{"url_path":"/sec/rdhl/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 EXHIBITS**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1553846/0001104659-26-049055-index.html","accession_number":"0001104659-26-049055","cik":"0001553846","ticker":"RDHL","issuer_name":"RedHill Biopharma Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1553846/0001104659-26-049055-index.html","primary_entity_key":"0001553846","primary_entity_name":"RedHill Biopharma Ltd."},"word_count":21474,"has_tables":true,"body_markdown":"**ITEM 19.            EXHIBITS**\n\nSee Exhibit Index on page 169.\n\n​\n\n167\n\n[Table of Contents](#TOC)\n\n**Glossary of Terms**\n\nCertain standards and other terms that are used in this Annual Report are defined below:\n\nH. pylori (*Helicobacter pylori*) **-** a Gram-negative bacterium found in the stomach. It was identified in 1982 by Dr. Barry Marshall and Dr. Robin Warren and is associated with peptic ulcer disease and the development of gastric cancer.\n\n**IND - Investigational New Drug -** a status assigned by the FDA to a drug before allowing its use in humans, so that experimental clinical trials may be conducted.\n\n**IRB - Institutional Review Board -**Under FDA regulations, an IRB is an appropriately constituted group that has been formally designated to review and monitor biomedical research involving human subjects.\n\n**ITT - intention-to-treat –**intention-to-treat analysis means all of the patients who were enrolled and randomized into a clinical study are included in the analysis.\n\nMycobacterium avium subspecies paratuberculosis**(MAP) -**an obligate pathogenic bacterium in the genus Mycobacterium. MAP is the causative agent of Johne’s disease, a chronic granulomatous ileitis occurring mainly in ruminants. MAP has been suspected as the cause of Crohn’s disease in humans.\n\n**NDA - New Drug Application -** an application by drug sponsors to the FDA for approval of a new pharmaceutical for sale and marketing in the U.S.\n\n**NTM - Nontuberculous Mycobacteria–**a class of Mycobacteria also known as environmental mycobacteria, atypical mycobacteria and mycobacteria other than tuberculosis (MOTT).\n\n**Ondansetron -** a drug in a class of medications called serotonin 5-HT3 receptor antagonists. Ondansetron works by blocking the action of serotonin, a natural substance that may cause nausea and vomiting.\n\n**Orphan Drug Designation** - the designation of orphan drug designation to drugs that are in the process of development for the treatment of rare diseases, affecting fewer than 200,000 people in the U.S. This status provides tax reductions and the exclusive rights to the cure for a specific condition for a period of seven years post-approval.\n\n**PK - pharmacokinetics -**the study of the absorption, distribution, metabolism, and excretion of drugs in the body.\n\n**QIDP - Qualified Infectious Disease Product -**designation granted under the FDA’s Generating Antibiotic Incentives Now Act, which is intended to encourage the development of new antibiotic drugs for the treatment of serious or life-threatening infections that have the potential to pose a serious threat to public health**.**\n\n**Sphingosine kinase-2 (SK2) -** an enzyme catalyzes the phosphorylation of sphingosine to generate sphingosine 1-phosphate. There are two isotypes of sphingosine enzyme, SK1 and SK2. Both isotypes have a key role in a variety of diseases, including the development of a range of solid tumors and are promising anti-cancer therapeutic targets.\n\n**TNFα -** Tumor necrosis factor alpha is a cell-signaling protein (cytokine) involved in systemic inflammation.\n\n​\n\n​\n\n168\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD**\n\nEXHIBIT INDEX\n\n​\n\n1.1*\n\n  ​ ​ ​\n\n[Articles of Association of the Registrant, as amended (unofficial English translation).](rdhl-20251231xex1d1.htm)\n\n​\n\n​\n\n​\n\n2.1\n\n​\n\n[Form of Deposit Agreement among the Registrant, the Bank of New York Mellon, as Depositary, and all Owners and Holders from time to time of American Depositary Shares issued hereunder (incorporated by reference to Exhibit 1 to the Registration Statement on Form F-6 filed by The Bank of New York Mellon with the Securities and Exchange Commission on December 6, 2012).](https://www.sec.gov/Archives/edgar/data/1201935/000101915512000696/redhilldepnrec.htm)\n\n​\n\n​\n\n​\n\n2.2\n\n​\n\n[Form of American Depositary Receipt (incorporated by reference to Exhibit 1 to the Registration Statement on Form F-6 filed by The Bank of New York Mellon with the Securities and Exchange Commission on December 6, 2012).](https://www.sec.gov/Archives/edgar/data/1201935/000101915512000696/redhilldepnrec.htm)\n\n​\n\n​\n\n​\n\n2.3*\n\n​\n\n[Description of Share Capital.](rdhl-20251231xex2d3.htm)\n\n​\n\n​\n\n​\n\n2.4\n\n​\n\n[Form of Warrant (incorporated by reference to Exhibit 1.3 of the Form 6-K filed with the Securities and Exchange Commission on December 5, 2022).](https://www.sec.gov/Archives/edgar/data/1553846/000117891322004262/exhibit_1-3.htm)\n\n​\n\n​\n\n​\n\n2.5\n\n​\n\n[Form of Placement Agent Warrant (incorporated by reference to Exhibit 1.5 of the Form 6-K filed with the Securities and Exchange Commission on April 3, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000117891323001293/exhibit_1-5.htm)\n\n​\n\n​\n\n​\n\n2.6\n\n​\n\n[Form of Placement Agent Warrant (incorporated by reference to Exhibit 1.3 of the Form 6-K filed with the Securities and Exchange Commission on July 25, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000117891323002551/exhibit_1-3.htm)\n\n​\n\n​\n\n​\n\n2.7\n\n​\n\n[Form of Placement Agent Warrant regarding Warrant Reprice and Reload Letter (incorporated by reference to Exhibit 1.6 of the Form 6-K filed with the Securities and Exchange Commission on July 25, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000117891323002551/exhibit_1-6.htm)\n\n​\n\n​\n\n​\n\n2.8\n\n​\n\n[Form of Placement Agent Warrant issued to the Placement Agent in the January 2024 Offering (incorporated by reference to Exhibit 1.3 of the Form 6 - K filed with the Securities and Exchange Commission on January 26, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000117891324000249/exhibit_1-3.htm)\n\n​\n\n​\n\n​\n\n2.9\n\n​\n\n[Form of Warrant issued to purchasers in the January 2024 Offering (incorporated by reference to Exhibit 1.2 of the Form 6-K filed with the Securities and Exchange Commission on January 26, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000117891324000249/exhibit_1-2.htm)\n\n​\n\n​\n\n​\n\n2.10\n\n​\n\n[Form of Warrant issued to purchasers in the April 2024 Offering (incorporated by reference to Exhibit 1.2 of the Form 6-K filed with the Securities and Exchange Commission on April 3, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000117891324001206/exhibit_1-2.htm)\n\n​\n\n​\n\n​\n\n4.1+\n\n​\n\n[Asset Purchase Agreement, dated August 11, 2010, by and between the Registrant and Giaconda Limited (RHB-104, 105, 106) (incorporated by reference to Exhibit 4.4 to Draft Registration Statement on Form DRS disseminated with the Securities and Exchange Commission, dated December 3, 2012).](https://www.sec.gov/Archives/edgar/data/1553846/000114420412065985/filename4.htm)\n\n​\n\n​\n\n​\n\n4.2\n\n​\n\n[Amendment to Asset Purchase Agreement by and between the Registrant and Giaconda Limited (RHB-104, 105, 106) dated February 27, 2014 (incorporated by reference to Exhibit 4.2 of the Annual Report on Form 20 F filed with the Securities and Exchange Commission on February 26, 2019).](https://www.sec.gov/Archives/edgar/data/1553846/000155837019001037/rdhl-20181231ex42acc9ab7.htm)\n\n​\n\n​\n\n​\n\n4.3+\n\n​\n\n[Exclusive License Agreement, dated March 30, 2015, by and between the Registrant and Apogee Biotechnology Corp (incorporated by reference to Exhibit 4.7 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 25, 2016).](https://www.sec.gov/Archives/edgar/data/1553846/000117184316008129/exh_47.htm)\n\n​\n\n​\n\n​\n\n4.4†\n\n​\n\n[Amendment #1 dated January 23, 2017, to the Exclusive License Agreement dated March 30, 2015, by and between the Registrant and Apogee Biotechnology Corp. (incorporated by reference to Exhibit 4.6 of the Annual Report on Form 20-F/A filed with the Securities and Exchange Commission on May 15, 2019).](https://www.sec.gov/Archives/edgar/data/1553846/000155837019005053/ex-4d6.htm)\n\n169\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n​\n\n4.5+\n\n​\n\n[Amendment #2 dated June 22, 2017, to the Exclusive License Agreement dated March 30, 2015, by and between the Registrant and Apogee Biotechnology Corp. (incorporated by reference to Exhibit 4.5 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 22, 2018).](https://www.sec.gov/Archives/edgar/data/1553846/000155837018000892/rdhl-20171231ex45c2953eb.htm)\n\n​\n\n​\n\n​\n\n4.6\n\n​\n\n[Amendment #5 dated January 23, 2019, to the Exclusive License Agreement dated March 30, 2015, by and between the Registrant and Apogee Biotechnology Corp. (incorporated by reference to Exhibit 4.10 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 26, 2019).](https://www.sec.gov/Archives/edgar/data/1553846/000155837019001037/rdhl-20181231ex410f5fd9a.htm)\n\n​\n\n​\n\n​\n\n4.7\n\n​\n\n[Form of Letter of Exemption and Indemnity adopted on June 22, 2022, as amended (unofficial English translation) (incorporated by reference to Exhibit 4.9 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 28, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000155837023007149/rdhl-20221231xex4d9.htm)\n\n​\n\n​\n\n​\n\n4.8\n\n​\n\n[Amended and Restated Award Plan (2010) (incorporated by reference to Exhibit 4.10 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 28, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000155837023007149/rdhl-20221231xex4d10.htm)\n\n​\n\n​\n\n​\n\n4.9\n\n​\n\n[Compensation Policy (incorporated by reference to Exhibit 10.7 of the Registration Statement on Form F-1 filed with the Securities and Exchange Commission on June 25, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325002235/exhibit_10-7.htm)\n\n​\n\n​\n\n​\n\n4.10\n\n​\n\n[Global Termination Agreement, dated July 19, 2024, by and among RedHill Biopharma Ltd., Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC (incorporated by reference to Exhibit 4.10 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 10, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000155837025004648/rdhl-20241231xex4d10.htm)\n\n​\n\n​\n\n​\n\n​\n\n4.11†\n\n​\n\n[Clinical Trial Agreement dated January 2, 2024, by and between RedHill Biopharma Ltd. and the Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc. (incorporated by reference to Exhibit 10.26 to the Registration Statement on Form F-1 filed with the Securities and Exchange Commission on February 9, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000117891324000425/exhibit_10-26.htm)\n\n​\n\n​\n\n​\n\n4.12\n\n​\n\n[Form of Securities Purchase Agreement dated March 30, 2023, by and among RedHill Biopharma Ltd. and the purchasers signatory thereto (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on April 3, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000117891323001293/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.13\n\n​\n\n[Form of Securities Purchase Agreement dated July 21, 2023, by and among RedHill Biopharma Ltd. and the purchasers signatory thereto (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on July 25, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000117891323002551/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.14\n\n​\n\n[Form of Securities Purchase Agreement dated January 25, 2024, by and among RedHill Biopharma Ltd. and the purchasers signatory thereto (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on January 26, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000117891324000249/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.15\n\n​\n\n[Form of Warrant Reprice and Reload Letter (incorporated by reference to Exhibit 1.4 of the Form 6-K filed with the Securities and Exchange Commission on July 25, 2023).](https://www.sec.gov/Archives/edgar/data/1553846/000117891323002551/exhibit_1-4.htm)\n\n​\n\n​\n\n​\n\n4.16\n\n​\n\n[Form of Inducement Letter by and between the Company and holders, dated September 28, 2023 (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on September 29, 2023)](https://www.sec.gov/Archives/edgar/data/1553846/000117891323003258/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.17\n\n​\n\n[Form of Securities Purchase Agreement dated March 29, 2024, by and among RedHill Biopharma Ltd. and the purchasers signatory thereto (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on April 3, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000117891324001206/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.18\n\n​\n\n[At The Market Offering Agreement, dated February 3, 2025, by and between RedHill Biopharma Ltd. and H.C. Wainwright & Co., LLC (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on February 3, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325000301/exhibit_1-1.htm)\n\n170\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n​\n\n4.19\n\n​\n\n[Form of Inducement Letter, by and between the Company and the Holders, dated May 14, 2025 (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on May 19, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325001868/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.20\n\n​\n\n[Any Market Purchase Agreement, dated as of June 20, 2025 between the Company and Alumni Capital, L.P. (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on June 25, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325002232/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.21\n\n​\n\n[Commitment Warrant issued to Alumni Capital, L.P. (incorporated by reference to Exhibit 4.1 of the Form 6-K filed with the Securities and Exchange Commission on June 25, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325002232/exhibit_4-1.htm)\n\n​\n\n​\n\n​\n\n4.22\n\n​\n\n[Form of Pre-Funded Warrant to be issued to Alumni Capital, L.P. (incorporated by reference to Exhibit 4.2 of the Form 6-K filed with the Securities and Exchange Commission on June 25, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325002232/exhibit_4-2.htm)\n\n​\n\n​\n\n​\n\n4.23\n\n​\n\n[Stock Purchase Agreement, dated October 17, 2025, between Talicia Holdings Inc. and Cumberland Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.19 of the Registration Statement on Form F-1 filed with the Securities and Exchange Commission on January 22, 2026).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325004158/exhibit_10-19.htm)\n\n​\n\n​\n\n​\n\n4.24†\n\n​\n\n[Exclusive Joint Commercialization Agreement, dated October 17, 2025, between Talicia Holdings Inc. and Cumberland Pharmaceuticals Inc. (incorporated by reference to Exhibit 10.20 of the Registration Statement on Form F-1 filed with the Securities and Exchange Commission on January 22, 2026).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325004158/exhibit_10-20.htm)\n\n​\n\n​\n\n​\n\n4.25\n\n​\n\n[Amendment to Market Purchase Agreement, dated October 20, 2025 (incorporated by reference to Exhibit 1.1 of the Form 6-K filed with the Securities and Exchange Commission on October 21, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325003530/exhibit_1-1.htm)\n\n​\n\n​\n\n​\n\n4.26\n\n​\n\n[Standby Equity Purchase Agreement, dated as of December 19, 2025, between RedHill Biopharma Ltd. and YA II PN, LTD. (incorporated by reference to Exhibit 99.1 of the Form 6-K filed with the Securities and Exchange Commission on December 23, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325004101/exhibit_99-1.htm)\n\n​\n\n​\n\n​\n\n4.27\n\n​\n\n[Form of Pre-Funded Warrant issued to YA II PN, Ltd. (incorporated by reference to Exhibit 99.2 of the Form 6-K filed with the Securities and Exchange Commission on December 23, 2025).](https://www.sec.gov/Archives/edgar/data/1553846/000117891325004101/exhibit_99-2.htm)\n\n​\n\n​\n\n​\n\n8.1*\n\n​\n\n[Subsidiary List.](rdhl-20251231xex8d1.htm)\n\n​\n\n​\n\n​\n\n11.1\n\n​\n\n[Insider Trading Policy (incorporated by reference to Exhibit 11.1 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 10, 2025)](https://www.sec.gov/Archives/edgar/data/1553846/000155837025004648/rdhl-20241231xex11d1.htm)\n\n​\n\n​\n\n​\n\n12.1*\n\n​\n\n[Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](rdhl-20251231xex12d1.htm)\n\n​\n\n​\n\n​\n\n12.2*\n\n​\n\n[Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](rdhl-20251231xex12d2.htm)\n\n​\n\n​\n\n​\n\n13**\n\n​\n\n[Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](rdhl-20251231xex13.htm)\n\n​\n\n​\n\n​\n\n15.1*\n\n​\n\n[Audited financial statements of Talicia Holdings, Inc., as of and for the year ended December 31, 2025.](rdhl-20251231xex15d1.htm)\n\n​\n\n​\n\n​\n\n15.2*\n\n​\n\n[Consent of Independent Registered Public Accounting Firm relating to the consolidated financial statements of the Company.](rdhl-20251231xex15d2.htm)\n\n​\n\n​\n\n​\n\n15.3*\n\n​\n\n[Consent of Independent auditors relating to the financial statements of Talicia Holdings.](rdhl-20251231xex15d3.htm)\n\n​\n\n​\n\n​\n\n171\n\n[Table of Contents](#TOC)\n\n97.1\n\n​\n\n[RedHill Biopharma Ltd. Policy for Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 of the Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 8, 2024).](https://www.sec.gov/Archives/edgar/data/1553846/000155837024004806/rdhl-20231231xex97d1.htm)\n\n​\n\n​\n\n​\n\n101\n\n​\n\nThe following financial statements from the Company’s 20-F for the fiscal year ended December 31, 2025, formatted in Inline XBRL: (i) Consolidated Statements of Comprehensive Loss, (ii) Consolidated Statements of Financial Position, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements.