{"url_path":"/sec/plx/10-k/2026/item-16","section_key":"item-16","section_title":"Item 16 Form 10-K Summary","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-18","source_url":"https://www.sec.gov/Archives/edgar/data/1006281/0001104659-26-029858-index.html","accession_number":"0001104659-26-029858","cik":"0001006281","ticker":"PLX","issuer_name":"Protalix BioTherapeutics, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1006281/0001104659-26-029858-index.html","primary_entity_key":"0001006281","primary_entity_name":"Protalix BioTherapeutics, Inc."},"word_count":16284,"has_tables":true,"body_markdown":"Item 16.      Form 10-K Summary\n\nNone.\n\n​\n\n77\n\n[Table of Contents](#TOC)\n\nSIGNATURES\n\nPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, as of March 18, 2026.\n\n \n\nPROTALIX BIOTHERAPEUTICS, INC.\n\n \n\n \n\n \n\nBy:\n\n/s/ Dror Bashan\n\n \n\n \n\nDror Bashan \n\n​\n\nPOWER OF ATTORNEY\n\nKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dror Bashan and Gilad Mamlok, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.\n\nPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.\n\n**Signature**\n\n**  ​ ​ ​**\n\n**Title**\n\n**  ​ ​ ​**\n\n**Date**\n\n \n\n \n\n \n\n \n\n/s/ Dror Bashan\n\n \n\nPresident, Chief Executive Officer\n\n \n\nMarch 18, 2026\n\nDror Bashan\n\n \n\n(Principal Executive Officer) and Director\n\n \n\n \n\n \n\n \n\n/s/ Gilad Mamlok\n\n \n\nChief Financial Officer, Treasurer and\n\n \n\nMarch 18, 2026\n\nGilad Mamlok\n\n \n\nSecretary (Principal Financial\n\n \n\n​\n\n​\n\nand Accounting Officer)\n\n​\n\n​\n\n \n\n \n\n \n\n/s/ Eliot Richard Forster\n\n \n\nChairman of the Board\n\n \n\nMarch 18, 2026\n\nEliot Richard Forster, Ph.D.\n\n \n\n \n\n \n\n \n\n \n\n/s/ Amos Bar Shalev\n\n \n\nDirector\n\n \n\nMarch 18, 2026\n\nAmos Bar Shalev\n\n \n\n \n\n \n\n \n\n \n\n/s/ Shmuel Ben Zvi\n\n \n\nDirector\n\n \n\nMarch 18, 2026\n\nShmuel Ben Zvi, Ph.D.\n\n \n\n \n\n \n\n \n\n \n\n/s/ Pol F. Boudes\n\n \n\nDirector\n\n \n\nMarch 18, 2026\n\nPol F. Boudes, M.D.\n\n \n\n \n\n​\n\n​\n\n​\n\n​\n\n​\n\n/s/ Christian Elze\n\n​\n\nDirector\n\n​\n\nMarch 18, 2026\n\nChristian Elze\n\n​\n\n​\n\n​\n\n​\n\n \n\n \n\n \n\n/s/ Gwen A. Melincoff\n\n \n\nDirector\n\n \n\nMarch 18, 2026\n\nGwen A. Melincoff\n\n \n\n \n\n \n\n \n\n \n\n/s/ Aharon Schwartz\n\n \n\nDirector\n\n \n\nMarch 18, 2026\n\nAharon Schwartz, Ph.D.\n\n \n\n​\n\n \n\n​\n\n​\n\n​\n\n​\n\n78\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nCONSOLIDATED FINANCIAL STATEMENTS\n\nTABLE OF CONTENTS\n\n \n\n  ​ ​ ​\n\n**Page**\n\n[**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**](#ReportofIndependentRegisteredPublicAccou)**(PCAOB name:****Kesselman & Kesselman C.P.A.s****and PCAOB ID:****1309****)**\n\n​\n\nF-2\n\n**CONSOLIDATED FINANCIAL STATEMENTS**\n\n​\n\n​\n\n[Consolidated Balance Sheets as of December 31, 2024, and 2025](#CONSOLIDATEDBALANCESHEETS_216383)\n\n​\n\nF-4\n\n[Consolidated Statements of Operations for the years ended December 31, 2023, 2024, and 2025](#CONSOLIDATEDSTATEMENTSOFOPERATIONS_58886)\n\n​\n\nF-5\n\n[Consolidated Statements of Changes in Stockholders’ Equity (Capital Deficiency) for the years ended December 31, 2023, 2024, and 2025](#CONSOLIDATEDSTATEMENTSOFCHANGESINCAPITAL)\n\n​\n\nF-6\n\n[Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024, and 2025](#CONSOLIDATEDSTATEMENTSOFCASHFLOWS_110294)\n\n​\n\nF-7\n\n[Notes to Consolidated Financial Statements](#NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS_5)\n\n​\n\nF-9\n\n​\n\n​\n\n​\n\nF-1\n\n[Table of Contents](#TOC)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Board of Directors and Stockholders of Protalix BioTherapeutics, Inc.\n\nOpinion on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of Protalix BioTherapeutics, Inc. and its subsidiary (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity (capital deficiency) and cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.\n\nBasis for Opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\nOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n​\n\nF-2\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\nCritical Audit Matters\n\nCritical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. We determined there are no critical audit matters.\n\n/s/ Kesselman & Kesselman\n\nCertified Public Accountants (Isr.)\n\nA member of PricewaterhouseCoopers International Limited\n\n \n\nTel Aviv, Israel\n​\n\n​\n\nMarch 18, 2026\n​\n\n​\n\nWe have served as the Company’s auditor since 2000.\n\nF-3\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(U.S. dollars in thousands)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**December 31, **\n\n​\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n**ASSETS**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**CURRENT ASSETS:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash and cash equivalents\n\n​\n\n$\n\n19,760\n\n​\n\n$\n\n14,680\n\nShort-term bank deposits\n\n​\n\n​\n\n15,070\n\n​\n\n​\n\n15,593\n\nRestricted deposit\n\n​\n\n​\n\n-\n\n​\n\n​\n\n702\n\nAccounts receivable\n\n​\n\n \n\n2,909\n\n​\n\n \n\n8,840\n\nOther assets\n\n​\n\n \n\n1,096\n\n​\n\n \n\n1,129\n\nInventories\n\n​\n\n \n\n21,243\n\n​\n\n \n\n25,729\n\nTotal current assets\n\n​\n\n$\n\n60,078\n\n​\n\n$\n\n66,673\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**NON-CURRENT ASSETS:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFunds in respect of employee rights upon retirement\n\n​\n\n$\n\n462\n\n​\n\n$\n\n578\n\nProperty and equipment, net\n\n​\n\n \n\n4,591\n\n​\n\n \n\n4,879\n\nDeferred income tax asset\n\n​\n\n​\n\n2,856\n\n​\n\n​\n\n2,516\n\nOperating lease right of use assets\n\n​\n\n \n\n5,430\n\n​\n\n \n\n7,700\n\nTotal assets\n\n​\n\n$\n\n73,417\n\n​\n\n$\n\n82,346\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**LIABILITIES AND STOCKHOLDERS' EQUITY**\n\n​\n\n \n\n​\n\n​\n\n \n\n  ​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**CURRENT LIABILITIES:**\n\n​\n\n \n\n​\n\n​\n\n \n\n  ​\n\nAccounts payable and accruals:\n\n​\n\n \n\n​\n\n​\n\n \n\n  ​\n\nTrade\n\n​\n\n$\n\n4,533\n\n​\n\n$\n\n5,259\n\nOther\n\n​\n\n \n\n19,588\n\n​\n\n \n\n19,875\n\nOperating lease liabilities\n\n​\n\n \n\n1,500\n\n​\n\n \n\n1,384\n\nTotal current liabilities\n\n​\n\n$\n\n25,621\n\n​\n\n$\n\n26,518\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**LONG TERM LIABILITIES:**\n\n​\n\n \n\n​\n\n​\n\n \n\n  ​\n\nLiability for employee rights upon retirement\n\n​\n\n$\n\n559\n\n​\n\n$\n\n661\n\nOperating lease liabilities\n\n​\n\n \n\n4,026\n\n​\n\n \n\n6,937\n\nTotal long term liabilities\n\n​\n\n$\n\n4,585\n\n​\n\n$\n\n7,598\n\nTotal liabilities\n\n​\n\n$\n\n30,206\n\n​\n\n$\n\n34,116\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**COMMITMENTS**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**STOCKHOLDERS' EQUITY**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCommon Stock, $0.001 par value: Authorized - as of December 31, 2024 and 2025, 185,000,000 shares; issued and outstanding - as of December 31, 2024 and 2025, 75,850,275 and 80,425,981 shares, respectively\n\n​\n\n​\n\n76\n\n​\n\n​\n\n80\n\nAdditional paid-in capital\n\n​\n\n​\n\n421,528\n\n​\n\n​\n\n433,147\n\nAccumulated deficit\n\n​\n\n​\n\n(378,393)\n\n​\n\n​\n\n(384,997)\n\nTotal stockholders' equity\n\n​\n\n​\n\n43,211\n\n​\n\n​\n\n48,230\n\nTotal liabilities and stockholders' equity\n\n​\n\n$\n\n73,417\n\n​\n\n$\n\n82,346\n\n​\n\n**The accompanying notes are an integral part of the consolidated financial statements.**\n\n​\n\nF-4\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(U.S. dollars in thousands, except share and per share amounts)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n​\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**REVENUES FROM SELLING GOODS**\n\n​\n\n$\n\n40,418\n\n​\n\n$\n\n52,981\n\n​\n\n$\n\n51,802\n\n**REVENUES FROM LICENSE AND R&D SERVICES**\n\n​\n\n \n\n25,076\n\n​\n\n \n\n418\n\n​\n\n \n\n942\n\n**TOTAL REVENUE**\n\n​\n\n​\n\n65,494\n\n​\n\n​\n\n53,399\n\n​\n\n​\n\n52,744\n\n**COST OF GOODS SOLD**\n\n​\n\n \n\n(22,982)\n\n​\n\n \n\n(24,319)\n\n​\n\n \n\n(26,993)\n\n**RESEARCH AND DEVELOPMENT EXPENSES**\n\n​\n\n \n\n(17,093)\n\n​\n\n \n\n(12,970)\n\n​\n\n \n\n(19,569)\n\n**SELLING, GENERAL AND ADMINISTRATIVE EXPENSES**\n\n​\n\n \n\n(14,959)\n\n​\n\n \n\n(12,193)\n\n​\n\n \n\n(11,682)\n\n**OPERATING INCOME (LOSS)**\n\n​\n\n \n\n10,460\n\n​\n\n \n\n3,917\n\n​\n\n \n\n(5,500)\n\n**FINANCIAL EXPENSES**\n\n​\n\n \n\n(3,180)\n\n​\n\n \n\n(1,062)\n\n​\n\n \n\n(1,191)\n\n**FINANCIAL INCOME**\n\n​\n\n \n\n1,286\n\n​\n\n \n\n1,299\n\n​\n\n \n\n1,083\n\n**FINANCIAL INCOME (EXPENSES), NET**\n\n​\n\n \n\n(1,894)\n\n​\n\n \n\n237\n\n​\n\n \n\n(108)\n\n**INCOME (LOSS) BEFORE TAXES ON INCOME**\n\n​\n\n​\n\n8,566\n\n​\n\n​\n\n4,154\n\n​\n\n​\n\n(5,608)\n\n**TAXES ON INCOME**\n\n​\n\n​\n\n(254)\n\n​\n\n​\n\n(1,222)\n\n​\n\n​\n\n(996)\n\n**NET INCOME (LOSS)**\n\n​\n\n$\n\n8,312\n\n​\n\n$\n\n2,932\n\n​\n\n$\n\n(6,604)\n\n**EARNINGS (LOSS) PER SHARE OF COMMON STOCK:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**BASIC**\n\n​\n\n$\n\n0.12\n\n​\n\n$\n\n0.04\n\n​\n\n$\n\n(0.08)\n\n**DILUTED**\n\n​\n\n$\n\n0.09\n\n​\n\n$\n\n0.04\n\n​\n\n$\n\n(0.08)\n\n**WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**USED IN COMPUTING EARNINGS (LOSS) PER SHARE:**\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n**BASIC**\n\n​\n\n \n\n67,512,527\n\n​\n\n​\n\n72,530,698\n\n​\n\n​\n\n78,546,234\n\n**DILUTED**\n\n​\n\n \n\n82,424,016\n\n​\n\n​\n\n81,057,176\n\n​\n\n​\n\n78,546,234\n\n​\n\n**The accompanying notes are an integral part of the consolidated financial statements.**\n\n​\n\nF-5\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY\n(CAPITAL DEFICIENCY)\n\n(U.S. dollars in thousands)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n​\n\n​\n\n**  ​ ​ ​**\n\n**Additional**\n\n**  ​ ​ ​**\n\n​\n\n​\n\n  ​ ​ ​\n\n  ​ ​ ​\n\n​\n\n​\n\n​\n\n**Common**\n\n​\n\n**Common**\n\n​\n\n**Paid–In**\n\n​\n\n**Accumulated**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Stock**\n\n​\n\n**Stock**\n\n​\n\n**Capital**\n\n​\n\n**Deficit**\n\n​\n\n**Total**\n\n​\n\n** **\n\n**Number of**\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n** **\n\n**Shares**\n\n​\n\n**Amount**\n\n**Balance at January 1, 2023**\n\n** **\n\n**53,790,167**\n\n​\n\n**$**\n\n**54**\n\n​\n\n**$**\n\n**379,167**\n\n​\n\n**$**\n\n**(389,861)**\n\n​\n\n**$**\n\n**(10,640)**\n\n**Changes during 2023:**\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n​\n\nIssuance of common stock under the Sales Agreement, net\n\n​\n\n12,560,150\n\n​\n\n​\n\n13\n\n​\n\n​\n\n23,941\n\n​\n\n​\n\n​\n\n​\n\n​\n\n23,954\n\nConvertible notes conversions\n\n​\n\n4,691,623\n\n​\n\n \n\n5\n\n​\n\n \n\n7,778\n\n​\n\n​\n\n​\n\n​\n\n​\n\n7,783\n\nShare-based compensation related to stock options\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n1,928\n\n​\n\n​\n\n​\n\n​\n\n​\n\n1,928\n\nShare-based compensation related to restricted stock award\n\n​\n\n1,371,362\n\n​\n\n​\n\n1\n\n​\n\n​\n\n1,519\n\n​\n\n \n\n  ​\n\n​\n\n \n\n1,520\n\nExercise of warrants\n\n​\n\n538,822\n\n​\n\n​\n\n*\n\n​\n\n​\n\n712\n\n​\n\n \n\n  ​\n\n​\n\n \n\n712\n\nNet income\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n8,312\n\n​\n\n​\n\n8,312\n\n**Balance at December 31, 2023**\n\n** **\n\n**72,952,124**\n\n​\n\n**$**\n\n**73**\n\n​\n\n**$**\n\n**415,045**\n\n​\n\n**$**\n\n**(381,549)**\n\n​\n\n**$**\n\n**33,569**\n\n**Changes during 2024:**\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n​\n\nInitial adoption of ASU 2020-06\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n(393)\n\n​\n\n​\n\n224\n\n​\n\n​\n\n(169)\n\nIssuance of common stock under the Sales Agreement, net\n\n​\n\n2,216,692\n\n​\n\n​\n\n2\n\n​\n\n​\n\n3,624\n\n​\n\n​\n\n​\n\n​\n\n​\n\n3,626\n\nShare-based compensation related to stock options\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n1,593\n\n​\n\n​\n\n​\n\n​\n\n​\n\n1,593\n\nShare-based compensation related to restricted stock award\n\n​\n\n681,459\n\n​\n\n​\n\n1\n\n​\n\n​\n\n1,659\n\n​\n\n​\n\n​\n\n​\n\n​\n\n1,660\n\nNet income\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n2,932\n\n​\n\n \n\n2,932\n\n**Balance at December 31, 2024**\n\n** **\n\n**75,850,275**\n\n​\n\n**$**\n\n**76**\n\n​\n\n**$**\n\n**421,528**\n\n​\n\n**$**\n\n**(378,393)**\n\n​\n\n**$**\n\n**43,211**\n\n**Changes during 2025:**\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\nIssuance of common stock under the Sales Agreement, net\n\n​\n\n2,775,215\n\n​\n\n​\n\n3\n\n​\n\n​\n\n6,809\n\n​\n\n​\n\n​\n\n​\n\n​\n\n6,812\n\nShare-based compensation related to stock options\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n1,494\n\n​\n\n \n\n  ​\n\n​\n\n \n\n1,494\n\nShare-based compensation related to restricted stock award\n\n​\n\n564,010\n\n​\n\n​\n\n*\n\n​\n\n​\n\n803\n\n​\n\n​\n\n​\n\n​\n\n​\n\n803\n\nExercise of warrants and options\n\n​\n\n1,236,481\n\n​\n\n​\n\n1\n\n​\n\n​\n\n2,513\n\n​\n\n​\n\n​\n\n​\n\n​\n\n2,514\n\nNet loss\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n(6,604)\n\n​\n\n \n\n(6,604)\n\n**Balance at December 31, 2025**\n\n** **\n\n**80,425,981**\n\n​\n\n**$**\n\n**80**\n\n​\n\n**$**\n\n**433,147**\n\n​\n\n**$**\n\n**(384,997)**\n\n​\n\n**$**\n\n**48,230**\n\n​\n\n*\n\nRepresents an amount less than $1.