{"url_path":"/sec/rdhl/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS**","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":10147,"has_tables":true,"body_markdown":"**ITEM 5.             OPERATING AND FINANCIAL REVIEW AND PROSPECTS**\n\n*You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly those in “Item 3. Key Information – D. Risk Factors.”*\n\n**Company Overview**\n\nWe are a specialty biopharmaceutical company, primarily focused on U.S. development and commercialization of drugs for GI diseases, infectious diseases and oncology. Our primary goal is to become a leading specialty biopharmaceutical company.\n\n109\n\n[Table of Contents](#TOC)\n\nWe are currently focused primarily on the advancement of our development pipeline of clinical-stage therapeutic candidates. We also commercialize in the U.S. our GI-related product, Talicia® (omeprazole, amoxicillin, and rifabutin), and continue to explore our strategic plans for other potential products and activities.\n\nAmong our therapeutic candidates, we are exploring opaganib as a potential treatment for various conditions, including the treatment of several cancers such as prostate cancer, cholangiocarcinoma and chronic lymphocytic leukemia; virus-induced acute respiratory distress syndrome (ARDS), informed by data from a Phase 2/3 clinical study in COVID-19, Ebola and other viral diseases; as well as metabolic disorders, including diabetes, obesity and nuclear radiation protection. Furthermore, we are investigating RHB-107 (upamostat) as a potential treatment for COVID-19 and other viruses as part of pandemic preparedness, including influenza.\n\nOur current pipeline consists of five therapeutic candidates, part of which are in mid-to-late stage clinical development. We generate our pipeline of therapeutic candidates by identifying, validating and in-licensing or acquiring products that are consistent with our product and corporate strategy and that have the potential to exhibit a favorable probability of therapeutic and commercial success. We have one product, Talicia®, that we primarily developed internally which has been approved for marketing and, to date, none of our other therapeutic candidates has generated revenues. We have out-licensed our commercial product, Talicia®, for specific territories outside the U.S., and one of our therapeutic candidates, RHB-102, worldwide (except for the U.S., Canada, and Mexico). Furthermore, we plan to commercialize our therapeutic candidates, upon approval, if any, through licensing and other commercialization arrangements with pharmaceutical companies on a global and territorial basis or independently with a dedicated commercial operation or in potential partnership with other commercial-stage companies. We also evaluate, on a case-by-case basis, co-development, co-promotion, licensing, acquisitions and similar arrangements.\n\nSince inception, we have funded our operations primarily through public and private offerings of our equity securities, loans and revenues from our commercial activity. As of December 31, 2025 and December 31, 2024, we had approximately $4.1 million and $4.8 million, respectively, of cash, cash equivalents, short-term investments and restricted cash.\n\n**Sale of Rights in Movantik**®**and Extinguishment of our Debt Obligations under the Credit Agreement with HCRM**\n\nOn February 23, 2020, we, through RedHill U.S., entered into a credit agreement (the “Credit Agreement”) with HCRM, and the lenders from time-to-time party thereto. Pursuant to the terms of the Credit Agreement, RedHill U.S. received a $30 million loan following the signing of the Credit Agreement. An additional $50 million tranche was used to fund the acquisition of rights to Movantik® from AstraZeneca. On February 2, 2023, we sold our rights in Movantik® to an affiliate of HCRM and in connection therewith our debt obligations under the Credit Agreement were extinguished.  In connection with this sale, RedHill U.S. retained substantially all pre-closing liabilities relating to Movantik®, and $16 million of our cash was deposited into the escrow account to pay pre-closing liabilities related to Movantik®.  \n\nFollowing the sale of our rights to Movantik®, we lost our primary revenue source, and our ability to operate as a financially viable commercial business became significantly more difficult. We are working to replace Movantik® with another commercial product, either internal or external, but this may not occur, and we may never achieve levels of revenue we have achieved through Movantik®. We also lost economies of scale in our commercial operations that we were able to benefit from by having Movantik® as a core commercial product.\n\nIn addition, in connection with the sale of Movantik®, the obligation to pay indemnification obligations and scheduled pre-closing liabilities of Movantik® were secured by a lien on Talicia®- related assets and our former Aemcolo®-related assets.\n\nOn July 15, 2024, we signed a Global Termination Agreement with Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC, affiliates of HCRM. This agreement terminated all remaining obligations under the Credit Agreement, including the lien previously placed on our Talicia®-related assets, and restored our control over the restricted escrow account established to cover Movantik® pre-closing liabilities and settlement of trade balances resulting from the transition services. As part of the agreement, we received approximately $9.9 million in cash and regained access to an additional $0.7 million previously held in escrow. The cash received was in settlement of liabilities related to Movantik® that were allocatable to HCRM and its affiliates under their agreements with us. As the cash received was less than the total net amount of these liabilities (approximately $12.2 million), we recognized a loss of approximately $2.3 million\n\n110\n\n[Table of Contents](#TOC)\n\nresulting from the termination agreement, presented under “Other expenses” in our consolidated statements of comprehensive income (loss) in our financial statements included elsewhere in this Annual Report. The agreement also terminated the transition services arrangement previously in place.\n\nOur financial statements include a going concern reference.  We will need to raise significant additional capital to finance our losses and negative cash flows from operations, and if we were to fail to raise sufficient capital or on favorable terms and/or divest assets on favorable terms or at all, we may need to cease operations.  Management has substantial doubt about our ability to continue as a going concern.\n\n**Description of our Products**\n\nThe following is a description of our current commercial product and five therapeutic candidates, most of which are in late-stage clinical development:\n\n*Commercial Product*\n\nTalicia® is our proprietary drug approved by the FDA for marketing in the U.S. for the treatment of *H. pylori* bacterial infection in adults. Talicia® is a combination of three approved drugs, omeprazole, which is a proton pump inhibitor (it prevents the secretion of hydrogen ions increasing the PH of the stomach), amoxicillin and rifabutin, which are antibiotics. Talicia® is administered to patients orally in the form of a fixed-dose, all-in-one capsule. On November 1, 2019, the FDA approved Talicia® for marketing in the U.S. for the treatment of *H. pylori* infection in adults and we launched Talicia® in the U.S. in March 2020. Talicia® is expected to receive a total of eight years of U.S. market exclusivity. Talicia® is the first therapeutic candidate we developed to be approved by the FDA. We currently commercialize Talicia® in the U.S through our collaboration with Cumberland. See “Item 4. Information on the Company – B. Business Overview – Acquisition, Commercialization and License Agreements – Transaction with Cumberland.”