\n\n​\n\n​\n\n​\n\n104\n\n​\n\nCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).\n\n*\n\nFiled herewith.\n\n**\n\nThe certification attached as Exhibit 13 shall not be deemed “filed” with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 20-F, irrespective of any general incorporation language contained in such filing.\n\n+\n\nConfidential treatment granted with respect to certain portions of this exhibit.\n\n†\n\nCertain identified confidential information in this exhibit has been omitted because such identified confidential information is (i) the type the Company treats as private or confidential and (ii) is not material. A copy of the omitted portions will be furnished to the SEC upon its request.\n\n​\n\n172\n\n[Table of Contents](#TOC)\n\nSIGNATURES\n\nThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.\n\n​\n\n​\n\n​\n\n​\n\nREDHILL BIOPHARMA LTD\n\n​\n\n​\n\n​\n\nBy:\n\n/s/ Dror Ben-Asher\n\n​\n\n​\n\nName: Dror Ben-Asher\n\n​\n\n​\n\nTitle: Chief Executive Officer and Chairman of the\n\n​\n\n​\n\nBoard of Directors\n\n​\n\n​\n\n​\n\n​\n\nBy:\n\n/s/ Razi Ingber\n\n​\n\n​\n\nName: Razi Ingber\n\n​\n\n​\n\nTitle: Chief Financial Officer\n\n​\n\n​\n\n​\n\nDate: April 27, 2026\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n173\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\n​\n\n2025 CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nTABLE OF CONTENTS\n\n​\n\n**Page**\n\n[Report of Independent Registered Public Accounting Firm](#ReportofIndependentRegisteredPublicAccou) (PCAOB ID No. 1309)\n\nF-1\n\n[Consolidated Statements of Comprehensive Income (Loss](#CONSOLIDATEDSTATEMENTSOFCOMPREHENSIVELOS))\n\nF-4\n\n[Consolidated Statements of Financial Position](#FINANCIALPOSITION_508977)\n\nF-5\n\n[Consolidated Statements of Changes in Equity (Capital Deficiency)](#CHANGESINEQUITY_719219)\n\nF-6\n\n[Consolidated Statements of Cash Flows](#CASHFLOWS_910026)\n\nF-7\n\n[Notes to the Consolidated Financial Statements](#NOTE1GENERAL_835186)\n\nF-8\n\n​\n\n​\n\n​\n\n​\n\n​\n\n[Table of Contents](#TOC)\n\n​\n\n1.**Report of Independent Registered Public Accounting Firm**\n\n​\n\nTo the Board of Directors and Shareholders of RedHill Biopharma Ltd.\n\n​\n\nOpinion on the Financial Statements\n\n​\n\nWe have audited the accompanying consolidated statements of financial position of RedHill Biopharma Ltd. and its subsidiary (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income (loss), of changes in equity (capital deficiency) and of 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”).\n\n​\n\nIn 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 IFRS Accounting Standards as issued by the International Accounting Standards Board.\n\n​\n\n*Substantial Doubt about the Company’s Ability to Continue as a Going Concern*\n\n​\n\nThe accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(a)(4) to the consolidated financial statements, the Company has an accumulated deficit and continues to incur negative operating cash flow. Management expects that the Company will incur additional losses and negative cash flows from operations. Management believes that there is presently insufficient funding available to fund its activities for a period exceeding one year from the date of issuance of the consolidated financial statements. These conditions and events indicate that a material uncertainty exists that may cast significant doubt (or raise substantial doubt as contemplated by PCAOB standards) about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1(a)(4). The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. This matter is also described in the \"Critical Audit Matters\" section of our report.\n\n​\n\nBasis for Opinion\n\n​\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\n​\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\n​\n\n​\n\nKesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,\nP.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il\n\n​\n\nF-1\n\n[Table of Contents](#TOC)\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\nCritical Audit Matters\n\n​\n\nThe critical audit matters communicated below 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. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\n​\n\n*Recognition and measurement of allowance for certain rebates*\n\n​\n\nAs described in Note 2(i)(1) to the consolidated financial statements, the Company offers various rebate and patient discount programs, which result in discounted prescriptions to qualified patients, of which the most significant are Managed Care (commercial rebates), Medicare Part D and Medicaid (and similar state programs). Rebates provided to patients under these arrangements are accounted for as variable consideration, and recognized as a reduction in revenue, for which unsettled amounts are accrued. The allowance for these rebates is calculated based on historical and estimated utilization of the rebate programs in accordance with the specific terms in the individual agreement, the estimated product in the channel and the projected duration of the Company to sell the units in the channel. The allowance reported as of December 31, 2025 for rebates and patient discount programs amounted to $5.5 million, with a significant portion relating to Managed Care, Medicare Part D, and Medicaid.\n\n​\n\nThe principal considerations for our determination that performing procedures related to recognition and measurement of the allowance for certain rebates is a critical audit matter are the significant estimations made by management due to the measurement uncertainty involved in developing the allowance, as the reserves are based on assumptions developed using contractual and mandated terms with payors and historical experience. This in turn led to a high degree of auditor judgment and subjectivity in applying procedures relating to these assumptions.\n\n​\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, developing an independent expectation of the allowance for Managed Care (commercial rebates), Medicare Part D and Medicaid (and similar state programs), using the terms of the specific rebates programs and the historical trend of actual rebates claims paid; comparing the independent estimate to management’s estimate recorded by the Company; and testing rebates claims processed by the Company, including evaluating those claims for consistency with the contractual and mandated terms of the Company’s arrangements.\n\n​\n\n​\n\n​\n\nKesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,\nP.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il\n\n​\n\nF-2\n\n[Table of Contents](#TOC)\n\n*The Company’s ability to continue as a going concern*\n\n​\n\nAs described above and in Note 1(a)(4) to the consolidated financial statements, the Company has an accumulated deficit and continues to incur negative operating cash flow, and its activities have been funded primarily through offerings of the Company’s securities and borrowing. There is no assurance that the Company’s business will generate sustainable positive cash flows to fund its business. Management expects that the Company will incur additional losses as it continues to focus its resources on advancing the development of its therapeutic candidates, that will result in negative cash flows from operating activities. Management believes that there is presently insufficient funding available to allow the Company to fund its activities for a period exceeding one year from the date of issuance of the consolidated financial statements. These conditions and events indicate that a material uncertainty exists that may cast significant doubt (or raise substantial doubt as contemplated by PCAOB standards) about the Company’s ability to continue as a going concern.\n\n​\n\nThe principal considerations for our determination that performing procedures related to the Company’s ability to continue as a going concern is a critical audit matter are the estimation and execution uncertainty regarding the Company’s future cash flows and the risk of bias in management’s judgments and assumptions in estimating these cash flows to conclude the Company would have sufficient liquidity to fund its operations for at least a year from the date of issuance of the consolidated financial statements. This in turn led to a high degree of auditor subjectivity and judgment to evaluate the audit evidence supporting the liquidity conclusions.\n\n​\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with our overall opinion on the consolidated financial statements. Our audit procedures included, among others, testing the reasonableness of the forecasted revenue, operating expenses, and uses and sources of cash used in management’s assessment of whether the Company has sufficient liquidity to fund operations for at least a year from the consolidated financial statements issuance date. We assessed the appropriateness of forecast assumption by comparing prior period forecasts to actual results, comparing forecasted revenue to recent historical financial information, inquiring of management regarding the mitigating actions to reduce costs and manage cash flows and assessing whether the mitigating actions were within the Company's control, testing the underlying data generated to prepare the forecast scenarios and determined whether there was adequate support for the assumptions underlying the forecast, and evaluating management's analysis of the impact of the above assumptions on the forecasted cash flows. We assessed the adequacy of the Company’s going concern disclosures included in Note 1(a)(4) to the consolidated financial statements.\n\n​\n\n/s/ Kesselman & Kesselman\n\nCertified Public Accountants (Isr.)\n\nA member of PricewaterhouseCoopers International Limited\n\n​\n\nTel-Aviv, Israel\n\nApril 27, 2026\n\nWe have served as the Company's auditor since 2010.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nKesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,\nP.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il\n\n​\n\nF-3\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n**REDHILL BIOPHARMA LTD.**\n\n​\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)\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**Note**\n\n**2025**\n\n​\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\n**REVENUES**\n\n21\n\n286\n\n​\n\n—\n\n​\n\n—\n\n**RESEARCH AND DEVELOPMENT EXPENSES**\n\n22\n\n2,023\n\n​\n\n1,588\n\n​\n\n3,529\n\n**GENERAL, ADMINISTRATIVE, BUSINESS AND DEVELOPMENT EXPENSES**\n\n23\n\n6,172\n\n​\n\n4,887\n\n​\n\n6,019\n\n**SHARE OF LOSS OF JOINT VENTURE**\n\n17\n\n33\n\n​\n\n—\n\n​\n\n—\n\n**OPERATING LOSS**\n\n​\n\n(7,942)\n\n​\n\n(6,475)\n\n​\n\n(9,548)\n\n**FINANCIAL INCOME**\n\n​\n\n1,318\n\n​\n\n8,347\n\n​\n\n301\n\n**FINANCIAL EXPENSES**\n\n​\n\n1,456\n\n​\n\n1,512\n\n​\n\n9,251\n\n**FINANCIAL INCOME (EXPENSES),**net\n\n24\n\n(138)\n\n​\n\n6,835\n\n​\n\n(8,950)\n\n**INCOME (LOSS) FROM CONTINUING OPERATIONS**\n\n​\n\n(8,080)\n\n​\n\n360\n\n​\n\n(18,498)\n\n**INCOME(LOSS) FROM DISCONTINUED OPERATIONS**\n\n16\n\n7,651\n\n​\n\n(8,628)\n\n​\n\n42,414\n\n**INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) FOR THE YEAR**\n\n​\n\n(429)\n\n​\n\n(8,268)\n\n​\n\n23,916\n\n**LOSS PER ORDINARY SHARE FROM CONTINUING OPERATION, basic and diluted (U.S. dollars)**\n\n25\n\n(0.00)\n\n​\n\n(0.00)\n\n​\n\n(0.01)\n\n**EARNINGS (LOSS) PER ORDINARY SHARE FROM DISCONTINUED OPERATION, basic and diluted (U.S. dollars)**\n\n25\n\n0.00\n\n​\n\n(0.00)\n\n​\n\n0.02\n\n**EARNINGS (LOSS) PER ORDINARY SHARE, basic and diluted (U.S. dollars)**\n\n25\n\n(0.00)\n\n​\n\n(0.00)\n\n​\n\n0.01\n\n​\n\n**The accompanying notes are an integral part of these consolidated financial statements.**\n\n​\n\n​\n\n​\n\nF-4\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD****.**\n\n​\n\nCONSOLIDATED STATEMENTS OF FINANCIAL POSITION\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**December 31, **\n\n​\n\n**December 31, **\n\n​\n\n**Note**\n\n**  ​ ​ ​**\n\n**2025**\n\n**  ​ ​ ​**\n\n**2024**\n\n​\n\n​\n\n​\n\n** U.S. dollars in thousands**\n\n**CURRENT ASSETS:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nCash and cash equivalents\n\n5\n\n​\n\n3,971\n\n​\n\n4,617\n\nTrade receivables\n\n​\n\n​\n\n79\n\n​\n\n2,539\n\nPrepaid expenses and other receivables\n\n6\n\n​\n\n2,478\n\n​\n\n1,104\n\nInventory\n\n7\n\n​\n\n—\n\n​\n\n3,651\n\n​\n\n​\n\n​\n\n6,528\n\n​\n\n11,911\n\n**NON-CURRENT ASSETS:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRestricted cash\n\n​\n\n​\n\n169\n\n​\n\n148\n\nTrade receivables\n\n​\n\n​\n\n201\n\n​\n\n—\n\nFixed assets\n\n8\n\n​\n\n49\n\n​\n\n135\n\nRight-of-use assets\n\n9\n\n​\n\n1,057\n\n​\n\n302\n\nIntangible assets\n\n10\n\n​\n\n5,291\n\n​\n\n5,547\n\nInvestment in a joint venture\n\n17\n\n​\n\n12,050\n\n​\n\n—\n\n​\n\n​\n\n​\n\n18,817\n\n​\n\n6,132\n\n**TOTAL ASSETS**\n\n​\n\n​\n\n25,345\n\n​\n\n18,043\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\nAccount payable\n\n​\n\n​\n\n731\n\n​\n\n1,168\n\nLease liabilities\n\n9\n\n​\n\n170\n\n​\n\n353\n\nAllowance for deductions from revenue\n\n13\n\n​\n\n6,304\n\n​\n\n9,288\n\nDerivative financial instruments\n\n4\n\n​\n\n—\n\n​\n\n1,421\n\nAccrued expenses and other current liabilities\n\n12\n\n​\n\n12,016\n\n​\n\n9,993\n\n​\n\n​\n\n​\n\n19,221\n\n​\n\n22,223\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**NON-CURRENT LIABILITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nLease liabilities\n\n9\n\n​\n\n900\n\n​\n\n3\n\nAccrued expenses and other non current liabilities\n\n12\n\n​\n\n456\n\n​\n\n—\n\nRoyalty obligation\n\n15(3)\n\n​\n\n500\n\n​\n\n500\n\n​\n\n​\n\n​\n\n1,856\n\n​\n\n503\n\n**TOTAL LIABILITIES**\n\n​\n\n​\n\n21,077\n\n​\n\n22,726\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**EQUITY (CAPITAL DEFICIENCY):**\n\n19\n\n​\n\n​\n\n​\n\n​\n\nOrdinary shares\n\n​\n\n​\n\n147,641\n\n​\n\n35,036\n\nAdditional paid-in capital\n\n​\n\n​\n\n270,382\n\n​\n\n375,082\n\nAccumulated deficit\n\n​\n\n​\n\n(413,755)\n\n​\n\n(414,801)\n\n**TOTAL EQUITY (CAPITAL DEFICIENCY)**\n\n​\n\n​\n\n4,268\n\n​\n\n(4,683)\n\n**TOTAL LIABILITIES AND EQUITY (CAPITAL DEFICIENCY)**\n\n​\n\n​\n\n25,345\n\n​\n\n18,043\n\n​\n\n**The accompanying notes are an integral part of these consolidated financial statements.**\n\n​\n\n​\n\n​\n\nF-5\n\n[Table of Contents](#TOC)\n\n​\n\n**REDHILL BIOPHARMA LTD.**\n\n​\n\nCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CAPITAL DEFICIENCY)\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**Ordinary**\n\n​\n\n**Additional**\n\n​\n\n**Accumulated**\n\n​\n\n**Total**\n\n​\n\n  ​ ​ ​\n\n**shares**\n\n  ​ ​ ​\n\n**paid-in capital**\n\n  ​ ​ ​\n\n**deficit**\n\n  ​ ​ ​\n\n**equity**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**(capital deficiency)**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\n**BALANCE AT JANUARY 1, 2023**\n\n \n\n2,835\n\n \n\n382,625\n\n \n\n(433,860)\n\n \n\n(48,400)\n\n**CHANGES DURING THE YEAR ENDED DECEMBER 31, 2023:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nShare-based compensation to employees and service providers\n\n \n\n—\n\n​\n\n—\n\n​\n\n2,209\n\n​\n\n2,209\n\nIssuance of ordinary shares (including resulting from warrants exercise), net of issuance costs\n\n​\n\n18,556\n\n​\n\n5,788\n\n​\n\n—\n\n​\n\n24,344\n\nIssuance of ordinary shares for vested RSUs\n\n \n\n50\n\n​\n\n(50)\n\n​\n\n—\n\n​\n\n—\n\nComprehensive income\n\n \n\n—\n\n​\n\n—\n\n​\n\n23,916\n\n​\n\n23,916\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**BALANCE AT DECEMBER 31, 2023**\n\n \n\n21,441\n\n \n\n388,363\n\n \n\n(407,735)\n\n \n\n2,069\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**BALANCE AT JANUARY 1, 2024**\n\n \n\n21,441\n\n \n\n388,363\n\n \n\n(407,735)\n\n \n\n2,069\n\n**CHANGES DURING THE YEAR ENDED DECEMBER 31, 2024:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nShare-based compensation to employees and service providers\n\n \n\n—\n\n​\n\n—\n\n​\n\n1,202\n\n​\n\n1,202\n\nIssuance of ordinary shares, net of expenses\n\n​\n\n13,135\n\n​\n\n(12,821)\n\n​\n\n—\n\n​\n\n314\n\nIssuance of ordinary shares for vested RSUs\n\n \n\n460\n\n​\n\n(460)\n\n​\n\n—\n\n​\n\n—\n\nComprehensive loss\n\n​\n\n—\n\n​\n\n—\n\n​\n\n(8,268)\n\n​\n\n(8,268)\n\n**BALANCE AT DECEMBER 31, 2024**\n\n \n\n35,036\n\n \n\n375,082\n\n \n\n(414,801)\n\n \n\n(4,683)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**BALANCE AT JANUARY 1, 2025**\n\n \n\n35,036\n\n \n\n375,082\n\n \n\n(414,801)\n\n \n\n(4,683)\n\n**CHANGES DURING THE YEAR ENDED DECEMBER 31, 2025:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nShare-based compensation to employees and service providers\n\n \n\n—\n\n​\n\n—\n\n​\n\n1,475\n\n​\n\n1,475\n\nIssuance of ordinary shares, net of expenses\n\n​\n\n110,565\n\n​\n\n(102,660)\n\n​\n\n—\n\n​\n\n7,905\n\nIssuance of ordinary shares for vested RSUs\n\n \n\n2,040\n\n​\n\n(2,040)\n\n​\n\n—\n\n​\n\n—\n\nComprehensive loss\n\n \n\n—\n\n​\n\n—\n\n​\n\n(429)\n\n​\n\n(429)\n\n**BALANCE AT DECEMBER 31, 2025**\n\n \n\n147,641\n\n \n\n270,382\n\n \n\n(413,755)\n\n \n\n4,268\n\n​\n\n​\n\n**The accompanying notes are an integral part of these consolidated financial statements.