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

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

INDAPTUS THERAPEUTICS, INC. (successor to INTEC PHARMA LTD.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

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

(Continued) - 2

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)Unaudited Condensed Consolidated Balance Sheets

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

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

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)Unaudited Condensed Consolidated Statements of Operations

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

Unaudited Condensed Consolidated Statements of Cash Flows

NOTE 1 -1: NATURE OF OPERATIONS AND BASIS OF PRESENTATION:GENERAL

Indaptus Therapeutics, Inc. (“Indaptus”), formerly “Intec Parent Inc.”, was established and incorporated in Delaware on February 24, 2021, as a private Delaware corporation and wholly owned subsidiary of Intec Pharma Ltd., (“Intec Israel”), a former publicly traded company.

Also, in connection with the Merger, Indaptus changed its name from “Intec Parent, Inc.” to “Indaptus Therapeutics, Inc.”. Following completion of the Merger, shares of Indaptus common stock commenced trading at market open on August 4, 2021, on the Nasdaq Capital Market under the name “Indaptus Therapeutics, Inc.” and under the symbol “INDP”.

In connection with the completion of the Merger, on August 4, 2021, the Company’s board determined to wind down the Accordion Pill business of Intec Israel. The Company expects that the winding down of the Accordion Pill business will be completed by the end of 2021.

For accounting purposes, Decoy is considered to have acquired Indaptus based on the terms of the Merger and an analysis of the criteria outlined in Accounting Standards Codification 805. The Merger has been accounted for as an asset acquisition (reverse merger transaction) rather than a business combination, as the net assets acquired/assumed by Decoy do not meet the definition of a business under U.S. GAAP. Accordingly, the historical financial statements of Decoy became the historical financial statements of the combined company upon the consummation of the Merger and the net assets acquired in connection with the Merger were recorded at their estimated fair market value as of August 3, 2021, the date of completion of the Merger.

Prior to the Merger Decoy’s capitalization was comprised of 732,635 outstanding shares of common stock, par value $0.001 per share (the “Decoy Common Stock”), 314,928 outstanding shares of Decoy preferred stock, par value $0.001 per share that were converted into 314,928 shares of Decoy Common Stock and 288,818 shares of Decoy Common Stock after giving effect to the conversion of Decoy SAFEs (Simple Agreements for Future Equity) into Decoy Common Stock.

As of the effective time of the Merger each outstanding share of Decoy Common Stock was converted into 2.654353395 shares of Indaptus common stock, par value $0.01 per share. Accordingly, 1,336,381 shares of Decoy’s Common Stock were converted to 3,547,227 Indaptus’ shares of common stock. In addition, at the effective time of the Merger, each outstanding and unexercised Decoy stock option converted into a stock option exercisable for that number of shares of Indaptus common stock subject to such option and the exercise price being appropriately adjusted to reflect the exchange ratio. Accordingly, 77,639 Decoy’s outstanding options were converted to 206,079 Indaptus stock options.

The accompanying unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements give retroactive effect to the exchange ratio for all periods presented. Any difference is recognized as an adjustment to additional paid in capital.

On August 3, 2021, immediately prior to the effectiveness of the Merger, Indaptus had 1,858,743 shares of common stock outstanding and a market capitalization of $17.9 million. The estimated fair value of the net assets of Indaptus on August 3, 2021, prior to the Merger, was approximately $8.7 million. The fair value of common stock on the Merger closing date, prior to the Merger, was above the fair value of the Indaptus’ net assets. As Indaptus’ net assets were predominantly composed of cash offset against current liabilities, the fair value of Indaptus’ net assets as of August 3, 2021, prior to the Merger, is considered to be the best indicator of the fair value and, therefore, the estimated preliminary purchase consideration.

The following table summarizes the net assets acquired based on their estimated fair values as of August 3, 2021, immediately prior to completion of the Merger:

ESTIMATED FAIR VALUE OF ASSETS ACQUIRED

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION (continued):

Risks and uncertainties

The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional capital (or financing) to fund operating losses (see below), competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, and dependence on key individuals.