\n\n*Therapeutic Candidates*\n\nRHB-204 is a patented fixed-dose combination product of three antibiotics that will simplify administration and optimize compliance. Each capsule contains the same components as RHB-104 (clarithromycin, clofazimine, and rifabutin) but at unique doses, selected based on modeling to provide optimal balance of the potential safety and efficacy in the treatment of NTM infection.\n\nOpaganib is an investigational new drug that is proprietary, first-in-class, orally administered SK2 selective inhibitor, with anti-viral, anti-inflammatory and anti-cancer activities, targeting multiple potential oncology, inflammatory, viral and GI indications. On March 30, 2015, we entered into an exclusive worldwide license agreement with Apogee, pursuant to which Apogee granted us the exclusive worldwide development and commercialization rights to ABC294640 (which we then renamed to ABC294640 (Yeliva®)) and as noted above, received an international non-proprietary name, opaganib, in 2018) and additional intellectual property for all indications. Under the terms of the agreement, as amended, we agreed to pay Apogee initial milestone payments of $3 million, of which the total amount has been paid, as well as up to $2 million in potential development milestone payments, and tiered royalties starting in the low double-digits. For more information regarding this agreement, see “Item 4. Information on the Company – B. Business Overview – Acquisition, Commercialization and License Agreements – License Agreement for opaganib.” In March 2022, we entered into an exclusive license agreement (the “Exclusive License Agreement”) with Kukbo for opaganib in South Korea. Under the terms of the Exclusive License Agreement, Kukbo was required to pay an upfront payment of $1.5 million, and we are also eligible milestone payments and royalties on net sales of oral opaganib. See “Item 4. Information on the Company – B. Business Overview – Acquisition, Commercialization and License Agreements - License Agreement with Kukbo” and “Legal Proceedings”.\n\nRHB-107 (upamostat; formerly Mesupron) (INN: upamostat) is a proprietary small molecule, first-in-class, potent serine protease inhibitor administered by oral capsule. RHB-107 is being investigated as a potential treatment for COVID-19 outpatients and other viruses as part of pandemic preparedness, including the Ebola virus. Additional indications in the area of inflammatory digestive diseases and inflammatory lung diseases could be targeted. On June 30, 2014, we acquired from Heidelberg the exclusive development and commercialization rights to RHB-107, excluding China, Hong Kong,\n\n111\n\n[Table of Contents](#TOC)\n\nTaiwan, and Macao, for all indications. We made an upfront payment to Heidelberg of $1.0 million with potential tiered royalties on net revenues, ranging from mid-teens up to 30%. We are responsible for all development, regulatory and commercialization of RHB-107. See “Item 4. Information on the Company – B. Business Overview – Acquisition, Commercialization and License Agreements – License Agreement for RHB-107.”\n\nRHB-104 is an investigational new drug intended to treat Crohn’s disease, which is a serious inflammatory disease of the GI system that may cause severe abdominal pain and bloody diarrhea, malnutrition and potentially life-threatening complications. RHB-104 is a patented combination of clarithromycin, clofazimine, and rifabutin, three generic antibiotic ingredients, in a single capsule. The compound was developed to treat Crohn’s disease through the targeting of MAP infection.\n\nRHB-102 (Bekinda®) is an investigational once-daily bi-modal extended-release oral formulation of ondansetron, a leading member of the family of 5-HT3 serotonin receptor inhibitors, intended to treat nausea, vomiting and diarrhea symptoms experienced in some people suffering from acute gastroenteritis, gastritis, and IBS-D.\n\n**Components of Statements of Comprehensive Loss**\n\nFollowing the completion of the Talicia Holdings transaction and the classification of the Talicia® operations conducted through RedHill U.S. as discontinued operations, the components described below relate solely to our continuing operations. The results of discontinued operations are presented separately in the consolidated statements of comprehensive loss for all periods presented.\n\nRevenues\n\nRevenues from continuing operations consist of licensing revenues. Following the completion of the Talicia Holdings transaction and the classification of certain operations, including the Company’s U.S. commercial operations and Talicia licensing activities, as discontinued operations, revenues from those activities are presented as discontinued operations.\n\nResearch and Development Expenses\n\nSee “Item 5. Operating and Financial Review and Prospects – C. Research and Development, Patents and Licenses” below.\n\nGeneral, Administrative Expenses and Business Development\n\nGeneral, administrative and business development expenses consist primarily of compensation for employees, directors and consultants in executive and operational functions, as well as professional services. Other significant general and administrative expenses include office-related expenses, travel, conferences, and other corporate overhead costs.\n\nFinancial Income and Expenses\n\nFinancial income and expenses consist of non-cash financing expenses in connection with changes in the fair value of derivative financial instruments, interest earned on our cash, cash equivalents, and short-term bank deposits, bank fees, interest, and finance changes for lease liabilities and other transactional costs and expense or income resulting from fluctuations of the U.S. dollar against other currencies, in which a portion of our assets and liabilities are denominated like NIS, for example.\n\nShare of (Profit) Loss of Joint Venture\n\nShare of (profit) loss of joint venture represents the Company’s share of the net results of Talicia Holdings, which is accounted for as a joint venture.\n\n112\n\n[Table of Contents](#TOC)\n\n**A.          Operating Results**\n\n**History of Losses**\n\nSince inception in 2009, we have generated significant losses in connection with the research and development of our therapeutic candidates and from our commercial operations. Although certain commercial activities have been classified as discontinued operations, our accumulated deficit reflects the results of all operations historically conducted by the Company. We may continue to incur additional losses as we continue to expand our research and development activities over time. As a result, we expect to continue incurring operating losses, which may be substantial over the next several years, and we will need to obtain substantial additional funds. As of December 31, 2025 and December 31, 2024, we had an accumulated deficit of approximately $413.8 million and $414.8 million, respectively.\n\nWe expect to continue to fund our operations over the next several years through licensing revenues, potential milestone and royalty payments, public or private equity offerings, debt financings, non-dilutive financings, including government grants, commercialization of our therapeutic candidates, if approved, or products we may commercialize or promote in the future.