**\n\n​\n\n​\n\nF-6\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\n​\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\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**Year Ended December 31,**\n\n​\n\n​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n**2023**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\n**OPERATING ACTIVITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIncome (loss)\n\n(429)\n\n \n\n(8,268)\n\n​\n\n23,916\n\n​\n\nAdjustments in respect of income and expenses not involving cash flow:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nShare-based compensation to employees and service providers\n\n457\n\n \n\n665\n\n​\n\n1,647\n\n​\n\nDepreciation\n\n384\n\n \n\n588\n\n​\n\n1,445\n\n​\n\nAmortization of intangible assets\n\n25\n\n​\n\n31\n\n​\n\n545\n\n​\n\nGains from the transfer of rights in Movantik® and extinguishment of debt obligations, see below\n\n—\n\n​\n\n—\n\n​\n\n(56,082)\n\n​\n\nGains from early termination of leases, and impairment of fixed assets, net\n\n—\n\n​\n\n(22)\n\n​\n\n(543)\n\n​\n\nGain on loss of control ( presented as part of  a discontinued operations)\n\n(7,983)\n\n​\n\n—\n\n​\n\n—\n\n​\n\nShare from loss of joint venture\n\n33\n\n​\n\n—\n\n​\n\n—\n\n​\n\nLoss from global termination agreement (See note 15(5)(b)) and below\n\n—\n\n​\n\n2,359\n\n​\n\n—\n\n​\n\nFair value (gains) losses on derivative financial instruments, recognition of day 1 loss and changes in royalty\nobligation\n\n(1,280)\n\n​\n\n(8,268)\n\n​\n\n5,359\n\n​\n\nLoss from modification of warrants terms as part of a new issuance\n\n—\n\n \n\n—\n\n​\n\n1,459\n\n​\n\nIssuance costs in respect of warrants and equity line of credit\n\n1,018\n\n​\n\n1,497\n\n​\n\n2,034\n\n​\n\nExchange differences and revaluation of bank deposits\n\n93\n\n​\n\n(4)\n\n​\n\n19\n\n​\n\n​\n\n(7,253)\n\n \n\n(3,154)\n\n​\n\n(44,117)\n\n​\n\nChanges in assets and liability items:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDecrease in trade receivables\n\n2,259\n\n​\n\n52\n\n​\n\n31,930\n\n​\n\nDecrease (increase) in prepaid expenses and other receivables\n\n(2,911)\n\n \n\n1,697\n\n​\n\n1,586\n\n​\n\nDecrease (increase)  in inventories (excluding THI transaction)\n\n(375)\n\n​\n\n738\n\n​\n\n2,387\n\n​\n\nDecrease in accounts payable\n\n(437)\n\n​\n\n(2,110)\n\n​\n\n(952)\n\n​\n\nIncrease (decrease) in accrued expenses and other liabilities\n\n2,479\n\n \n\n3,042\n\n​\n\n(13,354)\n\n​\n\nDecrease  in allowance for deductions from revenue\n\n(2,984)\n\n​\n\n(1,366)\n\n​\n\n(37,216)\n\n​\n\n​\n\n(1,969)\n\n \n\n2,053\n\n​\n\n(15,619)\n\n​\n\n**Net cash used in operating activities**\n\n**(9,651)**\n\n** **\n\n**(9,369)**\n\n​\n\n**(35,820)**\n\n​\n\n**Net cash used in operating activities from discontinued operation**\n\n**(2,460)**\n\n​\n\n**(434)**\n\n​\n\n**(18,998)**\n\n​\n\n**Net cash used in operating activities from continuing operation**\n\n**(7,191)**\n\n​\n\n**(8,935)**\n\n​\n\n**(16,822)**\n\n​\n\n**INVESTING ACTIVITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nPurchase of fixed assets\n\n(5)\n\n \n\n(9)\n\n​\n\n(11)\n\n​\n\nProceeds from investment in joint venture (see below)\n\n2,000\n\n \n\n—\n\n​\n\n—\n\n​\n\nReconciliation related to receivable from joint venture\n\n(304)\n\n​\n\n—\n\n​\n\n—\n\n​\n\nChange in investment in current bank deposits\n\n—\n\n \n\n—\n\n​\n\n15\n\n​\n\n**Net cash provided by (used in) investing activities**\n\n**1,691**\n\n** **\n\n**(9)**\n\n​\n\n**4**\n\n​\n\n**Net cash provided by investing activities from discontinued operation (see loss of control appendix below)**\n\n**1,696**\n\n​\n\n**—**\n\n​\n\n**—**\n\n​\n\n**Net cash (used in) provided by investing activities from continuing operation**\n\n**(5)**\n\n​\n\n**(9)**\n\n​\n\n**4**\n\n​\n\n**FINANCING ACTIVITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProceeds from issuance of ordinary shares and warrants, net of issuance costs\n\n7,764\n\n \n\n8,263\n\n​\n\n13,959\n\n​\n\nRepayment of payable in respect of intangible asset purchase\n\n—\n\n​\n\n—\n\n​\n\n(6,555)\n\n​\n\nDecrease in restricted cash\n\n—\n\n​\n\n790\n\n​\n\n15,210\n\n​\n\nPayment of principal with respect to lease liabilities\n\n(447)\n\n​\n\n(636)\n\n​\n\n(1,175)\n\n​\n\n**Net cash provided by financing activities**\n\n**7,317**\n\n** **\n\n**8,417**\n\n​\n\n**21,439**\n\n​\n\n**Net cash provided by financing activities from discontinued operation**\n\n**—**\n\n​\n\n**474**\n\n​\n\n**7,815**\n\n​\n\n**Net cash provided by financing activities  from continuing operation**\n\n**7,317**\n\n​\n\n**7,943**\n\n​\n\n**13,624**\n\n​\n\n**DECREASE IN CASH AND CASH EQUIVALENTS**\n\n(644)\n\n \n\n(961)\n\n​\n\n(14,377)\n\n​\n\n**EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS**\n\n(2)\n\n \n\n9\n\n​\n\n(22)\n\n​\n\n**BALANCE OF CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR**\n\n4,617\n\n \n\n5,569\n\n​\n\n19,968\n\n​\n\n**BALANCE OF CASH AND CASH EQUIVALENTS AT THE END OF YEAR**\n\n3,971\n\n \n\n4,617\n\n​\n\n5,569\n\n​\n\n**SUPPLEMENTARY INFORMATION ON INTEREST RECEIVED IN CASH**\n\n60\n\n​\n\n131\n\n​\n\n138\n\n​\n\n**SUPPLEMENTARY INFORMATION ON INTEREST PAID IN CASH**\n\n18\n\n​\n\n55\n\n​\n\n367\n\n​\n\n**SUPPLEMENTARY INFORMATION ON NON-CASH INVESTING AND FINANCING ACTIVITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAcquisition of right-of-use assets by means of lease liabilities\n\n1,048\n\n \n\n—\n\n​\n\n270\n\n​\n\nDecrease in lease liability (with corresponding decrease in right of use asset: none during 2025 and  amount of $166 in 2024 )\n\n—\n\n \n\n188\n\n​\n\n5,413\n\n​\n\nLoss of control of Talicia Holdings Inc.:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDerecognition of assets\n\n(1,538)\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDerecognition of intangible assets\n\n(232)\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDerecognition of inventory\n\n(4,026)\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRecognition of investment in joint venture\n\n13,779\n\n​\n\n​\n\n​\n\n​\n\n​\n\nGain on loss of control\n\n(7,983)\n\n​\n\n​\n\n​\n\n​\n\n​\n\nProceeds from investment in joint venture\n\n2,000\n\n​\n\n​\n\n​\n\n​\n\n​\n\nTransfer of rights in Movantik® and extinguishment of debt obligations:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDecrease in Intangible asset\n\n​\n\n​\n\n​\n\n​\n\n(59,503)\n\n​\n\nDecrease in Inventories\n\n​\n\n​\n\n​\n\n​\n\n(4,233)\n\n​\n\nDecrease in Payable in respect of Intangible asset\n\n​\n\n​\n\n​\n\n​\n\n4,602\n\n​\n\nDecrease in Borrowing\n\n​\n\n​\n\n​\n\n​\n\n115,216\n\n​\n\nGains from the transfer of the rights in Movantik® and extinguishment of debt obligations\n\n​\n\n​\n\n​\n\n​\n\n56,082\n\n​\n\n​\n\n​\n\n**The accompanying notes are an integral part of these consolidated financial statements.**\n\n​\n\nF-7\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**NOTE 1 - GENERAL:**\n\n**a.  General:**\n\n1)RedHill Biopharma Ltd. (the “Company”), incorporated on August 3, 2009, together with its wholly-owned subsidiary, RedHill Biopharma Inc. (“RedHill Inc.”), incorporated in Delaware, U.S. on January 19, 2017,is a specialty biopharmaceutical company primarily focused on gastrointestinal (“GI”) diseases and infectious diseases.\n\n​\n\n     The Company’s American Depositary Shares (“ADSs”) were traded on the Nasdaq Capital Market from December 27, 2012, were listed on the Nasdaq Global Market (“Nasdaq”) from July 20, 2018, and have been again listed on the Nasdaq Capital Market since November 15, 2023.\n\nOn March 23, 2023, the Company changed the ADS ratio from 1 ADS representing 10 ordinary shares to 1 ADS representing 400 ordinary shares. On August 20, 2024, the Company changed the ADS to ordinary share ratio from 1 ADS representing 400 ordinary shares to 1 ADS representing 10,000 ordinary shares. All data denominated in ADS were adjusted for these ratio changes.\n\nThe Company’s registered address is 21 Ha’arba’a St, Tel-Aviv, Israel.\n\n2)Since the Company established its commercial presence in the U.S. in 2017, it has promoted or commercialized various GI-related products that were either developed internally or acquired through in-licensing agreements. In particular, Talicia®, for the treatment of Helicobacter pylori infection in adults, was developed primarily internally by the Company and is its first internally developed product approved by the U.S. Food and Drug Administration (“FDA”). All these commercial activities are presented as discontinued operations. See note 16.  \n\n3)In October 2025, the Company established Talicia Holdings Inc. (“THI”), an entity formed to hold the Talicia® business and related activities, and entered into a strategic transaction with Cumberland Pharmaceuticals Inc. (“Cumberland”). In connection with this transaction, the Company transferred all Talicia®-related activities and operations to THI.\n\nAlthough the Company holds a 70% equity interest in THI, pursuant to the governing agreements between the parties, all significant operating, strategic and budgetary decisions require the joint approval of both the Company and Cumberland. Accordingly, the Company concluded that it lost unilateral control over THI and that THI is jointly controlled with Cumberland.\n\nIn addition, THI and Cumberland entered into an exclusive joint commercialization agreement for Talicia® in the United States, under which commercialization activities are conducted through THI.\n\nAs a result of the transaction and the loss of control over THI, the Company’s Talicia® commercial operations are presented as part of the discontinued operations in accordance with IFRS 5 (see Note 16).\n\nPrior to the transaction, the Company operated in both research and development and commercial segments, which included the commercialization of internally developed and in-licensed products. Following the transaction, the Company has exited its commercial operations and is primarily focused on research and development activities.\n\nUntil February 1, 2023, the Company commercialized Movantik® in the U.S., for the treatment of opioid-induced constipation. See also note 15 (5) regarding the transfer of the Company’s rights in Movantik® to HCR Collateral Management, LLC (“HCRM”) in exchange for all the Company’s debt obligations under the Credit Agreement with HCRM, as well as the Global Termination Agreement, which terminated all remaining credit ties related to this transaction.\n\nF-8\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nThe Company also continues to advance the development part of its late-stage therapeutic candidates.\n\n4) As of December 31, 2025, the Company has an accumulated deficit and negative working capital, and continues to incur negative operating cash flow. The Company’s activities have been funded primarily through public and private offerings of the Company’s securities and senior secured borrowing (now fully extinguished, see note 15(5)). There is no assurance that the Company’s business will generate sustainable positive cash flows to fund its business.\n\n​\n\nThe Company plans to further fund its future operations through potential distributions and other cash flows arising from out-licensing of its therapeutic candidates, commercialization of in-licensed or acquired products and raising additional capital through equity or debt financing or through other non-dilutive financing. Furthermore, the Company holds from time to time discussions with multiple parties regarding potential strategic transactions, although there is no assurance that these discussions will result in any such transactions. The Company’s current cash resources are not sufficient to complete the research and development of its therapeutic candidates until generation of sustainable positive cash flows. Management expects that the Company will incur additional losses as it continues to focus its resources on advancing the development of its therapeutic candidates, based on a prioritized plan expected to result in negative cash flows from operating activities. Management believes that there is presently insufficient funding available to allow the Company to fund its activities for a period exceeding one year from the date of this filing. In addition, as of the reporting date, the Company has a significant amount of obligations related to allowance for deductions from revenues that are past due, including certain obligations that are materially overdue. The Company is actively engaging with various counterparties in an effort to reach structured payment arrangements. To date, the Company has finalized formal agreements with a limited number of counterparties to reschedule payments over a period of up to 24 months. Accordingly, the portion of these specific obligations due beyond 12 months from the reporting date has been classified as non-current liabilities. For the remaining counterparties, while management believes there is a reasonable possibility that such arrangements could be reached, no formal agreements have been finalized, and there can be no assurance such arrangements will be achieved. These conditions and events indicate that a material uncertainty exists that may cast significant doubt (or raise substantial doubt as contemplated by PCAOB standards) about the Company’s ability to continue as a going concern.\n\nThe accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.\n\n5)    In October 2023, Israel was attacked by a terrorist organization and entered a state of war. As of the date of these consolidated financial statements, sustained conflict in the region is ongoing and has included periods of escalation on multiple fronts, including direct confrontations involving Iran. During the year ended December 31, 2025, 2024 and 2023, the impact of the conflicts on the Company results and financial condition was immaterial, but such impact may increase.\n\n​\n\n**b.****Approval of the financial statements:**\n\n​\n\nThe date of the approval of these financial statements by the Board of Directors (the \"BoD\") is April 27 2026.\n\n​\n\nF-9\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**NOTE 2 - MATERIAL ACCOUNTING POLICIES:**\n\n​\n\na.    Basis for presentation of the financial statements\n\n​\n\nThe consolidated financial statements of the Company have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board. (“IASB”).\n\n​\n\nThe material accounting policies described below have been applied consistently in relation to all the periods presented.\n\n​\n\nThe preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are material to the financial statements, are disclosed in note 3. Actual results could differ significantly from those estimates and assumptions.\n\n​\n\nb.    Translation of foreign currency transactions and balances\n\n​\n\n1)    Functional and presentation currency\n\n​\n\nItems included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Company and its subsidiary operate (the “Functional Currency”). The consolidated financial statements are presented in U.S. dollars (“$”), which is the Company’s functional and presentation currency.\n\n​\n\n2)   Transactions and balances\n\n​\n\nForeign currency transactions in currencies different from the Functional Currency (hereafter foreign currency), mostly New Israeli Shekel (“NIS”) and Euro are translated into the Functional Currency using the exchange rates at the dates of the transactions. Foreign exchange differences resulting from the settlement of such transactions and from the translation of period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recorded in the Consolidated Statements of Comprehensive Income (Loss) under financial income or financial expenses.\n\n​\n\nc.    Trade receivables  \n\n​\n\nTrade receivables are recognized initially at the amount of consideration that is unconditional. They are subsequently measured at amortized cost, less allowance for expected credit losses. The Company measures the loss allowance for expected credit losses on trade receivables based on lifetime expected credit losses.\n\n​\n\nd.     Inventory\n\n​\n\nAs of December 31, 2025, following the discontinuation of the Company’s Talicia® operations  (see notes 16 and 17), the Company no longer holds inventory. For the comparative period presented, inventory was stated at the lower of cost or net realizable value. Cost was determined using the first-in, first-out (FIFO) method. Net realizable value represented the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.\n\n​\n\ne. Fixed assets\n\nF-10\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n                            ​\n\nFixed assets items are stated at cost less accumulated depreciation.\n\nDepreciation is computed by the straight-line method, to reduce the cost of fixed assets to their residual value over their estimated useful lives as follows:\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n%\n\n \n\nComputer equipment\n\n​\n\n33\n\n​\n\nOffice furniture and equipment\n\n​\n\n8-15\n\n​\n\n​\n\nLeasehold improvements are depreciated by the straight-line method over the shorter of the term of the lease or the estimated useful life of the improvements.\n\n​\n\nf.    Intangible assets\n\n​\n\n1)    Licenses\n\n​\n\nThe Company’s intangible assets represent in-licenses of development-phase compounds acquired by the Company, where the Company continues or has the option to continue to do the development work (“R&D assets”), as well as commercialization rights for approved products (\"Commercialization assets\") which were fully derecognized in 2023 as part of the sale of the rights to Movantik® asset (See also note 15(5)).\n\n​\n\nDuring October 2025, the asset related to Talicia® was derecognized upon its transfer to THI and is therefore no longer included in the Company’s consolidated financial statements (see notes 16 and 17).