NOTE 9 - INCOME TAX

a)	Corporate tax rate

Ordinary taxable income in Israel is subject to a corporate tax rate of 23%.

ii.

The Company’s subsidiary Entera Bio, Inc. is taxed separately under the U.S. tax laws at a tax rate of 29% (federal and state tax)

b)	Losses for tax purposes carried forward to future years

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

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

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

c)	Tax assessments

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

d)	Loss before income taxes is composed of the following:

	Year ended December 31
	2025		2024
Entera Bio Ltd.(domestic)		11,436		9,479
Entera Bio Inc.(foreign)		3		48
Total loss before taxes		11,439		9,527

e)	Income tax expense:

	Year ended December 31
Current:	2025		2024
Subsidiary: (foreign)		-		-
Total current income tax		-		-
Deferred income taxes – subsidiary (foreign)		-		14
Total deferred income taxes		-		14
Total income tax expense		-		14

f)	Deferred income taxes:

	December 31,
Deferred tax assets:	2025			2024
Net operating loss carry forward		21,114			19,208
Research and development		1,027			854
Share-based compensation		687			639
Other		133			172
Net deferred tax assets before valuation allowance		22,961			20,873
Valuation allowance		(22,961	)		(20,873	)
Net deferred tax assets		-			-

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

g)	Roll-forward of valuation allowance:

Balance at January 1, 2024			19,471
Additions			1,402
Balance at January 1, 2025			20,873
Additions			2,088
Balance at December 31, 2025			22,961

h)	Reconciliation of theoretical tax expenses to actual expenses:

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

	Year Ended December 31, 2025						Year Ended December 31, 2024
	$			%			$			%
Statutory corporate tax rate		(2,630	)		(23	)		(2,202	)		(23	)
Foreign tax effects
United States		(1	)		*			(3	)		*
Non-taxable or non-deductible items:
Share-based compensation		535			(23	)		815			(23	)
Other		8			(23	)		2			(23	)

Change in valuation allowance		2,088			(23	)		1,402			(23	)
Effective tax rate		-			-			14			*