Exhibit 99.1

POLYPID LTD.

NOTICE OF ANNUAL AND EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 25, 2025

Notice is hereby given that an Annual and Extraordinary General Meeting of Shareholders (the “Meeting”) of PolyPid Ltd. (“PolyPid” or the “Company”) will be held on June 25, 2025 at 2:00 p.m. Israel time at the Company’s office, located at 18 Hasivim Street, Petach Tikva 4959376, Israel, for the following purposes:

The Company’s board of directors (the “Board of Directors”) recommends that you vote in favor of the proposed resolutions, which are described in the attached proxy statement.

Shareholders of record at the close of business on May 27, 2025 (the “Record Date”), are entitled to notice of and to vote at the Meeting, either in person or by appointing a proxy to vote in their stead at the Meeting (as detailed below).

A form of proxy for use at the Meeting, as attached to the proxy statement, together with a return envelope, will be sent to holders of the Company’s ordinary shares, no par value (the “Ordinary Shares”). By appointing “proxies,” shareholders may vote at the Meeting whether or not they attend. If a properly executed proxy in the attached form is received by the Company at least 4 hours prior to the Meeting, all of the Ordinary Shares represented by the proxy shall be voted as indicated on the form. Subject to applicable law and regulations, in the absence of instructions, the Ordinary Shares represented by properly executed and received proxies will be voted “FOR” all of the proposed resolutions to be presented at the Meeting for which the Board of Directors recommends a vote “FOR”. Shareholders may revoke their proxies or voting instruction form (as applicable) at any time before the deadline for receipt of proxies or voting instruction form (as applicable) by filing with the Company (in the case of holders of Ordinary Shares) a written notice of revocation or duly executed proxy or voting instruction form (as applicable) bearing a later date.

If your shares are registered directly in your name with our transfer agent, Equinity Trust Company, LLC, you are considered, with respect to those shares, the shareholder of record. In such case, these proxy materials are being sent directly to you. As the shareholder of record, you have the right to use the proxy card included with this proxy statement to grant your voting proxy directly to Mr. Tal Vilnai, Secretary and General Counsel of the Company, and Orna Blum, Assistant Secretary and Legal Counsel of the Company, or to vote in person at the Meeting.

If your shares are held through a bank, broker or other nominee, they are considered to be held in “street name” and you are the beneficial owner with respect to those shares. A beneficial owner as of the Record Date has the right to direct the bank, broker or nominee how to vote shares held by such beneficial owner at the Meeting and must also provide the Company with a copy of their identity card, passport or certification of incorporation, as the case may be. If your shares were held in “street name,” as of the Record Date, these proxy materials are being forwarded to you by your bank, broker or nominee who is considered, with respect to those shares, as the shareholder of record, together with a voting instruction card for you to use in directing the bank, broker or nominee how to vote your shares. You also may attend the Meeting. Because a beneficial owner is not a shareholder of record, you may not vote those shares directly at the Meeting unless you obtain a “legal proxy” from the bank, broker or other nominee that holds your shares directly, giving you the right to vote the shares at the Meeting. Brokers who hold shares in “street name” for clients typically have authority to vote on “routine” proposals even when they have not received instructions from beneficial owners. Proposal 1 on the agenda of the Meeting is considered routine. Absent specific instructions from the beneficial owner of the shares, brokers are not allowed to exercise their voting discretion, among other things, with respect to the election of directors or any matter that relates to executive compensation; and therefore, a “broker non-vote” occurs with respect to such uninstructed shares. Therefore, it is important for a shareholder that holds Ordinary Shares through a bank or broker to instruct its bank or broker how to vote its shares, if the shareholder wants its shares to count for all proposals.

Exhibit 99.2

POLYPID LTD.

PETACH TIKVA, ISRAEL

ANNUAL AND EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 25, 2025

The enclosed proxy is being solicited by the board of directors (the “Board of Directors”) of PolyPid Ltd. (the “Company” or “our,” “we” or “us”) for use at the Company’s annual and extraordinary general meeting of shareholders (the “Meeting”) to be held on June 25, 2025, at 2:00 p.m. Israel time, or at any adjournment or postponement thereof.

Upon the receipt of a properly executed proxy in the form enclosed, the persons named as proxies therein will vote the ordinary shares, no par value, of the Company (the “Ordinary Shares”) covered thereby in accordance with the directions of the shareholders executing the proxy. In the absence of such directions, and except as otherwise mentioned in this proxy statement, the Ordinary Shares represented thereby will be voted in favor of each of the proposals described in this proxy statement.

Two or more shareholders present, personally or by proxy, holding in the aggregate not less than twenty five percent (25%) of the Company’s outstanding Ordinary Shares, shall constitute a quorum for the Meeting. If within half an hour from the time the Meeting is convened a quorum is not present, the Meeting shall stand adjourned until the same day, June 25, 2025 at 4:00 p.m. Israel time at the same place (the “Adjourned Meeting”). At the Adjourned Meeting, if a quorum is not present within half an hour from the time appointed for such meeting, any number of shareholders present personally or by proxy shall be deemed a quorum and shall be entitled to deliberate and to resolve in respect of the matters for which the Meeting was convened. Abstentions and broker non-votes are counted as Ordinary Shares present for the purpose of determining a quorum.

Pursuant to the Israeli Companies Law, 5759-1999 (the “Companies Law”), Proposals No. 1, 2 and 7 described hereinafter each require the affirmative vote of shareholders present at the Meeting, in person or by proxy, and holding Ordinary Shares of the Company amounting in the aggregate to at least a majority of the votes actually cast by shareholders with respect to such proposals (a “Simple Majority”). The vote for re-electing each of the directors as set forth in Proposal No. 2 shall be made separately.

Proposals 3, 4, 5 and 6 are subject to the fulfillment of the voting requirement above and also one of the following additional voting requirements: (i) the majority of the shares that are voted at the Meeting in favor of such Proposal, excluding abstentions, includes a majority of the votes of shareholders who are not controlling shareholders and do not have a personal interest in the Proposal; or (ii) the total number of shares of the shareholders mentioned in clause (i) above that are voted against such Proposal does not exceed two percent (2%) of the total voting rights in the Company (the “Special Majority”).

