ORAMED PHARMACEUTICALS INC.

NOTE 1 - GENERAL:

Incorporation and Operations

Oramed Pharmaceuticals Inc. (collectively with its subsidiaries, the “Company”, unless the context indicates otherwise), a Delaware corporation, was incorporated on April 12, 2002.

On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd. (the “Subsidiary”), which is engaged in research and development.

On March 18, 2021, the Company entered into a license agreement with Oravax Medical Inc. (“Oravax”) and holds 63% of Oravax’s issued and outstanding share capital on a fully diluted basis, as of the date of issuance. Consequently, Oramed consolidates Oravax in its consolidated financial statements since that time.

On July 1, 2024, the Company incorporated a wholly-owned subsidiary in Nevada, Oramed NewCo, Inc. (“OraTech”), which was intended to serve as the company for the joint venture with Hefei Tianhui Biotech Co., Ltd. (“HTIT”) (see below).

Joint venture with HTIT

On February 7, 2025, the Company and HTIT entered into a Joint Venture Agreement (the “JV Agreement”), amending the original agreement signed on January 22, 2024. The joint venture (“JV”) was formed with the purpose of advancing the development and commercialization of oral insulin, combining the Company’s proprietary technology and funding with HTIT’s manufacturing capabilities. Through this partnership, the JV was expected to have the technology, resources, and production capacity to bring oral insulin to market.

The initial closing of the JV Agreement, initially set on April 30, 2025, and was subsequently extended. However, HTIT was unable to satisfy the closing conditions under the JV Agreement and the supplemental agreement. On October 23, 2025, the Company provided notice to HTIT to terminate the JV Agreement and the supplemental agreement. See note 16(c).

Scilex Transactions

See note 4 regarding the 2023 Scilex Transaction (as defined herein) and the 2024 Refinancing (as defined herein) and the Option Agreement (as defined in note 4).

In connection with the Scilex Transaction, on February 12, 2025, the Company received 50% equity interest in RoyaltyVest (“RoyaltyVest”), a company incorporated in the British Virgin Islands. For further details please see note 4 and note 6.

Investment in Alpha Tau Medical Ltd.

In April 2025, the Subsidiary acquired approximately 17% of the outstanding ordinary shares of Alpha Tau Medical Ltd. (“Alpha Tau”) (Nasdaq: DRTS) for an aggregate purchase price of $36,900. Concurrently, the Subsidiary and Alpha Tau also entered into a strategic services arrangement (“Service Agreement”). Further details are provided in note 8.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**U.S. Dollars in thousands (except share and per share data)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

The condensed consolidated financial statements included herein have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and, on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Form 10-K”). These condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results of the periods presented. Certain information and disclosures normally included in annual consolidated financial statements have been omitted in this interim period report pursuant to the rules and regulations of the Securities and Exchange Commission. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by U.S. GAAP for annual financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the 2024 Form 10-K. The results for interim periods are not necessarily indicative of a full fiscal year’s results.

Basic income per common stock is computed by dividing the net income attributable to stockholders for the period by the weighted average number of shares of common stock outstanding for each period, including vested restricted stock units (“RSUs”).

For the diluted income per share calculation for the nine and three months ended September 30, 2025 the weighted average number of shares outstanding during the period is adjusted for the potential dilution that could occur in connection with employee share-based payment, using the treasury stock method. The difference in the denominator results from the dilutive impact of 1,400,160 and 1,018,202 options and RSUs for the nine and three months ended September 30, 2025, respectively.

For the nine and three-month periods ended September 30, 2025, options to purchase common stock, warrants and RSUs in the amount of 1,410,533 and 1,469,908, respectively, were excluded from the calculation of diluted income per share, as their effect was antidilutive.

For the nine and three-month periods ended September 30, 2024, options to purchase common stock, warrants and RSUs in the amount of 726,018 and 881,686, respectively, were excluded from the calculation of diluted income per share, as their effect was antidilutive.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

In November 2024, the FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for years beginning after December 15, 2026, and interim periods within years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures.

In July 2025, the FASB issued ASU 2025-05 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”. The ASU introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. Under the practical expedient, when developing reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual reporting periods beginning after December 15, 2025 and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. The Company is evaluating the impact of ASU 2025-05 on its consolidated financial statements if it elects to apply the practical expedient.

In September 2025, the FASB issued ASU No. 2025-07 (“ASU 2025-07”), Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The guidance refines the scope of Topic 815 by clarifying which contracts are subject to derivative accounting and expand the scope exception for certain contracts not traded on an exchange to include contracts for which settlement is based on operations or activities specific to one of the parties to the contract. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The amendments in ASU 2025-07 are effective for annual periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments may be applied prospectively or on a modified retrospective basis. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements.

The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows:

As of September 30, 2025 and December 31, 2024, the carrying amounts of cash equivalents, short-term deposits, and accounts payable approximate their fair values due to the short-term maturities of these instruments.

The amounts funded in respect of employee rights are stated at cash surrender value which approximates its fair value.