\n\n**The accompanying notes are an integral part of the consolidated financial statements.**\n\n​\n\n​\n\nF-6\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(U.S. dollars in thousands)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**CASH FLOWS FROM OPERATING ACTIVITIES:**\n\n \n\n​\n\n  ​\n\n \n\n​\n\n  ​\n\n \n\n​\n\n  ​\n\nNet income (loss)\n\n​\n\n$\n\n8,312\n\n​\n\n$\n\n2,932\n\n​\n\n$\n\n(6,604)\n\nAdjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\nShare-based compensation\n\n​\n\n \n\n3,448\n\n​\n\n \n\n3,253\n\n​\n\n \n\n2,297\n\nDepreciation\n\n​\n\n \n\n1,191\n\n​\n\n \n\n1,304\n\n​\n\n \n\n1,465\n\nFinancial (income) expenses, net\n\n​\n\n \n\n(446)\n\n​\n\n \n\n310\n\n​\n\n \n\n606\n\nChanges in accrued liability for employee rights upon retirement\n\n​\n\n \n\n3\n\n​\n\n \n\n(151)\n\n​\n\n \n\n22\n\nChanges in deferred income tax asset\n\n​\n\n​\n\n(3,092)\n\n​\n\n​\n\n236\n\n​\n\n​\n\n340\n\nGain on amounts funded in respect of employee rights upon retirement\n\n​\n\n \n\n(50)\n\n​\n\n \n\n(18)\n\n​\n\n \n\n(20)\n\nLoss (gain) on sale of fixed assets\n\n​\n\n \n\n9\n\n​\n\n \n\n(3)\n\n​\n\n​\n\n-\n\nGain on conversions of convertible notes\n\n​\n\n​\n\n(421)\n\n​\n\n​\n\n-\n\n​\n\n​\n\n-\n\nAmortization of debt issuance costs and debt discount\n\n​\n\n​\n\n267\n\n​\n\n​\n\n-\n\n​\n\n​\n\n-\n\nChanges in operating assets and liabilities:\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\nDecrease in contracts liability\n\n​\n\n \n\n(13,178)\n\n​\n\n \n\n-\n\n​\n\n \n\n-\n\nDecrease (increase) in accounts receivable-trade and other assets\n\n​\n\n \n\n(428)\n\n​\n\n \n\n2,317\n\n​\n\n \n\n(5,890)\n\nChanges in operating lease right of use assets, net\n\n​\n\n \n\n13\n\n​\n\n \n\n(4)\n\n​\n\n \n\n(15)\n\nIncrease in inventories\n\n​\n\n \n\n(2,241)\n\n​\n\n \n\n(2,198)\n\n​\n\n \n\n(4,486)\n\nIncrease in accounts payable and accruals\n\n​\n\n \n\n5,295\n\n​\n\n \n\n696\n\n​\n\n \n\n292\n\nNet cash provided by (used in) operating activities\n\n​\n\n$\n\n(1,318)\n\n​\n\n$\n\n8,674\n\n​\n\n$\n\n(11,993)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**CASH FLOWS FROM INVESTING ACTIVITIES:**\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\n​\n\n \n\n​\n\nInvestment in bank deposits\n\n​\n\n​\n\n(20,420)\n\n​\n\n​\n\n(15,000)\n\n​\n\n​\n\n(5,000)\n\nShort-term deposit withdrawal\n\n​\n\n​\n\n5,000\n\n​\n\n​\n\n20,420\n\n​\n\n​\n\n5,000\n\nPurchase of property and equipment\n\n​\n\n​\n\n(1,149)\n\n​\n\n​\n\n(1,282)\n\n​\n\n​\n\n(1,638)\n\nProceeds from sale of property and equipment\n\n​\n\n​\n\n-\n\n​\n\n​\n\n3\n\n​\n\n​\n\n-\n\nAmounts paid (funded) in respect of employee rights upon retirement, net\n\n​\n\n \n\n(142)\n\n​\n\n \n\n80\n\n​\n\n \n\n(26)\n\nIncrease in restricted deposit\n\n​\n\n​\n\n-\n\n​\n\n​\n\n-\n\n​\n\n​\n\n(702)\n\nNet cash provided by (used in) investing activities\n\n​\n\n$\n\n(16,711)\n\n​\n\n$\n\n4,221\n\n​\n\n$\n\n(2,366)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**CASH FLOWS FROM FINANCING ACTIVITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPayment for convertible notes redemption\n\n​\n\n$\n\n-\n\n​\n\n$\n\n(20,420)\n\n​\n\n$\n\n-\n\nProceeds from issuance of common stock under the Sales Agreement, net\n\n​\n\n​\n\n23,954\n\n​\n\n​\n\n3,626\n\n​\n\n​\n\n6,812\n\nExercise of warrants and options\n\n​\n\n​\n\n712\n\n​\n\n​\n\n-\n\n​\n\n​\n\n2,514\n\nNet cash provided by (used in) financing activities\n\n​\n\n$\n\n24,666\n\n​\n\n$\n\n(16,794)\n\n​\n\n$\n\n9,326\n\n**EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS**\n\n​\n\n$\n\n(114)\n\n​\n\n$\n\n25\n\n​\n\n$\n\n(47)\n\n**NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**\n\n​\n\n \n\n6,523\n\n​\n\n \n\n(3,874)\n\n​\n\n \n\n(5,080)\n\n**BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR**\n\n​\n\n​\n\n17,111\n\n​\n\n \n\n23,634\n\n​\n\n \n\n19,760\n\n**BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR**\n\n​\n\n$\n\n23,634\n\n​\n\n$\n\n19,760\n\n​\n\n$\n\n14,680\n\n​\n\n​\n\n​\n\n**The accompanying notes are an integral part of the consolidated financial statements.**\n\n​\n\nF-7\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\n**CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED**)\n\n(U.S. dollars in thousands)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n​\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**SUPPLEMENTARY INFORMATION ON INVESTING AND FINANCING ACTIVITIES NOT INVOLVING CASH FLOWS:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPurchase of property and equipment\n\n​\n\n$\n\n614\n\n​\n\n$\n\n254\n\n​\n\n$\n\n369\n\nOperating lease right of use assets obtained in exchange for new operating lease liabilities\n\n​\n\n$\n\n1,567\n\n​\n\n$\n\n376\n\n​\n\n$\n\n3,185\n\nConvertible notes conversions\n\n​\n\n$\n\n7,783\n\n​\n\n$\n\n-\n\n​\n\n$\n\n-\n\nPartial settlement of liability for employee rights upon retirement through transfer of the related funds\n\n​\n\n$\n\n882\n\n​\n\n$\n\n-\n\n​\n\n$\n\n-\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**SUPPLEMENTARY DISCLOSURE ON CASH FLOWS**\n\n​\n\n​\n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\nTax paid\n\n​\n\n$\n\n-\n\n​\n\n$\n\n385\n\n​\n\n$\n\n1,183\n\nInterest paid\n\n​\n\n$\n\n2,742\n\n​\n\n$\n\n1,532\n\n​\n\n$\n\n-\n\nInterest received\n\n​\n\n$\n\n355\n\n​\n\n$\n\n1,487\n\n​\n\n$\n\n651\n\n​\n\nThe accompanying notes are an integral part of the consolidated financial statements.\n\n​\n\nF-8\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n**NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES**\n\n**a.    General**\n\nProtalix BioTherapeutics, Inc. (collectively with its subsidiary, the “Company”) and its wholly-owned subsidiary, Protalix Ltd., are commercial stage biopharmaceutical companies focused on the discovery, development, production and commercialization of innovative therapeutics for rare diseases with significant unmet needs. ProCellEx®, the Company’s proprietary plant cell-based protein expression system (“ProCellEx”), represents a new method for developing recombinant proteins in an industrial-scale manner.\n\nTo date, the Company has successfully developed two enzyme replacement therapies (ERTs); Elfabrio® (pegunigalsidase alfa) for the treatment of adult patients with a confirmed diagnosis of Fabry disease and Elelyso® (taliglucerase alfa) for the treatment of adult patients and children four years of age and older with Gaucher disease.\n\nElelyso, the Company’s first commercial product, was approved by the U.S. Food and Drug Administration (“FDA”) in 2012 for injection as an ERT for the long-term treatment of adult patients with a confirmed diagnosis of type 1 Gaucher disease. Elelyso is the first plant cell derived recombinant protein to be approved by the FDA for the treatment of Gaucher disease and is now approved in 40 markets including the United States, Brazil, Israel and others. It is not approved in the European Union (EU). In August 2014, the FDA approved Elelyso for injection for children four years of age and older.\n\nElfabrio, the Company’s second commercial product which was referred to as PRX-102 during its development stage, for the treatment of adult patients with Fabry disease, is our proprietary, plant cell culture expressed enzyme, and a chemically modified stabilized version of, the recombinant α-Galactosidase-A protein, a lysosomal enzyme. It was approved by the European Commission (“EC”) for marketing in the EU and by the FDA for marketing in the United States in May 2023 for adult patients with Fabry disease, and subsequently in more than 10 additional markets. The approvals cover the 1 mg/kg every-two-weeks (E2W) dosage.\n\nOn March 5, 2026, the EC ratified the positive opinion issued in January 2026 by the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines Agency (“EMA”). The EC decision approves, in the EU, the 2 mg/kg E4W dosing regimen for Elfabrio in Fabry disease adult patients stable with an ERT treatment.\n\nThe Company is committed to leveraging its record of success as the Company progresses with the development of treatments for rare and orphan diseases. In addition, the Company continuously works on the further development and enhancement of its ProCellEx technology. Accordingly, the Company is turning its focus to new, early-stage product candidates that treat indications for which there are high unmet needs in terms of efficacy and safety, including renal diseases. The Company believe that its treatments of interest will address both genetic and non-genetic diseases. The Company intends to use its ProCellEx platform and PEGylation capabilities, as well as other modalities such as small molecules and antibodies, to take advantage of highly innovative opportunities. The Company is also exploring novel platform technologies. Consistent with its strategy, the Company continuously evaluates potential strategic marketing partnerships as well as collaboration programs with biotechnology and pharmaceutical companies and academic research institutions. Except with respect to Elfabrio and Elelyso, the Company holds the worldwide commercialization rights to its other proprietary development candidates.\n\nThe Company’s product pipeline currently includes, among other candidates:\n\nPRX-115, the Company’s plant cell-expressed recombinant PEGylated uricase (urate oxidase) – a chemically modified enzyme to treat uncontrolled gout; and\n\nF-9\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nPRX-119, the Company’s plant cell-expressed PEGylated recombinant human DNase I product candidate for long and customized systemic circulation in the bloodstream for NETs-related diseases.\n\nObtaining marketing approval with respect to any product candidate in any country is dependent on the Company’s ability to implement the necessary regulatory steps required to obtain such approvals, and demonstrate the safety and efficacy of its product candidates. The Company cannot reasonably predict the outcome of these activities.\n\nSince its approval by the FDA, Elelyso has been marketed by Pfizer Inc. (“Pfizer”) originally pursuant to an exclusive license and supply agreement between Protalix Ltd. and Pfizer which was amended and restated in October 2015 (the “Amended Pfizer Agreement”). Pursuant to the Amended Pfizer Agreement, the Company sold to Pfizer its share in the collaboration worldwide except for Brazil. Pfizer is entitled to all of the revenues, and is responsible for 100% of expenses globally for Elelyso, excluding Brazil where the Company is responsible for all expenses and retains all revenues.\n\nOn June 18, 2013, the Company entered into a Supply and Technology Transfer Agreement (the “Brazil Agreement”) with Fundação Oswaldo Cruz (“Fiocruz”), an arm of the Brazilian Ministry of Health (the “Brazilian MoH”) for BioManguinhos alfataliglicerase. Fiocruz’s purchases of BioManguinhos alfataliglicerase to date have been significantly below certain agreed-upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding the termination right, the Company is, at this time, continuing to supply BioManguinhos alfataliglicerase to Fiocruz and patients continue to be treated with BioManguinhos alfataliglicerase in Brazil.