For this purpose, “Personal Interest” is defined under the Companies Law as: (1) a shareholder’s personal interest in the approval of an act or a transaction of the Company, including (i) the personal interest of any of his or her relatives (which includes for these purposes foregoing shareholder’s spouse, siblings, parents, grandparents, descendants, and spouse’s descendants, siblings, and parents, and the spouse of any of the foregoing); (ii) a personal interest of a corporation in which a shareholder or any of his/her aforementioned relatives serve as a director or the chief executive officer, owns at least 5% of its issued share capital or its voting rights or has the right to appoint a director or chief executive officer; and (iii) a personal interest of an individual voting via a power of attorney given by a third party (even if the empowering shareholder has no personal interest), and the vote of an attorney-in-fact shall be considered a personal interest vote if the empowering shareholder has a personal interest, and all with no regard as to whether the attorney-in-fact has voting discretion or not, but (2) excludes a personal interest arising solely from the fact of holding shares in the Company.

For this purpose, a “controlling shareholder” is any shareholder that has the ability to direct the Company’s activities (other than by means of being a director or office holder of the Company). A person is presumed to be a controlling shareholder if he or she holds or controls, by himself or together with others, one half or more of any one of the “means of control” of a company; in the context of a transaction with an interested party, a shareholder who holds 25% or more of the voting rights in the company if no other shareholder holds more than 50% of the voting rights in the company, is also presumed to be a controlling shareholder. “Means of control” is defined as any one of the following: (i) the right to vote at a general meeting of a company, or (ii) the right to elect directors of a company or its chief executive officer.

According to the Companies Law Regulations (Exemptions for Companies whose Securities are Listed for Trading on a Stock Exchange Outside of Israel) 5760-2000, by signing and submitting the attached proxy card, a shareholder of record declares and approves that he or she is not a controlling shareholder and/or has no personal interest in the approval of any of the items on the Meeting agenda that requires such declaration under the Companies Law, with the exception of a personal interest that the shareholder positively informed the Company about, as detailed in the attached proxy card.

Proposal 8 will not involve a vote by the shareholders and accordingly there is no proposed resolution.

It is noted that there may be changes on the agenda after publishing the proxy, and there may be position statements which can be published. Therefore, the most updated agenda will be furnished to the U.S Securities and Exchange Commission (“SEC”) on a Report on Form 6-K and will be made available to the public on the SEC’s website at www.sec.gov.

PROPOSAL 1

TO RE-ELECT KOST FORER GABBAY & KASIERER, CERTIFIED PUBLIC ACCOUNTANTS, AS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF THE COMPANY AND TO AUTHORIZE THE BOARD OF DIRECTORS OF THE COMPANY TO DETERMINE THEIR COMPENSATION

Under the Companies Law, the appointment of an independent auditor requires the approval of the shareholders of the Company.

The Board of Directors has approved and recommended the Company’s shareholders to approve the re-election of the accounting firm of Kost Forer Gabbay & Kasierer, Certified Public Accountants (Isr.), a member firm of EY Global (“EY”), as the independent registered public accountants of the Company until the next annual general meeting, and to authorized the Board of Directors to determine their compensation until the next annual general meeting.

The Board of Directors believes that the re-election of EY as the independent public accountants of the Company is appropriate and in the best interest of the Company and its shareholders, after examining, among other things, its expertise, experience in the industry in which the Company operates, the length of time they have served as an auditor of the Company, their reasonable compensation and its independence as an auditor.

For additional information of the fees paid by the Company and its subsidiaries to EY for each of the previous two fiscal years, please see “Item 16C - Principal Accountant Fees and Services” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on February 26, 2025.

The shareholders of the Company are requested to adopt the following resolution:

“RESOLVED, to re-elect EY as the Company’s independent registered public accountants, and to authorize the Board of Directors to determine their compensation, until the next annual general meeting of the Company’s shareholders.”

The approval of this proposal, as described above, requires the affirmative vote of a Simple Majority.

The Board of Directors unanimously recommends that the shareholders vote FOR the above proposal.

PROPOSAL 2

TO RE-ELECT EIGHT MEMBERS OF THE BOARD OF DIRECTORS OF THE COMPANY AND APPROVE THEIR COMPENSATION

Under the Companies Law and the Company’s Amended and Restated Articles of Association (the “Articles”), the management of the Company’s business is vested in the Board of Directors. Our Board of Directors is currently comprised of nine directors – Dikla Czaczkes Akselbrad, Yechezkel Barenholz, Joseph BenAmram, Nir Dror, Yitzchak Jacobovitz, Itzhak Krinsky, Robert B. Stein, Nurit Tweezer-Zaks (each, a “Re-Elected Director”) and Jacob Harel (Chairman). Mr. Harel informed the company that he will not seek re-election at the Meeting.

According to the resolution of the Company’s nomination committee from May 11, 2025, each of Prof. Barenholz, Mr. BenAmram, Mr. Dror, Mr. Jacobovitz, Dr. Krinsky, Dr. Stein and Dr. Tweezer-Zaks qualifies as an ‘independent director’ under the Nasdaq Stock Market rules.

It is proposed to re-elect each of the Re-Elected Directors as members of the Board of Directors to hold office until the close of the next annual general meeting, unless their office becomes vacant earlier in accordance with the provisions of the Companies Law and the Articles, unless otherwise provided in the Articles. Each director nominee has certified to us that they meet all requirements of the Companies Law for election as a director of a public company, they possess the necessary qualifications and have sufficient time to fulfill their duties as directors of the Company, taking into account the size and needs of the Company.

In their capacity as members of the Company’s Board of Directors, each Re-Elected Director, other than Ms. Czaczkes Akselbrad and Mr. Jacobovitz, shall be entitled to the following fees: (i) an annual fee of NIS 37,000 (approximately $10,4371) to directors located in Israel; $20,000 to the non-Israeli directors; and (ii) an attendance fee of NIS 2,480 (approximately $700) per meeting of the Board of Directors or a committee thereof, NIS 1,480 (approximately $417) for a Zoom/Teams/telephonic meeting or NIS 1,240 (approximately $350) for written resolutions, which amounts are less than the maximum amounts set forth in the second and third appendices of the Companies Regulations (Rules Concerning Compensation and Expenses of an External Director), 5760-2000.

Ms. Czaczkes Akselbrad’s compensation for her duty as Chief Executive Officer is in accordance with the terms of employment which were approved by the Company’s shareholders on May 3, 2022.

Mr. Jacobovitz decided to waive any compensation as a director.

In addition, according to the Company’s Current Compensation Policy (as defined in Proposal 6 herein), each Re-Elected Director, other than Ms. Czaczkes Akselbrad and Mr. Jacobovitz, will be granted the non-executive annual options grant, as described in the Current Compensation Policy. In addition, if Proposal 3 herein regarding the approval of an additional option grant for non-employee members of the Board of Directors is approved by the shareholders of the Company, each Re-Elected Director, other than Ms. Czaczkes Akselbrad and Mr. Jacobovitz, will be granted immediately the Additional Options Grant to Non-Executive Directors (as defined in Proposal 3 herein) as well.