The COVID-19 pandemic, that has spread globally, has resulted in significant financial market volatility and uncertainty in the past year. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies, including by causing disruptions in the supply of its product candidates and the conduct future clinical trials. The COVID-19 pandemic may affect the operations of the FDA and other health authorities, which could result in delays of reviews and approvals, including with respect to the Company’s product candidates. Additionally, while the potential economic impact brought by, and the duration of the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact its short-term and long-term liquidity. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company’s financial condition, liquidity, or results of operations is uncertain.

Going concern and management’s plans

The Company has incurred net losses and utilized cash in operations since inception, has an accumulated deficit as of September 30, 2021, of $12.5million, and expects to incur future additional losses as clinical testing and commercialization of the Company’s product candidates will require significant additional financing. Prior to the closing of the Merger, on August 3, 2021, Indaptus closed a private placement to raise gross cash proceeds of $30.0 million. The Company believes it has adequate cash to fund its operations for at least one year after the date of issuance of these consolidated financial statements.

Management plans to raise additional capital through equity and/or debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, these plans are not entirely within its control and cannot be assessed as being probable of occurring. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, or eliminate its research and development programs or other operations. If any of these events occur, the Company’s ability to achieve the development and commercialization goals would be adversely affected.

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.

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 2 - Basis of presentation

SIGNIFICANT ACCOUNTING POLICIES: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 September 30, 2021, the consolidated results of operations, changes in stockholders’ equity for the three and nine-month periods ended September 30, 2021, and 2020 and cash flows for the nine-month periods ended September 30, 2021 and 2020.

a.   PrinciplesThese unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Decoy’s annual financial statements for the year ended December 31, 2020, and their accompanying notes included in the Form S-4 filed with the SEC in connection with the Merger. The condensed balance sheet data as of consolidationDecember 31, 2020, included in these unaudited condensed consolidated financial statements was derived from the audited financial statements for the year ended December 31, 2020, but does not include all disclosures required by US GAAP for annual financial statements.

b.Fair value measurement

c.The results for the nine-month period ended September 30, 2021, are not necessarily indicative of the results expected for the year ending December 31, 2021.

Principles of consolidation

The consolidated financial statements include the accounts of Indaptus and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.

Use of estimates

The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. The most significant estimates relate to the determination of the fair value of stock-based compensation and the determination of period-end obligations to certain contract research organizations. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates.

Loss per share

Loss per share,

The following sharestock options, warrants and pre-funded warrants were excluded from the calculation of diluted loss per ordinary share because their effect would have been anti-dilutive for the periods presented (share data):

 SCHEDULE OF ANTI-DILUTIVE SECURITIES

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)Cash and cash equivalents

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 3 - COMMITMENTS AND CONTINGENT LIABILITIES:The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2021, and December 31, 2020, cash and cash equivalents consist primarily of checking and money market deposits. The Company’s cash balances exceed those that are federally insured; however, the Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held. To date, the Company has not recognized any losses caused by uninsured balances.

Assets held for sale

As a consequence,In connection with the Merger, the Company performeddetermined certain equipment held for use by pre-Merger Intec Israel was no longer useful to the Company’s operations and entered into an impairment assessment as of June 30, 2021, and recordedagreement with an impairment charge ofunrelated party to sell the Equipment in the amount of approximately $2.4 million and the Equipment has been impaired to approximately $1.3 million to reflect itsequipment. The Company recognizes assets held for sale at estimated fair value. For more details, see note 4b.

In addition, underThe fair value of the Agreement, the Company has a liability,equipment as of JuneSeptember 30, 2021, was approximately $600,000, net of commissions and disposition costs,based on purchase offers that the unrelated party received from certain buyers in the amount of €2.0 million (approximately $2.4 million) for LTS’s facility upgrading costs which will be paid upon termination. The Company expects to pay LTS this liability during the third quarter ofNovember 2021.