\n\n**Going Concern**\n\nOur consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the year ended December 31, 2025, our net cash used in operating activities was $9.7 million, leaving a cash balance of $4.1 million. Because we do not have sufficient resources to fund our operations for the next twelve months from the date of this filing, management has substantial doubt of our ability to continue as a going concern. We have determined that the Company’s available cash on December 31, 2025 is not sufficient to fund our operations and satisfy our payment obligations for a period exceeding one year from the date of this Annual Report. Our operational costs include the payment of pre-closing liabilities relating to Movantik®, which our subsidiary, RedHill U.S., retained under our agreement with HCRM for the extinguishment of all our debt obligations under the Credit Agreement in exchange for the transfer of our rights in Movantik® to an affiliate of HCRM. As of December 31, 2025, the estimated pre-closing liabilities relating to Movantik® were approximately $1.5 million. In addition, we assumed obligations under the Global Termination Agreement. As of December 31, 2025, the estimated obligations relating to the Global Termination Agreement were $5.7 million. In addition, as of the reporting date, we have significant amounts of obligations related to allowance for deductions from revenues and other liabilities that are past due, including certain obligations that are materially overdue. We are actively engaging with various counterparties in an effort to reach structured payment arrangements. To date, we have finalized formal agreements with a limited number of counterparties to reschedule payments over a period of up to 24 months. No other formal agreements have been finalized to date with respect to the remaining counterparties, and there can be no assurance such arrangements will be achieved. Any default on our obligations or defaults on our restructuring arrangements could result in legal proceedings against us, imposition of additional costs or penalties, and could materially adversely affect our business, financial condition, and results of operations. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should we be unable to continue as a going concern.\n\nWe will need to raise significant additional capital to finance our losses and negative cash flows from operations.  We are also actively pursuing and in discussions with multiple parties regarding strategic business transactions. If we were to fail to raise sufficient capital on favorable terms or at all, we may need to cease operations. There are no assurances that we will be able to raise significant additional capital on terms favorable to us or at all, particularly given the current difficult conditions in the capital markets and very low market capitalization which makes it more difficult to raise significant amounts of capital. In addition, following the sale of our rights to Movantik® in 2023, we lost our primary revenue source and our ability to operate as a financially viable commercial business has been significantly more difficult. If we are unsuccessful in achieving sufficient commercial sales of our products, or in raising sufficient capital, we will need to reduce activities and curtail or cease operations.\n\n113\n\n[Table of Contents](#TOC)\n\n**Comparison of the Year Ended December 31, 2025, to the Year Ended December 31, 2024**\n\nFollowing the classification of certain operations as discontinued operations, the comparison below relates solely to our continuing operations. Prior period results have been recast accordingly and are not directly comparable to historical results that included discontinued operations\n\n*Revenues*\n\nRevenues for the year ended December 31, 2025, were $0.3 million, generated from the Hyloris license for RHB-102 (Bekinda®), compared to no revenues for the year ended December 31, 2024.\n\n*Research and Development Expenses*\n\nResearch and Development Expenses were $2.0 million for the year ended December 31, 2025, as compared to $1.6 million for the year ended December 31, 2024. The increase was mainly driven by costs related to clinical activities.\n\n*General and Administrative and Business Development Expenses*\n\nGeneral, Administrative and Business Development Expenses for the year ended December 31, 2025, were $6.2 million, compared to $4.9 million for the year ended December 31, 2024. The increase was primarily attributable to legal expenses related to the Kukbo litigation.\n\n*Share of loss of joint venture*\n\nShare of loss of joint venture for the year ended December 31, 2025 was $33 thousand, representing a 70% share of the net loss of Talicia Holdings. This reflects less than three months of Talicia Holdings activity post-closing.\n\n*Operating Loss*\n\nOperating Loss for the year ended December 31, 2025, was $7.9 million, compared to Operating Loss of $6.5 million for the year ended December 31, 2024. The difference is primarily attributable to an increase in operating expenses, as detailed above.\n\n*Financial Income (Expenses), net*\n\nFinancial Expenses, net for the year ended December 31, 2025, were $0.1 million, compared to Financial Income, net of $6.8 million for the year ended December 31, 2024. The income recognized in the year ended December 31, 2024, was primarily driven by the revaluation of financial instruments, partially offset by other financing expenses.\n\n*Net Income (Loss) from continuing operations*\n\nNet loss from continuing operations was $8.1 million for the year ended December 31, 2025, compared to net income from continuing operations of $0.4 million for the year ended December 31, 2024. The change was primarily attributable to the absence of significant financial income recognized in 2024 from the revaluation of financial instruments, together with higher operating expenses in 2025.\n\n*Net Income (Loss) from discontinued operations*\n\nNet income from discontinued operations was $7.7 million for the year ended December 31, 2025, compared to net loss from discontinued operations of $8.6 million for the year ended December 31, 2024. The change was primarily attributable to the gain recognized upon loss of control of Talicia Holdings in 2025, and a decrease in other operating expenses.\n\nThe comparison below relates to the Company’s consolidated financial position as of the respective balance sheet dates:\n\n114\n\n[Table of Contents](#TOC)\n\n*Total Assets*\n\nTotal assets as of December 31, 2025, were $25.3 million, compared to $18.0 million as of December 31, 2024. The increase was primarily attributable to the Company’s investment in a joint venture as part of the Talicia Holdings transaction.\n\n*Total Liabilities*\n\nTotal liabilities as of December 31, 2025, were $21.1 million, compared to $22.7 million as of December 31, 2024. The decrease was primarily attributable to a reduction in allowance for deductions from revenues and a decrease in derivative financial instrument liabilities, partially offset by an increase in lease liabilities.\n\n**Comparison of the Year Ended December 31, 2024, to the Year Ended December 31, 2023**\n\nThis analysis can be found in Item 5 of the Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on April 10, 2025.\n\n**Non-IFRS Financial Measures**\n\nIn addition to our financial results reported in accordance with IFRS, we believe that Adjusted EBITDA, which is a non-IFRS financial measure, is useful in evaluating the performance of our business. See tables below for a discussion regarding our use of Adjusted EBITDA, including its limitations, and a reconciliation to the most directly comparable IFRS financial measure.\n\n**Adjusted EBITDA**\n\nWe define Adjusted EBITDA as net loss before depreciation and amortization, share-based compensation, and financial income (expenses). Our management believes Adjusted EBITDA is indicative of operational performance and ongoing profitability and uses Adjusted EBITDA to evaluate the operating performance and for planning and forecasting purposes. Non-IFRS financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under IFRS. There are a number of limitations related to the use of non-IFRS financial measures versus comparable financial measures determined under IFRS. For example, other companies in our industry may calculate the non-IFRS financial measures that we use differently or may use other measures to evaluate their performance. All of these limitations could reduce the usefulness of our non-IFRS financial measures as analytical tools. Investors are encouraged to review the related IFRS financial measure, Consolidated Comprehensive Income (Loss), and the reconciliations of Adjusted EBITDA provided below to Consolidated Comprehensive Income (Loss) and to not rely on any single financial measure to evaluate our business.