Entera Bio Ltd.

NOTE 1 - DESCRIPTION OF BUSINESS

The Company is focused on developing first-in-class oral tablet formats of peptides or protein replacement therapies. The Company focuses on underserved, chronic medical conditions for which oral administration of a protein therapy has the potential to significantly shift a treatment paradigm.

The Company’s most advanced product candidate, EB613, oral PTH(1-34), is being developed as the first oral, osteoanabolic (bone building) once-daily tablet treatment for post-menopausal women with low bone mineral density (“BMD”) and high-risk osteoporosis without prior fracture. The Company is also developing a next-generation formulation of EB613 utilizing its proprietary N-Tab®platform, which is expected to provide significant advantages in administration, commercialization, and strategic partnering. The Company is preparing to submit final protocol to the FDA and initiate a Phase 3 registrational study for EB613 pursuant to the FDA’s qualification of a quantitative BMD endpoint.

The Company’s product candidate, EB612, is being developed as the first oral PTH(1-34) tablet peptide replacement therapy for hypoparathyroidism. In February 2026, the Company amended and restated the 2025 Collaboration Agreement (as defined in Note 5) with OPKO Biologics, Inc., a subsidiary of OPKO Health, Inc. (“OPKO”), to advance the first oral long-acting PTH analog (“LA-PTH”) as a once-daily tablet for patients with hypoparathyroidism.

In addition, EB618 is being developed pursuant to the Company’s collaboration with OPKO, pursuant to which the companies are advancing a proprietary novel dual agonist GLP-1/glucagon peptide as a once-daily tablet treatment and as a weekly subcutaneous injection for patients with obesity, metabolic and fibrotic disorders. The oral program combines OPKO’s proprietary long-acting oxyntomodulin (“OXM”) analog (OPK-88006) and the Company’s proprietary N-Tab®platform.

In addition to its internal product development programs, the Company intends to license its proprietary N-Tab®platform to biopharmaceutical companies for use with their proprietary compounds.

The Company's management is of the opinion that its available funds as of December 31, 2025 will be sufficient to support the Company’s ongoing operations under its current plans through the middle of the third quarter of 2026.

NOTE 1 - DESCRIPTION OF BUSINESS (continued)

The Company’s current capital resources do not include the capital required to fund the Company's proposed Phase 3 program for EB613 in osteoporosis. These factors raise substantial doubt as to the Company's ability to continue as a going concern. Management continually evaluates various financing alternatives and strategic collaborations, as the Company will need to finance future research and clinical development with additional capital. However, there is no certainty that the Company will be able to obtain such funding. These consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the “functional currency”). The U.S. dollar is the currency of the primary economic environment in which the operations of the Company are conducted. The consolidated financial statements are presented in U.S. dollars.

The functional currency of the subsidiary is the U.S. dollar.

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Balances in non-U.S. dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-U.S. dollar transactions and other items in the statements of income (indicated below), the following exchange rates are used: (i) for transactions – exchange rates at transaction dates or average exchange rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) – historical exchange rates. Currency transaction gains and losses are presented in financial income, net, as appropriate.

The consolidated financial statements include the accounts of the Company and its subsidiary Entera Bio Inc. All inter-company transactions and balances have been eliminated in consolidation.

The Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash.

Bank deposits with original maturity dates of more than three months but less than one year are included in short-term deposits. Such short-term deposits bore interest at an average annual rate of approximately 1-4% for the years ended December 31, 2025 and 2024. Bank deposits with maturity of more than one year are considered long-term.

Restricted deposits are placed in an interest-bearing savings account and serve as security for the Company's office rent and credit card obligations. Restricted cash is designated specifically to fund the development costs under the 2025 Collaboration Agreement.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and restricted cash. The Company maintains cash held in checking accounts and deposits at financial institutions in major Israeli and U.S. banks. Management believes the Company is not exposed to significant credit risk with respect to its cash and cash equivalent deposits and restricted cash at its current financial institutions, but will continue to monitor regularly and adjust, if needed, to mitigate risk. The Company has established guidelines regarding diversification of its investments and their maturities, which are designed to maintain principal and maximize liquidity. To date, the Company has not experienced any losses associated with this credit risk and continues to believe that this exposure is not significant.