In addition, in their capacity as members of the Board of Directors, the Re-Elected Directors shall continue to be entitled to the same insurance, indemnification and exculpation arrangements as are currently in effect for the Company’s officers and directors, all of which are in accordance with the Articles and the Company’s Current Compensation Policy (as defined in Proposal 6 herein) or as may be from time to time.

A brief biography of the background and experience of each Re-Elected Director is set forth below:

Ms. Dikla Czaczkes Akselbrad has served as our Chief Executive Officer since July 2022 and a director since August 2022. From December 2016 to July 2022, Ms. Czaczkes Akselbrad served as our Executive Vice President and Chief Financial Officer. Prior to that time, Ms. Czaczkes Akselbrad served as our Chief Strategy Officer from July 2014 to December 2016. Ms. Czaczkes Akselbrad has over 20 years of experience in capital markets, finance and business development. Ms. Czaczkes Akselbrad served as a chief financial officer of Compugen Ltd. (Nasdaq: CGEN) from February 2008 to May 2014. She holds a B.A. in accounting and economics and an M.B.A. in finance, both from Tel Aviv University, and is a certified public accountant in Israel.

Prof. Yechezkel Barenholz, Ph.D. has served as a director since April 2008. Prof. Barenholz currently serves as head of the Laboratory of Membrane and Liposome Research at the Department of Biochemistry of the Hadassah Medical School at the Hebrew University of Jerusalem, a position he has held since 1975. He has served as Chief Executive Officer and Chief Scientific Officer of Ayana Pharma Ltd. since 2018 and 2014, respectively. He served as a director of Aulos Bioscience from 2019 to 2023. He is the major inventor and co-developer of Doxil®, the first nano-delivery system approved by the FDA, now approved globally and used to treat more than one million cancer patients. He led the development of generic Doxil at Ayana Pharma Ltd. that was approved by the FDA on October 2021, and which is now sold in the United States and Israel.  Prof. Barenholz has been awarded many national and international prizes including the prestigious Israel Prime Minister 2020 EMET prize in Nanotechnology. He holds a B.S., M.S. and Ph.D. in biochemistry from the Hebrew University of Jerusalem.

Mr. Joseph BenAmram has served as a director since May 2023. Mr. Joseph BenAmram held various leadership roles at Merck in sales, marketing and business development for over 22 years. In his last position he was Senior Vice President & President of EURAM Region from October 2017 to February 2019. From June 2016 to September 2017, he served as Senior Vice President & President of MER Region and from October 2013 to May 2016 as Senior Vice President & President, Diversified Brands Division. From August 2010 to October 2013, Mr. BenAmram served as Merck’s Vice President & General Manager Emerging Markets. Mr. BenAmram currently serves as the Chief Strategy Officer of Golden Age Health PTE. LTD. (since March 2023), Senior Advisor to Armira PE (since January 2023), Senior Advisor to Interna Therapeutics (since May 2021) and the chairman of the board of directors of MediCane Health Inc. (since March 2019). He holds an M.B.A. from Tel Aviv University, Recanati Graduate School of Business Administration, and a Bachelor’s degree in Economics and Management from Tel Aviv University, Recanati Graduate School of Business Administration.

Mr. Nir Dror has served as a director since May 2020. Mr. Dror currently serves as the Chief Financial Officer of Aurum Ventures M.K.I. Ltd., a position he has held since 2013. He holds a B.A. and L.L.M. from Tel Aviv University and an M.B.A. from the University of Michigan.

Mr. Yitzchak Jacobovitz has served as a director since February 2025. Mr. Jacobovitz is currently a partner at AIGH Capital Management, a position he has held since 2014. He has served as a director at the board of directors of Myomo, Inc. (NYSE American: MYO) since January 2023. Prior to his current positions, Mr. Jacobovitz was a managing director at Capstone, a policy research firm, and an analyst at Leap Tide Capital, a special situations hedge fund. Mr. Jacobovitz earned his Masters in Business Administration from Johns Hopkins University and is a Chartered Financial Analyst.

Dr. Itzhak Krinsky, Ph.D. has served as a director since January 2019. Dr. Krinsky currently serves as a director and member of the audit committee of Noramco Inc., Woodstock Sterile Solutions and Apotex Inc., positions he has held since September 2018, April 2021 and April 2023, respectively. Dr. Krinsky previously worked at Teva Pharmaceuticals Industries Ltd. as the Chairman of Teva Japan, Chairman of Teva South Korea and Head of Business Development, Asia Pacific from October 2012 to April 2016 after serving for more than 7 years on Teva’s Executive Committee. Dr. Krinsky served as a director of Kamada Ltd. from November 2017 to November 2019, as a member of the nominating and corporate governance committee of Advanz Pharma Corp. (formerly known as Concordia Healthcare Corp) from May 2017 to September 2018 and a Director and member of the Audit Committee at Globrands Ltd from July 2018 to December 2023. He holds a B.A. and M.A. in economics from Tel Aviv University and a Ph.D. in economics from McMaster University.

Dr. Robert B. Stein, M.D., Ph.D., has served as a director since June 2020. Dr. Stein currently serves as a Venture Partner at Samsara BioCapital, a position he has held since January 2018, and he is the Principal at RBS Biotech Consulting, LLC, which he founded in August 2008. He previously served as the Chief Scientific Officer and Head of Research and Development of Agenus Inc. from January 2014 to January 2016 and as the President of Research and Development from January 2016 to April 2017. He served as President, Regenerative Medicine at Mimedx, from 2019 to 2022. He serves on the boards of directors of Protagenic Therapeutics, Inc. since February 2016 and ImmunoGenesis Inc. since June 2020. He holds a B.S. in biology and chemistry from Indiana University and an M.D. and a Ph.D. in physiology and pharmacology from Duke University. Dr. Stein is board certified in Anatomic and Clinical Pharmacology. He has 45 years of experience in the pharma and biotech industries, including leadership roles at Merck, Ligand, DuPont, Incyte, Roche, and Kinemed in addition to the roles mentioned above. He has played a key role in the discovery and/or development of eight registered medicines, including Sustiva®, Promacta®, and Eliquis®.