\n\nThe Company, through its wholly-owned subsidiary, Protalix Ltd., has licensed the rights to commercialize Elelyso worldwide (other than Brazil) to Pfizer, and in Brazil to Fiocruz. Elelyso is marketed as BioManguinhos alfataliglicerase in Brazil.\n\nThe Company has partnered with Chiesi Farmaceutici S.p.A. (“Chiesi”) for the development and commercialization of Elfabrio through two exclusive global licensing and supply agreements. On October 19, 2017, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi Ex-US Agreement”) pursuant to which Chiesi was granted an exclusive license for all markets outside of the United States to commercialize Elfabrio. On July 23, 2018, Protalix Ltd. entered into an Exclusive License and Supply Agreement with Chiesi (the “Chiesi US Agreement”), with respect to the commercialization of Elfabrio in the United States.\n\nBecause the Company’s operations are conducted in the State of Israel, the business and operations may be directly affected by military, economic, political and geopolitical conditions in Israel. Since October 2023, Israel has suffered from missile and other similar attacks and has been engaged in military activity on a number of fronts, including with the Hamas in the Gaza Strip, Hezbollah in Lebanon, Iran, the Houthis terrorist group that controls parts of Yemen, and others, and both civilian and military targets in Israel have been attacked. Such clashes may escalate in the future into a greater regional conflict. In October 2025, Israel and Hamas entered into a ceasefire agreement intended to permanently end the war between Israel and Hamas. However, there are no assurances regarding continued compliance with such agreement. While the conflict created and continues to create heightened security concerns, disruptions to business operations, and economic instability within Israel, the ceasefire may contribute to improved regional stability. The security situation remains fluid and any renewed military actions, restrictions, or government-imposed measures could have a material adverse effect on the Company’s business, results of operations, and financial condition. On February 28, 2026, the US and Israeli militaries commenced air-based campaigns in Iran which have resulted in a larger regional event and has resulted in increased missile and similar attacks on civilian and military targets in Israel and in other countries in the region. This has resulted in global security concerns that may result in a greater or lasting regional conflict. It is currently\n\nF-10\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nnot possible to predict the duration or severity of the ongoing conflict or its effects on the Company’s business, results of operations, and financial conditions.\n\nThe Company expects to continue to incur significant expenditures in the near future due to research and developments efforts with respect to its product candidates. The Company believes that its cash and cash equivalents and short-term bank deposits are sufficient to satisfy the Company’s capital needs for at least 12 months from the date that these financial statements are issued.\n\n**b.    Basis of presentation**\n\nThe Company’s financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).\n\n**c.    Use of estimates in the preparation of financial statements**\n\nThe preparation of 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 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.\n\n**d.    Functional currency**\n\nThe dollar is the currency of the primary economic environment in which the operations of the Company and its Subsidiaries are conducted. The Company’s revenues are derived in dollars. Most of the Company’s expenses and capital expenditures are incurred in dollars, and the major source of the Company’s financing has been provided in dollars.\n\nTransactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items (stated below) reflected in the statements of operations, the following exchange rates are used: (i) for transactions – exchange rates at the transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization, etc.) – historical exchange rates. Currency translation gains and losses are recorded as financial income or expenses, as appropriate.\n\n**e.    Cash equivalents**\n\nThe Company considers 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, to be cash equivalents.\n\n**f.    Short-term bank deposits**\n\nBank 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 5.05%-5.75% for the years ended December 31, 2025 and 2024.\n\n**g.    Restricted deposit**\n\nRestricted deposit is deposited in an interested-bearing saving account which is used as a security for the Company's potential hedging activities.\n\nF-11\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n**h.    Accounts Receivables**\n\nAccounts receivable are recorded net of an allowance for credit losses. The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering historical collection experience, current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses and future expectations. As of December 31, 2025 and 2024, the allowance was negligible.\n\nNo write-off activity and recoveries for the periods presented were recognized.\n\n**i.    Inventories**\n\nInventories are valued at the lower of cost or net realizable value. Cost of raw and packaging materials and purchased products is determined using the “moving average” basis.\n\nCost of finished products is determined as follows: the value of the raw and packaging materials component is determined primarily using the “moving average” basis; the value of the labor and overhead component is determined on an average basis over the production period.\n\nInventory is written down for estimated obsolescence based upon management assumptions about future demand and market conditions.\n\n**j.    Property and equipment**\n\n1.    Property and equipment are stated at cost, net of accumulated depreciation and amortization.\n\n2.    The Company’s assets are depreciated by the straight-line method on the basis of their estimated useful lives as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n**Years**\n\nLaboratory equipment\n\n \n\n5\n\nFurniture\n\n \n\n10-15\n\nComputer equipment\n\n \n\n3\n\n​\n\nLeasehold 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.\n\n**k.    Impairment of long-lived assets**\n\nThe Company tests long-lived assets for impairment if an indication of impairment exists. If the sum of expected undiscounted future cash flows of definite life assets is less than the carrying amount of such assets, the Company recognizes an impairment loss in the amount by which the carrying amount of the assets exceeds their fair value.\n\n**l.    Income taxes**\n\n1.    Deferred income taxes\n\nDeferred taxes are determined utilizing the assets and liabilities method based on the estimated future tax effects of the differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using the tax rates expected to be in effect when\n\nF-12\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nthose differences reverse. A valuation allowance in respect of deferred tax assets is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.\n\n2.    Uncertainty in income taxes\n\nTax benefits recognized in the financial statements are those that the Company’s management deems at least more likely than not to be sustained, based on technical merits. The amount of benefits recorded for these tax benefits is measured as the largest benefit the Company’s management deems more likely than not to be sustained. Liabilities relating to uncertain tax positions are classified as current in the consolidated balance sheets to the extent the Company anticipates making payments within one year.\n\n**m.    Revenue Recognition**\n\nUnder Accounting Standards Codification (“ASC”), Topic 606, Revenue from Contracts with Customers, a contract with a customer exists only when: the parties to the contract have approved it and are committed to perform their respective obligations, the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“performance obligations”), the Company can determine the transaction price for the goods or services to be transferred, the contract has commercial substance and it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.\n\nRevenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer.\n\nRevenue is recognized net of any taxes collected from customers which are subsequently remitted to governmental entities (e.g., indirect taxes).\n\n1.    Revenues from selling products\n\nThe Company recognizes revenues from selling goods at a point in time when control over the product is transferred to customers (upon delivery).\n\nThe consideration promised in a contract with a Company’s customer is based on either fixed amounts or variable amounts. Variable amounts are based on the average net selling price of the drug product in the applicable territory. The Company estimates the variable consideration and recognizes revenue only to the extent the variable consideration is probable and that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue. The Company’s payment terms are generally 45 days or less.\n\n2.    Revenues from license and R&D services\n\nThe Company has identified two performance obligations in each of the Chiesi Ex-US Agreement and the Chiesi US Agreement (collectively, the “Chiesi Agreements”) as follows: (1) the license and research and development services and (2) the contingent performance obligation regarding future manufacturing.\n\nThe Company determined that the license together with the research and development services should be combined into a single performance obligation since Chiesi cannot benefit from the license without the research and development services. The research and development services are highly specialized and are dependent on the supply of the drug.\n\nF-13\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nThe future manufacturing was contingent on regulatory approvals of the drug and the Company deems these services to be separately identifiable from other performance obligations in the contract. Manufacturing services post-regulatory approval are not interdependent or interrelated with the license and research and development services. Following the regulatory approvals for Elfabrio received in May 2023, the Company started recognizing revenue from manufacturing. See also [revenue from selling products](#_k.__) above.\n\nThe transaction price was comprised of fixed consideration and variable consideration (capped research and development reimbursements). Under ASC 606, the consideration to which the Company would be entitled upon the achievement of contractual milestones, which are contingent upon the occurrence of future events, are a form of variable consideration. The Company estimates variable consideration using the most likely amount method. Amounts included in the transaction price are recognized only when it is probable that a significant reversal of cumulative revenues will not occur. Prior to recognizing revenue from variable consideration, the Company uses significant judgment to determine the probability of significant reversal of such revenue. Following the approval of Elfabrio by the FDA in 2023, the Company received a milestone payment equal to $20.0 million which was recognized as revenue from license and R&D services.\n\nSince the customer benefits from the research and development services as the entity performs the service, revenue from granting the license and the research and development services is recognized over time using the cost-to-cost method since the customer benefits from the research and development services as the entity performs the service.\n\nRevenue from additional research and development services ordered by Chiesi, is recognized over time using the cost-to-cost method.\n\n**n.    