The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable inputs that are based on inputs not quoted on active markets but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company determines if an arrangement is a lease at inception. Balances related to operating leases are included in operating lease right-of-use (“ROU”) assets and current and non-current operating lease liabilities in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized as of the commencement date based on the present value of lease payments over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will either exercise or not exercise the option to renew or terminate the lease.

The discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined. As the Company’s leases do not provide an implicit rate, the Company’s uses its estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Leasehold improvements are amortized by the straight-line method over the shorter of (i) the expected lease term and (ii) the estimated useful life of the improvements.

The Company grants share options and restricted share units (“RSUs”) (together “Share-Based Compensation”) to its employees, directors and non-employees in consideration for services rendered.

The Company classifies Share-Based Compensation as equity awards and accounts for such compensation using grant-date fair value. The Company recognizes the value of the Share-Based Compensation awards as an expense over the requisite service period.

The Company calculates the fair value of stock-based option awards on the date of grant using the Black-Scholes option pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected share price volatility and the expected option term. The computation of expected volatility is based on the historical volatility of the Company’s ordinary shares. The expected option term is calculated using the simplified method, as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis to estimate expected option terms. The interest rate for periods within the expected term of an award is based on the U.S. Treasury yield curve in effect at the time of grant. The Company’s expected dividend rate is zero because the Company does not currently pay cash dividends on its shares and does not anticipate doing so in the foreseeable future.

The Company elected to recognize compensation costs for awards granted to employees and directors conditioned only on continued service that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. The Company has elected to account for forfeitures as they occur.

Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, lab expenses, consumable equipment and consulting fees. All costs associated with research and development are expensed as incurred.

The Company recognizes revenues according to ASC 606, "Revenues from Contracts with Customers”.

ASC 606 Revenue from Contracts with Customer introduces a five-step model for recognizing revenue from contracts with customers, as follows:

1. Identify the contract with a customer.

2. Identify the performance obligations in the contract.

3. Determine the transaction price.

4. Allocate the transaction price to the performance obligations in the contract.

5. Recognize revenue when (or as) the entity satisfies a performance obligation.

Revenues attributed to the research services agreement are recognized over the duration of the research services agreement.

The Company records the elements of a collaboration agreement that represent joint operating activities in accordance with ASC 808, Collaborative Arrangements (“ASC 808”). Accordingly, the elements of a collaboration agreement that represent activities in which both parties are active participants, and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the collaborative activities, are recorded as a collaborative arrangement. Generally, the classification of a transaction under a collaborative arrangement is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. See Note 5b.

Basic loss per share is computed on the basis of the net loss for the period, divided by the weighted average number of outstanding ordinary shares, vested RSUs and pre-funded warrants during the period.

Diluted loss per share is based upon the weighted average number of ordinary shares and ordinary share equivalents outstanding when dilutive. Ordinary share equivalents include outstanding stock options, warrants and RSUs, which are included under the treasury stock method when dilutive. The calculation of diluted loss per share does not include options, warrants and RSUs exercisable into 17,351,501 ordinary shares and 16,790,842 ordinary shares for the years ended December 31, 2025 and 2024, respectively, because the effect would have been anti-dilutive.

Management applies the guidance in ASC 450-20, “Loss Contingencies” when assessing losses resulting from contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability is recorded as accrued expenses in the Company’s consolidated financial statements. Legal costs incurred in connection with loss contingencies are expensed as incurred.