Dr. Nurit Tweezer-Zaks, M.D., has served as a director since November 2023. Dr. Tweezer-Zaks served as Chief Executive Officer of MediCane R&D from July 2022 to December 2024. She previously served as Chief Medical Officer and Business Development of MediCane Health Inc. from April 2021 to July 2022. Dr. Tweezer-Zaks served as Chief Medical Officer of aMOON Venture Capital Fund from May 2020 to April 2021, and as Operating Partner and Head of Sourcing from June 2018 to April 2020. Prior to this, Dr. Tweezer-Zaks held increasingly senior positions at Sanofi. In her most recent role at Sanofi from June 2017 to June 2018, she served as Global Established Products Medical Lead – Strategic Decision for Portfolio Enhancement. Dr. Tweezer-Zaks holds M.D. and B.S. degrees from Ben Gurion University School of Medicine in Beer Sheva, Israel, and earned an M.B.A. from the Kellogg-Recanati International Executive MBA Program, a global partnership program between Northwestern University’s Kellogg School of Management in Evanston, IL, and Tel Aviv University’s Recanati Graduate School of Business Administration in Israel.

The Company’s shareholders will be requested to adopt the following resolutions at the Meeting:

The approval of each of these proposals, as described above, requires the affirmative vote of a Simple Majority.

The Board of Directors unanimously recommends that the shareholders vote FOR each of the above proposals.

PROPOSAL 3

TO APPROVE AN ADDITIONAL OPTION GRANT FOR NON- EXECUTIVE DIRECTORS

Background

According to the Current Compensation Policy (as defined in Proposal 6 herein), each non-executive member of the Board of Directors (the “Non-Executive Director”), that is re-elected as a member of the Board of Directors at each annual general shareholders meeting, is automatically granted an option to purchase up to 312 Ordinary Shares at an exercise price equal to the closing price of the Ordinary Shares on the date of grant (the “Current Annual Grant”).

Additional Options Grant

On May 11, 2025 and May 12, 2025, the compensation committee of the Board of Directors (the “Compensation Committee”) and the Board of Directors, respectively, approved and recommended to the Company’s shareholders to approve, an additional grant of options to purchase Ordinary Shares to Non-Executive Directors, in addition to their Current Annual Grant (the “Additional Options Grant to Non-Executive Directors”).

The Additional Options Grant to Non-Executive Directors is subject to each such director’s respective re-election as directors, pursuant to Proposal 2 hereof.

The total annual value of the Additional Options Grant to Non-Executive Directors, together with the Current Annual Grant, will be $40,000. The Additional Options Grant to Non-Executive Directors consists of options to purchase up to 14,128 Ordinary Shares to each Non-Executive Director (the Additional Options Grant together with the Current Annual Grant totals at 14,440 options).

The Current Annual Grant and the Additional Options Grant to Non-Executive Directors will be exercisable at an exercise price of $2.67, which equals the average closing price of the Company’s Ordinary Shares over the 30 trading days prior to May 12, 2025, and will vest in equal quarterly installments for a period of 4 years as of May 12, 2025.

When considering the Additional Options Grant to Non-Executive Directors, in terms which exceed the terms of the Current Compensation Policy (in value and at the exercise price as described above), our Compensation Committee and Board of Directors considered, inter alia: (i) the considerations mentioned in section 267(b)A of the Companies Law and any reference to the matters specified in part A and B of the first addition to the Companies Law; (ii) that the value of the Additional Options Grant to Non-Executive Directors is in accordance with the Company’s Proposed Compensation Policy (as defined in Proposal 6 herein); and (iii) that the value of the Additional Options Grant to Non-Executive Directors reflects a fair and reasonable value for each of the non-Executive Directors’ services, and is on par with similar companies, in accordance with comparative data reviewed by the Compensation Committee and the Board.

The Compensation Committee and the Board of Directors also considered, among other things, the Company’s size and the nature of its operations, and reviewed various data and information they deemed relevant, including comparative data regarding peer companies.

Accordingly, the Compensation Committee and Board of Directors determined that the Additional Options Grant to Non-Executive Directors is in the Company’s best interest.

The shareholders of the Company are requested to adopt the following resolution:

“RESOLVED, to approve the Additional Options Grant to Non-Executive Directors, as set forth in the Proxy Statement.”

The approval of this proposal, as described above, requires the affirmative vote of a Special Majority.

The Board of Directors unanimously recommends that the shareholders vote FOR the above proposal.

PROPOSAL 4

TO APPROVE AN OPTION GRANT FOR THE COMPANY’S CHIEF EXECUTIVE OFFICER,
MS. DIKLA CZACZKES AKSELBRAD

Ms. Dikla Czaczkes Akselbrad has served as the Company’s Chief Executive Officer since July 2022 and as a director since August 2022. From December 2016 to July 2022, Ms. Czaczkes Akselbrad served as our Executive Vice President and Chief Financial Officer.

On May 11, 2025 and May 12, 2025, the Compensation Committee and the Board of Directors, respectively, approved and recommend to the Company’s shareholders to approve a grant of options to Ms. Czaczkes Akselbrad as part of an annual grant of options to all of the Company’s employees.

Under this grant, Ms. Czaczkes Akselbrad will be granted an amount of options to purchase up to 120,000 Ordinary Shares (the “CEO Options”) on the following terms:

The CEO Options are granted in accordance with the capital gain track of Section 102 of the Israeli Income Tax Ordinance, 1961.

When considering the CEO Options grant, the Compensation Committee and Board of Directors considered numerous factors, including, among others: (i) the position, responsibilities, background and experience of Ms. Czaczkes Akselbrad; (ii) that the CEO Options granted to Ms. Czaczkes Akselbrad reflect a fair and reasonable value for Ms. Czaczkes Akselbrad’s services, commitment and contribution to the Company’s growth and achievements in the short and long term; (iii) that the grant of CEO Options to Ms. Czaczkes Akselbrad is in accordance with both the Company’s Current Compensation Policy and Proposed Compensation Policy (as defined in Proposal 6 herein); and (iv) that the grant of CEO Options to Ms. Czaczkes Akselbrad will create a similarity of interests between the Company’s shareholders and Ms. Czaczkes Akselbrad.

The Compensation Committee and the Board of Directors also considered, among other things, the Company’s size and the nature of its operations, and reviewed various data and information they deemed relevant, including comparative data regarding peer companies.

Accordingly, the Compensation Committee and Board of Directors determined that the CEO Options grant for Ms. Czaczkes Akselbrad is in the Company’s best interest.

The shareholders of the Company are requested to adopt the following resolution:

“RESOLVED, to approve the grant of CEO Options for Ms. Dikla Czaczkes Akselbrad, as set forth in the Proxy Statement.”

The approval of this proposal, as described above, requires the affirmative vote of a Special Majority.

The Board of Directors unanimously recommends a vote FOR the above proposal.

