Entera Bio Ltd.

NOTE 1 - DESCRIPTION OF BUSINESS

The Company is focused on developing first-in-class oral peptides. 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) tablet treatment for post-menopausal women with osteoporosis. In February 2026, the Company submitted to the U.S. Food and Drug Administration (the “FDA”) a clinical amendment which included the EB613 Phase 3 protocol, statistical analysis plan and open-label extension synopsis. In June 2026, the Company received feedback from the FDA on the submitted Phase 3 registrational plan for EB613.

The Company’s second product candidate, EB612, is being developed as the first oral acylated PTH(1-34) protein replacement tablet for patients with hypoparathyroidism. In February 2026, the Company amended and restated the 2025 Collaboration Agreement (as defined in Note 6) with OPKO Biologics, Inc., a subsidiary of OPKO Health, Inc. (“OPKO”), to advance this program jointly. Currently, the Company is advancing EB612 through IND-enabling studies and plans to initiate a Phase 1 Single Ascending Dose (SAD) study in 2027.

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 potential once-daily tablet treatment for patients with obesity, metabolic and fibrotic disorders.

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.

As described in Note 3b, on July 28, 2026, the Company completed a private placement financing (the "July 2026 Private Placement") of an aggregate of 134,803,910 ordinary shares and pre-funded warrants to purchase ordinary shares, resulting in net proceeds of approximately $260.9 million, after deducting issuance costs. The Company expects to use the net proceeds primarily to support activities related to the initiation of its Phase 3 registrational study of EB613, as well as for general working capital and corporate purposes.

NOTE 1 - DESCRIPTION OF BUSINESS (Cont.)

Based on the Company's current operating plan, management believes that its existing cash and cash equivalents will be sufficient to fund its planned operations for at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements.

The Company's research personnel and certain members of management are located in Israel, while its clinical, regulatory and supply chain activities are primarily conducted outside Israel. As of September 30, 2026, the Company's operations have remained largely unaffected by these events. For the nine months ended September 30, 2026 and 2025, and for the year ended December 31, 2025, the impact of these events on the Company's results of operations and financial condition was not material.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial statements. Accordingly, they do not include all of the information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial position as of September 30, 2026, the consolidated results of operations and statements of changes in shareholders' equity for the three and nine months ended September 30, 2026 and 2025, and cash flows for the nine months ended September 30, 2026 and 2025.

The consolidated results of operations for the three and nine months ended September 30, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2025, as filed with the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 27, 2026.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Basic loss per share is computed on the basis of net loss for the period divided by the weighted average number of outstanding ordinary shares, equity classified pre-funded warrants and vested restricted share units (“RSUs”) during the period. Each outstanding pre-funded warrant has no expiration and is exercisable at an exercise price of $0.000025 per ordinary share.

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, liability classified pre-funded warrants, warrants and RSUs, which are included under the treasury stock method when dilutive. The calculation of diluted loss per share did not include options, liability classified pre-funded warrants, warrants and RSUs exercisable into 29,411,128 ordinary shares and 17,016,053 ordinary shares for the nine months ended September 30, 2026 and 2025, respectively, and 36,219,126 ordinary shares and 17,806,128 ordinary shares for the three months ended September 30, 2026 and 2025, respectively, because the effect would have been anti-dilutive.

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. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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 - ISSUANCE OF ORDINARY SHARES, PRE-FUNDED WARRANTS AND WARRANTS

On April 1, 2026, the Company entered into a securities purchase agreement with certain funds affiliated with BVF Partners L.P. (collectively, “BVF”), providing for the private placement to BVF of an aggregate of 7,827,789 units (the “2026 Units”), each 2026 Unit consisting of (i) one ordinary share (or, in lieu thereof, one pre-funded warrant to purchase one ordinary share (the “April 2026 Pre-Funded Warrants”)) and (ii) one warrant to purchase one and one-half ordinary shares (the “2026 Ordinary Share Warrants”), for aggregate proceeds of approximately $10.0 million (or $1.2775 per 2026 Unit). On April 2, 2026, the Company issued 2,425,000 ordinary shares,5,402,789 April 2026 Pre-Funded Warrants, and 11,741,683 2026 Ordinary Share Warrants in connection with this offering.