When the Company issues freestanding instruments, it first analyzes the provisions of ASC 480, “Distinguishing Liabilities From Equity” (“ASC 480”) in order to determine whether the instrument should be classified as a liability, with subsequent changes in fair value recognized in the consolidated statements of operations in each period. If the instrument is not within the scope of ASC 480, the Company further analyzes the provisions of ASC 815-10 in order to determine whether the instrument is considered indexed to the entity’s own stock. To determine whether the freestanding equity instrument qualifies for classification within equity, the Company also considers the equity classification conditions in accordance with ASC 815-40. All warrants issued by the Company have been classified within stockholders’ equity as “Additional paid-in capital”.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Recently adopted accounting pronouncements

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 became effective for fiscal years beginning after December 15, 2024 and may be applied either retrospectively or prospectively, at the Company’s discretion. The Company adopted this standard retrospectively. See Note 9.

Recently issued accounting pronouncements, not yet adopted

In November 2024, the FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

In December 2025, the FASB issued ASU 2025-10 “Government Grants (Topic 832)“ to establish authoritative guidance on the accounting for government grants received by business entities. This update is effective beginning with the Company’s 2029 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

NOTE 3 - OPERATING LEASES

NOTE 3 - OPERATING LEASES (continued)

The lease cost was as follows:

Supplemental cash flow information related to leases was as follows:

Supplemental balance sheet information related to operating leases was as follows:

As of December 31, 2025, the maturity of lease liabilities under our non-cancelable operating leases were as follows:

NOTE 4 - COMMITMENTS AND CONTINGENCIES

The Company is committed to pay royalties to the Israel Innovation Authority (the “IIA”) on proceeds from sales of products for which the government provided grants with respect to the research and development of the PTH for osteoporosis. At the time the grants were received, successful development of the related project was not assumed. In the case of failure of the project that was partly financed by the IIA, the Company is not obligated to pay any such royalties.

Under the terms of the Company’s funding from the IIA, royalties are payable on sales of products developed from IIA funded projects in the amount of 3% of sales during the first three years following commencement of revenues,4% during the subsequent three years and 5% commencing the seventh year up to 100% of the amount of the grant received by the Company (dollar linked) plus annual interest based on SOFR. The amount that must be repaid may be increased to three times the amount of the grant received, and the rate of royalties may be accelerated, if manufacturing of the products developed with the grant money is transferred outside of the State of Israel. In addition, if the Company undergoes a change of control or otherwise transfers the technology “know-how” (as defined under the Research Law) in or outside of Israel, the amount that must be repaid will be increased up to six times.

As of December 31, 2025, the total royalty amount that would be payable by the Company to the IIA, before interest and potential increases as described above, was approximately $460. These grants were allocated to research and development in prior periods.

Following the signing of a former collaboration agreement in 2018, the IIA determined that the Company was required to pay 5.38% of each payment received by the Company from the counterparty under such agreement in an amount up to six times the grant received. As of December 31, 2025, the Company had paid a total of $96 to the IIA.

On February 22, 2011, Oramed and the Company entered into a patent transfer agreement, which superseded the patent license agreement, whereby Oramed assigned to the Company all of its rights, title and interest to its patent that Oramed licensed to the Company in 2010, under certain conditions. Under this agreement, the Company is obligated to pay Oramed royalties equal to 3% of its net revenues (as defined in the patent transfer agreement).

NOTE 5 - COLLABORATION AND RESEARCH AGREEMENTS

For years ended December 31, 2025 and 2024, the Company recognized revenues of $42 and $181 , respectively, from this agreement.

Under the 2025 Collaboration Agreement, the Company granted to OPKO an exclusive, sublicensable and non-transferable, worldwide license to certain of the Company's intellectual property and technology solely to develop, manufacture, and commercialize any GLP-1/glucagon dual agonist as an oral treatment form for the treatment of obesity, metabolic, cardiovascular, and fibrotic disorders in humans, and OPKO granted to the Company a non-exclusive, non-sublicensable and non-transferable license to certain of OPKO’s intellectual property and technology to the extent necessary for the Company to perform its obligations in relation to the Program, in each case subject to the exceptions contained therein.