PROPOSAL 5

TO APPROVE AN ADDITIONAL MILESTONE-BASED OPTION GRANT FOR THE COMPANY’S CHIEF EXECUTIVE OFFICER,
MS. DIKLA CZACZKES AKSELBRAD

In March 2025, the Company announced the successful completion of enrollment in its SHIELD II phase 3 trial of D-PLEX100 for the prevention of abdominal colorectal surgical site infections (the “Trial”). The Company anticipates reporting top-line results by the end of the second quarter of 2025. The expected timing for top-line results from the Trial is based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expected. 

On May 11, 2025 and May 12, 2025, the Compensation Committee and the Board of Directors, respectively, approved and recommend to the Company’s shareholders to approve an additional milestone-based grant of options to Ms. Czaczkes Akselbrad.

Our Compensation Committee and Board of Directors believe that a milestone-based grant of options is an effective tool to retain and incentivize our Chief Executive Officer. It enables us to grant equity compensation to our Chief Executive Officer based on the achievement of predetermined goals in order for the milestone-based grant to apply and be valid.

Under this grant, Ms. Czaczkes Akselbrad will be granted an amount of options to purchase up to 80,000 Ordinary Shares (the “CEO Milestone Options”) on the following terms:

The CEO Milestone Options are granted in accordance with the capital gain track of Section 102 of the Israeli Income Tax Ordinance, 1961.

When considering the CEO Milestone Options grant, our Compensation Committee and Board of Directors considered numerous factors, including, among others: (i) the position, responsibilities, background and experience of Ms. Czaczkes Akselbrad; (ii) that the CEO Milestone Options granted to Ms. Czaczkes Akselbrad reflect a fair and reasonable value for Ms. Czaczkes Akselbrad’s services, commitment and contribution to the Company’s growth and achievements in the short and long term; (iii) that the terms of the CEO Milestone Options to Ms. Czaczkes Akselbrad are in accordance with the Company’s Current Compensation Policy and Proposed Compensation Policy (as defined in Proposal 6 herein); (iv) that the CEO Milestone Options are subject to the Company achieving the Triggering Milestone which is an important milestone for the Company’s business; and (v) that the grant of CEO Milestone Options to Ms. Czaczkes Akselbrad will create a similarity of interests between the Company’s shareholders and Ms. Czaczkes Akselbrad.

Accordingly, the Compensation Committee and Board of Directors determined that the CEO Milestone Options grant for Ms. Czaczkes Akselbrad is in the Company’s best interest.

The shareholders of the Company are requested to adopt the following resolution:

“RESOLVED, to approve the grant of CEO Milestone Options for Ms. Dikla Czaczkes Akselbrad, as set forth in the Proxy Statement.”

The approval of this proposal, as described above, requires the affirmative vote of a Special Majority.

The Board of Directors unanimously recommends a vote FOR the above proposal.

PROPOSAL 6

TO APPROVE THE RENEWAL OF THE COMPANY’S COMPENSATION POLICY

Pursuant to the Companies Law, all public Israeli companies are required to adopt a written compensation policy for their officers and directors, which addresses certain items prescribed by the Companies Law and serves as a flexible framework for executive and director compensation. Accordingly, on June 18, 2020, the Company’s shareholders approved the compensation policy for the Company’s officers and directors for a period of five (5) years (the “Current Compensation Policy”).

Since our initial public offering took place on June 30, 2020, our Current Compensation Policy (which was amended on April 13, 2021) will expire on June 29, 2025 and requires renewal for an additional three-year period.

On March 30, 2025 and March 31, 2025, the Compensation Committee and Board of Directors, respectively, reviewed in depth the terms of the Current Compensation Policy and approved, and recommended to the Company’s shareholders to approve, a new compensation policy (the “Proposed Compensation Policy”). The purpose of the amendments in the Proposed Compensation Policy (compared to the Current Compensation Policy) is to meet the changing legal and business environment in which the Company operates and the compensation needs of its officers. The Compensation Committee and Board of Directors believe that the Proposed Compensation Policy will allow the Company to pay competitive salaries and award competitive bonuses.

The following table presents the main amendments made in the Proposed Compensation Policy compared to the Current Compensation Policy:

When considering the Proposed Compensation Policy, the Compensation Committee and Board considered numerous factors, including the advancement of the Company’s objectives, the Company’s business plan and its long-term strategy, and creation of appropriate incentives for its officers and directors. The Compensation Committee and the Board of Directors also considered, among other things, the Company’s risk management, size and the nature of its operations, and reviewed various data and information they deemed relevant.

The Proposed Compensation Policy is designed to promote retention and motivation of officers and directors, incentivize superior individuals’ excellence, align the interests of the Company’s directors and officers with the long-term performance of the Company and provide a risk management tool. To that end, a portion of an officer compensation package is targeted to reflect the Company’s short and long-term goals, as well as the officer’s individual performance, while taking into account each officer’s skills, education, expertise and achievements.

In light of all of the above and in order to adhere to the global best practices in executive compensation and to ascertain the positioning of our directors’ and officers’ pay packages vis-à-vis our peers, we conducted, together with an outside consultant, a benchmarking study with peer companies. The study included executive compensation information of comparable companies in the biotech field located in Israel and in the United States, including public Israeli companies traded on Nasdaq or dually listed for trading on Nasdaq and the Tel Aviv Stock Exchange, some of which do business in the same geographical locations as our Company.

The Proposed Compensation Policy is attached hereto as Exhibit A.

The shareholders of the Company are requested to adopt the following resolution:

“RESOLVED, that the Proposed Compensation Policy, in the form attached as Exhibit A to this Proxy Statement, be, and it hereby is, approved for a term of three (3) years as of the date of this Meeting.”

The approval of this proposal, as described above, requires the affirmative vote of a Special Majority.

The Board of Directors recommends a vote FOR the approval of the proposed resolution.

PROPOSAL 7

TO APPROVE AN ACCELERATION OF VESTING PERIOD FOR UNVESTED OPTIONS UPON TERMINATION OF SERVICES OF MR. JACOB HAREL, AS COMPANY’S CHAIRMAN OF THE BOARD OF DIRECTORS

Mr. Jacob Harel has served as a director since November 2017 and the Chairman of our board of directors since December 2017. Mr. Jacob Harel informed the Company that he will not seek re-election at the Meeting and therefore, his service as a director and the Chairman of our board of directors will terminate on the date of the Meeting, June 25, 2025.

An amount of options to purchase up to 1,625 Ordinary Shares, with an exercise price of $4.24, which were previously granted to Mr. Harel, would vest on July 2, 2025 if Mr. Harel continued his service as a director. However, according to our Option Plan, upon the termination of a grantee’s service, for any reason whatsoever, any options granted in favor of such grantee, which are not vested options, shall immediately expire and terminate and become null and void.