Research and development costs**\n\nResearch and development costs are expensed as incurred and consist primarily of personnel, subcontractors and consultants (mainly in connection with clinical trials), facilities, equipment and supplies for research and development activities. In connection with purchases of assets, amounts assigned to intangible assets to be used in a particular research and development project that have no alternative future use are charged to research and development costs at the purchase date. Costs incurred for performing research and development services are included in research and development expenses.\n\n**o.    Concentration of credit risks and trade receivable**\n\nFinancial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, bank deposits, restricted deposit and account receivables - trade. The Company’s deposits are instruments with highly rated financial institutions, mainly in Israeli banks, and, as a matter of policy, limits the amounts of credit exposure to any one financial institution. The Company has not experienced any credit losses in these accounts and does not believe it is exposed to any significant credit risk on these instruments. The Company’s trade receivables represent amounts to be received from its customers. The Company does not require its customers to post collateral with respect to receivables.\n\n​\n\nF-14\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nAs of December 31, 2024 and 2025, the accounts receivables trade balance was composed of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nChiesi\n\n​\n\n$\n\n-\n\n​\n\n$\n\n5,473\n\nPfizer\n\n​\n\n \n\n1,192\n\n​\n\n \n\n1,426\n\nFiocruz\n\n​\n\n \n\n1,717\n\n​\n\n \n\n1,941\n\n​\n\n​\n\n$\n\n2,909\n\n​\n\n$\n\n8,840\n\n​\n\n**p.    Share-based compensation**\n\nThe Company accounts for share-based payment awards classified as equity awards, including stock-based option awards and restricted stock, using the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite service period.\n\nThe Company calculates the fair value of stock-based option awards on the date of grant using the Black-Scholes option pricing model. This option pricing model requires estimates as to the option’s expected term and the price volatility of the underlying stock.\n\nThe Company measures compensation expense for restricted stock based on the market value of the underlying stock at the date of grant.\n\nThe Company elected to recognize compensation cost for awards to employees with only service conditions that have a graded vesting schedule using the accelerated method.\n\nThe Company elects to account for forfeitures as they occur.\n\n**q.    Net earnings (loss) per share**\n\nBasic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of common stock, par value $0.001 per share (the “Common Stock”), outstanding during each period.\n\nDiluted earnings per share is calculated by dividing (a) the net income that includes addition of financial expenses related to convertible notes by (b) the weighted-average number of shares of Common Stock outstanding during each period increased to include the number of additional shares of Common Stock that would have been outstanding if the potentially dilutive shares had been issued.\n\nIn computing diluted earnings per share, basic earnings per share are adjusted to take into account the potential dilution that could occur upon: (i) the exercise of options and non-vested restricted stock granted under employee stock compensation plans using the treasury stock method; (ii) the exercise of warrants using the treasury stock method; and (iii) the conversion of convertible notes using the “if-converted” method.\n\n**r.    Convertible notes**\n\nIn September 2024, the Company repaid in full all of the outstanding principal and interest payable under its 7.50% Senior Secured Convertible Promissory Notes due 2024 (the “2024 Notes”). The repayment of the convertible notes at maturity was financed entirely with available cash.\n\nPrior to January 1, 2024, the Company accounted for its outstanding convertible notes using the guidance set forth in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815 which required that the Company determine whether the embedded conversion option must\n\nF-15\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nbe separated from the other features of the applicable note instrument and accounted for separately. ASC 470-20 regarding debt with conversion and other options requires the issuer of a convertible debt instrument that may be settled in cash upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The Company’s outstanding 2024 Notes were accounted for as a liability (debt) and equity component (conversion option) as the convertible notes may be settled wholly or partly in cash, at the option of the Company, when converted.\n\nStarting from January 1, 2024, the convertible debt instruments were accounted for as a single liability measured at amortized cost.\n\n**s.    Leases**\n\nLeases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, the Company classifies the lease as a finance lease. Otherwise, the Company classifies the lease as an operating lease. The Company does not have any finance leases.\n\nOperating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets.\n\nROU 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 at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments.\n\nThe Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means, for those leases, the Company does not recognize ROU assets or lease liabilities.\n\nLease terms 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 Company recognizes lease expenses over the lease term on a straight-line basis.\n\nThe Company applies the portfolio approach to account for the operating lease ROU assets and liabilities for certain car leases and incremental borrowing rates.\n\n**t.    New accounting pronouncements**\n\n*Recently adopted accounting pronouncements*\n\nIn December 2023, the FASB issued Accounting Standards Update (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 is effective for fiscal years beginning after December 15, 2024 on a prospective basis with the option to apply the standard retrospectively. The Company adopted this standard on a prospective basis. See [Note 12](#_NOTE_12_-).\n\n​\n\nF-16\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n*Recently issued accounting pronouncements, not yet adopted*\n\nIn 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 within fiscal years 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.\n\nIn 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.\n\nIn December 2025, the FASB issued ASU 2025-11 to amend the guidance in “Interim Reporting” (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. The Company is currently evaluating the effects that ASU 2025-11 will have on its interim consolidated financial statements and related disclosures.\n\nF\n\n​\n\nNOTE 2 - COMMERCIALIZATION AGREEMENTS\n\na.In October 2015, the Company entered into the Amended Pfizer Agreement with Pfizer that amended and restated the Pfizer Agreement of November 30, 2009. Pursuant to the amendment, the Company granted Pfizer an exclusive, worldwide license, excluding Brazil. Pfizer acquired all the information, knowledge and permission to manufacture and sell Elelyso.\n\nProtalix Ltd. also agreed to provide Pfizer with:\n\n1.Manufacturing and supply of the drug substance for its incorporation into the licensed product in consideration of an agreed price per unit.\n\n2.Assistance in arranging for the manufacture of the drug substance by Pfizer or by alternative supplier chosen by Pfizer in consideration of an agreed hourly rate plus reimbursement of expenses.\n\n**b.**    In October 2017, Protalix Ltd. entered into the Chiesi Ex-U.S. Agreement with respect to the commercialization of pegunigalsidase alfa (hereafter – the drug) for the treatment of Fabry disease. Under the terms of the Chiesi Ex-U.S. Agreement, Protalix Ltd. granted to Chiesi exclusive licensing rights for the commercialization of the drug for all markets outside of the United States. At the effective date, Protalix Ltd. had maintained the exclusive commercialization rights to the drug in the United States, which rights were subsequently granted to Chiesi in July 2018.\n\nProtalix Ltd. is mainly responsible for (i) continuing the development of the drug until a regulatory approval is granted and (ii) manufacture and supply the drug to Chiesi, based on Chiesi’s requests.\n\nF-17\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nThe consideration consists of the following:\n\n1.Upfront, non-refundable payment of $25.0 million.\n\n2.Additional payments of up to $25.0 million in development costs, capped at $10.0 million per year.\n\n3.Payments for additional studies, as may be approved from time to time by Chiesi.\n\n4.Milestone payments of up to $320.0 million with respect to certain regulatory and commercial events as defined in the Chiesi Ex-U.S. Agreement, which has been reduced to $295.0 million.\n\n5.Additional payments as consideration for the supply of the drug. The payment will vary from 15% to 35% of Chiesi’s average selling price of the drug, depending on the amount of annual sales.\n\n6.Protalix Ltd. will be the sole manufacturer of the drug.\n\nChiesi does not have sublicensing rights (except for certain territories).\n\nIn July 2018, Protalix Ltd. entered into the Chiesi US Agreement with respect to the commercialization of the drug for the treatment of Fabry disease. Under the terms of the Chiesi US Agreement, Protalix Ltd. granted to Chiesi exclusive licensing rights for the commercialization of the drug for all markets in the United States. Protalix Ltd. is mainly responsible for (i) continuing the development of the drug until a regulatory approval is granted, (ii) continuing certain clinical development efforts in relation to the drug after a regulatory approval is granted and (iii) manufacture and supply the drug to Chiesi, based on Chiesi’s requests.\n\nThe consideration consists of the following:\n\n1.Upfront, non-refundable payment of $25.0 million.\n\n2.Additional payments of up to $20.0 million in development costs, capped at $7.5 million per year.\n\n3.Payments for additional studies, as may be approved from time to time by Chiesi.\n\n4.Milestone payments of up to $760.0 million with respect to certain regulatory and commercial events as defined in the Chiesi US Agreement.\n\n5.Additional payments as consideration for the supply of the drug. The payment will vary from 15% to 40% of Chiesi’s average selling price of the drug, depending on the amount of annual sales.\n\n6.Protalix will be the sole manufacturer of the drug.\n\nChiesi does not have sublicensing rights.\n\n**c.**\n\nOn June 18, 2013, Protalix Ltd. entered into the Brazil Agreement with Fiocruz for BioManguinhos. Fiocruz’s purchases of BioManguinhos alfataliglicerase to date have been significantly below certain agreed upon purchase milestones and, accordingly, the Company has the right to terminate the Brazil Agreement. Notwithstanding, the Company is, at this time, continuing to supply BioManguinhos alfataliglicerase to Fiocruz under the Brazil Agreement, and patients continue to be treated with BioManguinhos alfataliglicerase in Brazil.\n\nF-18\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nNOTE 3 - PROPERTY AND EQUIPMENT\n\na.Composition of property and equipment grouped by major classifications is as follows:\n\nComposition of property and equipment grouped by major classifications is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n(*U.S. dollars in thousands*)\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nLaboratory equipment\n\n​\n\n$\n\n19,043\n\n​\n\n$\n\n20,090\n\nFurniture and computer equipment\n\n​\n\n \n\n3,374\n\n​\n\n \n\n3,765\n\nLeasehold improvements\n\n​\n\n \n\n17,913\n\n​\n\n \n\n18,070\n\n​\n\n​\n\n$\n\n40,330\n\n​\n\n$\n\n41,925\n\nLess – accumulated depreciation and amortization\n\n​\n\n \n\n(35,739)\n\n​\n\n \n\n(37,046)\n\n​\n\n​\n\n$\n\n4,591\n\n​\n\n$\n\n4,879\n\n​\n\nb.Depreciation in respect of property and equipment during the years ended December 31, 2023, 2024, and 2025 were as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nDepreciation in respect of property and equipment\n\n​\n\n$\n\n1,191\n\n​\n\n$\n\n1,304\n\n​\n\n$\n\n1,465\n\n​\n\nNOTE 4 - INVENTORIES\n\na.Inventories at December 31, 2024 and 2025 consisted of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n(*U.S. dollars in thousands)*\n\n​\n\n**2024**\n\n​\n\n**2025**\n\nRaw materials\n\n​\n\n$\n\n4,549\n\n​\n\n$\n\n5,980\n\nWork in progress\n\n​\n\n \n\n11,245\n\n​\n\n​\n\n9,375\n\nFinished goods\n\n​\n\n \n\n5,449\n\n​\n\n​\n\n10,374\n\nTotal inventory\n\n​\n\n$\n\n21,243\n\n​\n\n$\n\n25,729\n\n​\n\nb.Write-down of inventory under cost of goods sold recorded during the years ended December 31, 2023, 2024, and 2025 were as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nWrite-down of inventory under cost of goods sold\n\n​\n\n$\n\n800\n\n​\n\n$\n\n90\n\n​\n\n$\n\n30\n\n​\n\nNOTE 5 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT\n\nThe Israeli Subsidiary is required to make a severance payment upon dismissal of an employee or upon termination of employment in certain circumstances. The severance pay liability to the employees (based upon length of service and the latest monthly salary - one month’s salary for each year employed) is recorded on the Company’s balance sheets under “Liability for employee rights upon retirement.” The liability is recorded as if it were payable at each balance sheet date on an undiscounted basis.