Under the terms of the 2025 Collaboration Agreement, the Company and OPKO will retain 40% and 60%, respectively, of all proceeds deriving from the Program, and will be responsible for 40% and 60% of the Program’s development costs, respectively. Following the completion of the Phase 1 stage, the Company may continue to fund its 40% share of the Program to maintain its right to proceeds or to opt-out (the “Opt-Out”). If the Company exercises the Opt-Out, then the Company and OPKO will retain 15% and 85%, respectively, of all proceeds deriving from the Program, while OPKO will be solely responsible for ongoing development and commercialization funding of the Program.

In connection with the execution of the 2025 Collaboration Agreement, the Company issued and sold to OPKO an aggregate of 3,685,226 ordinary shares for a total purchase price of $8.0 million, representing a purchase price per share equal to approximately $2.17, which was the volume weighted average price per share for the 30 trading days immediately preceding the date of the 2025 Collaboration Agreement.

OPKO has agreed to a customary lockup with respect to such shares, and may not sell or otherwise transfer them for a period of 12 months following the date of the 2025 Collaboration Agreement, and OPKO has additionally agreed to a customary “standstill” provision, pursuant to which, for a 24-month period following the date of the 2025 Collaboration Agreement, OPKO may not acquire additional equity in the Company or otherwise take certain other actions, in each case without the Company’s consent.

The Company has agreed to use the proceeds from the sale of the foregoing ordinary shares solely to fund its development cost obligations under the 2025 Collaboration Agreement, and has entered into an escrow arrangement, together with OPKO and an escrow agent, into which such proceeds in an amount of $8,000 have been deposited. Such proceeds are presented under restricted cash in the consolidated balance sheet, and disbursed to fund such development costs. If the 2025 Collaboration Agreement expires or is terminated for any reason, any funds remaining in such escrow will be disbursed to the Company.

NOTE 5 - COLLABORATION AND RESEARCH AGREEMENTS (Cont.)

The Company determined that the agreement is a collaboration arrangement under the scope of ASC 808, as the parties are active participants and exposed to the risks and rewards of the collaborative activity. The consideration received was allocated to the collaboration component and the equity component.

The Company recognized as equity the fair value of the ordinary shares issued to OPKO net of issuance costs (issuance costs of $75) based on the fair value of the ordinary shares, which was the Nasdaq closing share price as of the date of the 2025 Collaboration Agreement. The remaining consideration was allocated to the agreement and presented under current other payables (an amount of $295) and Other long-term liabilities (an amount of $515) in the balance sheet and will be recognized as the program is performed.

For the year ended December 31, 2025, the Company recognized net expenses of $437 relating to the 2025 Collaboration Agreement.

See Note 11 for a discussion of the A&R Collaboration Agreement.

NOTE 6 - SHARE CAPITAL

Each ordinary share is entitled toone vote. The holder of an ordinary share is also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors.

A holder of an ordinary share also has the right to receive upon liquidation of the Company, a sum equal to the nominal value of such share, and if a surplus per share remains, to receive such surplus, subject to the rights conferred on any class of shares which may be issued in the future. Since its inception, the Company has not declared any dividends.

On January 10, 2025, the Company filed Supplement No. 1 to the prospectus supplement relating to the Leerink ATM Program, which provides the Company with the ability to sell up to an additional 30,000,000 ordinary shares under the Leerink ATM Program. In June 2025, following the filing a new Registration Statement on Form S-3 to replace the Company’s prior expiring Registration Statement on Form S-3, the Company filed a new prospectus supplement that provides the Company with the ability, but not the obligation, to continue to sell up to 30,000,000 ordinary shares under the Leerink ATM Program.

During the year ended December 31, 2025, the Company issued an aggregate of 2,731,574 ordinary shares pursuant to the Leerink ATM Program for net proceeds of $6,067 at a weighted average price of $2.29 per ordinary share.

NOTE 6 - SHARE CAPITAL (continued)

As of December 31, 2025, approximately $29.95 million of ordinary shares remained available for sale under the Leerink ATM Program.