\n\n​\n\nR&D assets that are available for use are stated at cost and amortized on a straight-line basis over their useful life from the time they are available for use. R&D assets that are not available for use are not amortized and are tested for impairment at least annually.\n\n​\n\nAmounts due for future payments based on contractual agreements are accrued upon reaching the relevant milestones.\n\n​\n\nAll intangible assets are tested for impairment if any events have occurred or changes in circumstances have taken place which might indicate that their carrying amounts may not be recoverable. See also note 3 for key assumptions used in the determination of the recoverable amounts.\n\n​\n\n2)    Research and development\n\n​\n\nResearch expenses are recognized as an expense as incurred.\n\n​\n\nResearch and development costs for the performance of pre-clinical trials, clinical trials, and    manufacturing by subcontractors are recognized as expenses when incurred.\n\n​\n\ng.     Financial instrument\n\n​\n\nWarrants and other equity instruments exercisable to the Company’s ordinary shares are classified as an equity instrument only if they are settled by the Company exchanging a fixed amount of cash for a fixed number of its own equity instruments (the ‘fixed for fixed’ criteria).\n\nOtherwise, these instruments are classified as a derivative financial asset or liability measured at fair value through profit or loss, until the fixed for fixed creteria is met.\n\nF-11\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n​\n\n​\n\nNon-derivative financial liabilities are initially recognized at their fair value minus transaction costs and are subsequently measured at amortized cost. In case there is a difference between the fair value at initial recognition and the transaction price (“day 1 loss”), the financial liabilities are adjusted to reflect the day 1 loss and changes are recorded to profit or loss while unrecognized day 1 loss is amortized over the contractual life of the instrument. Any amounts not recognized in profit or loss before the date of exercise or maturity will be recognized in profit or loss on that date.\n\n​\n\nTransaction costs relating to the issuance of derivative financial instruments measured at fair value through profit or loss are expensed to profit or loss.\n\n​\n\nFinancial liabilities are included in current liabilities, except for those with maturities greater than 12 months after the Statements of Financial Position date (for which they are classified as noncurrent liabilities).\n\n​\n\nFinancial liabilities are derecognized when, and only when, they are extinguished. The difference between the carrying amount of the financial liability extinguished and the consideration paid, including any non-cash assets transferred, is recognized in profit or loss. As for the accounting for the extinguishment of the financial liability to HCR, as well as the Global Termination Agreement which terminated all remaining credit ties related to this transaction, see note 15(5).  \n\n​\n\nh.   Share-based payments.\n\n​\n\nThe Company operates an equity-settled, share-based compensation plan to employees and service providers. As part of the plans, the Company grants employees and service providers, from time to time and at its discretion, options to purchase Company shares and restricted share units (“RSUs”). For employees, the total amount recognized as an expense over the vesting period of the options is determined by reference to the fair value of the options at the grant date whereas the fair value of RSUs is determined based on the market price of the Company’s shares at the grant date. For service providers, the Company measures the awards based on the fair value of the asset or service received. when the fair value of the goods or services received cannot be estimated reliably, the awards are measured by reference to the fair value of the equity instruments granted.The amounts are recorded against the accumulated deficit within equity.\n\n​\n\nVesting conditions (other than market conditions) are included in the assumptions about the number of equity instruments that are expected to vest.\n\n​\n\nAt the end of each reporting period, the Company revises its estimates of the number of equity instruments that are expected to vest based on non-market vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to accumulated deficit.\n\n​\n\nWhen exercising options or upon the vesting of RSU , the Company issues new shares. The proceeds (if any), less directly attributable transaction costs, are recognized as share capital (par value) and additional paid-in capital. RSUs are settled through the issuance of shares upon vesting, with no cash consideration received by the Company.\n\n​\n\ni.    Revenue from contracts with customers\n\n​\n\nThe Company’s revenue recognition policies described below were applied throughout the periods presented in these financial statements. As further described in note 16, in October 2025, the\n\nF-12\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nCompany transferred its Talicia®-related business activities to THI in connection with the  agreement  with Cumberland. Accordingly, revenue from product sales and certain licensing activity associated with these operations are presented as discontinued operations.\n\n​\n\nThe Company applies a practical expedient in the standard and does not adjust the transaction price for the effects of significant financing components if, at contract inception, the Company expects the period between customer payment and the transfer of goods or services to be one year or less.\n\n​\n\n1)Revenue from the sale of products\n\nThe Company sold products mainly to wholesale distributors. Revenue was recognized at a point in time when control over the product was transferred to the customer (upon delivery), at the net selling price, which reflected reserves for variable consideration, including discounts and allowances.\n\n​\n\nThe Company estimates variable consideration and includes it in the transaction price only to the extent it is highly probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.\n\nThe specific considerations the Company uses in estimating these amounts related to variable consideration are as follows:\n\n​\n\nTrade discounts and distribution fees - The Company offered discounts to its customers, as an incentive for prompt payment. These discounts were recorded as a reduction of revenue in the period the related revenue from the sale of products was recognized. In addition, distribution fees were paid to certain distributors based on contractually determined rates from the gross consideration. As the fee paid to the customer was not for a distinct good or service, it was recognized as a reduction of revenue in the period the related revenue from the sale of products was recognized.\n\nRebates and patient discount programs - The Company offered various rebate and patient discount programs, which resulted in discounted prescriptions to qualified patients. The Company estimates the allowance for these rebates and coupons based on historical and estimated utilization of the rebate and discount programs. These estimates were initially recorded at the time the revenues were recognized and are subsequently adjusted as a reduction of revenue until the related obligations are settled. See also notes 3 and 13.\n\nProduct returns - The Company offered customers a right of return of expired products. The Company estimates the amount of product sales that may be returned by its customers and records this estimate as a reduction of revenue. Such estimates were initially recorded at the time of sale based on historical rates of return, or, if such historical data was not available, based on the Company’s sales information, its visibility into the inventory remaining in the distribution channel, and product dating. The Company continues to monitor and update these estimates until the right of return period expires.\n\nThese allowances, together with all related obligations and programs arising from product sales prior to the strategic transaction with THI, remain the responsibility of the Company and were not transferred to THI.\n\n​\n\n2)    Revenues from licensing\n\nF-13\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n​\n\nLicenses of intellectual property (“IP”) rights are distinct from other promises in a contract with a customer (such as manufacturing and supply services) if the customer can benefit from the IP either on its own or together with other resources that are readily available to the customer and if the Company’s promise to license the IP is separately identifiable from other promises in the contract.  \n\n​\n\nIf the promise to grant the license is distinct, the Company determines whether the nature of the promise in granting the license is to provide the customer with either a right to access the Company’s IP as it exists throughout the license period or a right to use the Company’s IP as it exists at the point in time at which the license is granted. Accordingly, revenue from a license providing a right of use to the Company’s IP is recognized at the point in time when control of the distinct license is transferred to the customer.\n\n​\n\nSales -based royalties that are allocated to license of IP are recognized only when (or as) the later of the following occurs: (a) the subsequent sale occurs; and (b) the performance obligation to which some or all the sales-based royalty has been allocated has been satisfied (or partially satisfied).\n\n​\n\nRevenue from achieving additional milestones is recognized only when it is highly probable that a significant reversal of cumulative revenues will not occur, usually upon achievement of the specific milestone, in accordance with the relevant agreement.\n\n   \n\nj.    Earnings (Loss) per share\n\n​\n\nThe computation of basic earnings (loss) per share is based on the Company’s earnings (loss) divided by the weighted average number of ordinary shares, vested RSUs, and pre-funded warrants outstanding during the period.\n\n​\n\nIn calculating the diluted earnings (loss) per share, using the treasury stock method, the Company adds the weighted average of the number of potential shares to be issued to the average number of shares outstanding including pre-funded warrants and vested RSUs used to calculate the basic earnings (loss) per share, assuming all shares that have a potentially dilutive effect have been exercised into shares. \n\n​\n\nk.    Deferred taxes\n\n​\n\nSince the Company is unable to assess whether it will have taxable income in the foreseeable future, no deferred tax assets were recorded in these financial statements. \n\n \n\nl.    Leases\n\n​\n\nThe leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.\n\n​\n\nThe right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.\n\n​\n\nF-14\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nAssets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed lease payments and variable lease payments that are based on an index or a rate.\n\n​\n\nThe lease payments are discounted using the lessee’s incremental borrowing rate, as the interest rate implicit in the lease is not readily determined.\n\n​\n\nRight-of-use assets are measured at cost being the amount of the initial measurement of the lease liability.\n\n​\n\nPayments associated with short-term leases and leases of low-value assets are not recognized as right-of-use assets or lease liabilities but are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets include IT-equipment and small items of office furniture.\n\n​\n\nContracts may contain both lease and non-lease components. For leases of properties, the Company allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. However, for leases of vehicles, the Company has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.\n\n​\n\nm.    Joint Arrangements\n\n​\n\nJoint arrangements are arrangements of which the Company has joint control, established by contracts requiring unanimous consent for decisions about the relevant activities. The Company applies IFRS 11 to all joint arrangements and classifies them as either joint operations or joint ventures, depending on the contractual rights and obligations of each investor.\n\nInvestments in joint ventures are accounted for using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures. Under the equity method, the investment is initially recognized at cost or at fair value in case of a retained interest following a loss of control of a subsidiary. Subsequently, the carrying amount is adjusted to recognize the Company’s share of the joint venture’s post-acquisition profit or loss and other comprehensive income. Distributions received from the joint venture reduce the carrying amount of the investment.\n\n​\n\nAt each reporting date, the Company assesses whether there is objective evidence that the investment is impaired.\n\n​\n\nCommencing October 2025, following the transaction described in notes 16 and 17, the Company’s interest in THI is classified as a joint venture (jointly controlled with Cumberland) and is accounted for using the equity method as described above.\n\n​\n\nn.    Loss of Control\n\n​\n\nWhen the Company loses control of a subsidiary, it derecognizes the assets and liabilities of the former subsidiary. The Company recognizes the fair value of the consideration received, if any, and any retained interest in the former subsidiary at its fair value at the date control is lost. Any resulting gain or loss is recognized in profit or loss and includes the remeasurement of any retained interest to fair value. See note 16 for further information regarding the loss of control in THI.\n\n​\n\no.    Discontinued Operations\n\n​\n\nF-15\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nA discontinued operation is a component of the Company that has been disposed of, and represents a separate major line of business. Results of discontinued operations are presented separately in the consolidated statements of comprehensive income (loss) (See note 16). Comparative information for prior periods is reclassified to reflect the results of the discontinued operation as if it had been discontinued from the start of the earliest period presented.\n\n​\n\np.    New international financial reporting standards, amendments to standards and new interpretations:\n\n​\n\nIFRS 18, Presentation and Disclosure in the Financial Statements\n\nThis standard replaces IAS 1, “Presentation of Financial Statements.” As part of the new disclosure requirements, companies will be required to present new defined subtotals in the statement of profit or loss, including operating profit and profit before financing and tax. In addition, items in the statement of profit or loss will be classified into defined categories: operating, investing, financing, income taxes and discontinued operations. The standard also includes a requirement to provide separate disclosure regarding the use of management-defined performance measures, as well as principles for the grouping and disaggregation of items in the financial statements and the notes thereto. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with an option for early adoption. The standard requires retrospective application, including the presentation of comparative information. The Company has not early adopted this standard and is currently evaluating the potential impact of IFRS 18 on its consolidated financial statements and disclosures.\n\n​\n\n**NOTE 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS:**\n\n​\n\nThe preparation of financial statements requires management to make estimates which, by definition, will seldom equal the actual results and will affect the reported amounts in the Company’s consolidated financial statements and the accompanying notes. Some of the policies described in note 2 of the Company’s consolidated financial statements involve a high degree of judgment or complexity. The Company believes that the most critical accounting policies and significant areas of judgment and estimation are in:\n\n​\n\n•Recognition and measurement of allowance for rebates and patient discount programs.\n\n•Impairment reviews of intangible research and development assets.\n\n​\n\n​\n\n**Recognition and measurement of allowance for rebates and patient discount programs**\n\n​\n\nThe Company offers various rebate and patient discount programs, which result in discounted prescriptions to qualified patients. These rebates and discounts, provided to wholesalers and patients, are accounted for as variable consideration, and recognized as a reduction in revenue, for which unsettled amounts are accrued. Rebate allowances are calculated based on historical and estimated utilization at revenue recognition.  \n\n​\n\nThe main estimates used in recognizing and measuring these allowances relate to the amount of products sold to customers not yet prescribed to patients (units “in the channel”) and the projected duration of selling these units. The Company periodically evaluates its estimates against actual results and, if necessary, updates the estimates accordingly.\n\n​\n\nF-16\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**Impairment reviews of intangible R&D assets**\n\n​\n\nThe Company reviews annually or when events or changes in circumstances indicate the carrying value of the R&D assets may not be recoverable.\n\n​\n\nWhen and if necessary, an impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is determined using discounted cash flow calculations where the asset’s expected post-tax cash flows are risk-adjusted over their estimated remaining useful economic life. The risk-adjusted cash flows are discounted using the estimated Company’s post-tax weighted average cost of capital (“WACC”) which is 17.2%.