Mr. Harel has asked for an acceleration of the vesting period of such 1,625 unvested options with an exercise price of $4.24 (the “Proposed Acceleration Mechanism”) such that the unvested options will vest as of the date of the Meeting.

At a meeting of the Compensation Committee held on May 11, 2025, the Compensation Committee reviewed, recommended and approved, and the Board of Directors at its meeting held on May 12, 2025, subsequently approved, the Proposed Acceleration Mechanism upon termination of service of Mr. Harel. The Proposed Acceleration Mechanism is in accordance with the Current Compensation Policy and the Proposed Compensation Policy (as such terms are defined in Proposal 6 herein).

When considering the Proposed Acceleration Mechanism, the Compensation Committee and Board of Directors considered, among others: (i) Mr. Harel’s long-term dedicated service and contribution to the Company and the Board of Directors; and (ii) that the Proposed Acceleration Mechanism is in accordance with the Current Compensation Policy.

The shareholders of the Company are requested to adopt the following resolution:

“RESOLVED, to approve an acceleration of vesting period for unvested options upon termination of services of Mr. Jacob Harel, the Company’s chairman of the board of directors, as set forth in the Proxy Statement.”

The approval of this proposal, as described above, requires the affirmative vote of a Simple Majority.

The Board of Directors unanimously recommends that the shareholders vote FOR the above proposal.

PROPOSAL 8

DISCUSSION OF THE COMPANY’S FINANCIAL STATEMENTS AND ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2024

Pursuant to the Companies Law, the Company is required to present the Company’s audited financial statements and Annual Report on Form 20-F for the year ended December 31, 2024, to the Company’s shareholders. The financial statements and Annual Report on Form 20-F for the year ended December 31, 2024, were filed with the SEC on February 26, 2025, and are available on the SEC’s website at:

https://www.sec.gov/Archives/edgar/data/1611842/000121390025017412/ea0231533-20f_polypid.htm

At the Meeting, shareholders will have an opportunity to review, ask questions and comment on the Company’s audited consolidated financial statements for the year ended December 31, 2024.

This agenda item will not involve a vote by the shareholders, and accordingly there is no proposed resolution.

Your vote is important! Shareholders are urged to complete and return their proxies promptly in order to, among other things, ensure action by a quorum and to avoid the expense of additional solicitation. If the accompanying proxy is properly executed and returned in time for voting, and a choice is specified, the shares represented thereby will be voted as indicated thereon. EXCEPT AS MENTIONED OTHERWISE IN THIS PROXY STATEMENT, IF NO SPECIFICATION IS MADE, THE PROXY WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT.

Proxies and all other applicable materials should be sent to:

Equiniti Trust Company, LLC

55 Challenger Road, 2nd Floor

Ridgefield Park, NJ 07660  

ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable to foreign private issuers. Accordingly, the Company files reports and other information with the SEC. All documents which the Company will file on the SEC’s EDGAR system will be available for retrieval on the SEC’s website at http://www.sec.gov.

As a foreign private issuer, the Company is exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations. In addition, the Company is not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. The Notice of the Annual and Extraordinary General Meeting of Shareholders and the proxy statement have been prepared in accordance with applicable disclosure requirements in the State of Israel.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROXY STATEMENT OR THE INFORMATION FURNISHED TO YOU IN CONNECTION WITH THIS PROXY STATEMENT WHEN VOTING ON THE MATTERS SUBMITTED TO SHAREHOLDER APPROVAL HEREUNDER. THE COMPANY HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS DOCUMENT. THIS PROXY STATEMENT IS DATED MAY 21, 2025. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN MAY 21, 2025, AND THE MAILING OF THIS DOCUMENT TO SHAREHOLDERS SHOULD NOT CREATE ANY IMPLICATION TO THE CONTRARY.

Exhibit 99.3

POLYPID LTD.

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Mr. Tal Vilnai, Secretary and General Counsel of PolyPid Ltd. (the “Company”), and Ms. Orna Blum, Assistant Secretary and Legal Counsel of the Company, and each of them, agents and proxies of the undersigned, with full power of substitution to each of them, to represent and to vote on behalf of the undersigned all the Ordinary Shares of the Company which the undersigned is entitled to vote at the Annual and Extraordinary General Meeting of Shareholders (the “Meeting”) to be held on June 25, 2025 at 2:00 p.m. Israel time, and at any adjournments or postponements thereof, upon the following matters, which are more fully described in the Notice of Annual and Extraordinary General Meeting of Shareholders and proxy statement relating to the Meeting.

This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned. If no direction is made with respect to any matter, this Proxy will be voted FOR such matter. Any and all proxies heretofore given by the undersigned are hereby revoked.

(Continued and to be signed on the reverse side)

POLYPID LTD.

ANNUAL AND EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

Date of Meeting: June 25, 2025

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒

PLEASE NOTE: By signing and submitting this proxy card, you declare that you are not a controlling shareholder of the Company (as defined in the Israeli Companies Law 5759-1999) (the “Companies Law”), and have no personal interest in the approval of any of the items that are proposed for approval at the annual and extraordinary general meeting of shareholders, which require such declaration under the Companies Law, except as notified to the Company via Email to Mr. Tal Vilnai, e-mail address: Tal.V@polypid.com .

In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the Meeting or any adjournment or postponement thereof.

Please sign exactly as your name appears on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, trustee or guardian, please give full title as such. If the signed is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

Exhibit A

Proposed Compensation Policy

Compensation Policy

PolyPid Ltd.

(the “Company”)

Compensation Policy for Officers and Directors of the Company

Table of Contents

Amendment No. 20 to the Israeli Companies Law, 5759-1999 (the “Companies Law”) was enacted on December 12, 2012. This amendment mandates the adoption of a compensation policy for Officers and Directors in publicly traded companies, and defines a special procedure for authorizing employment terms for Officers (as defined below).

The purpose of the Compensation Policy is to describe PolyPid’s overall compensation strategy for Officers and Directors and to provide guidelines for setting compensation of its Officers and Directors.

The Compensation Policy is a multi-year policy which initially shall be in effect for a period of five years from the date that the Company becomes a public company, and thereafter will need to be approved by the Company’s shareholders every three years.

The Compensation Committee and the Board of Directors (the “Board” or “Board of Directors”) shall review the Compensation Policy from time to time, as required by the Companies Law. The Compensation Policy shall be brought for reconsideration as required by the Companies Law.

For purposes of this Policy, “Officers” shall mean “office holders” as such term is defined in the Companies Law, excluding, unless otherwise expressly indicated herein, PolyPid non-executive directors or Chairman (the “Directors”).