NOTE 7 - SHARE-BASED COMPENSATION

On March 17, 2013, the Company's Board of Directors approved a Share Incentive Plan (the “2013 Plan”). Under the 2013 Plan, the Company reserves specified number of ordinary shares for allocation to stock options (each, an “Option”), RSUs, restricted share awards and performance-based awards, that are awarded to employees and non-employees under the 2013 Plan. Each Option is exercisable for one ordinary share.

Any Option granted under the 2013 Plan that is not exercised within six years from the date upon which it becomes exercisable will expire. Since adopting the 2018 Plan (as defined below), the Company has not granted any awards under the 2013 Plan.

On July 2, 2018, the Company's Board of Directors and shareholders of the Company approved a new Share Incentive Plan (the “2018 Plan”) and reserved 1,371,398 ordinary shares for allocation to stock options (each, a "2018 Plan Option"), RSUs, restricted share awards and performance-based awards, to employees and non-employees for issuance under the 2018 Plan. Each 2018 Plan Option is exercisable for one ordinary share.

Any 2018 Plan Option that is not exercised within 10 years from the date of grant will expire.

The 2018 Plan Options granted to employees are subject to the terms stipulated by section 102(b)(2) of the Israeli Income Tax Ordinance (the “Ordinance”). According to these provisions, the Company will not be allowed to claim as an expense for tax purposes the amounts credited to the employees as a capital gain benefit in respect of the options granted.

The 2018 Plan Options granted to related parties or non-employees of the Company are governed by Section 3(i) of the Ordinance or Non-Qualified Share Options ("NSO"). The Company will be allowed to claim as an expense for tax purposes in the year in which the related parties or non-employees exercised the options into shares.

NOTE 7 - SHARE-BASED COMPENSATION (continued)

As of December 31, 2025,2,052,375 ordinary shares remained available for future grants under the 2018 Plan.

On January 1, 2026, the Company’s Board of Directors approved an increase of 2,308,931 ordinary shares that may be issued under the Company’s 2018 Plan pursuant of the evergreen provision contained in f the 2018 Plan.

The fair value of each option granted is estimated at the date of grant using the Black-Scholes option-pricing model, with the following assumptions:

NOTE 7 - SHARE-BASED COMPENSATION(continued)

The total fair value of options granted during the year ended December 31, 2025 and 2024 was $2,943 and $2,059, respectively.

The aggregate intrinsic value of the outstanding and exercisable options as of December 31, 2025 was $3,121 and $3,632, respectively.

The following tables summarize information concerning RSUs as of December 31, 2025:

NOTE 7 - SHARE-BASED COMPENSATION (continued)

As of December 31, 2025, the Company had 142,981 unvested RSUs. The total unrecognized compensation cost of employee RSUs as of December 31, 2025 was $57, which is expected to be recognized over a weighted average period of 0.33 years.

The total vesting-date value of equity classified RSUs that vested during 2025 was $676.

The following table illustrates the effect of share-based compensation on the statements of operations:

NOTE 8 - SEGMENT INFORMATION

* Other development expenses include materials and productions and others. ** Other segment expenses include payroll and related expenses, share-based compensation, legal and audit and related fees and others.

NOTE 9 - INCOME TAX

The balance of carryforward losses of Entera Bio Ltd. as of December 31, 2025 and 2024 was approximately $91.8 million and $83.5 million, respectively.

Under Israeli tax law, tax loss carry-forwards have no expiration date.

The balance of carryforward losses of Entera Bio Inc. as of December 31, 2025 and 2024 was each approximately $0.15 million.

The Company and its subsidiary have tax assessments that are considered to be final through tax year 2020.

NOTE 9 - INCOME TAX (continued)

In assessing the likelihood of realizing deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences and carry forward losses become deductible. Based on the taxable loss in the Israel and in the United States, management believes it was more likely than not that the deferred tax assets will not be realized.

NOTE 9 - INCOME TAX(continued)

Following is a reconciliation of the theoretical provision for income tax, assuming all income is taxed at the statutory corporate tax rate applicable to Israeli corporations, and the actual tax on income:

NOTE 10 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION:

Balance sheets:

NOTE 11 - SUBSEQUENT EVENTS