,065 ADSs and (B) warrants to purchase 156,741 restricted ADSs held by Pontifax (Israel) II – Individual Investors
LP (“Pontifax Israel Individual Investors”) and (iii) (A) 1,535,732 ADSs and (B) warrants to purchase 536,032 restricted
ADSs held by Pontifax (Cayman) II LP (“Pontifax Cayman,” and together with Pontifax Israel and Pontifax Israel Individual
Investors, the “Pontifax Group”). The Pontifax Group acquired its holdings in Kitov Pharma in January 2020 upon completion
of the FameWave Transaction in exchange for its holdings in FameWave and a cash investment of $1.167 million. The ADSs were issued
on a private placement basis in Israel pursuant to exemptions from the prospectus requirements under applicable Israeli securities
laws and from the registration requirements of the Securities Act. Pontifax Group owns, in aggregate, 3,141,594 restricted ADSs
and warrants to purchase 1,096,532 restricted ADSs representing 1,096,532 restricted ordinary shares, which are presently exercisable.
Pursuant to the terms of the warrants, Pontifax Group cannot exercise the warrants to the extent that Pontifax Group would beneficially
own, along with any affiliates after any such exercise, more than 9.99% of our outstanding ordinary shares. To our knowledge,
including based on a form 13G filed by Pontifax (Israel) II L.P., Pontifax (Cayman) II L.P., Pontifax Management II L.P., Pontifax
Management 2 G.P. (2007) Ltd., Ran Nussbaum and Tomer Kariv. with the SEC on February 13, 2020, these are the only holdings of
Pontifax Group in Kitov Pharma. According to the disclosure on the Form 13G, Pontifax Management is the general partner of the
Pontifax (Israel) II - Individual Investors, L.P., Pontifax (Israel) II L.P., and Pontifax (Cayman) II L.P., and Pontifax Management
GP is the general partner of Pontifax Management. Mr. Kariv and Ran Nussbaum are directors of Pontifax Management GP and, as such,
hold voting and/or dispositive power over the ADSs held by these entities. Pontifax Group has signed a Shareholder’s Undertaking
in connection with the FameWave Transaction containing, amongst other matters, certain standstill limitations and an undertaking
not to vote its ADSs, subject to certain exceptions relating to significant corporate transactions, against the recommendation
of our board of directors, during an initial transfer lockup period of between 6-12 months following the closing of the FameWave
Transaction, and subsequent to the transfer lock-up period until the earlier of its holdings being reduced to below 2.5% of our
issued and outstanding shares or 24 months following the closing of the FameWave Transaction. Of the 3,141,594 restricted ADSs
beneficially owned by Pontifax Group, 2,193,085 restricted ADSs are being held by Altshuler Shaham as trustee and escrow agent
in connection with the closing of the FameWave Transaction. While such ADSs are held by Altshuler Shaham, the right to vote such
ADSs is solely exercisable by Pontifax Group.
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Except as indicated in footnotes to this
table, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares shown
to be beneficially owned by them, based on information provided to us by such shareholders or otherwise disclosed by them in public
filings.
Changes in Percentage Ownership by Major Shareholders
OrbiMed Israel Partners Limited Partnership
OrbiMed acquired its holdings in Kitov Pharma
in January 2020 upon completion of the FameWave Transaction in exchange for its holdings in FameWave and a cash investment of $1.167
million. It owns (i) 3,461,983 restricted ADSs and (ii) warrants to purchase 1,256,736 restricted ADSs representing 1,256,736 restricted
ordinary shares, which are presently exercisable. Pursuant to the terms of the warrants, OrbiMed cannot exercise the warrants to
the extent that OrbiMed would beneficially own, along with any affiliates after any such exercise, more than 9.99% of our outstanding
ordinary shares.
M. Arkin (1999) Ltd.
Arkin acquired its holdings in Kitov Pharma
in January 2020 upon completion of the FameWave Transaction in exchange for its holdings in FameWave and a cash investment of $1.167
million. These holdings include (i) 3,292,139 restricted ADSs and (ii) warrants to purchase 1,171,814 restricted ADSs representing
1,171,814 restricted, ordinary shares, which are immediately exercisable.
Pontifax (Israel) II LP/Pontifax (Israel) II – Individual
Investors LP/Pontifax (Cayman) II LP
Pontifax Group acquired its holdings in
Kitov Pharma in January 2020 upon completion of the FameWave Transaction in exchange for its holdings in FameWave and a cash investment
of $1.167 million. Pontifax Group owns, in aggregate, (i) 3,141,594 restricted ADSs and (ii) warrants to purchase 1,096,542 restricted
ADSs representing 1,096,542 restricted ordinary shares, which are presently exercisable. P pursuant to the terms of the warrants,
Pontifax Group cannot exercise the warrants to the extent that Pontifax Group would beneficially own, along with any affiliates
after any such exercise, more than 9.99% of our outstanding ordinary shares.
Acquisition of FameWave Ltd. –
Voting and Shareholder’s Undertaking
On March 14, 2019, we entered into the Acquisition
Agreement to acquire FameWave, a privately held Israeli biopharmaceutical company (FameWave’s main asset is CM-24, a clinical
stage humanized monoclonal antibody targeting CEACAM1, a novel immune checkpoint protein belonging to the Human CEA (Carcino-Embryonic
Antigen) protein family. The Acquisition Agreement was amended on August 16, 2019, pursuant to which the parties agreed that all
major closing conditions have been met other than finalizing the tax ruling for the sellers and the issuance and exchange of shares
in the companies. On January 7, 2020, the FameWave Transaction closed. Each of the selling FameWave shareholders, including the
investors in the concurrent private placement ADS issuance, has represented to us that other than the applicable voting undertaking
and the Registration Rights Agreement that was entered into at the closing of the FameWave Transaction, such party is not, and
will not be, a party to any agreement or arrangement, whether written or oral, with us, any of the our officers or shareholders
or a corporation in which the our officers or shareholders are an Interested Party (as defined in the Israeli Companies Law, 5759-1999),
regulating the management of the Company, the shareholders’ rights in the Company, the transfer of shares in the Company,
including any voting agreements, shareholder agreements or any other similar agreement even if its title is different or has any
other relations or agreements with any of our shareholders, directors or officers. In addition, each of the investment funds and
any FameWave shareholders that signed the Registration Rights Agreement in connection with the FameWave Transaction, entered into
the Shareholder’s Undertaking, which amongst other matters, contains undertakings of the shareholder not to seek to become
part of a bloc of shares of the Company which would necessitate a special tender offer under the Israeli Companies Law, or would
otherwise seek to effect a change of control in Kitov. Furthermore, to the best of our knowledge it is the intention of all of
the investment funds and the other FameWave shareholders to be passive unaffiliated shareholders of the Company. Upon the closing
of the acquisition, FameWave became a wholly owned subsidiary of Kitov Pharma. For more information on the transaction, including
details of the issuances of our securities to the significant shareholders of FameWave and the investment funds, please see Item
4.A. History and Development of the Company – Recent Developments – FameWave Acquisition. For more Information on the
Acquisition Agreement in connection with this transaction please see Item 10 – Additional Information – C. Material
Contracts – FameWave Acquisition Agreement. For more Information on the Voting and Shareholder’s Undertaking please
see Item 10 – Additional Information – C. Material Contracts – FameWave Acquisition Agreement. – Voting
and Shareholder’s Undertaking.