\n\nThe following table presents Adjusted EBITDA for the Company’s continuing operations for the years ended December 31, 2025, 2024, and 2023, together with a reconciliation to consolidated net loss and comprehensive loss, reflecting continuing operations only:\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\nAdjusted EBITDA\n\n​\n\n(7,330)\n\n​\n\n(5,591)\n\n​\n\n(8,217)\n\n​\n\n115\n\n[Table of Contents](#TOC)\n\nThe following table provides a reconciliation of Adjusted EBITDA to net loss for the periods presented, reflecting continuing operations only:\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\nIncome (Loss) from continuing operations\n\n​\n\n(8,080)\n\n​\n\n360\n\n​\n\n(18,498)\n\nDepreciation\n\n​\n\n(298)\n\n​\n\n(301)\n\n​\n\n(310)\n\nShare-based compensation to employees and service providers\n\n​\n\n(312)\n\n​\n\n(583)\n\n​\n\n(1,021)\n\nFinancial income (expenses), net\n\n​\n\n(138)\n\n​\n\n6,835\n\n​\n\n(8,950)\n\nAdjusted EBITDA\n\n​\n\n(7,330)\n\n​\n\n(5,591)\n\n​\n\n(8,217)\n\n​\n\n**B.          Liquidity and Capital Resources**\n\nLiquidity and Capital Resources\n\nSince inception, we have funded our operations primarily through public and private offerings of our equity securities, loans and revenues from our commercial activity. Other potential sources of liquidity in the future may include government grants or subordinated indebtedness or other non-dilutive financings. As of December 31, 2025, we had approximately $4.1 million of cash, cash equivalents, short-term investments and restricted cash.\n\nThrough our U.S. investment in Talicia Holdings, our joint venture with Cumberland, we participate in the commercialization of Talicia® in the United States. However, our ability to generate profits from such commercialization remains uncertain and to date, these activities have generated operating losses. Other than Talicia®, our therapeutic candidates are in research and development stage, and therefore do not yet generate revenues. We expect losses and negative cash flows to continue for the foreseeable future, primarily as a result of ongoing general and administrative expenses and continued product research and development, subject to resources obtained. Management anticipates that significant additional expenditures will be necessary to develop and expand our business before significant positive operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. Current available funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through the issuance of equity securities for cash or strategic collaborations to operate our business. We will need to raise additional capital to continue to fund our product research and development. We intend to seek additional working capital through equity financings, debt financings, or other arrangements, including through the SEPA or other public offerings or private placements. No assurance can be given that any such financing will be available or, if available, on acceptable terms. Even if we are able to obtain additional financing, it may cause substantial dilution for our shareholders. On August 9, 2024, we filed a registration statement on Form F-3 (File No. 333-281417) with the SEC. As of the filing date of this Annual Report, we are subject to the limitations of General Instruction I.B.5 of Form F-3, which limits the amount of funds we can raise through primary public offerings of securities in any twelve-calendar month period using a registration statement on Form F-3 to one-third of the aggregate market value of our ordinary shares held by non-affiliates. Therefore, we will be limited in the amount of proceeds we are able to raise by selling our securities using Form F-3, until such time as our public float held by non-affiliates exceeds $75.0 million.\n\nAs of December 31, 2025, we had significant amounts of obligations related to allowances for deductions from revenues and other liabilities that were past due, including certain amounts that were materially overdue. We are actively engaging with relevant counterparties to reach structured payment arrangements. To date, we have finalized formal agreements with a limited number of counterparties to reschedule payments over a period of up to 24 months. No assurance can be given that we will reach similar arrangements with the remaining counterparties or that we will comply with agreed payment schedules. Any default could materially affect our financial condition and ability to continue as a going concern.\n\n116\n\n[Table of Contents](#TOC)\n\n*Going Concern*\n\nOur consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the year ended December 31, 2025, our net cash used in operating activities was $9.7 million leaving a cash balance of $4.1 million. Because we do not have sufficient resources to fund our operations for the next twelve months from the date of this filing, management has substantial doubt of our ability to continue as a going concern. See “– B. Operating Results – Going Concern”.\n\n*Nasdaq Deficiency Letter*\n\nOn April 8, 2026, we received a letter from the Listings Qualifications Department of Nasdaq notifying us that, for a period of thirty consecutive business days prior to April 2, 2026, the bid price for the ADSs had closed below the minimum $1.00 per ADS requirement for continued listing on The Nasdaq Capital Market under Minimum Price Rule. In accordance with Nasdaq Listing Rule 5810(c)(2)(B), we have been provided an initial period of 180 calendar days, or until October 5, 2026, to regain compliance. The letter states that the Nasdaq staff will provide written notification that we have achieved compliance with Rule 5550(a)(2), if at any time during the 180-day period, the bid price of the ADSs closes at least as $1.00 per share or more for a minimum of ten consecutive business days.\n\nIf we are not compliant with the minimum bid price requirement at the end of the 180-day cure period, we may be eligible for an additional 180-calendar day extension. To be eligible for the second 180-day period, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and will need to provide written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. Under Nasdaq rules, after the second 180-day compliance period expires, if we do not regain compliance with the price criteria for 10 consecutive business days prior to the end of the second period, a request for a hearing no longer stays the suspension and delisting of the ADSs pending the Nasdaq Hearing Panel’s decision. After the second 180-day period expires, trading of the ADSs is automatically suspended, and the ADSs will move to the over-the-counter market while the appeal is pending. In addition, under the amended rule, we will not be eligible for any cure period to address a deficiency in the minimum bid price requirement if we effected a reverse stock split in the prior year.\n\nAny delisting from Nasdaq or any suspension of the trading of our ADSs would have a material adverse effect on both the market price of our ADSs and the market for our ADSs. A delisting from Nasdaq could substantially decrease trading in the ADSs, adversely affect the market liquidity of the ordinary shares as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect our ability to obtain financing on acceptable terms, and may result in potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of our ADSs may decline further, and shareholders may lose some or all of their investment.