\n\nThe liability is funded in part from the purchase of insurance policies or by the establishment of pension funds with dedicated deposits in the funds. The amounts used to fund these liabilities are included in the Company’s balance sheets under “Funds in respect of employee rights upon retirement.” These policies are the Company’s assets. However, under labor agreements and subject to certain limitations, any policy may be transferred to the ownership of the individual employee for whose benefit the funds were deposited.\n\nF-19\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nFor the years ended December 31, 2023, 2024, and 2025, the Company’s deposits with insurance companies in connection with its severance payment obligations were approximately as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nDeposits with insurance companies in connection with severance payment obligations\n\n​\n\n$\n\n142\n\n​\n\n$\n\n32\n\n​\n\n$\n\n26\n\n​\n\nIn accordance with the current employment agreements with certain employees, the Company makes regular deposits with certain insurance companies for accounts controlled by each applicable employee in order to secure the employee’s rights upon retirement. The Company is fully relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. The liability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected in the Company’s balance sheets, as the amounts funded are not under the control and management of the Company and the pension or severance pay risks have been irrevocably transferred to the applicable insurance companies (the “Contribution Plans”).\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nTotal Severance Expenses\n\n​\n\n$\n\n801\n\n​\n\n$\n\n820\n\n​\n\n$\n\n1,044\n\nSeverance Expenses in respect of Contribution Plans\n\n​\n\n$\n\n798\n\n​\n\n$\n\n859\n\n​\n\n$\n\n1,022\n\nGain on amounts funded in respect of employee rights upon retirement\n\n​\n\n$\n\n50\n\n​\n\n$\n\n18\n\n​\n\n$\n\n20\n\n​\n\nThe Company expects to contribute approximately $1,180,000 in the year ending December 31, 2026 to insurance companies in connection with its severance liabilities, approximately $1,152,000 of which will be contributed to one or more Contribution Plans.\n\nDuring the five-year period following December 31, 2025, the Company expects that up to 15 employees may retire upon normal retirement age.\n\n​\n\nNOTE 6 - COMMITMENTS\n\na.    Royalty Commitments\n\nThe Company is obligated to pay royalties to the National Authority for Technological Innovation (“NATI”) on proceeds from the sale of products developed from research and development activities that were funded, partially, by grants from NATI or its predecessor, the Office of the Israeli Innovation Authority (IIA). At the time the grants were received, successful development of the related projects was not assured.\n\nIn the case of failure of a project that was partly financed as described above, the Company is not obligated to pay any such royalties or repay funding received from NATI or the IIA.\n\nUnder the terms of the applicable funding arrangements, royalties of 3% to 6% are payable on the sale of products developed from projects funded by NATI or the IIA, which payments shall not exceed, in the aggregate, 100% of the amount of the grant received (dollar linked), plus, commencing upon January 1, 2001, interest at an annual rate based on SOFR. In addition, if the Company receives approval to manufacture products developed with government grants outside the State of Israel, it will, subject to certain exceptions, be required to pay an increased total amount of royalties, depending on the manufacturing volume that is performed outside the State of Israel, and, possibly, an increased royalty rate.\n\nF-20\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nRoyalty expenses to NATI or the IIA are included in the statement of operations as a component of the cost of revenues during the years ended December 31, 2023, 2024, and 2025 were approximately as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nRoyalty expenses to NATI or the IIA\n\n​\n\n$\n\n1,868\n\n​\n\n$\n\n1,582\n\n​\n\n$\n\n1,557\n\n​\n\nThe maximum total royalty amount payable by the Company under these funding arrangements at December 31, 2024 and 2025 (without interest, assuming 100% of the funds are payable) is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nMaximum total royalty amount payable (without interest, assuming 100% of the funds are payable)\n\n​\n\n$\n\n33,900\n\n​\n\n$\n\n32,391\n\n​\n\nb.    Subcontracting Agreements\n\nThe Company has entered into sub-contracting agreements with several clinical providers and consultants in Israel, the United States and certain other countries in connection with its primary product development process. As of December 31, 2025, total commitments under said agreements were approximately $17.7 million.\n\nc.    Fill/Finish Agreement\n\nOn August 29, 2022, the Company entered into a Fill/Finish Agreement (the “F/F Agreement”) and a Letter Agreement, in each case with Chiesi. The Company agreed to supply Chiesi with drug substance for pegunigalsidase alfa and, following relevant technology and technical information transfer activities, Chiesi has agreed, among other things, to provide the Company with commercial fill/finish services for pegunigalsidase alfa. The F/F Agreement did not change the terms and conditions of the Chiesi Agreements. Subsequently, in November 2024, the Company and Chiesi amended the F/F Agreement to provide that a different Chiesi facility may act as a secondary supplier of such services and that the F/F Agreement shall have an initial term of 10 years, unless terminated earlier in accordance with the terms of the F/F Agreement. Prior to expiration of the initial term, the term may be extended by mutual agreement for an additional period of seven years upon mutual written agreement prior to expiration of the initial term. Under the F/F Agreement, the Company is obligated to pay to Chiesi an amount equal to €2.5 million in connection with the necessary technology transfer, QA tests and capital expenditures. Such amount is to be paid over the term of the F/F agreement based on the actual vials produced by Chiesi thereunder. Under the amendment, the Company and Chiesi agreed to share equally the costs of establishing the new facility as an alternative source for Fill/Finish. The Company’s share of such costs amounting to €400,000 shall be due and payable upon Chiesi’s completion of the manufacture of the requisite validation batches and issuance of the process validation report.\n\n​\n\nNOTE 7 - OPERATING LEASES\n\nThe Company is a party to several lease agreements for its facilities that included varying lease periods and options for extensions. The Company is currently in the second option period for each of the three leases, which periods are not uniform. In September 2025, the Company amended all of the facility leases, collectively, to provide that the third option period for each lease will end on December 31, 2031 and will be associated with a uniform rent increase equal to 7.5%. Thereafter, each lease will extend automatically, on an individual basis, for up to four additional five-year periods unless the Company provides the lessor with six months’ advance notice that it does not intend that any individual option extension become effective. Each option to renew a lease in each of the four\n\nF-21\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\noption periods shall include a rent increase equal to 5% of the rent payable for the applicable previous option period. Prior to the amendment, the options to extend the leases were associated with increases of either 7.5% or 10%. The Company expects to exercise the final option in future periods. As of December 31, 2025, the Company provided bank guarantees of approximately $586,000, in the aggregate, to secure the fulfillment of its obligations under the lease agreements. The Company adjusted the operating lease right of use assets by $3.1 million reflecting the amount of remeasurement of the lease liability using a new discount rate at the amendment date.\n\nThe Company has entered into several three-year leases for vehicles which are regularly amended as new vehicles are leased.\n\nThe following table sets forth data regarding the Company’s operating leases for the years ended December 31, 2023, 2024, and 2025:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n(*U.S. dollars in thousands)*\n\n  ​ ​ ​\n\n**2023**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\nOperating lease costs\n\n​\n\n$\n\n1,471\n\n​\n\n$\n\n1,639\n\n​\n\n$\n\n1,815\n\n​\n\nCash paid for amounts included in the measurement of lease liabilities\n\n​\n\n​\n\n1,484\n\n​\n\n​\n\n1,634\n\n​\n\n​\n\n1,804\n\n​\n\nWeighted average remaining lease term (in years)\n\n​\n\n​\n\n6.8\n\n​\n\n​\n\n6.0\n\n​\n\n​\n\n22.6\n\n​\n\nWeighted average discount rate\n\n​\n\n​\n\n12.8\n\n%\n\n​\n\n12.8\n\n%\n\n​\n\n13.4\n\n%\n\n​\n\nThe following table sets forth a maturity analysis of the Company’s operating lease liabilities as of December 31, 2025:\n\n​\n\n​\n\n​\n\n​\n\n(*U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**December 31, 2025**\n\nFirst year\n\n​\n\n$\n\n1,384\n\nSecond year\n\n​\n\n$\n\n1,192\n\nThird year\n\n​\n\n$\n\n1,104\n\nFourth year\n\n​\n\n$\n\n1,058\n\nFifth year and thereafter\n\n​\n\n$\n\n22,445\n\nTotal undiscounted cash flows\n\n​\n\n$\n\n27,183\n\nLess: imputed interest\n\n​\n\n$\n\n18,862\n\nPresent value of operating lease liabilities\n\n​\n\n$\n\n8,321\n\n​\n\n​\n\n​\n\nNOTE 8 - SHARE CAPITAL\n\na.    Authorized Capital\n\nUnder the Company’s Certificate of Incorporation, as amended, the Company is authorized to issue 185,000,000 shares of Common Stock, par value $0.001 per share, and 100,000,000 shares of preferred stock, par value $0.0001 per share.\n\n**b.**Rights of the Company’s Common Stock\n\nThe Company’s Common Stock is listed on the NYSE American. The Company voluntarily delisted its Common Stock from the Tel Aviv Stock Exchange effective March 22, 2023. Each share of Common Stock is entitled to one vote. The holders of shares of Common Stock are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors. Since its inception, the Company has not declared any dividends.\n\nF-22\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nc.    Stock based compensation\n\nOn December 14, 2006, the Board of Directors adopted the Protalix BioTherapeutics, Inc. 2006 Stock Incentive Plan, as amended (the “Plan”). The Plan has since been amended to, among other things, increase the number of shares of Common Stock available under the Plan to 17,475,171 shares. The grant of options to Israeli employees under the Plan is subject to the terms stipulated by Sections 102 and 102A of the Israeli Income Tax Ordinance (the “Ordinance”). Each option grant made to an Israeli citizen is subject to the track chosen by the Company, either Section 102 or Section 102A of the Ordinance, and pursuant to the terms thereof, the Company is not allowed to claim, as an expense for tax purposes, the amounts credited to employees as a benefit, including amounts recorded as salary benefits in the Company’s accounts, in respect of options granted to employees under the Plan, with the exception of the work-income benefit component, if any, determined on the grant date. For Israeli non-employees, the share option plan is subject to Section 3(i) of the Ordinance.