This Policy is not intended to affect current agreements nor affect obligating customs (if applicable) between the Company and its Officers or Directors as such may exist prior to the approval of this Compensation Policy.

Nothing in this Compensation Policy shall obligate the Company to grant any particular type or amount of compensation to any Officer, unless expressly stated otherwise, nor shall it derogate from approval procedures mandated by the Companies Law.

Any amendment to this Compensation Policy shall require the approvals as set forth in the Companies Law.

Strong and effective leadership is fundamental to PolyPid’s continued growth and success. This requires the ability to attract, retain, reward and motivate highly skilled officers in international, competitive labor markets.

The Compensation Policy is intended to align between the need to incentivize officers to succeed in achieving the Company’s Objectives and their assigned goals and the need to assure that the compensation structure meets PolyPid’s interests and its overall strategic and financial objectives.

In support of this goal, the compensation elements granted to PolyPid’s Officers are designed to meet the following objectives:

Officers’ compensation packages will generally (but is not limited to) be comprised of the following elements:

The “mix” of the elements that will be provided to each Officer will be structured in order to support the Company’s philosophy of compensating Officers for Company and individual performance and aligning their interests with stakeholders’ interests, while recognizing that the mix may vary from period to period and from Officer to Officer.

Generally, some or all of the following parameters will be considered when reviewing the compensation terms of an Officer:

Notwithstanding the foregoing, the maximum value of the variable compensation components (excluding the termination payments, Special Bonus and Lump sum sign up bonus) shall be up to 450% of each Officer’s total fixed compensation as specified in section 3.1.1., on an annual basis.

Base salary is a fixed compensation element which provides compensation to an Officer for performance of his or her standard duties and responsibilities taking into account the parameters described in section 3.2 above (the “Base Salary”).

The Base Salary for newly hired Officers will be set taking the following considerations into account:

Payroll review

When deciding on increasing an Officer’s Base Salary, the following considerations, in addition to the abovementioned, shall be applied: Changes to the Officer’s scope of responsibilities and business challenges, the need to retain the Officer, inflation since the last Base Salary update and updated market rate.

Adjustments to Base Salary may be periodically reviewed, considered and approved in accordance with the law. Such review will be conducted by the Company itself, or by an external advisor, at the Company’s discretion.

The following benefits and perquisites may be granted to the Officers in order, among other things, to comply with legal requirements:

PolyPid may offer additional benefits and perquisites to the Officers, which will be comparable to customary market practices, such as, but not limited to: company car benefits (including coverage or related tax expenses); company cellular phone (including coverage or related tax expenses); complementary health insurance; medical check-ups; meals; etc.; provided however, that such additional benefits and perquisites shall be determined in accordance with PolyPid’s policies and procedures.

Non-Israeli Officers may receive similar, comparable or customary benefits and perquisites as applicable in the jurisdiction in which they are employed.

The compensation derived from the benefits and perquisites set forth in this Section 3.5 shall not be deemed part of the Maximum Monthly Base Salary and shall be added thereto.

PolyPid’s short term incentive scheme will be based on a variable monetary bonus paid annually, designed to reward Officers based on the Company and/or their individually defined results (the “Bonus”).

During the first calendar quarter of each calendar year (or for new hired Officers during each calendar year, no more than three months following his/her employment), the Compensation Committee and the Board will determine the following for each Officer as well as the formula for calculating the bonus payment at the end of the year:

Maximum Bonus (cap): The maximum bonus is the maximum amount an Officer will be entitled to receive upon overachievement. The maximum bonus of each Officer shall not exceed the amount of 9 monthly base salaries, or with respect to the Chief Executive Officer, 12 monthly base salaries.

Objectives: The Company Objectives and Individual Objectives will be determined based on pre-defined measurable and quantified considerations.

The Bonus may include (but is not limited to) any one or more of the following criteria:

Both Company Objectives and Individual Objectives may combine quantitative and qualitative goals, provided that, there is a clear and measurable index for each goal.

The Board may set targets for a period of more than one year, in which case either: (a) the Officer will be entitled to the bonus (per each year included in such multi-year period) only upon achieving such targets at the end of such period; or (b) the Officer shall be entitled to a relative portion/milestone of such bonus, according to the estimated progress to date, in each case, as determined in advance.

Discretionary Component: The bonus may include a discretionary component of up to 20% of the Officer’s annual cash target Bonus and with respect to the CEO up to 30% of the CEO’s annual cash target Bonus but not more than 3 monthly salaries (without the need of shareholders’ approval), based on the evaluation of such Officer’s supervisors, or the Board of Directors in the case of the CEO.

Discretionary bonuses must be supported by rationale clearly articulating the individual contributions or circumstances warranting additional compensation beyond predetermined metrics.

Thresholds: Subject to the last paragraph below, the Compensation Committee and the Board may, with respect to any period or Officer, determine one or more thresholds for the payment of the annual cash bonus or any components thereof, in such manner that if the threshold is not achieved, the annual cash bonus or the particular component thereof, with respect to which the threshold was not achieved, will not be paid.

The Compensation Committee and the Board of Directors alone may decide to change the measurable targets applicable to an Officer at any time during the year, if the change is for the best interest of the Company and for special circumstances (for example: change of job description, regulatory changes, other material events), that the Compensation Committee and Board of Directors believes that justify making such change (including retroactive change).

Notwithstanding the foregoing, subject to any applicable law, the Company’s Compensation Committee and Board of Directors shall be entitled to approve payment of Bonus based on all or some of the measurable targets and/or of discretionary bonus, on an annual, quarterly, monthly, or otherwise basis.

The Board may determine to pay the Bonus (in whole or partially) by equity.

3.6.1 Clawback Recoupment Policy

The Company may seek reimbursement of all, or a portion of any compensation paid to an Officer based on financial data included in Company’s financial statements in any fiscal year that are found to be inaccurate and are subsequently restated. In any such event, the Company will seek reimbursement from the Officers to the extent such Officers would not have been entitled to all or a portion of such compensation, based on the financial data included in the restated financial statements. The Compensation Committee will be responsible for approving the amounts to be recouped and for setting terms for such recoupment from time to time in accordance with a recoupment policy adopted from time to time by the Compensation Committee or the Board. Any recoupment under this Section 3.6.1 may be in addition to (and not limited by) any other remedies or rights of recoupment available to the Company pursuant to the terms of any similar policy or under any applicable law. 

Reduction of Bonus: The Board of Directors according to its professional experience and the circumstances may reduce the Bonus, at its sole discretion prior to the Bonus payment.