\n\n*Financing Activities*\n\nOn December 19, 2025, we issued to YA II PN, Ltd., a Cayman Islands exempt limited company (“YA”), 122,130 ADSs as initial commitment shares. In addition, we issued 386,593 ADSs and a pre-funded warrant to acquire 590,446 ADSs in the aggregate for aggregate gross proceeds of $1.0 million, pursuant to a Standby Equity Purchase Agreement (the “SEPA”) executed that date between the parties.  For more information, see “ – Standby Equity Purchase Agreement” below.\n\nFrom July 15, 2025 through December 31, 2025, we issued to Alumni Capital LP (“Alumni”) 2,247,136 ADSs at a weighted average offering price of approximately $1.48 per ADS for aggregate net proceeds of approximately $3.3 million pursuant to a committed equity line purchase agreement executed between the Company and Alumni on June 20, 2025.  For more information, see “Any Market Purchase Agreement” below.\n\nOn May 14, 2025, the investors from the April 2024 offering described below agreed to the exercise of all of their warrants to purchase 85,778 ADSs 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\n117\n\n[Table of Contents](#TOC)\n\nOn April 3, 2024, we issued 85,778 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 fees and expenses.\n\nOn January 26, 2024, we issued (i) in a registered direct offering 400,000 ADSs at a purchase price of $20.00 per ADS and (ii) in a concurrent private offering, warrants (the “January 2024 Warrants”) to acquire 400,000 ADSs in the aggregate at an exercise price of $25.00 per ADS (the “January 2024 Offering”). The gross proceeds were approximately $8.0 million, before fees and expenses. The January 2024 Warrants are exercisable immediately after the issuance date and have a term of five years following the issuance date. After the mentioned offerings and the November 2023 warrants’ exercise described below, as of January 31, 2024, the Company’s share capital included 1,188,121 ADSs, the January 2024 Warrants, December 2022 Warrants to purchase 30,234 ADSs (as defined below), and placement agent warrants to purchase 44,649 ADSs. These placement agent warrants have exercise prices ranging from $14.6875 per ADS to $125.00 per ADS and expire between April 3, 2028, and January 25, 2029. These warrants were issued to the placement agent as part of the compensation for the offerings conducted in April, July, and September 2023, as well as January 2024.\n\nBetween November 27, 2023, and November 29, 2023, the September 2023 Reload Warrants (as defined below) were exercised for a total of approximately $4.0 million gross proceeds to the Company.\n\nOn September 28, 2023, we entered into a warrant reprice and reload letter with holders of (i) the May 2022 Warrants (as defined below), as amended as described below, (ii) the December 2022 Warrants (as defined below), as amended as described below, (iii) warrants issued on April 3, 2023 (as amended, the “Class B Warrants”), and (iv) warrants issued on July 25, 2023 (the “July 2023 Warrants”, and together with the May 2022 Warrants, the December 2022 Warrants and the Class B Warrants, the “Existing Warrants”) to purchase up to an aggregate of 172,076 ADSs, pursuant to which such holders agreed to exercise their Existing Warrants in full at a reduced exercise price of $11.75 per ADS for aggregate gross proceeds of approximately $2.0 million, before deducting the fees and expenses.  In exchange, the exercising holders received new unregistered warrants to purchase up to an aggregate of 344,154 ADSs (the “September 2023 Reload Warrants”) at an exercise price of $11.75 per ADS and with exercise terms ranging from eighteen months to five years.\n\nOn July 25, 2023, we issued in a registered direct offering 43,397 ADSs and pre-funded warrants to purchase 8,680 ADSs for aggregate gross proceeds to us, together with the proceeds of the concurrent Reload Agreement described below, of approximately $3.8 million, before deducting fees and expenses. In connection with the offering, on July 21, 2023, we entered into a warrant reprice and reload letter (the “Reload Agreement”) with a certain holder of Series A Warrants to purchase up to an aggregate of 60,000 ADSs and Series B Warrants to purchase up to an aggregate of 60,000 ADSs, each issued in April 2023, pursuant to which: (i) such holder exercised its Series A Warrants in full at a reduced exercise price of $33.75 per ADS in exchange for new unregistered warrants to purchase up to an aggregate of 60,000 ADSs at an exercise price of $45.00 per ADS exercisable until April 3, 2028, and (ii) the exercise price of the Series B Warrants was reduced to $45.00 per ADS. We also agreed to reduce the exercise price of (i) the May 2022 Warrants (as defined below), as amended as described below, and (ii) the December 2022 Warrants (defined below) to purchase up to an aggregate of 38,873 ADSs, at an exercise price of $45.00 per ADS.\n\nOn April 3, 2023, we issued in a registered direct offering (i) 10,800 ADSs and pre-funded warrants to purchase 49,200 ADSs, (ii) Series A Warrants to purchase up to an aggregate of 60,000 ADSs, and (iii) Series B Warrants to purchase up to an aggregate of 60,000 ADSs at a combined offering price of $100.00 per ADS (or pre-funded warrant) and accompanying Series A Warrant and Series B Warrant. The Series A Warrants had an initial exercise price of $118.75 per ADS (subsequently reduced to $33.75 per ADS as described above), were exercisable immediately and had a term of five years following issuance. The Series B Warrants had an initial exercise price of $100.00 per ADS (subsequently reduced to $45.00 as described above), were exercisable immediately and had a term of nine months following issuance. The gross proceeds were approximately $6.0 million, before fees and expenses.\n\nIn connection with the April 2023 offering, we reduced the exercise price of the May 2022 Warrants (defined below) to $118.75 per ADS and amended the termination date to April 3, 2028 (subsequently amended in July 2023 as described above).\n\n118\n\n[Table of Contents](#TOC)\n\nDuring the year ended December 31, 2023, we sold 105 ADSs under an at-the-market program (the “ATM program”) for total gross proceeds of approximately $20,000. During the year ended December 31, 2022, we sold 1,223 ADSs under the ATM program for total gross proceeds of approximately $2.0 million. We terminated the ATM program effective as of April 4, 2024. See “ATM Program with Cantor”, below.\n\nOn December 6, 2022, we consummated an underwritten offering of 21,775 ADSs and pre-funded warrants to purchase 10,225 ADSs for gross proceeds of approximately $8.0 million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us in connection with the offering. In addition, the investors in this financing received warrants to purchase 69,107 ADSs with an exercise price of $115.7625 per ADS (following a reset on March 31, 2023, in connection with the ratio change of the ADSs to the Company’s ordinary shares) (the “December 2022 Warrants”).\n\nOn May 11, 2022, we issued (i) in a registered direct offering a total of 5,059 ADSs and pre-funded warrants to purchase 5,503 ADSs and (ii) in a concurrent private placement, warrants to acquire 13,204 ADSs at a purchase price of $1,480.00 per ADS (“May 2022 Warrants”). The gross proceeds were approximately $15.0 million, before fees and expenses. The warrants were exercisable six months after the issuance date and had a term of five and one-half years.