Elron Electronic Industries : Financial Statements as of September 30, 2021

ELRON ELECTRONIC INDUSTRIES LTD.

English Translation of Periodic Report for the Third Quarter of 2021

Filed with the Israel Securities Authority

Part	Content
I	Material Changes and Updates that Occurred in Elron's Business
II	Board of Directors Report
III	Interim Financial Statements
IV	Effectiveness of the Internal Control over Financial Reporting and
	Disclosure

ELRON ELECTRONIC INDUSTRIES LTD.

English Translation of Periodic Report for the Third Quarter of 2021

Filed with the Israel Securities Authority

Part I

Material Changes and Updates that Occurred in Elron's Business for the Three Months ended September 30, 2021

Elron Electronic Industries Ltd.

("Elron" or the "Company")

English Translation of Quarterly Report

for the Third Quarter of 2021

Part I

Material Changes and Updates that Occurred in the Company's

Business in the Three Months Ended September 30, 2021

Details according to Regulation 39A of the Israel Securities Regulations (Periodic

and Immediate Reports), 1970

In this section:
"Board of Directors Report"	English Translation of Elron's Board of
	Directors Report for the Third Quarter of
	2021, included in Part II of this report.
"Financial Statements"	English Translation of Elron's Interim
	Consolidated Financial Statements as of
	September 30, 2021, included in Part III of
	this report.
"Annual Report"	Elron's Annual Report for the year ended
	December 31, 2020 filed with the Israeli
	Securities Authority.

The rest of the terms in this report shall have the meaning ascribed to them in the Annual Report, unless stated explicitly otherwise.

The matters described below are in addition to the developments and changes that occurred in the first three quarters of 2021 that were already previously described in Part I of the Company's Quarterly Report for the First or Second Quarter of 2021. The matters described below are presented according to the section numbers in Part I of the Annual Report.

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1. Section 15 of Part I of the Annual Report - Investments

In the first nine months of 2021, Elron (directly and indirectly) invested approximately $13.5 million in the group companies. For further details, see Section 1.4 of the Board of Directors Report and Note 3 to the Financial Statements.

2. Section 24 of Part I of the Annual Report - BrainsGate

Section 24.11- In regard with BrainsGate's application for PMA marketing approval submitted to the FDA, in August 2021 BrainsGate has updated that the FDA has informed BrainsGate that it will bring BrainsGate's marketing approval application to a panel meeting which is expected to take place by the end of the year.

3. Section 25 of Part I of the Annual Report - CartiHeal

Sections 25.11- Further to the Annual Report, regarding CartiHeal's submission of the Agili-C implant's modular PMA to the FDA, in September 2021, CartiHeal completed the submission to the FDA of the clinical and final module of the PMA application and therefore completed the FDA PMA application.

Sections 25.13- Further to the Annual Report, regarding the transaction for the investment in and option for the sale of CartiHeal, in August 2021, Bioventus (the "Purchaser") announced that it decided to proceed with the investment and option transaction for the sale of CartiHeal to the Purchaser (the "Transaction"), and subsequently deposited an escrow payment of $50 million to ensure the exercise of the call option and put option.

The Purchaser further announced that the above decision came following its review of a statistical analysis report of the pivotal clinical trial of the Agili-C implant, reimbursement coding analysis and significant market diligence including surgeon interviews with respect to Agili-C's commercialization opportunity and ultimate market potential.

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Yaron Elad		Niv Levy
CEO		CFO
November 14, 2021, Tel Aviv, Israel

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