Property and equipment

INDAPTUS THERAPEUTICS INC. (successor to INTEC PHARMA LTD.)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 3 - COMMITMENTS AND CONTINGENT LIABILITIES (continued):

Plaintiffs inProperty and equipment assets are stated at cost less accumulated depreciation. Depreciation is calculated using the Actions alleged, among other things, thatstraight-line method over the membersestimated useful lives of the Intec Board breached their fiduciary duties by agreeing toassets. The Company uses an estimated useful life of three years for employee-related computers and other office equipment and five years for furniture. Leasehold improvements are amortized over the Merger and misrepresented and failed to disclose in the proxy statement/prospectus (the “Proxy Statement”), which forms partshorter of the Registration Statement on Form S-4 (the “Registration Statement”) filed bylease-term or the Company as a co-registrant on April 20, 2021 with the U.S. Securities and Exchange Commission (the “Commission”), allegedly material information necessary for the shareholdersestimated useful life of the Company to cast an informed vote on the Merger.

related asset.

On May 12, 2021, solely to eliminatePatents

The Company expenses patent costs, including related legal costs, as incurred and records such costs within general and administrative expense in the burden, expense and riskaccompanying consolidated statements of further litigation, and without admitting any liability or wrongdoing, the Company made certain supplemental disclosures to the Proxy Statement forming part of Amendment No. 1 to the Registration Statement filed by the Company as a co-registrant with the Commission on May 12, 2021.operations.

Accrued research and development costs

Plaintiffs subsequently voluntarily dismissed

The Company records the Actions (on May 13, 2021 in the St. Hilarie and Tran cases, on July 12, 2021 in the Davidson case, and on July 13, 2021 in the Figueroa case). In addition, and in order to avoid the uncertainties and costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred. These costs are a contested application for plaintiffs’ attorneys’ feessignificant component of the Company’s research and development expenses, with a substantial portion of the Company’s on-going research and without any admission that plaintiffs’ claims were meritorious or that any such fees or expenses would be owed, on July 13, 2021, the defendants entered into an agreement pursuant to which the Company agreed to pay plaintiffs’ counsel a fee in the amount of $225,000 (the “Negotiated Attorney Fee”). The Negotiated Attorney Fee is made in full satisfaction of anydevelopment activities conducted by third-party service providers, including contract research and all claims for fees or costs by any of Plaintiffs’ counsel in the Actions and fully resolves them. The Negotiated Attorney Fee was recorded in the statement of operation as general and administrative expenses for the six-month period ended June 30, 2021, and was paid in July 2021.

NOTE 4 - IMPAIRMENT OF NON-CURRENT ASSETSmanufacturing organizations.

The Company accrues for expenses resulting from obligations under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers for which payment flows do not match the periods over which services or materials are provided to the Company. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the proportion of work performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset, which will be amortized or expensed as the contracted services are performed.

Research and development expenses

Research and development costs that do not meet the criteria for capitalization are expensed as incurred. Research and development expenses consist primarily of fees paid to CROs as well as compensation expenses for certain employees involved in the planning, managing, and analyzing the work of the CROs.

General and administrative expenses

General and administrative expenses include compensation, employee benefits, and stock-based compensation for executive management, finance administration and human resources, facility costs (including rent), professional service fees, and other general overhead costs, including depreciation, to support the Company’s operations.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it was probableis more likely than not that some portion or all of the deferred tax assets will not be realized in the foreseeable future. As of September 30, 2021, and December 31, 2020, the Company has recorded a full valuation allowance against its deferred tax assets.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in general and administrative expenses.

Stock-based compensation

The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined using the Black-Scholes-Merton (“Black-Scholes”) option pricing model as of the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis.

The Black-Scholes model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value of options granted by using the Black-Scholes model with the following assumptions:

Expected Volatility—The Company estimated volatility for option grants by evaluating the historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.

Expected Term—The expected term of the Company’s options represents the period that the Disposition will result in a Business Termination andstock-based awards are expected to be outstanding. The expected term was estimated using the simplified method for employee stock options since this is considered a triggering event the Company performed an impairment assessmentdoes not have adequate historical exercise data to estimate the expected term.

Risk-Free Interest Rate—The risk-free interest rate is based on its non-current assetsthe implied yield currently available on US Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date.