\n\nAs of December 31, 2025, 2,092,933 shares of Common Stock remain available for grant under the Plan.\n\nThe vesting period of the outstanding options and restricted shares is generally three or four years from the date of grant. The rights of common stock obtained from the exercise of options (once vested) and the restricted stock are identical to those of other common stock of the Company. The contractual term of these options is primarily for ten years.\n\n1.    **Options and restricted stock granted to employees and directors:**\n\nA summary of share option plans, and related information, under all of the Company’s equity incentive plans for the year ended December 31, 2025, and the effect of share-based compensation on the statement of operations for the year ended December 31, 2025, is as follows:\n\na)Options granted to employees and directors:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, 2025**\n\n​\n\n  ​ ​ ​\n\n​\n\n**  ​ ​ ​**\n\n**Weighted**\n\n​\n\n​\n\n**Number**\n\n​\n\n**average**\n\n​\n\n​\n\n**of**\n\n​\n\n**exercise**\n\n​\n\n​\n\n**options**\n\n​\n\n**price**\n\nOutstanding at beginning of year\n\n \n\n7,402,295\n\n​\n\n$\n\n1.98\n\nChanges during the year:\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\nGranted\n\n \n\n1,458,990\n\n​\n\n \n\n1.56\n\nExpired and forfeited\n\n​\n\n(258,526)\n\n​\n\n \n\n7.53\n\nExercised\n\n​\n\n(328,481)\n\n​\n\n​\n\n1.13\n\nOutstanding at end of year\n\n \n\n8,274,278\n\n​\n\n$\n\n1.76\n\nExercisable at end of year\n\n \n\n5,464,917\n\n​\n\n$\n\n1.94\n\n​\n\n​\n\nF-23\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nb)\n\nRestricted stock granted to employees and directors:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, 2025**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Weighted ******\n\n​\n\n​\n\n**Number of**\n\n​\n\n​\n\n**average**\n\n​\n\n​\n\n**Restricted**\n\n​\n\n​\n\n**of fair value**\n\n​\n\n​\n\n**Stock**\n\n​\n\n​\n\n**at grant date**\n\nOutstanding at beginning of year\n\n​\n\n862,816\n\n​\n\n$\n\n1.70\n\nChanges during the year:\n\n​\n\n​\n\n​\n\n​\n\n​\n\nGranted\n\n​\n\n564,010\n\n​\n\n​\n\n1.66\n\nVested\n\n​\n\n(687,232)\n\n​\n\n$\n\n1.81\n\nNon vested at end of year\n\n​\n\n739,594\n\n​\n\n$\n\n1.58\n\n​\n\nc)\n\nThe following table summarizes information concerning outstanding and exercisable options as of December 31, 2025:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, 2025**\n\n​\n\n​\n\n**Options outstanding**\n\n​\n\n**Options exercisable**\n\n​\n\n**  ​ ​ ​**\n\n**Number of**\n\n**  ​ ​ ​**\n\n**Weighted**\n\n**  ​ ​ ​**\n\n​\n\n**  ​ ​ ​**\n\n**Weighted**\n\n​\n\n​\n\n**options **\n\n​\n\n**average**\n\n​\n\n​\n\n​\n\n**average**\n\n​\n\n​\n\n**outstanding**\n\n​\n\n**remaining**\n\n​\n\n**Number of**\n\n​\n\n**remaining**\n\n**Exercise**\n\n​\n\n**at end of**\n\n​\n\n**contractual**\n\n​\n\n**options**\n\n​\n\n**contractual**\n\n**prices**\n\n​\n\n**year**\n\n​\n\n**life**\n\n​\n\n**exercisable**\n\n​\n\n**life**\n\n$1.03-$2.00\n\n​\n\n7,017,970\n\n​\n\n7.44\n\n​\n\n4,208,609\n\n​\n\n6.64\n\n$3.55-$3.73\n\n​\n\n836,308\n\n​\n\n3.65\n\n​\n\n836,308\n\n​\n\n3.65\n\n$4.69-$5.60\n\n \n\n420,000\n\n \n\n2.76\n\n \n\n420,000\n\n \n\n2.76\n\n​\n\n \n\n8,274,278\n\n​\n\n​\n\n \n\n5,464,917\n\n​\n\n​\n\n​\n\nAs of December 31, 2025, the aggregate intrinsic value of all the outstanding options and exercisable options was approximately $3.4 million and $2.3 million, respectively.\n\nd)\n\nThe weighted average grants date per share fair value of restricted stock granted in 2023, 2024, and 2025 was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n​\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nWeighted average grants date per share fair value (USD)\n\n​\n\n$\n\n1.99\n\n​\n\n$\n\n1.24\n\n​\n\n$\n\n1.66\n\n​\n\ne)\n\nThe fair value of each option granted during 2023, 2024, and 2025 for both employees and directors is estimated at the date of grant using the Black-Scholes option-pricing model. The following weighted average assumptions were applied in determining the options’ fair value on their grant date:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n​\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\nWeighted average grants date fair value (USD)\n\n​\n\n1.84\n\n​\n\n1.10\n\n​\n\n1.56\n\n​\n\nExercise price (USD)\n\n​\n\n1.84\n\n \n\n1.10\n\n​\n\n1.56\n\n​\n\nRisk free rate\n\n​\n\n4.44\n\n%\n\n3.55\n\n%\n\n3.89\n\n%\n\nVolatility\n\n​\n\n79.41\n\n%\n\n79.29\n\n%\n\n73.64\n\n%\n\nDividend yield\n\n​\n\n0\n\n%\n\n0\n\n%\n\n0\n\n%\n\nExpected life (Years)\n\n​\n\n5.75\n\n \n\n5.75\n\n​\n\n5.75\n\n​\n\n​\n\nF-24\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nf)\n\nThe total unrecognized compensation cost of employee stock options at December 31, 2025 is approximately $1.3 million. The unrecognized compensation cost of employee stock options is expected to be recognized over a weighted average period of 0.84 years.\n\nDuring the years ended December 31, 2023 and 2024, there were no exercises of stock options, and the Company did not realize any tax benefit in connection with any exercises. During the year ended December 31, 2025, employees and former employees exercised options to purchase 328,481 shares of the Company’s common stock in the aggregate, and the Company did not realize any tax benefits equal in connection with such exercises.\n\nThe total vesting-date value of equity classified restricted stock vested during the year ended December 31, 2025 was $1.3 million. As of December 31, 2025, the unrecognized compensation cost related to all unvested equity classified restricted stock of $0.7 million is expected to be recognized as an expense over a weighted-average period of 0.87 years.\n\ng)\n\nThe following table illustrates the effect of share-based compensation on the statement of operations:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nCost of goods sold\n\n​\n\n$\n\n596\n\n​\n\n$\n\n631\n\n​\n\n$\n\n431\n\nResearch and development expenses\n\n​\n\n​\n\n777\n\n​\n\n​\n\n589\n\n​\n\n​\n\n680\n\nSelling, general, and administrative expenses\n\n​\n\n \n\n2,075\n\n​\n\n \n\n2,033\n\n​\n\n \n\n1,186\n\n​\n\n​\n\n$\n\n3,448\n\n​\n\n$\n\n3,253\n\n​\n\n$\n\n2,297\n\n​\n\nd.    Private and 144A Offerings\n\nDuring the year ended December 31, 2023, the Company issued (i) 301,810 shares of Common Stock in connection with the cash exercise of a warrant issued in 2020 and generated proceeds equal to $0.7 million from such exercise and (ii) 237,012 shares of Common Stock in connection with the cashless exercise of a warrant to purchase 845,000 shares of Common Stock issued in 2020. The Company did not generate any proceeds from the cashless exercise.\n\nDuring the year ended December 31, 2023, the Company issued, in the aggregate, 4,691,623 shares of Common Stock in connection with the conversions of 2024 Notes. In connection with such conversions, during the year ended December 31, 2023, the Company paid to the converting holders $0.9 million representing cash payments due to accrued but unpaid interest, make-whole interest payments and payments in lieu of fractional shares.\n\nDuring the year ended December 31, 2025, the Company issued:\n\n(i)908,000 shares of Common Stock in connection with the exercise of warrants issued in 2020 generating proceeds equal to approximately $2.1 million from such exercises. All unexercised warrants expired on March 11, 2025. Accordingly, as of March 12, 2025, no warrants remained outstanding.\n\n(ii)328,481 shares of Common Stock in connection with the cash exercise of options to purchase 328,481 shares of Common Stock by certain current and former employees of the Company. The Company received cash proceeds equal to $0.4 million in connection with such exercises.\n\nF-25\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\ne.    At-the-Market (ATM) Offering\n\nOn July 2, 2021, the Company entered into an At The Market Offering Agreement (the “2021 Sales Agreement”) with H.C. Wainwright & Co., LLC, as the Company’s sales agent (the “Agent”) which was amended on May 2, 2022. Pursuant to the terms of the 2021 Sales Agreement, the Company was able to sell from time to time through the Agent, shares of Common Stock having an aggregate offering price of up to $20.0 million (the “ATM Shares”). During the term of the 2021 Sales Agreement which ended during the quarter ended March 31, 2023, the Company sold a total of 13,980,060 ATM Shares for total gross proceeds of approximately $20.0 million, thereby completing the ATM program under said agreement.\n\nOn February 27, 2023, the Company entered into an At The Market Offering Agreement (the “2023 Sales Agreement”) with the Agent. Pursuant to the terms of the 2023 Sales Agreement, the Company may sell, from time to time through the Agent, ATM Shares having an aggregate offering price of up to $20.0 million. On March 17, 2025, the Company entered into an amendment to the 2023 Sales Agreement pursuant to which the Company increased the aggregate gross sales price of shares of Common Stock available for offer and sale under the Sales Agreement by $20.0 million.\n\nThe Company has no obligation to sell any shares of Common Stock under the 2023 Sales Agreement, and may at any time suspend sales under the 2023 Sales Agreement or terminate the 2023 Sales Agreement in accordance with its terms. The Agent is entitled to a commission of up to 3.0% of the aggregate gross proceeds from the shares of Common Stock sold under the 2023 Sales Agreement.\n\nDuring the year ended December 31, 2023, the Company sold, in the aggregate, 12,560,150 shares of Common Stock under the 2021 Sales Agreement and 2023 Sales Agreement. The Company generated gross proceeds equal to approximately $24.9 million in connection with such sales (issuance cost was approximately $0.9 million).\n\nDuring the year ended December 31, 2024, the Company sold, in the aggregate 2,216,692 shares of Common Stock under the 2023 Sales Agreement. The Company generated gross proceeds equal to approximately $3.8 million in connection with such sales (issuance cost was approximately $0.1 million).\n\nDuring the year ended December 31, 2025, the Company sold, in the aggregate, 2,775,215 shares of Common Stock under the 2023 Sales Agreement. The Company generated gross proceeds equal to approximately $7.0 million in connection with such sales (issuance costs were $0.2 million). All such sales were effected during the first and second quarters of 2025.\n\nAs of December 31, 2025, shares of Common Stock for total gross proceeds of approximately $15.7 million remain available to be sold under the Sales Agreement.\n\nNOTE 9 - CONVERTIBLE NOTES\n\nIn September 2024, the Company repaid all of the $20.42 million outstanding principal and interest payable under the 2024 Notes. The repayment of the convertible notes at maturity was financed entirely with available cash.\n\nThe 2024 Notes were issued pursuant to an indenture entered into between the Company, the guarantors party thereto, The Bank of New York Mellon Trust Company, N.A., as trustee and Wilmington Savings Fund Society, FSB, as collateral agent. Interest on the 2024 Notes was payable semi-annually at a rate of 7.50% per annum. The outstanding 2024 Notes matured three years after the issuance thereof and were guaranteed by the Company’s subsidiaries. The 2024 Notes were secured by perfected liens on all of the assets of the Company and its subsidiaries.\n\nF-26\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nThe following table sets forth total interest expense recognized related to the 2024 Notes:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n(*U.S. dollars in thousands*)\n\n​\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\nContractual interest expense\n\n​\n\n$\n\n2,534\n\n​\n\n$\n\n1,022\n\nAmortization of debt issuance costs and debt discount\n\n​\n\n \n\n267\n\n​\n\n \n\n—\n\nTotal\n\n​\n\n$\n\n2,801\n\n​\n\n$\n\n1,022\n\n​\n\n​\n\nNOTE 10 - FAIR VALUE MEASUREMENT\n\nThe Company discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received from the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.