Each 2026 Ordinary Share Warrant has an exercise price of $1.24 per share, became exercisable on October 2, 2026, expires five years following the date of issuance, and is subject to customary adjustments. The 2026 Ordinary Share Warrants are exercisable only for cash so long as the Company has an effective registration statement registering the shares issuable upon exercise of the 2026 Ordinary Share Warrants. The 2026 Ordinary Share Warrants were classified as equity upon issuance, as they met the criteria for equity classification under ASC 815-40.

The April 2026 Pre-Funded Warrants were originally issued with an exercise price of NIS 0.0000769 per share, became exercisable upon issuance and have no expiration date. Prior to their reclassification to equity on August 21, 2026 (see Note 3c below), the April 2026 Pre-Funded Warrants were not considered indexed to the ordinary shares under ASC 815-40-15 and were classified as a financial liability measured at fair value (Level 2, based on the quoted share price), with changes in fair value recognized in financial expenses, net.

NOTE 3 - ISSUANCE OF ORDINARY SHARES, PRE-FUNDED WARRANTS AND WARRANTS (Cont.)

The proceeds of the 2026 Private Placement were allocated first to the April 2026 Pre-Funded Warrants based on their fair value as of the closing date of $6.8 million (based on the closing share price of $1.26 on April 2, 2026), and the residual proceeds of $3.2 million were allocated to the ordinary shares.

The Company had issuance costs of approximately $171 thousand, of which $116 thousand allocated to the April 2026 Pre-Funded Warrants was recognized immediately in the statement of operations and the remaining portion allocated to the equity components was deducted from additional paid-in capital.

Through August 21, 2026, the pre-funded warrants liability was measured at fair value on a recurring basis based on the quoted price of the Company’s ordinary shares (Level 2) based on the Company's share's market price less the nominal exercise price.

The fair value of the April 2026 Pre-Funded Warrants was $17.5 million as of August 21, 2026. Accordingly, the Company recognized a loss from the change in fair value of $7.9 million and $10.6 million for the three and nine months ended September 30, 2026, respectively. See also Note 3c.

On July 26, 2026, in connection with the July 2026 Private Placement, the Company entered into a securities purchase agreement (the “July 2026 Purchase Agreement”) with certain institutional and accredited investors, including BVF, providing for the issuance and sale of an aggregate of 134,803,910 ordinary shares or, in lieu thereof, pre-funded warrants to purchase ordinary shares (the “July 2026 Pre-Funded Warrants”), at a purchase price of $2.04 per ordinary share, for aggregate gross proceeds of approximately $275.0 million. On July 28, 2026, the Company issued 122,961,215 ordinary shares and July 2026 Pre-Funded Warrants to purchase 11,842,695 ordinary shares. The Company incurred issuance costs of approximately $14.1 million, consisting of placement agent fees and legal expenses.

The July 2026 Pre-Funded Warrants were originally issued with an exercise price of NIS 0.0000769 per ordinary share, became exercisable upon issuance, do not expire and are subject to customary beneficial ownership limitations and adjustments. As described in Note 3a above, the July 2026 Pre-Funded Warrants were originally classified as a financial liability measured at fair value, based on the market share price, until their reclassification to equity on August 21, 2026. See Note 3c below.

The proceeds of the July 2026 Private Placement were allocated first to the July 2026 Pre-Funded Warrants based on their fair value as of the closing date of $38.6 million (based on the closing share price of $3.26 on July 28, 2026), and the residual proceeds of $236.4 million were allocated to the ordinary shares. Issuance costs were allocated on the same basis: approximately $2.0 million allocated to the July 2026 Pre-Funded Warrants was recognized immediately in the statement of operations and $12.1 million allocated to the ordinary shares was deducted from additional paid-in capital.