\n\nStandby Equity Purchase Agreement\n\nOn December 19, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA. Pursuant to the SEPA, subject to the limitations and conditions set forth therein, we have the right, but not the obligation, to sell to YA pursuant to notice to YA (the “Advance Notice”) from time to time (each such occurrence, an “Advance”) up to an aggregate of $25 million (the “Commitment Amount”) of ADSs until the earlier of (i) the 36-month anniversary of the date of execution of the SEPA and (ii) YA’s purchase of the total Commitment Amount under the Purchase Agreement. On the Effective Date, we issued to YA 386,593 ADSs as initial equity shares at a price per ADS of $1.0235 and a pre-funded warrant to acquire 590,446 ADSs in the aggregate for aggregate gross proceeds of $1.0 million. Under the SEPA, ADSs sold in an Advance will be sold at a per ADS price equal to, at the Company’s election as specified in the applicable advance notice, either (i) 95% of the Market Price (as defined below) during the applicable one-day pricing period  (the “Option 1 Pricing Period”) or (ii) 97% of the Market Price (as defined below) during the applicable three-day pricing period, in each case as further set forth in the SEPA. “Market Price” is defined as, for any Option 1 Pricing Period, the volume weighted average price (“VWAP”) of the ADSs during the Option 1 Pricing Period, and for any Option 2 Pricing Period, the lowest daily VWAP of the ADSs during the Option 2 Pricing Period, excluding certain days as set forth in the Purchase Agreement.  If the total number of ADSs traded on Nasdaq during the applicable Pricing Period is less than the Volume Threshold (as defined below), then the number of ADSs issued and sold pursuant to such Advance Notice will be reduced to the greater of (i) 30% of the trading volume of the ADSs on Nasdaq during the relevant Pricing Period or (ii) the number of ADSs sold by the Investor during such Pricing Period, but in each case not to exceed the amount requested in the Advance Notice. “Volume Threshold” is defined as a number of ADSs equal to the quotient of (i) the number of ADSs requested by us in the Advance Notice divided by (ii) 0.30.\n\nIn addition, the Company may not issue or sell any ADSs to the Investor under the SEPA which, when aggregated with all other ADSs and ordinary shares then beneficially owned by the Investor and its affiliates, would result in the Investor and its affiliates beneficially owning more than 9.99% of the then-outstanding ADSs. As consideration for the Investor’s commitment to purchase ADSs under the SEPA, we issued 122,130 ADSs on the Effective Date and agreed to issue an aggregate of 366,390 ADSs as subsequent commitment shares to be issued in three equal installments – on the 90th day, 180th day and 270th day anniversary of the execution of the SEPA.\n\nTransaction with Cumberland\n\nOn October 20, 2025, we entered into a Stock Purchase Agreement between Talicia Holdings and Cumberland, whereby Cumberland agreed to invest $4 million, payable in two equal tranches - $2 million of which was paid at closing and $2 million to be paid within 12 months of execution of the definitive agreements, to acquire a 30% equity interest in Talicia Holdings. We retained 70% ownership. Talicia Holdings is jointly controlled by RedHill and Cumberland under accompanying governance arrangements that provide for equal board representation and joint decision-making on key matters. In addition, under a related shareholders agreement, the transfer of shares by either us or Cumberland is subject\n\n119\n\n[Table of Contents](#TOC)\n\nto a right of refusal by the other party, and each party is subject to non-competition and non-solicitation obligations for so long as such party owns shares in Talicia Holdings.\n\nConcurrently, Talicia Holdings and Cumberland entered into a five-year Exclusive Joint Commercialization Agreement for Talicia® in the United States.  Under the agreement, the parties will jointly commercialize Talicia® in the U.S., through a joint commercialization committee with equal representation and joint decision-making to oversee commercialization, pricing, contracting, sales and marketing activities related to Talicia®. Net revenues from U.S. sales of Talicia® will be shared equally between the parties. As part of the agreement, Talicia Holdings granted Cumberland an exclusive license to use Talicia Holdings’ intellectual property solely for the joint commercialization of Talicia® under the agreement, and sublicensing or co-promotion by Cumberland requires Talicia Holdings’ prior written consent.\n\n120\n\n[Table of Contents](#TOC)\n\nAny Market Purchase Agreement\n\nOn June 20, 2025, we entered into the Any Market Purchase Agreement with Alumni establishing a $10 million equity line of credit (as amended, “Any Market Purchase Agreement”). Pursuant to the Any Market Purchase Agreement, we have the right, but not the obligation, to sell to Alumni, from time to time, ADSs for an aggregate purchase price of up to $10 million (the “Alumni Commitment Amount”), subject to the terms of the Any Market Purchase Agreement, any time until  the earlier (i) the date on which the ADSs cease trading on  the NYSE, the NYSE  American, The Nasdaq Capital Market, The Nasdaq Global Market, or The Nasdaq Global Select Market (or any nationally recognized successor to any of the foregoing), (ii) the date on which the Investor shall have purchased securities pursuant to Purchase Notices (defined below) for an aggregate purchase price equal to the Alumni Commitment Amount, or (iii) 5:00 p.m. Eastern Time on June 30, 2026.\n\nThe ADSs are to be issued and sold to Alumni at a per ADS price equal to, at the election of the Company as specified in the relevant written notice from the Company to Alumni (the “Purchase Notice”): (i) the lowest daily volume weighted average price of the ADSs during the five (5) consecutive business days immediately prior to the date of the Purchase Notice (each such date, a “Purchase Notice Date”) with respect to a Purchase Notice (a “Regular Purchase Notice”), as determined by Alumni, multiplied by ninety percent (90%) (the “Regular Purchase Price”) or (ii) the lowest traded price of the ADSs on the Purchase Notice Date with respect to a Purchase Notice (a “Forward Purchase Notice”), as determined by Alumni, multiplied by ninety six percent (96%) (the “Forward Purchase Price”).\n\nIn consideration for Alumni’s execution and delivery of the Any Market Purchase Agreement, on June 20, 2025, we issued to Alumni an unregistered commitment warrant valid for a term of five years, entitling Alumni to purchase up to 333,333 ADSs at $3.00 per ADS, subject to adjustments therein.\n\nUnder the Any Market Purchase Agreement, we may, at our discretion, direct Alumni to purchase (A) the number of ADSs having an aggregate purchase price equal to the lesser of $500,000 or sixty percent (60%) of the average daily trading volume of the ADSs on Nasdaq over the most recent five business days prior to the respective Purchase Notice Date, unless waived upon mutual discretion between us and Alumni, up to an amount no greater than an aggregate purchase price equal to $3,000,000, at the Regular Purchase Price, or (B) the number of ADSs having an aggregate purchase price equal to the lesser of $500,000 or thirty percent (30%) of the trading volume of the ADSs on the Principal Market beginning at 4:00 a.m. New York time on the Purchase Notice Date and ending at the time on the Purchase Notice Date that the Purchase Notice has been received by email by Alumni, at the Forward Purchase Price. Subject to the terms of the Any Market Purchase Agreement, we may deliver up to two Purchase Notices with the Forward Purchase Price on any given business day. The Any Market Purchase Agreement also prohibits us from directing Alumni to purchase any ADSs (i) if  those ADSs, when aggregated with all other ADSs then held or beneficially owned by Alumni and its affiliates, would result in Alumni and its affiliates holding or having beneficial ownership, at any single point in time, of more than 4.99% (9.99% in the case of Forward Purchase Notices) of the number of ADSs outstanding immediately after the issuance of Purchase Notice Securities issuable pursuant to a Purchase Notice, or (ii) where the issuance of such ADSs, when aggregated with all other ADSs and Ordinary Shares then held or beneficially owned by Alumni and its affiliates, would result in Alumni and its affiliates holding or having beneficial ownership, at any single point in time, of more than 4.99% (9.99% in the case of Forward Purchase Notices) of the Company’s issued share capital or voting rights in it (unless and until the Company obtains the approval of its shareholders for the issuance of ADSs in excess of such amount), in either case subject to the option to issue Prefunded Warrants in lieu of ADSs with respect to the sales pursuant to any Regular Purchase Notice.