\n\n​\n\nThe main estimates used in calculating the recoverable amount include: outcome of the therapeutic candidates R&D activities; probability of success in gaining regulatory approval, size of the potential market and the Company’s asset’s specific share in it; amount and timing of projected future cash flows and the Company’s main interest rate risk during the periods.\n\n​\n\nIn the years presented in these financial statements, there were no impairments recorded for intangible R&D assets.\n\n​\n\n​\n\n**NOTE 4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT:**\n\n​\n\na.Financial risk management:\n\n​\n\n1)    Financial risk factors\n\n​\n\nThe Company’s faces various financial risks: market risks (including foreign exchange and interest risks), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s results of operations and financial position.\n\n​\n\nRisk management is performed by the Chief Financial Officer of the Company who identifies and evaluates financial risks in close cooperation with the Company’s Chief Executive Officer.\n\n​\n\nThe Company’s finance department is responsible for carrying out financial risk management activities in accordance with policies approved by its BoD. The BoD provides general guidelines for overall financial risk management, as well as policies dealing with specific areas, such as exchange rate risk, interest rate risk, credit risk, use of financial instruments, and investment of excess cash. In order to minimize market risk and credit risk, the Company invests the majority of its cash balances in low-risk investments, such as highly rated bank deposits with terms of up to one-year term with exit points.\n\n​\n\n(a)   Market risks\n\n​\n\nThe Company may face foreign exchange risk due to payments and investments in currencies other than the U.S. dollar, its functional currency. The Company manages the foreign exchange risk by aligning its liquidity currencies with the currencies of expected expenses, based on projected cash flows. A 5% appreciation of the U.S. dollar against the NIS, assuming all other variables remained constant, would have resulted in a negligible change in expenses across all the reported years, indicating immaterial foreign exchange risks.\n\n​\n\nF-17\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n(b)  Credit risk\n\n​\n\nCredit risk arises mainly from cash and cash equivalents, bank deposits, restricted cash, and trade and other receivables. The Company estimates that since the liquid instruments are mainly invested with highly rated institutions, the credit and interest risks associated with these balances are low.\n\n​\n\nFollowing the transfer of the Talicia®-related operations in October 2025 (see notes 16 and17), the credit risk previously associated with the Company’s U.S. commercial operations and related trade receivables has been substantially reduced, as those operations were transferred to THI and are presented as discontinued operations. As of December 31, 2025, credit risk from receivables primarily relates to amounts due from THI in connection with inventory sold to THI as part of the transactions. No loss allowance was recorded as of December 31, 2025.\n\n​\n\n(c)   Liquidity risk\n\n​\n\nPrudent liquidity risk management requires maintaining sufficient cash or the availability of funding through an adequate amount of committed credit facilities. Management monitors rolling forecasts of the Company’s liquidity reserve (comprising of cash, cash equivalents and bank deposits). This is generally carried out based on the expected cash flow in accordance with practices and limits set by the management of the Company.\n\n​\n\nThe Company has entered into an equity line of credit  arrangements, which provides it with the ability to issue shares to an investor, subject to certain conditions. As of December 31, 2025, a portion of this facility remains available for use. These arrangements represents an additional potential source of liquidity for the Company. For further details, see notes 19 (d) and 19 (e).\n\n​\n\nFor the year ended December 31, 2025, the Company generated revenues primarily from commercialization activities classified within discontinued operations. Following the transfer of the Talicia®-related operations in October 2025 (see notes 16 and 17), the Company’s revenue-generating commercialization activities are no longer part of continuing operations. As a result, the Company’s continuing operations are primarily focused on research and development activities and do not currently generate sufficient revenues to cover operating expenses. Accordingly, this gives rise to liquidity risk and raises significant doubt about the Company’s ability to continue as a going concern (see Note 1).\n\n​\n\nThe tables below break down the Company’s financial liabilities into relevant maturity groupings based on their contractual and estimated maturities. The amounts disclosed in the tables are the contractual and estimated undiscounted cash flows.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Contractual maturities of financial liabilities********As of  December 31, 2025**\n\n**Less than 1 year**\n\n​\n\n**2-5 years**\n\n​\n\n**More than 5 years**\n\n​\n\n**Total contractual cash flows**\n\n​\n\n**Carrying amount**\n\n​\n\n**U.S. Dollars in Thousands**\n\nAccount payable\n\n731\n\n​\n\n—\n\n​\n\n—\n\n​\n\n731\n\n​\n\n731\n\nLease liabilities\n\n246\n\n​\n\n1,058\n\n​\n\n22\n\n​\n\n1,326\n\n​\n\n1,070\n\nAccrued expenses and other  liabilities\n\n12,472\n\n​\n\n—\n\n​\n\n—\n\n​\n\n12,472\n\n​\n\n12,472\n\nRoyalty obligation\n\n—\n\n​\n\n137\n\n​\n\n1,040\n\n​\n\n1,177\n\n​\n\n500\n\nTotal\n\n13,449\n\n​\n\n1,195\n\n​\n\n1,062\n\n​\n\n15,706\n\n​\n\n14,773\n\nF-18\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**Contractual maturities of financial liabilities********As of  December 31, 2024**\n\n**Less than 1 year**\n\n​\n\n**2-5 years**\n\n​\n\n**More than 5 years**\n\n​\n\n**Total contractual cash flows**\n\n​\n\n**Carrying amount**\n\n​\n\n**U.S. Dollars in Thousands**\n\nAccounts payable\n\n1,168\n\n​\n\n—\n\n​\n\n—\n\n​\n\n1,168\n\n​\n\n1,168\n\nLease liabilities\n\n365\n\n​\n\n3\n\n​\n\n—\n\n​\n\n368\n\n​\n\n356\n\nAccrued expenses and other current liabilities\n\n9,993\n\n​\n\n—\n\n​\n\n—\n\n​\n\n9,993\n\n​\n\n9,993\n\nRoyalty obligation\n\n—\n\n​\n\n137\n\n​\n\n1,246\n\n​\n\n1,383\n\n​\n\n500\n\nTotal\n\n11,526\n\n​\n\n140\n\n​\n\n1,246\n\n​\n\n12,912\n\n​\n\n12,018\n\n​\n\n2)    Capital risk management\n\n​\n\nThe Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders, maintain optimal capital structure, and to reduce the cost of capital.\n\n​\n\n3)    Fair value estimation\n\n​\n\nThe carrying amount of cash equivalents, restricted cash, bank deposits, receivables, account payables and accrued expenses approximate their fair value either due to their short-term characteristics. or, for certain obligations, because they are measured at the present value of future cash flows.\n\n​\n\nThe fair value of the Royalty obligation balance is not materially different from its carrying amount.\n\n​\n\nThe following table presents the change in derivative liabilities measured at level 3 for the year ended December 31, 2025, and December 31, 2024:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Derivative**** ****financial instruments**\n\n​\n\n**Year Ended December 31, **\n\n​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n \n\n​\n\n**U.S. dollars in thousands**\n\n​\n\nBalance at beginning of the period\n\n1,421\n\n​\n\n741\n\n​\n\nInitial recognition of financial liability\n\n—\n\n​\n\n9,860\n\n​\n\nInitial recognition of unrecognized day 1 loss\n\n—\n\n​\n\n(952)\n\n​\n\nExcercise of financial liability  \n\n(141)\n\n​\n\n—\n\n​\n\nFair value adjustments recognized in profit or loss and recognition of day 1 loss\n\n(1,280)\n\n​\n\n(8,228)\n\n​\n\n**Balance at end of the period**\n\n—\n\n​\n\n1,421\n\n​\n\n​\n\n​\n\nF-19\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nFinancial Instruments:\n\n​\n\ns\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**U.S. dollars in thousands**\n\n​\n\n​\n\n​\n\n​\n\n**Non-cash changes**\n\n​\n\n​\n\nJanuary 1, 2025\n\nPrincipal and interest payments (includes credits)\n\nAddition during the year\n\nDecreases during the year\n\nInterest expense\n\nForeign exchange movement\n\n12/31/2025\n\nPayables in respect to the global termination agreement (See note 15(5)(b))\n\n6,871\n\n—\n\n​\n\n(1,395)\n\n209\n\n—\n\n5,685\n\nLease liabilities\n\n356\n\n(447)\n\n1,048\n\n—\n\n18\n\n95\n\n1,070\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Non-cash changes**\n\n​\n\n​\n\nJanuary 1, 2024\n\nPrincipal and interest payments\n\nAddition during the year\n\nDecreases during the year\n\nInterest expense\n\nForeign exchange movement\n\n12/31/2024\n\nPayables in respect to the global termination agreement (See note 15(6)(b))\n\n—\n\n—\n\n11,443\n\n(4,750)\n\n178\n\n—\n\n6,871\n\nLease liabilities\n\n1,173\n\n(691)\n\n—\n\n(188)\n\n55\n\n7\n\n356\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Non-cash changes**\n\n​\n\n​\n\nJanuary 1, 2023\n\nPrincipal and interest payments\n\nAddition during the year\n\nDecreases during the year\n\nInterest expense\n\nForeign exchange movement\n\n12/31/2023\n\nBorrowing\n\n115,216\n\n—\n\n—\n\n(115,216)\n\n—\n\n—\n\n—\n\nPayable in respect of intangible assets purchase\n\n11,157\n\n(6,555)\n\n—\n\n(4,602)\n\n—\n\n—\n\n—\n\nLease liabilities\n\n7,475\n\n(1,529)\n\n270\n\n(5,413)\n\n367\n\n3\n\n1,173\n\n​\n\n​\n\n**NOTE 5 - CASH AND CASH EQUIVALENTS:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nCash in bank\n\n​\n\n1,348\n\n​\n\n1,882\n\nShort-term bank deposits\n\n \n\n2,623\n\n \n\n2,735\n\n​\n\n \n\n3,971\n\n \n\n4,617\n\n​\n\n​\n\n​\n\n**NOTE****6****- PREPAID EXPENSES AND OTHER RECEIVABLES:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nAdvance to suppliers\n\n​\n\n78\n\n​\n\n77\n\nReceivable from the joint venture partner (see note 16(a))\n\n​\n\n1,243\n\n​\n\n—\n\nGovernment institutions\n\n \n\n379\n\n \n\n334\n\nPrepaid expenses and others\n\n \n\n778\n\n \n\n693\n\n​\n\n \n\n2,478\n\n \n\n1,104\n\n​\n\n​\n\n​\n\n**NOTE**7**- INVENTORY:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n​\n\n** U.S. dollars in thousands**\n\nRaw materials\n\n​\n\n—\n\n​\n\n513\n\nWork in progress\n\n​\n\n—\n\n​\n\n308\n\nF-20\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nFinished goods\n\n \n\n—\n\n \n\n2,830\n\n​\n\n \n\n—\n\n \n\n3,651\n\n​\n\nDuring the years ended December 31, 2025, 2024, and 2023, the Company recognized amounts of $2 million , $3.4 million, and $4.4 million respectively, in inventory cost as part of cost of revenues. These amounts are presented in the consolidated statements of comprehensive income (loss) as part of the results from discontinued operations.\n\n​\n\nThe amounts recognized include write-downs of inventories to net realizable value amounted to $0.2 million in 2025, $0.2 million in 2024, and $1.3 million in 2023.\n\n​\n\nAs of December 31, 2025, following the completion of the THI transactions (see notes 16 and17), the Company no longer holds inventory. All inventory was sold to THI as part of the transactions.\n\n​\n\n​\n\n**NOTE 8 - FIXED ASSETS:**\n\n​\n\nThe composition of assets and accumulated depreciation are grouped by major classifications:\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**Cost**\n\n​\n\n**Accumulated depreciation**\n\n​\n\n**Depreciated balance**\n\n​\n\n​\n\n**December 31**\n\n​\n\n**December 31**\n\n​\n\n**December 31**\n\n​\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nOffice furniture and equipment (including computers)\n\n \n\n1,073\n\n \n\n1,068\n\n \n\n1,046\n\n \n\n988\n\n \n\n27\n\n \n\n80\n\nLeasehold improvements\n\n \n\n379\n\n \n\n379\n\n \n\n358\n\n \n\n324\n\n \n\n21\n\n \n\n55\n\n​\n\n \n\n1,452\n\n \n\n1,447\n\n \n\n1,404\n\n \n\n1,312\n\n \n\n48\n\n \n\n135\n\n​\n\n​\n\n​\n\n**NOTE 9 - LEASES:**\n\n​\n\nAmounts recognized in the consolidated statements of financial position:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31,**\n\n​\n\n**2025**\n\n​\n\n**2024**\n\n​\n\n**U.S dollars in thousands**\n\n**Right-of-use assets:**\n\n​\n\n​\n\n​\n\nProperties\n\n1,057\n\n \n\n302\n\nVehicles\n\n—\n\n \n\n—\n\n​\n\n1,057\n\n \n\n302\n\n**Lease liabilities:**\n\n  ​\n\n \n\n  ​\n\nCurrent\n\n170\n\n​\n\n353\n\nNon-current\n\n900\n\n \n\n3\n\n​\n\n1,070\n\n \n\n356\n\nFor the year ended December 31, 2025, there were additions of $1 million and there were no additions to the right-of-use assets and lease liabilities during the year ended 2024. There were no decreases in lease liability during the year ended December 31, 2025, and for the year ended December 31, 2024 there were decreases of $0.2 million (With corresponding decrease in right of use asset in an amount of $0.2 million in the year ended December 31, 2024).\nIn December 2025, the Company signed an amendment to its existing lease agreement, pursuant to which the lease term was extended and the leased premises were reduced.\nThe amended lease term expires on January 31, 2031. The Company has an option to extend the lease for an additional five-year period; however, this option was not considered in determining the lease term.\n\n​\n\nAmounts recognized in the consolidated statements of comprehensive loss:\n\nProperties\n\n293\n\n \n\n470\n\nVehicles\n\n—\n\n​\n\n51\n\n​\n\n293\n\n​\n\n521\n\nInterest expense\n\n18\n\n​\n\n55\n\nForeign exchange differences\n\n95\n\n​\n\n7\n\nExpenses relating to short-term leases and leases of low-value assets are immaterial.\n\n​\n\n​\n\n​\n\nF-21\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nThe total cash outflow for leases in 2025 and 2024 was $0.4 million and $0.7 million, respectively.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**NOTE 10 - INTANGIBLE ASSETS:**\n\n​\n\n**a.    **The Company’s intangible assets represent in-licenses of R&D assets. The changes in those assets are as follows:\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n** **\n\n**U.S. dollars in thousands**\n\n​\n\n​\n\n**  ​**\n\n​\n\n**  ​**\n\n**R&D assets:**\n\n​\n\n​\n\n​\n\n​\n\n**Cost:**\n\n​\n\n​\n\n​\n\n​\n\nBalance at beginning of year\n\n​\n\n5,757\n\n​\n\n5,757\n\nDerecognition following transfer of Talicia® activity to THI\n\n​\n\n(466)\n\n​\n\n—\n\nBalance at end of year\n\n​\n\n5,291\n\n​\n\n5,757\n\n**Accumulated amortization:**\n\n​\n\n​\n\n​\n\n​\n\nBalance at beginning of year\n\n​\n\n(210)\n\n​\n\n(179)\n\nAmortization charges\n\n​\n\n(25)\n\n​\n\n(31)\n\nDerecognition following transfer of Talicia® activity to THI\n\n​\n\n235\n\n​\n\n—\n\nBalance at end of year\n\n​\n\n—\n\n​\n\n(210)\n\n​\n\n​\n\n5,291\n\n​\n\n5,547\n\n**Commercialization assets:**\n\n​\n\n​\n\n​\n\n​\n\n**Cost:**\n\n​\n\n​\n\n​\n\n​\n\nBalance at beginning of year\n\n​\n\n—\n\n​\n\n11,788\n\nDisposal during the year\n\n​\n\n—\n\n​\n\n(11,788)\n\nBalance at end of year\n\n​\n\n—\n\n​\n\n—\n\n**Accumulated impairments and amortization:**\n\n​\n\n​\n\n​\n\n​\n\nBalance at beginning of year\n\n​\n\n—\n\n​\n\n(11,788)\n\nDisposal during the year*\n\n​\n\n—\n\n​\n\n11,788\n\nBalance at end of year\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n5,291\n\n​\n\n5,547\n\n​\n\nThe Company estimated the useful life of the assets related to Talicia® at approximately 15 years from marketing approval date November 2019. The amortization expenses were recognized under cost of revenues and are presented in the consolidated statements of comprehensive income (loss) as part of the results from discontinued operations. In October 2025, the Company derecognized the  Talicia® intangible asset following the transfer of the Talicia® activity to THI as part of a loss of control transaction. The derecognition reflects the net carrying amount of the transferred assets (see also notes 16,17).\n\nSee also note 15 (5) regarding the transfer of the Company’s rights in Movantik® to HCRM in exchange for all the Company’s debt obligations under the Credit Agreement with HCRM.\n\n*In July 2024, the Company terminated its license agreement with Cosmo Technologies Ltd. (“Cosmo”) for Aemcolo® (see note 15(8)), effective October 8, 2024. Following the termination,  the Company derecognized the remaining carrying amounts related to the Aemcolo® intangible asset, including its cost and accumulated amortization and impairment. As the asset had been fully written off as of December 31, 2022, the derecognition had no effect on the Consolidated Statements of Financial Position or Consolidated Statements of Comprehensive Income (Loss).\n\n**NOTE 11 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT:**\n\n​\n\nThe Company’s pension liability and the Company’s liability for payment of severance pay for employees in Israel for whom the liability is within the scope of Section 14 of the Severance Pay Law is covered by ongoing deposits with defined contribution plans. The amounts deposited are not included in the Statements of Financial Position.\n\n​\n\nF-22\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nThe amounts charged as an expense with respect to defined contribution plans in 2025, 2024, and 2023 were $157,000, $156,000, and $197,000, respectively.