Dividend Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

The Company has elected to recognize forfeitures as of June 30, 2021. Following this assessment, the Company recorded an impairment charge on its non-current assets in the amount of approximately $3.2 million. The Company’s non-currents assets include operating lease right-of-use assets and property and equipment which include the Equipment at LTS and property and equipment in the offices and operational spaces in Jerusalem (the “Group Assets”).

they occur.

Fair value measurements

Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company follows the established framework for measuring fair value and providing disclosures about fair value measurements.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Accounting Standards Codification (“ASC”) 820 – Fair Value Measurement requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to estimate fair value, and defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of September 30, 2021 and December 31, 2020, the recorded values of cash and cash equivalents, assets held for sale, prepaid expenses, and accounts payable and other current liabilities approximate their fair values due to the short-term nature of these items.

As of December 31, 2020, the carrying value of outstanding SAFEs approximates the estimated aggregate fair value of the instruments as the valuation cap provided in the SAFEs is a reasonable approximation of the Company’s enterprise value. On August 3, 2021, the SAFEs converted into common stock of the post-Merger entity.

Recently adopted accounting pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2018-13 as of January 1, 2020 with no impact on the financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 31, 2020 and interim periods within that year. The Company adopted ASU 2019-12 on January 1, 2021 with no material impact to its financial statements or related disclosures.

NOTE 3: PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets are comprised of the following:

SCHEDULE OF PREPAID EXPENSE AND OTHER CURRENT ASSETS

NOTE 4: ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

Accounts payable and other current liabilities are comprised of the following:

SCHEDULE OF ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

NOTE 5: STOCK-BASED COMPENSATION

In 2018, Decoy adopted the Decoy Biosystems, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan, pursuant to which the board of directors may grant nonstatutory stock options to purchase shares of the Company’s common stock to outside directors and consultants and either nonstatutory or incentive stock options to purchase shares of the Company’s common stock to employees.

In June 2021, the Intec Israel shareholders voted to approve the Indaptus 2021 Stock Incentive Plan, a share option plan for grants to employees, officers, consultants, directors and other service providers, (the “2021 Plan”), that became effective upon the closing of the Merger. The 2021 Plan provides for up to 1,864,963 shares of the Company’s common stock. Immediately after the Merger, all Decoy’s outstanding options under the 2018 Plan were converted to 206,079 options under the 2021 Plan. In addition, immediately after the Merger, all Intec Israel’s outstanding options were converted into 57,701 options of Indaptus under the 2021 Plan. Future awards may be made only under the 2021 Plan.

The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, unrestricted stock awards, stock appreciation rights and other forms of stock-based compensation. The 2021 Plan permits the Company’s board to change the type, terms and conditions of awards as circumstances may change. This flexibility to adjust the type of compensation to be granted is particularly important given current economic and world events.

INDAPTUS THERAPEUTICS INC. (successorOn August 4, 2021, Indaptus’ board approved a grant of an aggregate of options to INTEC PHARMA LTD.)purchase 1,049,750 shares of common stock to Indaptus’ directors, executive officers and employees as follows:

NOTESSCHEDULE OF OPTIONS GRANTED TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES

(Unaudited)

A summary of the stock option activity during the nine months ended September 30, 2021, is presented in the table below:

NOTE 4 - IMPAIRMENTSCHEDULE OF NON-CURRENT ASSETS (continued):SHARE BASED-COMPANSATION

The Company recognized stock-based compensation expense of $795,338 and $39,208 during the three months ended September 30, 2021 and 2020, respectively. The Company recognized stock-based compensation expense of $836,456 and $116,872 during the nine months ended September 30, 2021, and 2020, respectively. As of September 30, 2021, total compensation cost not yet recognized related to unvested stock options was approximately $6.6 million, which is expected to be recognized over a weighted-average period of 2.2 years.

The Company recorded an impairment chargeestimates the fair value of stock options on its Group Assets as follows:the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The weighted average inputs used to measure the value of the options granted in August 2021 are presented in the table below. The weighted average grant date fair value of stock option issued during the three and nine months ended September 30, 2021, was $8.45.

SCHEDULE OF WEIGHTED AVERAGE INPUTS USED TO MEASURE VALUE OF OPTIONS GRANTED