\n\n*ATM Program with H.C. Wainwright & Co., LLC*\n\nOn February 3, 2025, we entered into a sales agreement (the “Wainwright Sales Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), for the sale of ADSs, pursuant to which we are able to offer and sell, from time to time, ADSs through our ATM program, with Wainwright acting as our agent. Under the prospectus supplement relating to the ATM program and the accompanying base prospectus, we are permitted to sell ADSs having an aggregate offering price of up to $387,230 from time to time through Wainwright, acting as our agent, in accordance with the Wainwright Sales Agreement. To date, we have sold 890,001 ADSs at a weighted average offering price of $3.85 per ADS for aggregate net\n\n121\n\n[Table of Contents](#TOC)\n\nproceeds of approximately $3.3 million pursuant to the Wainwright Sales Agreement and related prospectus supplement and accompanying base prospectus.\n\n*Term Loan Facility*\n\nOn February 23, 2020, we, through our wholly-owned subsidiary, RedHill U.S., entered into the Credit Agreement with HCRM, as Administrative Agent, and the lenders from time to time party thereto. Pursuant to the terms of the Credit Agreement, RedHill U.S. received a $30 million loan following the signing of the Credit Agreement. An additional $50 million tranche was used to fund the acquisition of rights to Movantik® from AstraZeneca. See “Item 4. Information on the Company – B. Business Overview – Sale of Movantik® to HCRM.*”*\n\nWe also entered into a Security Agreement, a Pledge Agreement, an Israeli-law governed Fixed Charge Debenture and an Israeli-law governed Floating Charge Debenture in favor of HCRM, pursuant to which our obligations under the Credit Agreement (and those of RedHill U.S.) were secured by a pledge of all of our holdings of the capital stock of RedHill U.S., substantially all of the assets of RedHill U.S., and all of our assets relating in any material respect to Talicia®.\n\nOn February 2, 2023, we reached an agreement with HCRM for the extinguishment of all our debt obligations under the Credit Agreement in connection with the transfer of our rights in Movantik® to Movantik Acquisition Co., an affiliate of HCRM. HCRM assumed substantially all post-closing liabilities relating to Movantik®, with RedHill U.S. retaining substantially all pre-closing liabilities relating to Movantik®. These collateral documents were amended to provide HCRM with security interests in (i) an escrow account (“Escrow Account”) established to pay pre-closing liabilities related to Movantik® that were retained by RedHill U.S. under the terms of the asset purchase agreement, (ii) Talicia®-related assets, (iii) our former Aemcolo®-related assets and (iv) accounts receivable related to Movantik® accrued as of the Closing (as defined in the APA) to secure “Go-Forward Obligations” consisting of indemnification obligations under the APA and the Credit Agreement and scheduled pre-closing liabilities relating to Movantik® until substantially all pre-closing liabilities relating to Movantik® were paid or other specific conditions were met.\n\nOn July 15, 2024, we signed a Global Termination Agreement with Movantik Acquisition Co., Valinor Pharma, LLC, and HCR Redhill SPV, LLC, affiliates of HCRM. As a result of the agreement, we received approximately $9.9 million in cash. This amount was in settlement of liabilities related to Movantik® that were allocatable to HCRM and its affiliates under their agreements with us. As the cash received was less than the total net amount of these liabilities (approximately $12.2 million), we recognized a loss of approximately $2.3 million resulting from the termination agreement, presented under “Other expenses” in our consolidated statements of comprehensive income (loss) in our financial statements included elsewhere in this Annual Report. We also gained full control over an additional $0.7 million previously held in a restricted account and settlement of trade balances resulting from the transition services. The agreement terminated all existing credit ties with the agreement parties, removed the lien on Talicia® and restored full control over cash collections back to us.\n\n*ATM Program with Cantor Fitzgerald & Co. and SVB Leerink LLD*\n\nOn July 29, 2021, we entered into the sales agreement (the “Cantor – SVB Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and SVB Leerink LLC (“SVB”), for the sale of ADSs, pursuant to which we were able to offer and sell, from time to time, ADSs through our ATM program, with SVB and Cantor acting as our agents. Under the prospectus supplement relating to the ATM program and the accompanying base prospectus, we offered and were permitted to sell ADSs having an aggregate offering price of up to $100.0 million from time to time through SVB and Cantor, acting as our agents, in accordance with the Cantor – SVB Sales Agreement. On November 3, 2022, we received notice from SVB notifying us and Cantor of SVB’s termination of the Cantor – SVB Sales Agreement with respect to itself. On April 4, 2024, we delivered written notice to Cantor and terminated the Cantor – SVB Sales Agreement. Prior to termination, we sold 1,378 ADSs at a weighted average offering price of $1,871.07 per ADS for approximate aggregate net proceeds of approximately $2.5 million pursuant to the Cantor – SVB Sales Agreement and related prospectus supplement and accompanying base prospectus since the launch of the ATM program in July 2021.\n\n122\n\n[Table of Contents](#TOC)\n\n*Additional Cash Requirements*\n\nWe are obligated to make various payments upon the achievement of agreed-upon milestones or make certain royalty payments under our in-license agreements with Apogee with respect to opaganib and with Heidelberg with respect to RHB-107, under our asset purchase agreement with Giaconda Limited with respect to Talicia®, RHB-104, and RHB-106 and under our agreement with UCF or the University of Minnesota, pursuant to which we are obligated to make various payments upon the achievement of agreed-upon milestones or make certain royalty payments. See “ - Company Overview – Therapeutic Candidates” above. All of our in-licensing agreements are terminable at-will by us upon prior written notice.\n\nIn addition, we continue to have negative cash flows from operations, and our ability to generate sufficient revenues for our operations is significantly limited after the sale of the rights to Movantik®. We estimate that, absent sufficient revenues from  our continuing operations and other sources to fund our operations and meet our obligations- including the remaining pre-closing liabilities related to Movantik® and the additional liabilities assumed under the Global Termination Agreement, as described above- we will need to raise significant additional capital in order to continue as a going concern. Our current cash and cash equivalents are not sufficient to continuously fund our operations and satisfy our payment obligations for a period exceeding one year from the date of this Annual Report. If we are unable to secure additional financing, we may be required to reduce our operations, divest certain assets, or take other measures that could materially adversely affect our reputation, business, financial condition or results of operations.