\n\n​\n\n**NOTE 12- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nAccrued expenses*\n\n \n\n3,608\n\n \n\n2,195\n\nOther current liabilities**\n\n​\n\n2,078\n\n​\n\n503\n\nPayable in respect to the Global Termination Agreement\n\n​\n\n5,685\n\n​\n\n6,693\n\nEmployees and related liabilities\n\n \n\n543\n\n \n\n510\n\nGovernment institutions\n\n \n\n102\n\n \n\n92\n\n​\n\n \n\n12,016\n\n \n\n9,993\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* Accrued expenses expected to be settled beyond twelve months from the reporting date amount to approximately $0.5 million as of December 31, 2025 and are presented as non-current liabilities.\n\nTo date, the Company has finalized formal agreements with a limited number of counterparties to reschedule payments over a period of up to 24 months. Accordingly, the portion of these specific obligations due beyond 12 months from the reporting date has been classified as non-current liabilities.\n\n​\n\n** Includes approximately $1.2 million related to the supplier reimbursement arrangement described in note 16(a), which is presented on a gross basis with a corresponding receivable in prepaid expenses and other receivables.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**NOTE 13****-****ALLOWANCE FOR DEDUCTIONS FROM REVENUES:**\n\n​\n\nThe following table shows the movement of the allowance for deductions from revenue:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Rebates and patient discount programs**\n\n​\n\n**Product returns**\n\n​\n\n**Total**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nAs of January 1, 2025\n\n \n\n7,863\n\n \n\n1,425\n\n​\n\n9,288\n\nIncreases\n\n​\n\n4,854\n\n​\n\n126\n\n​\n\n4,980\n\nDecreases (utilized)\n\n \n\n(7,024)\n\n​\n\n(1,216)\n\n​\n\n(8,240)\n\nAdjustments\n\n​\n\n(146)\n\n​\n\n422\n\n​\n\n276\n\nAs of December 31, 2025\n\n \n\n5,547\n\n \n\n757\n\n​\n\n6,304\n\n​\n\n​\n\n**Rebates and patient discount programs**\n\n​\n\n**Product returns**\n\n​\n\n**Total**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nAs of January 1, 2024\n\n \n\n8,087\n\n \n\n2,567\n\n​\n\n10,654\n\nIncreases\n\n​\n\n9,712\n\n​\n\n259\n\n​\n\n9,971\n\nDecreases (utilized)\n\n \n\n(10,423)\n\n​\n\n(2,500)\n\n​\n\n(12,923)\n\nAdjustments\n\n​\n\n487\n\n​\n\n1,099\n\n​\n\n1,586\n\nAs of December 31, 2024\n\n \n\n7,863\n\n \n\n1,425\n\n​\n\n9,288\n\n​\n\n​\n\n**Rebates and patient discount programs**\n\n​\n\n**Product returns**\n\n​\n\n**Total**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nAs of January 1, 2023\n\n \n\n46,636\n\n \n\n1,234\n\n​\n\n47,870\n\nF-23\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nIncreases\n\n​\n\n21,225\n\n​\n\n859\n\n​\n\n22,084\n\nDecreases (utilized)\n\n \n\n(60,498)\n\n​\n\n(2,969)\n\n​\n\n(63,467)\n\nAdjustments\n\n​\n\n724\n\n​\n\n3,443\n\n​\n\n4,167\n\nAs of December 31, 2023\n\n \n\n8,087\n\n​\n\n2,567\n\n​\n\n10,654\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**NOTE 14 – BORROWING:**\n\n​\n\n **Credit agreement with HCRM**\n\n​\n\nOn February 23, 2020 (“Closing Date”), RedHill Inc. entered into a credit agreement and certain security documents (the “Credit Agreement”) with HCRM.\n\n​\n\nThe Credit Agreement contained certain customary affirmative and negative covenants, including a financial covenant requiring RedHill Inc. to maintain a minimum level of cash, as well as a covenant requiring it to maintain minimum net sales. In 2022, the Company did not maintain certain covenants in the Credit Agreement. Subsequently, on February 2, 2023, the Company and RedHill Inc. reached an agreement with HCRM resulting in the extinguishment of all of RedHill Inc. debt obligations (including all principal, interest, revenue interest, prepayment premiums and exit fees) under the Credit Agreement in exchange for the transfer of its rights in Movantik® to Movantik Acquisition Co., an affiliate of HCRM. On July 15, 2024, the Company and RedHill Inc signed a Global Termination Agreement with Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC, affiliates of HCRM. This agreement terminates the Credit Agreement from February 23, 2020, which was amended on February 2, 2023. See also note 15(5).\n\n​\n\n​\n\n**NOTE 15 - COMMITMENTS:**\n\n​\n\n**Agreements to purchase intellectual property and commercial products:**\n\n​\n\n1)   On August 11, 2010, the Company acquired intellectual property for three gastrointestinal therapeutic candidates through an asset purchase agreement with a publicly-traded Australian company. Pursuant to the asset purchase agreement, as amended, the Company paid the Australian company an initial amount of $500,000 and undertook to pay future payments in the range of 7% - 20% from the Company’s revenues that may be generated from the sale and sublicense of the therapeutic candidates, less certain deductible amounts, as detailed in the agreement. Such potential payments are due until termination or expiration of the last of the patents transferred to the Company pursuant to the agreement (each on a product-by-product basis).  \n\n​\n\nThrough December 31, 2025, the Company has paid the Australian company in total $1.5 million.\n\n​\n\n2)   On June 30, 2014, the Company entered into an agreement with a German company that granted the Company the exclusive worldwide (excluding China, Hong Kong, Taiwan, and Macao) development and commercialization rights to all indications to a therapeutic candidate. Under the terms of the agreement, the Company paid the German company an upfront payment of $1 million and agreed to pay the German company potential tiered royalties, less certain deductible amounts, as detailed in the agreement, ranging from mid-teens and up to 30%. Such potential royalties are due until the later of (i) the expiration of the last to expire licensed patent that covers the product in the relevant country and (ii) the expiration of regulatory exclusivity in the\n\nF-24\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nrelevant country. Through December 31, 2025, the Company has paid the German company only the initial amount mentioned above.\n\n​\n\n3)   On March 30, 2015, the Company entered into an agreement with a U.S.-based private company that granted the Company the exclusive worldwide development and commercialization rights for all indications to a therapeutic candidate, and additional intellectual property rights, targeting multiple oncology, inflammatory and GI indications. Under the terms of the agreement, the Company undertook to pay the U.S. company an initial amount of $1.5 million and an additional amount of $2 million to be paid on a specific date. In addition, the Company undertook to pay up to $2 million in potential development milestone payments, and potential tiered royalties on revenues, less certain deductible amounts starting in the low double-digits, as detailed in the agreement. Such potential royalties are due until the later of (i) the expiration of the last to expire licensed patent that covers the product in the relevant country; and (ii) the expiration of regulatory exclusivity in the relevant country. Through December 31, 2025, the Company paid the U.S. company a total of $3 million.\n\n​\n\nFollowing an amendment to the agreement from February 2018, during December 2018, the Company elected to convert the remaining $0.5 million into increased future potential royalty payments. The liability is adjusted based on the Company's expectations for future royalty payments.  As of December 31, 2025, and December 31, 2024, the Company recognized $0.5 million as a non-current liability for the potential royalty payments.\n\n​\n\n4)   **Movantik**®**acquisition:**\n\n​\n\nEffective April 1, 2020 (the (“Effective Date”), RedHill Inc. entered into an exclusive license agreement with AstraZeneca, granting RedHill Inc. exclusive, worldwide (excluding Europe, Canada) commercialization and development rights to Movantik® (naloxegol).\n\n​\n\nThe total acquisition consideration, including upfront payment, discounted present value of the deferred payment amounted to approximately $65 million amortized over 12.5 years from the effective date.\n\n​\n\nSee also note 15 (5) regarding the transfer of the Company’s rights in Movantik® to HCRM in exchange for all the Company’s debt obligations under the Credit Agreement with HCRM.\n\n​\n\n5) **Movantik Transactions:**\n\n​\n\na)On February 2, 2023, the Company and RedHill Inc. reached an agreement with HCRM resulting in the extinguishment of all of RedHill Inc. debt obligations (including all principal, interest, revenue interest, prepayment premiums and exit fees) under the Credit Agreement in exchange for the transfer of its rights in Movantik® to Movantik Acquisition Co., an affiliate of HCRM. HCRM assumed substantially all post-closing liabilities, and RedHill Inc. retained substantially all pre-closing liabilities relating to Movantik®. As part of the parties' arrangement, and to ensure continuous patient care, RedHill Inc. also provided nine months of paid transition services. HCRM retained security interests in certain of the Company’s assets until substantially all pre-closing liabilities of Movantik® have been paid or other specific conditions are met. Following the agreement, the $16 million held as restricted cash under the Credit Agreement was deposited into an escrow account to pay pre-closing liabilities of Movantik®.\n\nAccounting treatment:\n\nF-25\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nThe gains from transferring Movantik® rights and extinguishment of debt obligations include: (1) the gain from the sale of Movantik®, reflecting the difference between the carrying value and fair value of the assets transferred, and presented in the consolidated statements of comprehensive income (loss) as part of the results from discontinued operations in the amount of $35.5 million and (2) the gain from the debt extinguishment, reflecting the difference between the carrying amount (the amortized cost) of the financial liability to HCRM and the fair value of the assets transferred, presented as financial income as part of the results from discontinued operations in the amount of $20.6 million.\n\n​\n\nTo determine the fair value of the rights to Movantik®, the Company based its estimate on the terms outlined in a non-binding term sheet with a third party which ultimately did not materialize, which included a cash payment of $95 million for the rights to Movantik®.\n\n​\n\nThe fair value of nonmonetary assets relating to Movantik® transferred to settle debt obligations was used to measure debt extinguishment gain. The service fees relating to the transition services are presented in the Company’s consolidated statement of comprehensive income (loss) as other income as part of the results from discontinued operations.\n\n​\n\nb)On July 15, 2024, the Company and RedHill Inc signed a Global Termination Agreement with Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC, affiliates of HCRM (the “Global Termination Agreement”). This agreement terminates the Credit Agreement dated February 23, 2020, as amended on February 2, 2023, which included a lien on Talicia® and Aemcolo® assets and established an escrow account with restricted funds for Movantik® liabilities (for further details, see note 1(a)(2) above and notes 14(a), 15(4) and 15(5).\n\nThe Global Termination Agreement terminated all existing credit ties, removing the aforementioned lien and restoring control over the restricted escrow funds and settlement of trade balances resulting from the transition services. In connection with the agreement, the Company received approximately $9.9 million in cash for the settlement of liabilities related to Movantik®, that were allocatable to HCRM and its affiliates under their agreements with the Company. As the cash received was less than the total net amount of these liabilities (approximately $12.2 million), the Company recognized a loss of approximately $2.3 million resulting from the termination agreement, presented under other expenses in the Consolidated Statements of Comprehensive Income (Loss) as part of the results from discontinued operations. In addition, the Company gained full control over $0.7 million previously held in the restricted account.\n\n​\n\n6)   \n\nIn October 2021, the Company entered into a license agreement with Gaelan Medical Trade LLC (\"Gaelan\") for Talicia® in the United Arab Emirates (UAE). The Company received a $2 million upfront payment in April 2022 and is eligible for additional milestone payments and tiered royalties up to mid-teens on net sales of Talicia® in the UAE. Gaelan is responsible for obtaining and maintaining regulatory approvals, and any and required clinical or other studies. In March 2022, the agreement was amended to Gaelan to sublicense or assign its rights and obligations.\n\n​\n\nA related supply agreement designates the Company (via a third party CMO) as exclusive manufacturer and supplier of Talicia® to Gaelan during the term of the agreement.\n\n​\n\nF-26\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nThe Company accounted for the license and manufacturing and supply services as distinct performance obligations, mainly due to the manufacturing not being specialized or unique and can be manufactured by others (i.e. – the good or service is capable of being distinct), as well as due to that the license agreement and the manufacturing and supply services do not significantly affect each other (i.e. – the promise is distinct within the context of the contract).\n\n​\n\nIn August 2024, Gaelan made its first commercial sale in the UAE, triggering a $0.5 million milestone payment due in August 2025. The Company recognized this milestone as revenue in the Consolidated Statements of Comprehensive Income (Loss) for the year ended 2024, along with royalty revenues from sales made during the year. Revenue recognized in connection with this arrangement is included in discontinued operations (see Note 26).\n\n​\n\nIn September 2025, the Company and Gaelan entered into an amendment to the license agreement, pursuant to which the licensed territory was expanded to include additional countries in the Gulf Cooperation Council (“GCC”), subject to the Company’s approval and other contractual conditions. The amendment provides for additional non-refundable upfront and milestone payments, including aggregate fixed payments of $0.5 millions payable regardless of regulatory approvals or commercialization outcomes, as well as additional contingent milestone payments and continued minimum tiered royalties on net sales across the expanded territory. Certain of the milestone and royalty-related payments are subject to regulatory approvals, commercial launches, and the passage of time.\n\n​\n\nIn connection with the THI transactions (see notes 16 and 17), the Company transferred to THI its rights to all future proceeds and receivables under this arrangement, while retaining certain receivables existing as of the transaction date.\n\n​\n\n7)   In March 2022, the Company entered into an exclusive license agreement with Kukbo Co. Ltd (\"Kukbo\") for oral opaganib for the treatment of COVID-19 in South Korea. Under the terms of the license agreement, the Company is entitled to an upfront payment of $1.5 million as well as milestone payments and royalties on net sales. Kukbo is entitled under the agreement to the exclusive rights to opaganib in South Korea for COVID-19.\n\n​\n\nFollowing Kukbo’s default in paying the Company $5 million under a subscription agreement, dated October 25, 2021, in exchange for ADSs, and the $1.5 million due under the license agreement as described above, the Company filed a lawsuit in NYC against Kukbo in September 2022. Kukbo subsequently filed claims against RedHill.\n\n      ​\n\nIn December 2024, the court granted summary judgment in the Company’s favor, awarding approximately $6.5 million in principal, plus accrued interest at a rate of 9% per annum- amounting to approximately $2.2 million as of December 31, 2025. The court also awarded attorneys’ fees and related amounts, which together with accrued statutory interest amounted to approximately $1.9 million as of December 31, 2025. The summary judgement became final in October 2025, and the attorneys’ fee award subsequently became final in March 2026 after Kukbo did not perfect its appeal. As of December 31, 2025, the Company had not recognized any revenue under the license agreement as the criteria for revenue recognition were not yet met.\n\n​\n\nThe Company is party to a contingency fee agreement with its legal counsel, Haynes and Boone, LLP, as amended on December 29, 2024. Under the amended agreement, the firm is entitled to a double-digit percentage of gross recovery. If no collection is made within six months following a final favorable outcome, which in this case began in March 2026 when the attorneys’ fee award became final and no further appeal remained available, the Company is\n\nF-27\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nrequired to pay such firm its standard fees incurred since entering into the contingency fee agreement. If collections are made thereafter, the Company is required to pay additional amounts such that the total amount paid equals the contractual contingent fee.\n\n​\n\n       Following the finalization of the summary judgment with respect to the principal award in October 2025, the Company concluded that a present obligation existed in respect of the minimum amount payable under the contingent fee agreement, since a favorable outcome was no longer contingent. Accordingly the Company recognized in 2025 an expense and corresponding accrual of approximately $1.4 million.\n\n​\n\nAny additional payments contingent upon future collections will be recognized when the relevant conditions are met.