\n\nThe accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:\n\nLevel 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.\n\nLevel 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.\n\nLevel 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.\n\nIn determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.\n\nThe fair value of the financial instruments included in the working capital of the Company is usually identical or close to their carrying value.\n\nNOTE 11 – NET EARNINGS (LOSS) PER SHARE\n\nBasic and diluted net earnings (loss) per share attributable to common stockholders were calculated as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n*(In thousands, except share data)*\n\n  ​ ​ ​ ​\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n**  ​ ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​ ​**\n\nNumerator:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet income (loss)\n\n​\n\n$\n\n8,312\n\n​\n\n$\n\n2,932\n\n​\n\n$\n\n(6,604)\n\n​\n\nAdd:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFinancial expenses of 2024 Notes*\n\n​\n\n​\n\n(1,168)\n\n​\n\n​\n\n39\n\n​\n\n​\n\n​\n\n​\n\nNet income (loss) for diluted calculation\n\n​\n\n$\n\n7,144\n\n​\n\n$\n\n2,971\n\n​\n\n$\n\n(6,604)\n\n​\n\nDenominator:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nWeighted average shares of Common Stock outstanding for basic calculation\n\n​\n\n​\n\n67,512,527\n\n​\n\n​\n\n72,530,698\n\n​\n\n​\n\n78,546,234\n\n​\n\nWeighted average dilutive effect of 2024 Notes\n\n​\n\n​\n\n13,335,430\n\n​\n\n​\n\n7,667,323\n\n​\n\n​\n\n​\n\n​\n\nWeighted average dilutive effect of stock options and restricted stock\n\n​\n\n​\n\n1,576,059\n\n​\n\n​\n\n859,155\n\n​\n\n​\n\n​\n\n​\n\nWeighted average shares of Common Stock outstanding for diluted calculation\n\n​\n\n​\n\n82,424,016\n\n​\n\n​\n\n81,057,176\n\n​\n\n​\n\n78,546,234\n\n​\n\nF-27\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n* Financial expenses on 2024 Notes consists of add back of financial expense incurred during the year and inclusion of make-whole interest payments that will be incurred upon conversion.\n\nIn the year ended December 31, 2023, the diluted earnings per share do not include 18,254,264 shares of Common Stock underlying outstanding warrants and stock options because the effect would be anti-dilutive. In the year ended December 31, 2024, the diluted earnings per share do not include 16,661,907 shares of Common Stock underlying outstanding stock options, unvested restricted shares and warrants because the effect would be anti-dilutive. In the year ended December 31, 2025, the diluted earnings per share do not include 10,672,506 shares of Common Stock underlying outstanding stock options, unvested restricted shares and warrants because the effect would be anti-dilutive.\n\nNOTE 12 - TAXES ON INCOME\n\na.**The Company**\n\nProtalix BioTherapeutics, Inc. is taxed according to U.S. tax laws. The Company’s income is taxed in the United States at a rate of up to 21%.\n\nThe U.S. Tax Cuts and Jobs Act, which was enacted into law in December 2017 (the “TCJA”) represents fundamental and dramatic modifications to the U.S. tax system. It contains several key tax provisions that impacted the Company including the reduction of the maximum U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Other significant changes under the TCJA includes, among others, a one-time repatriation tax on accumulated foreign earnings, a limitation of NOL deduction to 80% of taxable income, and indefinite carryover of post-2017 NOLs. The TCJA also repealed the corporate alternative minimum tax for tax years beginning after December 31, 2017. Losses generated prior to January 1, 2018 will still be subject to the 20-year carryforward limitation and the alternative minimum tax. Other impacts due to the TCJA included the repeal of the domestic manufacturing deduction, modification of taxation of controlled foreign corporations, a base erosion anti-abuse tax, modification of interest expense limitation rules, modification of limitation on deductibility of excessive executive compensation, and taxation of global intangible low-taxed income.\n\nModification of interest expense limitation rules under the TCJA provides generally that for taxable years 2019-2022 interest expense deduction shall be limited to 50% of the EBITDA and for taxable years 2022 onwards to 30% of EBIT. Disallowed interest deduction may be carried forward indefinitely. The Company believes that any potential impact (if applicable) of this limitation will be offset by utilization of available NOLs.\n\nOn July 4, 2025, tax reform legislation was enacted in the United States through the passage of H.R.1, The One Big Beautiful Act, which includes significant corporate tax changes, including a restoration of the current deductibility of domestic research expenditures beginning in 2025 under IRC Section 174A, with transition options for previously capitalized amounts. Foreign research expenditures continue to require capitalization subject to the mandatory 15-year amortization period under existing IRC Section 174. The Company implemented the transition options permitted.\n\nSection 174 which requires taxpayers to capitalize and amortize research and development expenses for tax years beginning after December 31, 2021, resulted in the capitalization of research and development costs of approximately $14.4 million, $11.9 million and $14.6 million in 2023, 2024, and 2025, respectively. The Company will amortize these costs for tax purposes over 15 years for research and development performed outside the United States.\n\nF-28\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nThe Company believes that all future profits of its Subsidiary will be indefinitely reinvested or that there is no expectation to distribute any taxable dividends from the Subsidiary. The determination of the amount of the unrecognized deferred tax liability related to the undistributed earnings is estimated as an immaterial amount.\n\nb.    Protalix Ltd.\n\nThe Company as a “foreign-investment company” measures its results for tax purposes in dollar based on Income Tax Regulations (Bookkeeping Principles of Foreign Invested Companies and of Certain Partnerships and the Determination of Their Taxable Income), 1986. The Israeli Subsidiary is taxed according to Israeli tax laws:\n\n1.**Tax rates**\n\nThe income of the Israeli Subsidiary, other than income from “Approved Enterprises,” is taxed in Israel at the regular corporate tax rates.\n\nThe corporate tax rate was 23% for 2018 and thereafter.\n\nCapital gain on a sale of assets is subject to capital gain tax according to the corporate tax rate in effect in the year during which the assets are sold.\n\n2.**The Law for the Encouragement of Capital Investments, 1959 (the “Encouragement of Capital Investments Law”)**\n\nUnder the Encouragement of Capital Investments Law, including Amendment No. 60 to the Encouragement of Capital Investments Law as published in April 2005, by virtue of the “Approved Enterprise” status the Israeli Subsidiary is entitled to various tax benefits as follows:\n\na.    **Reduced tax rates**\n\nIncome derived from the Approved Enterprise during a 10-year period commencing upon the year in which the enterprise first realizes taxable income is tax exempt, provided that the maximum period to which it is restricted by the Encouragement of Capital Investments Law has not elapsed.\n\nThe Israeli Subsidiary has an “Approved Enterprise” plan since 2004. The period of benefits in respect of the main enterprise of the Company has not yet commenced.\n\nIf the Israeli Subsidiary subsequently pays a dividend out of income derived from the “Approved Enterprise” during the tax exemption period, it will be subject to tax on the gross amount distributed (including the company tax on these amounts), at the rate which would have been applicable if such income not been exempted.\n\nb.    **Conditions for entitlement to the benefits**\n\nThe Israeli Subsidiary’s entitlement to the benefits described above is subject to its fulfillment of conditions stipulated by the law, rules and regulations published thereunder, and the instruments of approval for the specific investment in an approved enterprise. Failure by the Israeli Subsidiary to comply with these conditions may result in the cancellation of the benefits, in whole or in part, and the Israeli Subsidiary may be required to refund the amount of the benefits with interest. The Israeli Subsidiary received a final implementation approval with respect to its “Approved Enterprise” from the Investment Center.\n\nF-29\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nc.    **Amendment of the Law for the Encouragement of Capital Investments, 1959**\n\nIn recent years, several amendments have been made to the Encouragement of Capital Investments Law which have enabled new alternative benefit tracks, subject to certain conditions.\n\nThe Encouragement of Capital Investments Law was amended as part of the Economic Policy Law for the years 2011-2012 (amendment 68 to the Encouragement of Capital Investments Law), which was passed by the Israeli Knesset on December 29, 2010. The amendment sets alternative benefit tracks to those currently in effect under the provisions of the Encouragement of Capital Investments Law. On December 29, 2016, Amendment 73 to the Encouragement of Capital Investments Law was published. This amendment sets new benefit tracks, inter alia, “Preferred Technological Enterprise” and “Special Preferred Technological Enterprise” (the “Capital Investments Law Amendment”).\n\nTo date, the Company has elected not to have the Capital Investments Law Amendment apply to the Company.\n\nc.    Tax losses carried forward to future years\n\nAs of December 31, 2024 and 2025, the Company had aggregate NOL carry-forwards equal to approximately $227.2 million and $219.8 million, respectively, that are available to reduce future taxable income as follows:\n\n1.**The Company**\n\nThe Company’s carry-forward NOLs, equal to approximately $22.2 million and $20.0 million as of December 31, 2024 and 2025, respectively, may be restricted under Section 382 of the Internal Revenue Code (“IRC”). IRC Section 382 applies whenever a corporation with NOL experiences an ownership change. As a result of IRC Section 382, the taxable income for any post change year that may be offset by a pre-change NOL may not exceed the general IRC Section 382 limitation, which is the fair market value of the pre-change entity multiplied by the IRC long-term tax exempt rate.\n\n2.**Protalix Ltd.**\n\nAt December 31, 2024 and 2025, the Israeli Subsidiary had approximately $205.0 million and $199.8 million, respectively, of carry-forward NOLs that are available to reduce future taxable income with no limited period of use.\n\nSignificant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, the Company considered all available evidence, including past operating results, the most recent projections for taxable income, and prudent and feasible tax planning strategies. The Company reassesses its valuation allowance periodically and if future evidence allows for a partial or full release of the valuation allowance, a tax benefit will be recorded accordingly.\n\nF-30\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nd.    Deferred income taxes:\n\nThe components of the Company’s net deferred tax assets at December 31, 2024 and 2025 were as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n(*U.S. dollars in thousands*)\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nIn respect of:\n\n \n\n​\n\n  ​\n\n \n\n​\n\n  ​\n\nResearch and development expenses\n\n​\n\n$\n\n3,055\n\n​\n\n$\n\n3,717\n\nOther timing differences\n\n​\n\n \n\n452\n\n​\n\n \n\n684\n\nNet operating loss carry forwards\n\n​\n\n \n\n50,014\n\n​\n\n \n\n48,479\n\nValuation allowance\n\n​\n\n \n\n(50,665)\n\n​\n\n \n\n(50,364)\n\n​\n\n​\n\n \n\n2,856\n\n​\n\n \n\n2,516\n\n​\n\nDeferred taxes are computed using the tax rates expected to be in effect when those differences reverse.