The fair value of the July 2026 Pre-Funded Warrants as of August 21, 2026, was approximately $38.3 million. Accordingly, the Company recognized income from the change in fair value of $355 thousand for the three and nine months ended September 30, 2026. See also Note 3c.

NOTE 3 - ISSUANCE OF ORDINARY SHARES, PRE-FUNDED WARRANTS AND WARRANTS (Cont.)

Effective upon the closing of the July 2026 Private Placement, the Company granted BVF certain rights to designate two nominees to the Company’s board of directors, subject to specified ownership thresholds and other conditions. In connection with the July 2026 Private Placement, the Company also agreed to submit to its shareholders an increase in the number of ordinary shares reserved under the 2018 Equity Incentive Plan (the “2018 Plan”) and certain equity awards to executive officers.

On August 21, 2026, the Company and BVF, the holder of all outstanding April 2026 and July 2026 Pre-Funded Warrants, amended the terms of such pre-funded warrants to change the exercise price from NIS 0.0000769 per ordinary share to $0.000025 per ordinary share. Following the amendment, the pre-funded warrants met the criteria for equity classification under ASC 815-40. In accordance with the standard, the pre-funded warrants were remeasured to fair value as of August 21, 2026, with the change in fair value recognized in financial expenses, net, and their fair value was reclassified from liability to additional paid-in capital. Following this amendment the pre-funded warrants no longer require remeasurement on a recurring basis as of the end of each reporting period. As of September 30, 2026, none of the April 2026 or July 2026 Pre-Funded Warrants had been exercised.

Through August 21, 2026, the pre-funded warrant liability was measured at fair value on a recurring basis based on the quoted price of the Company’s ordinary shares (Level 2).

The following table presents the changes in the pre-funded warrants liability (Level 2):

NOTE 4 - EQUITY AND SHARE-BASED COMPENSATION

**Changes in Share Capital:

Share-based Compensation:

NOTE 4 - EQUITY AND SHARE-BASED COMPENSATION (Cont.)

Share-based Compensation (Cont.):

NOTE 4 - EQUITY AND SHARE-BASED COMPENSATION (Cont.)

Share-based Compensation (Cont.):

The following tables summarize information concerning RSUs:

NOTE 5 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

Balance sheets:

NOTE 6 - COLLABORATION AND RESEARCH AGREEMENTS

On March 16, 2025, the Company entered into a collaboration agreement with OPKO (the “2025 Collaboration Agreement”), which is accounted for as a collaboration arrangement within the scope of ASC 808.

Under the terms of the 2025 Collaboration Agreement, the Company and OPKO have agreed to collaborate with respect to the preclinical and clinical development and decision making related to the EB618 Program. The Company and OPKO share in the economics and development costs of such program at 40% and 60%, respectively, subject to certain opt-out provisions. In connection with the agreement, the Company issued 3,685,226 ordinary shares to OPKO for aggregate gross proceeds of $8.0 million, which were allocated between equity and the collaboration components of the arrangement. Amounts allocated to the collaboration component are recognized over the period of performance and presented within other liabilities in the consolidated balance sheet.

On February 3, 2026, the Company and OPKO amended and restated the 2025 Collaboration Agreement (the “A&R Collaboration Agreement”) to expand the scope of the collaboration to include the EB612 Program. Development costs and proceeds related to the EB612 Program are shared equally between the parties. Except for the foregoing expansion, the material terms of the 2025 Collaboration Agreement remain unchanged.

For the three and nine months ended September 30, 2026, the Company recognized net expenses of $655 thousand and $1.8 million, respectively, relating to the A&R Collaboration Agreement.

NOTE 7 – SEGMENT INFORMATION

• Other segment expenses mainly related to general and administrative expenses, including payroll and related expenses, share-based compensation, legal and audit fees and others, and to financial expenses (income), net, including changes in the fair value of the pre-funded warrants liability.