The Compensation Committee and the Board may determine that with respect to any specific year, all or any particular Officer or Officers shall not be entitled to a Bonus or that the payment of bonus will be delayed.

3.6.2. Cash Bonus for Vice Presidents (VPs) (Officers subordinate to the CEO)

Notwithstanding the aforesaid in this Section 3.6 , if the Company has so determined in the framework of an annual bonus plan, the Company may grant its VPs an annual bonus that is not based, in whole or in part, upon measurable criteria. Such annual bonus (or part thereof) shall be determined according to this Section 3.6, except that the performance level of each such VP may not be determined pursuant to qualitative measurements but rather on non-measurable evaluation of such VPs performance.

3.6.3. Neutralization of one-off events

As part of the calculation of the eligibility to Cash Bonus that is based measurable targets on the basis of financial statements data (if such targets are set) the Board of Directors or the Compensation Committee will be authorized to neutralize the effect of “one-off events”, or alternatively to decide that such events should not be neutralized in a certain year, as applicable.

3.6.4. One-Time Bonus: In addition to the Cash Bonus, the Compensation Committee and the Board of Directors may elect upon the recommendation of the Chief Executive Officer (or the Chairman in the case of a bonus payable to the Chief Executive Officer) to pay certain Officers (including Directors, subject to other approvals required under applicable law) a one-time bonus in recognition for their special contribution to key transactions and events in the company’s lifecycle, such as (but not limited to) M&A, consummation of a merger, or sale or assignment by the Company of all or substantially all of the issued and outstanding shares of the Company and/or all or substantially all of the Company’s assets, public financing, achievement of major corporate goal in R&D, sales, strategic alliances, operations etc.

Such One-Time Bonus shall not exceed the amount of six (6) monthly salaries for each Officer.

An approval of a One-Time Bonus to the CEO which is not a controlling shareholder, that meets the aforesaid conditions, shall not be subject to the approval of the General Meeting, as long as the aggregate amount of all of the discretionary bonuses paid to the CEO in the relevant year does not exceed three (3) monthly salaries.

All Officers, excluding Non-Employee directors, may be incentivized through lump sum sign up cash bonuses, designed to attract skilled and experienced executives in a competitive industry environment. The lump sum sign-up bonus shall not exceed NIS 250,000 for Israeli based officers and 100,000$ for non-Israel based officers and shall not be calculated as part of the Base salary and/or Cash Bonus compensation.

PolyPid’s long term incentive is variable equity-based compensation, designed to retain Officers, align Officers and shareholders’ interests and incentivize achievement of long-term goals.

The Company shall be entitled to grant to Officers (including Employee and Directors) Stock Options, Restricted Stocks, Restricted Stock Units (if applicable) or any other equity-based compensation.

General guidelines for the grant of Stock Options (“Options”):

Any other terms of the equity-based compensation will be determined by the Compensation Committee and the Board of Directors, in accordance with the Company’s equity compensation policies and programs in place from time to time, subject to any applicable law.

Repricing and exchange equity-based compensation: With approval of the Compensation Committee and the Board of Directors, the Company may decide to replace existing Options with RSUs or existing Options with other Options, in different quantities of RSUs and/or Options as well as with different vesting periods and/or exercise price.

Advance notice

Pursuant to the Officer’s employment agreement, he or she shall be entitled to an advance notice prior to termination for a period of up to six (6) months (the “Notice Period”).

During the Notice Period, the Officer is required to keep performing his or her duties pursuant to his or her agreement with the Company, unless the compensation committee has released the Officer from such obligation.

During the Notice Period, Officers will be entitled to full payment of compensation.

Adjustment period

Officers may receive an additional transition period during which the Officer will be entitled to up to an additional eight (8) months of continued Base Salary, benefits and perquisites beyond the Advance Notice period described above.

When determining such payments, the Compensation Committee and the Board will generally consider, inter alia, the term of service or employment, Company performance during such term, the contribution of the Officer to the achievement of the Company’s goals, the circumstances of termination and the Officer’s compensation during the term of service or employment.

Officers may receive an adjustment period only if they work in the Company for at least two (2) years.

Adjustment period may be materialized by continued employee-employer relations or by a payment of lump sum equal to the economic value of base salary, benefits and perquisites for the number of adjustment months approved for the specific officer.

In the process of composing this policy, the Committee and the Board examined, among other things, the ratio between overall compensation of Officers and the average and median compensation of other employees in Israel, as well as the possible ramifications of such ratio on the work environment in PolyPid, in order to ensure that levels of Officer compensation will not have a negative impact on the positive work relations in PolyPid.

The possible ramifications of the ratio in the work environment will continue to be examined from time to time in order to ensure that levels of Officer’s compensation, as compared to that for the other employees, will not have a negative impact on work relations in PolyPid.

(a) The following table indicates the non-executive directors and Chairman maximum annual cash compensation:

The Company will release all current and future Directors and Officers from liability and provide them with indemnification to the fullest extent permitted by law and its Articles of Association.

Liability insurance policy

Until otherwise determined, the Company will purchase and periodically renew, at the Company’s expense, insurance coverage in respect of the liability of its current and future Directors and Officers to the maximum extent permitted by law and its Articles of Association, with an annual coverage of up to $100 million with an annual premium: (i) reflecting market terms and not having a substantial effect on the Company’s profitability, assets or obligations; or (ii) in the amount which will not exceed $5,000,000 and will include coverage with respect to any public offering of shares or other securities of the Company.

In addition, such insurance coverage may include “run-off” provisions covering the Directors and Officers liability following termination of service or employment.

Officers and Directors shall be covered by directors’ and Officers’ liability insurance which the Company shall acquire, from time to time, subject to the approval of the Company’s board of directors and shareholders, to the extent required by law.

The Chief Executive Officer, as shall be in office from time to time, and/or any other person designated by him or her, shall have the authority to obtain, renew and keep in force and affect such insurance within the above parameters.

Indemnification and Release

The Company awards, and shall continue to award, indemnification and release undertakings to Directors and Officers as may be from time to time, subject to the approvals required in accordance with the provisions of the Companies Law.

An Immaterial Change in the terms of employment of an Officer, other than the Chief Executive Officer, may be approved by the Chief Executive Officer, and an Immaterial Change in the terms of employment of the Chief Executive Officer, as may be approved by the Board and Compensation Committee, provided that the amended terms of employment are in accordance with this Compensation Policy. An “Immaterial Change in the Terms of Employment” means a change in the terms of employment/services of an Officer within annual total cost to the Company not exceeding an amount equal 20% of the annual compensation (i.e., Fixed Compensation and Variable Compensation) of such Officer.