\n\ne.    Reconciliation of the theoretical tax expense to actual tax expense\n\nA reconciliation of the statutory U.S. federal income tax rate of 21% in 2025 to the effective income tax rate is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, 2025 **\n\n​\n\n*(U.S. dollars in thousands)*\n\n​\n\n**$**\n\n**%**\n\n​\n\nU.S Federal Statutory tax rate\n\n**  ​ ​ ​**\n\n​\n\n(1,178)\n\n(21)\n\n​\n\nForeign Tax Effects  (Israel):\n\n​\n\n​\n\n​\n\n​\n\n​\n\nChange in Valuation allowances\n\n​\n\n​\n\n(301)\n\n(5)\n\n​\n\nShare based compensation\n\n​\n\n​\n\n528\n\n9\n\n​\n\nOther\n\n​\n\n​\n\n(10)\n\n-\n\n​\n\nEffect of changes in tax law enacted in the current period\n\n​\n\n​\n\n105\n\n2\n\n​\n\nEffect of Cross Border Tax Laws, net\n\n​\n\n​\n\n1,735\n\n31\n\n​\n\nNon-taxable or non-deductible items\n\n​\n\n​\n\n117\n\n2\n\n​\n\nEffective tax rate\n\n​\n\n​\n\n996\n\n18\n\n​\n\n​\n\nA reconciliation of the statutory U.S. federal income tax rate of 21% in 2024 and 2023 to the effective income tax rate is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\nTax computed at the statutory U.S. income tax rate\n\n**  ​ ​ ​**\n\n$\n\n1,799\n\n​\n\n$\n\n872\n\n**  ​ ​ ​**\n\nDifferences in tax rate\n\n​\n\n​\n\n(899)\n\n​\n\n​\n\n(436)\n\n​\n\nStatutorily non-deductible expenses\n\n​\n\n​\n\n1,684\n\n​\n\n​\n\n506\n\n​\n\nChange in Valuation allowances\n\n​\n\n​\n\n(6,932)\n\n​\n\n​\n\n(953)\n\n​\n\nUtilization of carry-forward losses and other temporary items without deferred taxes recognition\n\n​\n\n​\n\n3,602\n\n​\n\n​\n\n1,233\n\n​\n\nWithholding tax\n\n​\n\n​\n\n1,000\n\n​\n\n​\n\n-\n\n​\n\n​\n\n​\n\n$\n\n254\n\n​\n\n$\n\n1,222\n\n​\n\n​\n\nF-31\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nf.    Valuation allowance roll-forward\n\nThe following table presents the change in the Company’s valuation allowance during the periods presented:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n(*U.S. dollars in thousands*)\n\n​\n\n​\n\n​\n\nBalance at December 31, 2022\n\n​\n\n$\n\n(58,550)\n\nAdditions to valuation allowance\n\n​\n\n​\n\n(728)\n\nReductions to valuation allowance\n\n​\n\n​\n\n7,660\n\nBalance at December 31, 2023\n\n​\n\n$\n\n(51,618)\n\n​\n\n​\n\n​\n\n​\n\nBalance at December 31, 2023\n\n​\n\n$\n\n(51,618)\n\nReductions to valuation allowance\n\n​\n\n​\n\n953\n\nBalance at December 31, 2024\n\n​\n\n$\n\n(50,665)\n\n​\n\n​\n\n​\n\n​\n\nBalance at December 31, 2024\n\n​\n\n$\n\n(50,665)\n\nReductions to valuation allowance\n\n​\n\n​\n\n301\n\nBalance at December 31, 2025\n\n​\n\n$\n\n(50,364)\n\n​\n\ng.    Uncertain tax position\n\nProvisions of ASC 740-10, Income Taxes, clarify whether to recognize assets or liabilities for tax positions taken that may be challenged by a tax authority. A reconciliation of the beginning and ending amount of unrecognized tax benefits, is as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n*(U.S. dollars in thousands)*\n\n​\n\n​\n\n​\n\nBalance at December 31, 2022\n\n​\n\n$\n\n530\n\nIncrease for tax position related to current year\n\n​\n\n​\n\n275\n\nBalance at December 31, 2023\n\n​\n\n$\n\n805\n\n​\n\n​\n\n​\n\n​\n\nBalance at December 31, 2023\n\n​\n\n$\n\n805\n\nIncrease for tax position related to current year\n\n​\n\n​\n\n-\n\nBalance at December 31, 2024\n\n​\n\n$\n\n805\n\n​\n\n​\n\n​\n\n​\n\nBalance at December 31, 2024\n\n​\n\n$\n\n805\n\nIncrease for tax position related to current year\n\n​\n\n​\n\n-\n\nBalance at December 31, 2025\n\n​\n\n$\n\n805\n\n​\n\nh.    Tax assessments\n\nIn accordance with the Income Tax Ordinance, as of December 31, 2025, all of Protalix Ltd.’s tax assessments through tax year 2020 are considered final.\n\n​\n\nF-32\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nA summary of open tax years by major jurisdiction is presented below:\n\n​\n\n​\n\n​\n\n**Jurisdiction:**\n\n**  ​ ​ ​**\n\n**Years:**\n\nIsrael\n\n \n\n2021-2025\n\nUnited States (*)\n\n \n\n2022-2025\n\n​\n\n(*)\n\nIncludes federal, state and local (or similar provincial jurisdictions) tax positions.\n\n​\n\ni.    Income (loss) before taxes on income is composed of the following:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nDomestic\n\n​\n\n​\n\n(7,061)\n\n​\n\n​\n\n(4,548)\n\n​\n\n​\n\n(4,579)\n\nForeign\n\n​\n\n​\n\n15,627\n\n​\n\n​\n\n8,702\n\n​\n\n​\n\n(1,029)\n\n​\n\n​\n\n$\n\n8,566\n\n​\n\n$\n\n4,154\n\n​\n\n$\n\n(5,608)\n\n​\n\nj.    **The following table summarizes the Company’s taxes on income:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\n​\n\n**Year Ended December 31, **\n\n​\n\n*(U.S. dollars in thousands)*\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\nCurrent taxes on income - US (federal)\n\n​\n\n$\n\n3,346\n\n​\n\n$\n\n986\n\n​\n\n$\n\n656\n\n​\n\nDeferred taxes on income - US (federal)\n\n​\n\n​\n\n(3,092)\n\n​\n\n​\n\n236\n\n​\n\n​\n\n340\n\n​\n\nTotal taxes on income\n\n​\n\n$\n\n254\n\n​\n\n$\n\n1,222\n\n​\n\n$\n\n996\n\n​\n\n​\n\nFollowing the regulatory approvals of Elfabrio in May 2023, the receipt of the $20.0 million milestone payment and the launch of Elfabrio in the United States, the Company released the valuation allowance previously recorded on deferred tax assets in respect of its NOLs in the United States resulting in a net tax benefit of $3.1 million. The Company concluded that, based upon the preponderance of positive evidence over negative evidence and the anticipated ability to use the deferred tax assets, it was more likely than not that these deferred tax assets would be realizable due to forecasted profits. The Company considered the following: (i) cumulative profits for tax over the previous 12 quarters in its U.S. operations; (ii) the impact of IRC Section 174 which requires the Company to capitalize and amortize its research and development expenses over 15 years; and (iii) its forecasted profits in the United States following the regulatory approvals of Elfabrio.\n\n​\n\nk.    Income taxes paid:\n\nThe income taxes paid by the Company are as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year ended December 31, **\n\n*(U.S. dollars in thousands)*\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nUnited States (federal)\n\n​\n\n$\n\n-\n\n​\n\n$\n\n385\n\n​\n\n$\n\n1,183\n\n​\n\n​\n\n​\n\nNOTE 13 – SEGMENT INFORMATION\n\na.The Company operates in Israel as a single operating segment. The Company’s President and Chief Executive Officer is the chief operating decision maker (the “CODM”). The CODM makes decisions on resource allocation, assesses performance of the business and monitors budget versus actual results on a consolidated basis. For additional information see [Note 14](#_NOTE_14_-).\n\nF-33\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\nb.Segment information:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31,**\n\n*(U.S. dollars in thousands)*\n\n  ​ ​ ​\n\n**2023**\n\n  ​ ​ ​\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nRevenues from customers\n\n \n\n$\n\n65,494\n\n \n\n$\n\n53,399\n\n \n\n$\n\n52,744\n\nLess:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nEmployee salaries and related expenses\n\n​\n\n \n\n24,075\n\n​\n\n \n\n21,780\n\n​\n\n \n\n24,722\n\nSub-contractors expense\n\n​\n\n \n\n14,008\n\n​\n\n \n\n8,682\n\n​\n\n \n\n12,275\n\nInterest expense\n\n​\n\n \n\n3,180\n\n​\n\n \n\n1,062\n\n​\n\n \n\n-\n\nInterest income\n\n​\n\n​\n\n(1,286)\n\n​\n\n​\n\n(1,299)\n\n​\n\n​\n\n(1,083)\n\nDepreciation\n\n​\n\n​\n\n1,191\n\n​\n\n​\n\n1,304\n\n​\n\n​\n\n1,465\n\nOther segment expenses*\n\n​\n\n​\n\n15,760\n\n​\n\n​\n\n17,716\n\n​\n\n​\n\n20,973\n\nIncome (loss) before taxes on income\n\n​\n\n​\n\n8,566\n\n​\n\n​\n\n4,154\n\n​\n\n​\n\n(5,608)\n\nTaxes on income\n\n​\n\n​\n\n254\n\n​\n\n​\n\n1,222\n\n​\n\n​\n\n996\n\nSegment net income (loss)\n\n​\n\n$\n\n8,312\n\n​\n\n$\n\n2,932\n\n​\n\n$\n\n(6,604)\n\n​\n\n* Other expenses included in net income (loss) includes raw materials, rent and utilities and others.\n\nc.The following table summarizes the Company’s disaggregation of revenues:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31,**\n\n*(U.S. dollars in thousands)*\n\n​\n\n**2023**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n**2025**\n\n*Gaucher disease:*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPfizer (Ireland)\n\n​\n\n$\n\n12,522\n\n​\n\n$\n\n12,617\n\n​\n\n$\n\n18,227\n\nFiocruz (Brazil)\n\n​\n\n$\n\n10,401\n\n​\n\n$\n\n11,031\n\n​\n\n$\n\n11,062\n\n*Fabry disease:*\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nChiesi (Italy)\n\n​\n\n$\n\n17,495\n\n​\n\n$\n\n29,333\n\n​\n\n$\n\n22,513\n\nTotal revenues from selling goods\n\n​\n\n$\n\n40,418\n\n​\n\n$\n\n52,981\n\n​\n\n$\n\n51,802\n\nRevenues from license and R&D services\n\n​\n\n$\n\n25,076\n\n​\n\n$\n\n418\n\n​\n\n$\n\n942\n\n​\n\nd.Long lived assets are located in Israel.\n\nNOTE 14 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION\n\na.     Balance sheets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n(*U.S. dollars in thousands*)\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**a.     Other assets:**\n\n \n\n​\n\n  ​\n\n \n\n​\n\n  ​\n\nInstitutions\n\n​\n\n$\n\n486\n\n​\n\n$\n\n634\n\nPrepaid expenses\n\n​\n\n \n\n500\n\n​\n\n \n\n394\n\nSundry\n\n​\n\n \n\n110\n\n​\n\n \n\n101\n\n​\n\n​\n\n$\n\n1,096\n\n​\n\n$\n\n1,129\n\n​\n\nF-34\n\n[Table of Contents](#TOC)\n\nPROTALIX BIOTHERAPEUTICS, INC.\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n(*U.S. dollars in thousands*)\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\n**b.     Accounts payable and accruals – other:**\n\n \n\n​\n\n  ​\n\n \n\n​\n\n  ​\n\nPayroll and related expenses\n\n​\n\n$\n\n1,343\n\n​\n\n$\n\n1,629\n\nProvision for vacation\n\n​\n\n \n\n1,811\n\n​\n\n \n\n2,309\n\nAccrued expenses\n\n​\n\n \n\n9,568\n\n​\n\n \n\n9,790\n\nRoyalties payable\n\n​\n\n \n\n1,080\n\n​\n\n \n\n799\n\nIncome tax payable\n\n​\n\n​\n\n3,476\n\n​\n\n​\n\n2,950\n\nPayable to customer\n\n​\n\n​\n\n2,056\n\n​\n\n​\n\n2,029\n\nProperty and equipment suppliers\n\n​\n\n \n\n254\n\n​\n\n \n\n369\n\n​\n\n​\n\n$\n\n19,588\n\n​\n\n$\n\n19,875\n\n​\n\n**b.     Statements of operations:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n*(U.S. dollars in thousands)*\n\n​\n\n**Year ended December 31, **\n\n**Research and development expenses:**\n\n​\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nEmployee salaries and related expenses\n\n​\n\n$\n\n7,758\n\n​\n\n$\n\n7,068\n\n​\n\n$\n\n9,696\n\nSubcontractor-related expenses\n\n​\n\n​\n\n6,345\n\n​\n\n​\n\n2,432\n\n​\n\n​\n\n5,631\n\nMaterials-related expenses\n\n​\n\n​\n\n596\n\n​\n\n​\n\n885\n\n​\n\n​\n\n1,288\n\nDepreciation\n\n​\n\n​\n\n391\n\n​\n\n​\n\n428\n\n​\n\n​\n\n515\n\nOther expenses\n\n​\n\n​\n\n2,003\n\n​\n\n​\n\n2,157\n\n​\n\n​\n\n2,439\n\n​\n\n​\n\n$\n\n17,093\n\n​\n\n$\n\n12,970\n\n​\n\n$\n\n19,569\n\n​\n\nNOTE 15 - RELATED PARTY TRANSACTIONS\n\na.Non-Executive Director Compensation\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n(*U.S. dollars in thousands*)\n\n**  ​ ​ ​**\n\n**2023**\n\n**  ​ ​ ​**\n\n**2024**\n\n**  ​ ​ ​**\n\n**2025**\n\nCompensation (including share-based compensation) to the non-executive directors\n\n​\n\n$\n\n429\n\n​\n\n$\n\n555\n\n​\n\n$\n\n478\n\n​\n\nb.In September 2023, with the consent of the Audit Committee of the Board of Directors, the Company engaged one of its non-executive directors to advise the Company regarding business development and licensing efforts on a consultancy basis. The engagement expired in September 2025. For the years ended December 31, 2023, 2024, and 2025, we recorded an expense of a total of $35,475, $1,350, and $0 for consulting fees under such engagement, respectively.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**NOTE 16 - SUBSEQUENT EVENTS**\n\na.Since December 31, 2025, the Company has collected approximately $5.5 million from sales to Chiesi $1.4 million from sales to Pfizer and approximately $1.9 million from sales to Brazil.\n\nb.The Company became entitled to a regulatory milestone payment of $25.0 million from Chiesi in connection with the EC’s approval of the E4W dosing regimen.\n\n​\n\nF-35"}