\n\n​\n\n8)   In July 2024, the Company terminated its license agreement with Cosmo for Aemcolo®, a treatment for traveler’s diarrhea. The agreement, initially dated October 17, 2019, was officially terminated on October 8, 2024. Upon termination, the Company ceased all commercialization of Aemcolo® and all rights under the agreement reverted to Cosmo.\n\n​\n\n9)\n\nOn February 24, 2025, the Company entered into an exclusive license agreement with Hyloris Pharmaceuticals SA (“Hyloris”) for the development and commercialization of RHB-102 (Bekinda®) in all territories outside the United States, Canada and Mexico. Under the agreement, the Company received a payment of $0.1 million and is entitled to minimum annual payments. In addition, the Company is entitled to receive up to $60 million in potential milestone payments contingent upon achieving specified commercial targets, and tiered royalties of up to the mid-20% on net sales, net of certain cost recoupments. See note 21.\n\n​\n\n​\n\n**NOTE 16 -****DISCONTINUED OPERATIONS - TALICIA HOLDINGS INC. TRANSACTION:**\n\n​\n\nA.**Description of the Transaction and Loss of Control**\n\nOn October 17, 2025 (the “Closing Date”), the Company completed a strategic transaction, following an investment by Cumberland in exchange for a 30% equity interest. As part of the transaction and prior to its completion, the Company formed THI and transferred to THI substantially all Talicia®-related business activities, including (i) Talicia® intellectual property rights and certain manufacturing arrangements, (ii) prepaid regulatory fees, and (iii) rights to future proceeds and receivables under the Gaelan arrangement, while retaining certain receivables existing as of the transaction date (see note 15). The transfer also included the Talicia® U.S. commercialization operations and related employees.\n\n​\n\nOn the Closing Date, THI received a total equity investment of $4  million from Cumberland in exchange for shares representing a 30% equity interest in THI. Of this amount, $2.0 million was received at closing, and the remaining $2.0 million is payable within 12 months of the Closing Date.\n\nFollowing the transaction, the Company holds a 70% equity interest in THI. However, based on the terms of the Shareholders’ Agreement and the Exclusive Joint Commercialization Agreement, it was determined that the Company lost unilateral control over THI.\n\n​\n\nUnder the Co-Commercialization Agreement, the Company remains obligated to make certain supplier payments, while being entitled to reimbursement from Cumberland. Accordingly, the Company recognized the related amounts on a gross basis, as a current liability together with a corresponding receivable.\n\nF-28\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nAs of December 31, 2025, the related balance amounted to $1.2 million, reflected in prepaid expenses and other receivables and in accrued expenses and other current liabilities. This presentation increased both current assets and current liabilities by the same amount and did not affect the Company’s net assets.\n\n​\n\nAccounting treatment:\n\nFollowing completion of the transaction, governance of THI is shared between the Company and Cumberland. Pursuant to Talicia Holdings’ organizational documents and the related stockholders’ and commercialization agreements, substantially all relevant activities, including key operating, strategic and budgetary decisions, require the joint approval of both shareholders through Talicia Holdings’ board of directors and designated joint committees.\n\nAccordingly, although the Company retained a 70% equity interest in Talicia Holdings, it concluded that it no longer controls THI unilaterally and instead shares joint control with Cumberland. As a result, and since the Company has rights to THI’s net assets, THI is accounted for as a joint venture in accordance with IFRS 11.\n\nUpon the loss of control on the Closing Date, the Company deconsolidated THI and recognized its retained 70% investment at fair value. The fair value of the retained investment was determined based on the implied pre-money valuation of THI derived from Cumberland’s investment, supported by a discounted cash flow valuation. Goodwill was recognized as part of the initial carrying amount of the investment.Thereafter, the Company’s retained 70% interest in THI is accounted for as an investment in a joint venture under the equity method (see note 17).\n\nAccordingly, the Company’s U.S. commercial operations and the Talicia licensing activites, which represent a separate major line of business, are presented retrospectively as discontinued operations in accordance with IFRS 5. The results of the discontinued operations are presented as a single amount in the consolidated statements of comprehensive income (loss).\n\nB.**Gain on Loss of Control**\n\nThe Company recognized a gain on loss of control of approximately $8 million in connection with the deconsolidation of THI, measured as the difference between (i) the aggregate of the fair value of the consideration and the fair value of the retained 70% interest in THI and (ii) the carrying amount of THI’s net assets derecognized at the date control was lost.\n\nIn connection with the transaction, the Company transferred inventory to THI with a consideration of approximately $4.8 million. Of this amount, $2.0 million was effectively settled at closing through Cumberland’s investment, and the remaining $2.8 million represents an outstanding balance payable by THI and is reflected as part of the Company’s investment in THI as of December 31, 2025.\n\n​\n\n​\n\n​\n\n​\n\n** U.S. dollars in thousands**\n\n**Fair value of the retained interest in THI:**\n\n​\n\nFair value of the 70% equity interest in THI *\n\n8,948\n\nFair value of Inventory transferred from the Company to THI\n\n4,831\n\n**Total fair value of retained interest**\n\n**13,779**\n\n​\n\n​\n\n**Carrying amount of net assets derecognized:**\n\n​\n\nInventory (at cost)\n\n(4,026)\n\nIntangible asset\n\n(232)\n\nReceivables\n\n(1,538)\n\n**Total carrying amount of net assets derecognized**\n\n**(5,796)**\n\n​\n\n​\n\n**Gain on loss of control**\n\n**7,983**\n\n​\n\n​\n\n* Derived from the implied pre-money valuation of THI based on Cumberland's $4.0 million investment for a 30% equity interest.\n\n​\n\n​\n\nF-29\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nC.**Financial Performance of the Discontinued Operation**\n\nThe results of the Company’s U.S. commercial operations and the Talicia licensing activites included in the consolidated statements of comprehensive income (loss) are as follows. Amounts for 2025 include results of the discontinued operation up to the Closing Date (October 17, 2025), together with the gain on loss of control recognized on deconsolidation, which is presented within other income (loss) from discontinued 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**Year Ended December 31, **\n\n​\n\n  ​\n\n​\n\n**2025**\n\n​\n\n**2024**\n\n**  ​ ​ ​**\n\n**2023**\n\n​\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\n**NET REVENUES**\n\n​\n\n​\n\n7,490\n\n​\n\n8,043\n\n​\n\n6,530\n\n**COST OF REVENUES**\n\n​\n\n​\n\n1,977\n\n​\n\n3,193\n\n​\n\n3,459\n\n**GROSS PROFIT**\n\n​\n\n​\n\n5,513\n\n​\n\n4,850\n\n​\n\n3,071\n\n**SELLING AND MARKETING EXPENSES**\n\n​\n\n​\n\n3,315\n\n​\n\n5,950\n\n​\n\n14,756\n\n**GENERAL AND ADMINISTRATIVE EXPENSES**\n\n​\n\n​\n\n2,624\n\n​\n\n4,679\n\n​\n\n10,200\n\n**OTHER INCOME (EXPENSES)***\n\n​\n\n​\n\n8,062\n\n​\n\n(2,359)\n\n​\n\n44,064\n\n**OPERATING INCOME(LOSS)**\n\n​\n\n​\n\n7,636\n\n​\n\n(8,138)\n\n​\n\n22,179\n\n**FINANCIAL INCOME**\n\n​\n\n​\n\n127\n\n​\n\n54\n\n​\n\n20,588\n\n**FINANCIAL EXPENSES**\n\n​\n\n​\n\n112\n\n​\n\n544\n\n​\n\n353\n\n**FINANCIAL INCOME (EXPENSES),**net\n\n​\n\n​\n\n15\n\n​\n\n(490)\n\n​\n\n20,235\n\n**INCOME(LOSS) FROM DISCONTINUED OPERATIONS**\n\n​\n\n​\n\n7,651\n\n​\n\n(8,628)\n\n​\n\n42,414\n\n*Includes a gain recognized upon loss of control of THI in 2025\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nD.**Cash Flow Information of the Discontinued Operation**:\n\nNet cash flows attributable to the discontinued operation 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**Year Ended December 31,**\n\n​\n\n​\n\n  ​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n**2023**\n\n​\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\n**OPERATING ACTIVITIES:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet cash used in operating activities\n\n​\n\n(2,460)\n\n \n\n(434)\n\n​\n\n(18,998)\n\n​\n\nNet cash provided by financing activities\n\n​\n\n—\n\n \n\n474\n\n​\n\n7,815\n\n​\n\nNet cash provided by investing activities\n\n​\n\n1,696\n\n​\n\n—\n\n​\n\n—\n\n​\n\nINCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS\n\n​\n\n(764)\n\n \n\n40\n\n​\n\n(11,183)\n\n​\n\n​\n\n​\n\nE.**Comparative information**:\n\n​\n\nComparative information for the years ended December 31, 2024 and 2023 has been restated to present the Talicia® business as a discontinued operation in accordance with IFRS 5.\n\n​\n\n**NOTE 17- INVESTMENT IN JOINT VENTURE:**\n\n​\n\nA.**Basis of accounting**\n\nFollowing the transaction described in note 16 above, the Company accounts for its retained interest in THI as an investment in a joint venture. The investment is accounted for using the equity method in accordance with IAS 28.\n\nB.**Carrying amount and movements**\n\nThe movement in the carrying amount of the investment in THI was as follows:\n\n​\n\nF-30\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nFair value of retained interest at date of loss of control (Oct 17, 2025)\n\n​\n\n13,779\n\nPayment for  inventory transferred\n\n​\n\n(2,000)\n\nRecognition of receivable from joint venture related to supplier obligations\n\n​\n\n304\n\nShare of loss of THI (from October 17, 2025 to December 31, 2025)\n\n​\n\n(33)\n\nCarrying amount at December 31, 2025\n\n​\n\n12,050\n\n​\n\nThe investment in THI is presented within non-current assets in the consolidated statements of financial position.\n\nC.**Summarised financial information**\n\nThe summarised financial information presented below represents amounts for THI on a 100% basis. The Company’s interest in THI is 70%.\n\nStatement of financial position (100% THI):\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**December 31, **\n\n​\n\n​\n\n**2025**\n\n​\n\n​\n\n** U.S. dollars in thousands**\n\nCurrent Assets*\n\n​\n\n8,534\n\nNon - Current Assets\n\n​\n\n9,910\n\nCurrent Liabilities\n\n​\n\n4,172\n\nNon - Current Liabilities\n\n​\n\n1,537\n\nNet Assets\n\n​\n\n12,735\n\n*includes the reclassification of the stock subscriptions receivable from Cumberland ($1.9 million at its present value as of December 31, 2025) from contra-equity to a receivable\n\nReconciliation to the carrying amount of the investment\n\n​\n\n​\n\n​\n\n**December 31, 2025**\n\n​\n\n** U.S. dollars in thousands**\n\nTHI's net assets (on an IFRS basis, see table above), excluding goodwill\n\n11,179\n\nGoodwill\n\n1,556\n\n**THI's net assets on an IFRS basis, as presented above**\n\n**12,735**\n\nCompany's ownership interest\n\n70%\n\n**Share of THI's net assets accounted for under the equity method**\n\n**8,915**\n\nAdd: Receivable from THI for inventory transferred *\n\n2,831\n\nAdd: Receivable from THI for supplier reimbursement obligations\n\n304\n\n**Total investment in joint venture, as presented on the Consolidated Statements of Financial Position**\n\n**12,050**\n\n​\n\n​\n\n* Represents the Company's receivable from THI for inventory transferred in connection with the formation transaction, expected to be settled from THI's operating cash flows over time.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nF-31\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n​\n\n​\n\n**Summarized statement of profit and loss (100% THI)**\n\n​\n\n**For the period from inception (September 12, 2025) to December 31, 2025**\n\n​\n\n** U.S. dollars in thousands**\n\nRevenue\n\n711\n\n**loss and comprehensive loss for the period**\n\n**(47)**\n\n​\n\n​\n\n*The loss and comprehensive loss above includes the following items required to be separately disclosed under IFRS 12:*\n\n​\n\nDepreciation and amortization\n\n91\n\nInterest income\n\n62\n\nIncome tax benefit\n\n19\n\n​\n\nReconciliation to the share of (profit) loss of joint venture:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**For the period from inception (September 12, 2025) to December 31, 2025**\n\nTHI's loss and comprehensive loss for the period (from statement of profit and loss above)\n\n(47)\n\nCompany's ownership interest\n\n70%\n\n**Company's share of THI's loss, recognized in the Consolidated Statements of Comprehensive Income (Loss)**\n\n**(33)**\n\n​\n\n​\n\n​\n\n​\n\n**NOTE 18 - INCOME TAX:**\n\n​\n\n**a.   Taxation of the Company in Israel:**\n\n​\n\n1)   Measurement of results for tax purposes\n\n​\n\nThe Company elected to compute its taxable income in accordance with Income Tax Regulations (Rules for Accounting for Foreign Investors Companies and Certain Partnerships and Setting their Taxable Income), 1986. Accordingly, the Company’s taxable income or loss is calculated in U.S. dollars.\n\n​\n\nThe results of the Company are measured for tax purposes in accordance with Accounting Principles Generally Accepted in Israel (Israeli GAAP). These financial statements are prepared in accordance with IFRS. The differences between IFRS and Israeli GAAP, both on an annual and a cumulative basis cause differences between taxable results and the results are reflected in these financial statements.\n\n​\n\n2)   Tax rates\n\n​\n\nThe net income of the Company is subject to the Israeli corporate tax rate. Israeli corporate tax rates is 23%.\n\n​\n\n**b.   U.S. subsidiary:**\n\n​\n\nThe Company’s subsidiary is incorporated in the U.S. and is taxed under U.S. tax laws. The applicable corporate tax rate is 21%.  \n\n​\n\nF-32\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nAs a general rule, inter-company transactions between the Israel-resident Company and its U.S-resident subsidiary are subject to the reporting provisions of the Income Tax Regulations, section 85-A, 2006 of the Israeli Tax Ordinance of the Israeli Tax Ordinance.\n\n​\n\n**c**.   **Carryforward losses****:**\n\n​\n\nAs of December 31, 2025, the Company had net operating loss (“NOLs”) carried forward of approximately $323 million. Under Israeli tax laws, carryforward tax losses have no expiration date.\n\n​\n\nAs of December 31, 2025, the U.S. subsidiary had a net operating loss carryforward of approximately $44 million, with no expiration date, but is limited to offset 80% of the net income in the year it is utilized.\n\n​\n\nUnder U.S. tax laws, for NOLs arising after December 31, 2017, the 2017 Act limits a taxpayer’s ability to utilize NOL carryforwards to 80% of taxable income. In addition, NOLs arising after 2017 can be carried forward indefinitely, but carryback is generally prohibited.\n\n​\n\nDeferred tax assets on losses for tax purposes carried forward to subsequent years are recognized if utilization of the related tax benefit against a future taxable income is expected.  The Company has not created deferred taxes on its carryforward losses since their utilization is not expected in the foreseeable future.\n\n​\n\n**d**.   **Deductible temporary differences:**\n\n​\n\nThe amount of cumulative deductible temporary differences, other than carryforward losses (as mentioned in c. above), for which deferred tax assets have not been recognized in the Statements of Financial Position as of December 31, 2025, and 2024, were $3 million and $3 million, respectively. These temporary differences have no expiration dates.\n\n​\n\n**e**.   **Tax assessments:**\n\n​\n\nThe Company has not been assessed for tax purposes since its incorporation. The Company’s tax assessments for 2020 are therefore considered final.\n\n​\n\n**NOTE 19 - SHARE CAPITAL:**\n\n​\n\n**a.  ****Composition:**\n\n​\n\nCompany share capital is composed of shares of NIS 0.01 par value, as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Number of shares**\n\n​\n\n​\n\n**December 31, **\n\n​\n\n  ​ ​ ​\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\nAuthorized ordinary shares (1)\n\n​\n\n159,994,000,000\n\n​\n\n39,994,000,000\n\nAuthorized preferred shares (reserved)\n\n​\n\n6,000,000\n\n​\n\n6,000,000\n\nIssued and paid ordinary shares\n\n \n\n50,923,261,000\n\n \n\n12,899,831,000\n\nIssued and paid – in ADSs term\n\n​\n\n5,092,326\n\n​\n\n1,290,000\n\n​\n\n(1)On May 26, 2025, the annual general meeting of shareholders approved the increase of the authorized share capital of the Company to NIS 1,600,000,000, consisting of (i) 159,994,000,000 Ordinary Shares, NIS 0.01 par value per share, and (ii) 6,000,000 preferred shares, NIS 0.01 par value per share\n\nF-33\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n(2)On March 21, 2024, the extraordinary general meeting of shareholders approved the increase of the authorized share capital of the Company to NIS 400,000,000, consisting of (i) 39,994,000,000 Ordinary Shares, NIS 0.01 par value per share, and (ii) 6,000,000 preferred shares, NIS 0.01 par value per share\n\n(3)On March 23, 2023, the Company changed the ADS ratio from 1 ADS representing 10 ordinary shares to 1 ADS representing 400 ordinary shares. On August 20, 2024, the Company changed the ADS to ordinary share ratio from 1 ADS representing 400 ordinary shares to 1 ADS representing 10,000 ordinary shares. All data denominated in ADS were adjusted for this ratio changes.