\n\nHowever, additional financing may not be available on acceptable terms, if at all, including due to the difficult conditions in the capital markets, particularly with respect to securities of biopharmaceutical companies on the U.S. stock exchanges, including the ADSs, and due to the very low market capitalization which makes it more difficult to raise significant amounts of capital. If we are not able to maintain compliance with Nasdaq’s continued listing requirements this would also adversely affect our ability to raise capital.\n\nOur future capital requirements will depend on many factors including but not limited to:\n\n●our ability to successfully commercialize commercial products and our therapeutic candidates, upon approval, if any, including securing commercialization agreements with third parties and favorable pricing and market share;\n\n●we may consume available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated; the regulatory path of each of our therapeutic candidates;\n\n●the progress, success, and cost of our clinical trials and research and development programs;\n\n●the costs, timing, and outcome of regulatory review and obtaining regulatory approval of our therapeutic candidates and addressing regulatory and other issues that may arise post-approval; the costs of enforcing our issued patents and defending intellectual property-related claims;\n\n●the costs of developing sales, marketing, and distribution channels; and\n\n●consumption of available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated.\n\nCash Flow\n\n*Net Cash Used in Operating Activities*\n\nNet Cash Used in Operating Activities for the year ended December 31, 2025, was $9.7 million, compared to $9.4 million for the year ended December 31, 2024. The cash used in operating activities was primarily directed towards settling pre-closing liabilities related to Movantik® and other operational activities.\n\n*Net Cash Provided by (used in) Investing Activities*\n\nNet Cash Provided by Investing Activities for the year ended December 31, 2025, was $1.7 million, primarily related to the proceeds from the investment in a joint venture, compared to an immaterial amount used in investing activities for the year ended December 31, 2024.\n\n123\n\n[Table of Contents](#TOC)\n\n*Net Cash Provided by Financing Activities*\n\nNet Cash Provided by Financing Activities for the year ended December 31, 2025, was $7.3 million, primarily generated through equity offerings and exercise of certain warrants. Net Cash Provided by Financing Activities for the year ended December 31, 2024, was $8.4 million, primarily generated through equity offerings.\n\nWe did not have any material commitments for capital expenditures, including any anticipated material acquisition of plant and equipment or interests in other companies, as of December 31, 2025.\n\n**C.          Research and Development, Patents and Licenses**\n\nOur research and development expenses consist primarily of costs of clinical trials, professional services, share-based payments and payroll, and related expenses. The clinical trial costs are mainly related to payments to third parties to manufacture our therapeutic candidates, to perform clinical trials with our therapeutic candidates and to provide us with regulatory services. We charge all research and development expenses to operations as they are incurred. The research and development of certain of our product candidates, including opaganib, are supported by grants and industry partners (e.g. ANZUP/Bayer)\n\nDue to the inherently unpredictable nature of clinical development processes, we are unable to estimate with any certainty the costs we will incur in the continued development of the therapeutic candidates in our pipeline for potential commercialization. Our future research and development expenses will depend on the preclinical and clinical success of each therapeutic candidate, and the ongoing assessments of each therapeutic candidate’s commercial potential. In addition, we cannot forecast with any degree of certainty which therapeutic candidates may be subject to future commercialization arrangements, when such commercialization arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. See “Item 3. Key Information – D. Risk Factors – Risks Related to Regulatory Matters - Talicia® or any product for which we may obtain regulatory approval or acquire commercialization rights may not become or continue to be commercially viable products.”\n\nAs we obtain results from pre-clinical and clinical trials, we may elect to discontinue or delay the development and clinical trials for certain therapeutic candidates in order to focus our resources on more promising therapeutic candidates or projects. Completion of clinical trials by us or our licensees may take several years or more, but the length of time generally varies according to the type, complexity, novelty and intended use of a therapeutic candidate. See “Item 3. Key Information – D. Risk Factors – Risks Related to Regulatory Matters.”\n\nWe expect our research and development expenses to stay material as we continue the advancement of our pre-clinical and clinical trials and therapeutic candidates’ development. The lengthy process of completing pre-clinical and clinical trials and seeking regulatory approvals for our therapeutic candidates requires substantial expenditures or third party support. Any failure or delay in completing clinical trials, or in obtaining regulatory approvals, could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have a material adverse effect on our operations. Due to the factors set forth above, we are not able to estimate with any high certainty if and when we would recognize any substantial revenues from our projects.\n\n124\n\n[Table of Contents](#TOC)\n\n**D.          Trend Information**\n\nOther than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.\n\n**E.****Critical Accounting Estimates**\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 our consolidated financial statements and the accompanying notes. Some of the policies described in Note 2 of our consolidated financial statements involve a high degree of judgment or complexity. We believe that the most critical accounting policies and significant areas of judgment and estimation are in:\n\n●Recognition and measurement of allowance for rebates and patient discount programs.\n\n●Impairment reviews of intangible research and development assets.\n\nRecognition and Measurement of Allowance for Rebates and Patient Discount Programs\n\nWe offered various rebate and patient discount programs, which resulted in discounted prescriptions to qualified patients. Rebates and discounts provided to the wholesalers and to the patients under these arrangements were accounted for as variable consideration, and were recognized as a reduction in revenue, for which unsettled amounts were accrued. The allowance for these rebates was calculated based on historical and estimated utilization of the rebate and discount programs at the time the revenues were recognized. The main estimates used in recognizing and measuring this allowance relate to the amount of products sold to customers not yet prescribed to patients (units “in the channel”) and projected duration of the Company to sell the units in the channel. We periodically evaluate our estimates against actual results and, if necessary, updates the estimates accordingly.\n\nImpairment Reviews of Intangible Research and Development Assets\n\nWe review annually or when events or changes in circumstances indicate the carrying value of the research and development assets may not be recoverable.\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 our estimated post-tax weighted average cost of capital which was 17.2% as of December 31, 2025.\n\nThe main estimates used in calculating the recoverable amount include: outcome of the therapeutic candidates research and development activities; probability of success in gaining regulatory approval, size of the potential market and our asset’s specific share in it and amount and timing of projected future cash flows.\n\n​\n\n125\n\n[Table of Contents](#TOC)"}