\n\nb.Through December 31, 2025, the Company sold 890,001 ADSs under its ATM offering program at an average price of $3.85 per ADS, generating net proceeds of approximately $3.3 million, net immaterial issuance expenses\n\nc.On May 14, 2025, the Company and the investors from the April 2024 offering agreed to the exercise of all 85,779 warrants issued in that offering, at a reduced exercise price of $1.50 per ADS (reduced from the prior exercise price of $18.75 per ADS), resulting in gross proceeds of approximately $0.13 million.\n\nd.On June 20, 2025, the Company entered into a committed equity line purchase agreement (the “Any Market Purchase Agreement”) with Alumni Capital LP (“Alumni”), pursuant to which the Company obtained the right, at its sole discretion and subject to certain conditions, to sell up to $10 million of ADSs to Alumni. Sales under the agreement, initiated by the Company through written purchase notices, executed at a price per ADS calculated based on formulas reflecting discounts to prevailing market prices. In addition, the Company may issue prefunded warrants instead of ADSs under certain purchase notices, subject to contractual ownership limitations.\n\nIn connection with the agreement, the Company issued to Alumni as a fee, a commitment warrant to purchase up to 333,333 ADSs at an exercise price of $3.00 per ADS for no consideration. The commitment warrant was accounted as a share-settled share-based payment to Alumni and was carried at initial recognition of the agreement as an immediate expense for the service, recorded in the Consolidated Statements of Comprehensive Loss under financial expenses, with a corresponding adjustment to accumulated deficit.\n\nThe fair value of the warrant was computed using the Black and Scholes option pricing model. The fair value was based on the price of an ADS on June 20, 2025, and based on the following parameters: risk-free interest rates of 4.04% and an average standard deviation of 125.2%. The fair value of the warrant at the grant date was approximately $0.5 million.\n\nIn addition, the Company recognized transactions costs of $0.1 million as a financial expense.\n\nUntil December 31, 2025, the Company made drawings under its Any Market Purchase Agreement with Alumni Capital LP. During this period, the Company issued 2,247,136 ADSs in multiple tranches pursuant to written purchase notices, for total net proceeds of approximately $3.3 million.\n\ne.On December 19, 2025, the Company entered into a Standby Equity Purchase Agreement with Yorkville Advisors Global, LP (“YA”), pursuant to which YA committed to purchase, at the Company’s discretion and subject to certain conditions, up to $25 million of ADSs over a period of up to 36 months.\n\nSales under the agreement are initiated by the Company through written purchase notices and are executed at a price per ADS determined in accordance with a formula based on prevailing market\n\nF-34\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nprices, subject to contractual limitations. The Company is under no obligation to utilize the facility.\n\nIn connection with the execution of the agreement, the Company issued to YA 122,130 ADSs as initial commitment shares.The Company recognized an expense of approximately $0.5 million in connection with the issuance of the initial commitment shares, which was accounted for as a share-based payment.\n\nIn addition, during December 2025, the Company issued 386,593 ADSs as initial equity shares and pre-funded warrants exercisable into 590,446 ADSs, for aggregate gross proceeds of approximately $1.0 million.\n\nThe pre-funded warrants are exercisable at a nominal exercise price and are subject to ownership limitations. As of December 31, 2025, no additional ADSs were issued under the Standby Equity Purchase Agreement.\n\nThe Company recognized an expense of approximately $0.5 million in connection with the issuance of the initial commitment shares, which was accounted for as a share-based payment.\n\nf.During 2025 and 2024, the Company issued 70,705 and 17,218 ADSs, respectively, resulting from vested RSUs that had been issued to employees, officers, directors, and consultants of the Company.\n\ng.On January 26, 2024, the Company issued 400,000 ADSs at a purchase price of $20 per ADS and warrants to purchase 400,000 ADSs at an exercise price of $25 per ADS. These warrants may be exercised in cash or on a cashless basis, are immediately exercisable, and expire in five years. The Company also issued to the placement agent warrants to purchase 24,000 ADSs under the same terms. The gross proceeds from the offering were $8 million, before deducting approximately $0.9 million in fees and expenses.\n\nThe warrants were classified as a financial liability due to a net settlement provision. These derivatives were recognized and subsequently measured at fair value through profit or loss. Upon initial recognition the fair value of the warrants was adjusted to reflect the unrecognized day 1 loss. This unrecognized day 1 loss is amortized over the warrants’ contractual life. Issuance expenses amounted to $0.9 million allocated to the warrants were recorded directly in the Consolidated Statements of Comprehensive Income (Loss). See also note 4.\n\nh.On April 3, 2024, the Company issued 85,779 ADSs at a purchase price of $14.57 per ADS and warrants to purchase 85,779 ADSs at an exercise price of $18.75 per ADS. These warrants may be exercised in cash or on a cashless basis, are immediately exercisable and expire in five years. The gross proceeds from the offering were $1.25 million, before deducting offering expenses approximately $0.1 million in expenses. See note 19 (c) above.\n\nThe warrants were classified as a financial liability due to a net settlement provision. These derivatives were recognized and subsequently measured at fair value through profit or loss. The consideration, net of issue expenses, was allocated to the various issued instruments. Out of the gross consideration, $0.9 million was allocated to the warrants. The remainder of approximately $0.35 million was allocated to equity. Issuance expenses allocated to the liability instruments were recorded directly in the Consolidated Statements of Comprehensive Income (Loss), while those allocated to equity were recorded against additional paid in capital. See also note 4.\n\n**NOTE 20 - SHARE-BASED PAYMENTS:**\n\n​\n\na.On May 30, 2010, a general meeting of shareholders approved the option plan of the Company (the\n\nF-35\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n“Option Plan”), after being approved by the BoD. In 2017 the Option Plan was amended and restated as the Amended and Restated 2010 Award Plan (the “Award Plan”). As of December 31, 2025, the Award Plan allows the Company to allocate up to 10,815,660,000 options to purchase ordinary shares and RSUs (equivalent to 1,081,566 ADSs) to employees, consultants, officers and directors and could be reserved by the BoD for issuance under the Award Plan. The terms and conditions of the grants were determined by the BoD and in accordance with the Award Plan.\n\n​\n\nb.On March 26, 2025, the BoD granted 78,950 RSUs to employees and consultants of the Company. These RSUs will vest in 8 equal quarterly installments over two years and had a fair value of $0.2 million on the grant date, based on the ADS price on that date. In addition, the general meeting of the Company’s shareholders held on May 26, 2025, following approval by the Company’s BoD in March 2025, approved grant of 30,350 RSUs to the Company’s directors and Chief Executive Officer, on the same terms. The fair value of these RSUs on the approval date was $0.1 million.\n\nDuring 2025, approximately 1,638 options and RSUs were forfeited, resulting in $0.01 million in reversed expenses.\n\n​\n\n​\n\nc.On June 24, 2024, the BoD granted 41,760 RSUs to employees and consultants. These RSUs will vest in 8 equal quarterly installments over two years and had a fair value of $0.4 million on the grant date, based on the ADS price on that date. In addition, the general meeting of the Company’s shareholders held on September 18, 2024, subsequent to approval of the Company’s BoD in June 2024, approved grant of 15,320 RSUs for directors and the Company's Chief Executive Officer and Chief Commercial Officer in the same terms. The fair value of these RSUs on the date of approval was $0.1 million.\n\nDuring 2024, approximately 2,584 options and RSUs were forfeited, resulting in $0.3 million in reversed expenses.\n\n​\n\n**d.    Changes in the number of options in ADSs and weighted averages of exercise prices are as follows:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n​\n\n**2025**\n\n​\n\n**2024**\n\n​\n\n​\n\n​\n\n​\n\n**Weighted **\n\n​\n\n​\n\n​\n\n**Weighted **\n\n​\n\n​\n\n​\n\n​\n\n**average of**\n\n​\n\n​\n\n​\n\n**average of**\n\n​\n\n​\n\n**Number of **\n\n​\n\n**exercise**\n\n​\n\n**Number of **\n\n​\n\n**exercise**\n\n​\n\n  ​ ​ ​\n\n**options**\n\n  ​ ​ ​\n\n**price ($)**\n\n  ​ ​ ​\n\n**options**\n\n  ​ ​ ​\n\n**price ($)**\n\nOutstanding at beginning of year\n\n​\n\n2,619\n\n​\n\n6,329.96\n\n​\n\n3,894\n\n​\n\n6,324.50\n\nExpired and forfeited\n\n \n\n(302)\n\n \n\n6,208.05\n\n \n\n(1,275)\n\n \n\n6,277.89\n\nOutstanding at end of year\n\n \n\n2,317\n\n \n\n6,345.85\n\n \n\n2,619\n\n \n\n6,329.96\n\nExercisable at end of year\n\n \n\n2,315\n\n \n\n6,347.56\n\n \n\n2,525\n\n \n\n6,310.15\n\n​\n\n**e. Changes in the number of RSUs in ADSs during the period are as follows:**\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**2025**\n\n**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\n**Number of **\n\n​\n\n**Number of **\n\n​\n\n​\n\n  ​ ​ ​\n\n**RSUs**\n\n  ​ ​ ​\n\n**RSUs**\n\n  ​ ​ ​\n\nOutstanding at beginning of year\n\n​\n\n37,767\n\n​\n\n7,121\n\n​\n\nVested RSUs\n\n \n\n(83,787)\n\n​\n\n(23,938)\n\n​\n\nF-36\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\nExpired and forfeited\n\n \n\n(1,638)\n\n \n\n(2,496)\n\n \n\nGranted\n\n \n\n109,300\n\n \n\n57,080\n\n \n\nOutstanding at end of year\n\n \n\n61,642\n\n \n\n37,767\n\n \n\n​\n\nf.**The following is information about the exercise price and remaining useful life of outstanding options at year-end:**\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**2025**\n\n​\n\n**2024**\n\n**Number of**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Number of**\n\n​\n\n​\n\n​\n\n​\n\n**options**\n\n​\n\n​\n\n​\n\n**Weighted**\n\n​\n\n**options**\n\n​\n\n​\n\n​\n\n**Weighted**\n\n**outstanding**\n\n​\n\n​\n\n​\n\n**average of**\n\n​\n\n**outstanding**\n\n​\n\n​\n\n​\n\n**average of**\n\n**at end of**\n\n​\n\n**Exercise price**\n\n​\n\n**remaining**\n\n​\n\n**at end of**\n\n​\n\n**Exercise price**\n\n​\n\n**remaining**\n\n**year**\n\n  ​ ​ ​\n\n**range**\n\n  ​ ​ ​\n\n**useful life**\n\n  ​ ​ ​\n\n**year**\n\n  ​ ​ ​\n\n**range**\n\n  ​ ​ ​\n\n**useful life**\n\n2,317\n\n​\n\n$1,670-$10,370\n\n​\n\n4.17\n\n​\n\n2,619\n\n​\n\n$1,670-$10,370\n\n​\n\n5.04\n\n​\n\n**g.    ****Expenses recognized in profit or loss for the options********and RSUs are as follows:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2023**\n\n**U.S.**** ****dollars in thousands**\n\n457\n\n​\n\n665\n\n​\n\n1,647\n\n​\n\nThe remaining compensation expenses as of December 31, 2025, are $0.1 million and will be expensed in full by December 2026.\n\n​\n\n**NOTE 21 - NET REVENUES****:**\n\n​\n\nIncludes $0.3 million in 2025 revenues related license agreement with Hyloris, see note 15(9) above.\n\n​\n\n**NOTE 22 - RESEARCH AND DEVELOPMENT EXPENSES:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2023**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nPayroll and related expenses\n\n​\n\n176\n\n​\n\n222\n\n​\n\n390\n\nProfessional services\n\n \n\n881\n\n \n\n708\n\n​\n\n605\n\nShare-based payments\n\n \n\n86\n\n \n\n156\n\n \n\n138\n\nClinical and pre-clinical trials\n\n \n\n531\n\n \n\n114\n\n \n\n1,891\n\nIntellectual property development\n\n \n\n206\n\n \n\n238\n\n \n\n222\n\nOther\n\n \n\n143\n\n \n\n150\n\n \n\n282\n\n​\n\n \n\n2,023\n\n \n\n1,588\n\n \n\n3,528\n\n​\n\n​\n\n​\n\n**NOTE 23 - GENERAL, ADMINISTRATIVE, BUSINESS AND DEVELOPMENT EXPENSES:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2023**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nPayroll and related expenses\n\n​\n\n2,054\n\n​\n\n1,838\n\n​\n\n2,218\n\nShare-based payments\n\n \n\n226\n\n \n\n427\n\n \n\n884\n\nProfessional services\n\n \n\n3,129\n\n \n\n1,696\n\n \n\n2,260\n\nOffice-related expenses\n\n \n\n634\n\n \n\n536\n\n \n\n484\n\nOther\n\n \n\n129\n\n \n\n390\n\n \n\n172\n\n​\n\n \n\n6,172\n\n \n\n4,887\n\n \n\n6,018\n\n​\n\n​\n\n​\n\n​\n\nF-37\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**NOTE 24 - FINANCIAL INCOME (EXPENSES), net****:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2023**\n\n​\n\n**U.S. dollars in thousands**\n\n**Financial income:**\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFair value gains on derivative financial instruments\n\n1,280\n\n \n\n8,228\n\n \n\n—\n\nOther Income\n\n15\n\n \n\n40\n\n \n\n210\n\nInterest from bank deposits\n\n23\n\n \n\n79\n\n \n\n91\n\n​\n\n1,318\n\n \n\n8,347\n\n \n\n301\n\n**Financial expenses:**\n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\nInterest for lease liabilities\n\n19\n\n​\n\n44\n\n​\n\n63\n\nIssuance cost in respect of warrants and equity line of credit\n\n1,018\n\n​\n\n1,497\n\n​\n\n2,034\n\nLoss from changes in exchange rates\n\n87\n\n \n\n(29)\n\n \n\n115\n\nFair value loss on derivative financial instruments\n\n—\n\n​\n\n—\n\n​\n\n5,569\n\nLoss from modification of warrants terms as part of a new issuance\n\n—\n\n​\n\n—\n\n​\n\n1,459\n\nOther\n\n332\n\n \n\n—\n\n \n\n11\n\n​\n\n1,456\n\n \n\n1,512\n\n \n\n9,251\n\n**Financial income (expenses),**net**from continuing operation**\n\n(138)\n\n \n\n6,835\n\n \n\n(8,950)\n\n​\n\n(\n\n​\n\n​\n\n​\n\n**NOTE 25********– EARNINGS (LOSS) PER ORDINARY SHARE:**\n\n​\n\na.**Basic**\n\nThe following is data taken into account in the computation of basic earnings (loss) per share:\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2023**\n\nEarnings (Loss) from continuing operation (U.S. dollars in thousands)\n\n​\n\n(8,080)\n\n​\n\n360\n\n​\n\n(18,498)\n\nEarnings (Loss) from discontinued operation (U.S. dollars in thousands)\n\n​\n\n7,651\n\n​\n\n(8,628)\n\n​\n\n42,414\n\nEarnings (Loss) attributible to ordinary shares\n\n​\n\n(429)\n\n​\n\n(8,268)\n\n​\n\n23,916\n\nWeighted average number of ordinary shares outstanding during the period (in thousands)\n\n \n\n31,591,752\n\n \n\n12,322,721\n\n \n\n2,591,222\n\n**Basic earnings (loss) per share (U.S. dollars) from continuing operation**\n\n \n\n(0.00)\n\n \n\n0.00\n\n \n\n(0.01)\n\n**Basic earnings (loss) per share (U.S. dollars) from discontinued operation**\n\n​\n\n0.00\n\n​\n\n(0.00)\n\n​\n\n0.02\n\n**Total Basic earnings (loss) per share (U.S. dollars)**\n\n​\n\n(0.00)\n\n​\n\n(0.00)\n\n​\n\n0.01\n\n​\n\n \n\nb.**Diluted**\n\nThe Company has three categories of potentially dilutive ordinary shares: warrants issued to investors and options, and RSUs issued to employees and service providers. The effect of these options, RSUs and warrants on the loss per share from continuing operation for all reporting years is anti-dilutive.\n\n​\n\nThe calculation of diluted earnings (loss) per share as of December 31, 2025, does not include 8,082,156,400 of ordinary shares underlying warrants, 23,170,400 of ordinary shares underlying options and 616,420,000 of ordinary shares underlying RSUs, because the effect would be anti-dilutive.\n\n​\n\nF-38\n\n[Table of Contents](#TOC)\n\n**REDHILL BIOPHARMA LTD.**\n\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n​\n\n**NOTE 26********- RELATED PARTIES:**\n\n​\n\n**a.    Key management includes members of the Board of Directors, including the Company’s Chief Commercial Officer and Chief Executive Officer:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n  ​ ​ ​\n\n**2023**\n\n​\n\n​\n\n**U.S. dollars in thousands**\n\nKey management compensation:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nSalaries and other short-term employee benefits\n\n \n\n1,045\n\n \n\n1,030\n\n \n\n1,189\n\nPost-employment benefits\n\n \n\n52\n\n \n\n49\n\n \n\n56\n\nShare-based payments\n\n \n\n124\n\n \n\n205\n\n \n\n407\n\nOther long-term benefits\n\n \n\n33\n\n \n\n31\n\n \n\n35\n\n​\n\n**b.**    **Balances with related parties:**\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**2025**\n\n  ​ ​ ​\n\n**2024**\n\n​\n\n​\n\n**U.S. dollars in thousand**\n\nCurrent liabilities -\n\n​\n\n  ​\n\n​\n\n  ​\n\nCredit balance in “accrued expenses and other current liabilities.”\n\n \n\n191\n\n \n\n176\n\nNon Current Assets -\n\n​\n\n​\n\n​\n\n​\n\nReceivable balance in \"investment in a joint venture.\"\n\n​\n\n3,135\n\n​\n\n—\n\n​\n\n​\n\n​\n\n**NOTE 27 - EVENTS SUBSEQUENT TO DECEMBER 31, 2025:**\n\n​\n\n​\n\n​\n\n(1)On January 23, 2026, the BoD granted 382,850 RSUs to employees and consultants of the Company. These RSUs will vest in 8 equal quarterly installments over two years and had a fair value of $0.4 million on the grant date, based on the ADS price on that date. In addition, the general meeting of the Company’s shareholders held on March 5, 2026, following approval by the Company’s BoD in January 2026, approved grant of 104,500 RSUs to the Company’s directors and Chief Executive Officer, on the same terms. The fair value of these RSUs on the approval date was $0.1 million\n\n(2)On March 5, 2026, the annual general meeting of shareholders approved the increase of the authorized share capital of the Company to NIS 5,000,000,000, consisting of (i) 499,994,000,000 Ordinary Shares, NIS 0.01 par value per share, and (ii) 6,000,000 preferred shares, NIS 0.01 par value per share.\n\n​\n\n​\n\n​\n\n​\n\nF-39"}