HTIT

On November 30, 2015, the Company entered into a TLA, with HTIT and on December 21, 2015, the parties entered into an amended and restated technology license agreement that was further amended by the parties on June 3, 2016 and July 24, 2016 (the “HTIT License Agreement”).

As of December 31, 2024, an aggregate amount of $22,382 was allocated to the HTIT License Agreement, all of which were received through December 31, 2024. Through December 31, 2024, the Company recognized revenue associated with this agreement in the aggregate amount of $20,382, and deferred the remaining amount of $2,000, which was presented as long-term deferred revenues on the consolidated balance sheet as of December 31, 2024.

Through September 30, 2025, the Company recognized revenue associated with the HTIT License Agreement in an aggregate amount of $22,382, of which $2,000 was recognized in the nine months ended September 30, 2025 following HTIT’s waiver of any claims and demands against the Company which was signed in connection with the JV Agreement.

Alpha Tau

The Company recognizes income from its Service Agreement with Alpha Tau for investor relations and public relations on a straight-line basis. Under the Service Agreement, the Company received non-cash consideration of Alpha Tau Warrants (as defined below) to purchase up to 3,237,000 shares, measured at their issuance date fair value of $2,727 and entitled to receive six semi-annual payments of $500, totaling $3,000. The income is recognized on a straight-line basis and presented under the “Other income, net” line item (net of related expenses), since the Company does not view investor relations services to be output of its ordinary activities. In addition, changes in the fair value of the Alpha Tau Warrants are presented under “Financial Income (loss), net”.

In April 2025, the Company received the first $500 payment. Of this amount, $423 was recognized as income and recorded under “Other income, net,” while the remaining $77 was deferred and presented under “Deferred income”.

In addition, the Company recorded an income of $322 related to the straight-line recognition of the Alpha Tau Warrants under “Other income, net”. For further details, see Note 8.

The Company holds an investment in Alpha Tau granting it significant influence over the investee. In determining whether the Company has significant influence, the Company considered not only whether its ownership is equal to or greater than 20%, but less than or equal to 50%, but also whether it has a board seat and whether it participates in the policy-making process of the investee, among other criteria.

Investments granting significant influence are generally accounted for under the equity method. For the investment in Alpha Tau, the Company has elected the fair value option under ASC 825-10. The fair value option has been elected as the Company believes it best reflects the underlying economics of the investment in Alpha Tau. As a result, the Company recognizes the change in the fair value in “Financial income (loss), net”.

Summarized financial information for Alpha Tau, as determined in accordance with Rule 8-03(b)(3) of Regulation S-X is included in note 8.

NOTE 3 - MARKETABLE SECURITIES

The Company’s marketable securities include investments in equity securities of DNA Group (T.R.) Ltd. (“DNA”), Entera Bio Ltd. (“Entera”), Scilex Holding Company (“Scilex”) and Pelthos Therapeutics Inc (“Pelthos”) at fair value with changes in fair value recognized in income.

Composition

Pelthos Therapeutics Inc. Securities Purchase Agreement

On July 1, 2025, the Company entered into a securities purchase agreement with Pelthos Therapeutics Inc. (“PTHS”), pursuant to which the Company invested $1,500 and acquired 150,000 shares of PTHS common stock.

In connection with this transaction, the Company entered into a customary registration rights agreement with PTHS and a customary lock-up agreement pursuant to which the Company is not permitted to sell its shares of PTHS until December 31, 2025, subject to exceptions and earlier termination as set forth in the lock-up agreement.

PTHS ordinary shares are traded on the Nasdaq Capital Market. The fair value of those securities is measured at the quoted prices of the securities on the measurement date. The value of the shares as of September 30, 2025 was $4,200.

The Company has classified the PTHS ordinary shares as short-term marketable securities.

NOTE 4 - INVESTMENTS, AT FAIR VALUE

On April 14, 2025, Scilex effected a 1-for-35 reverse stock split of its issued and outstanding common stock (“Reverse Split”). As a result, every 35 shares of Scilex common stock were automatically reclassified into 1 share of common stock, with fractional shares rounded up to the nearest whole share. Unless otherwise indicated, all share numbers presented below reflect the effect of the Reverse Split. The 6,500,000 Subsequent Penny Warrants (as defined below) that were outstanding and had not been exercised into Scilex common stock as of the Reverse Split date, were not subject to adjustment under the Reverse Split. Accordingly, the number of warrants is presented at its original, pre-split amount.

NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued):

2023 Scilex Transaction

On September 21, 2023, the Company entered into and consummated the transactions (collectively, the “2023 Scilex Transaction”) contemplated by a securities purchase agreement with Scilex, pursuant to which Scilex issued to the Company:

On September 20, 2024, the Company and Scilex entered into an extension agreement (the “Extension Agreement”) to extend the due date of the September 21, 2024 payment. Pursuant to the Extension Agreement, Scilex paid to the Company $2,000 on September 23, 2024, which payment was to be applied as follows: (i) $1,700 to the payment due under the Tranche A Note on March 21, 2025 and (ii) $300 to purchase the Transferred Warrants (as defined below).

In January 2025, the Company extended Tranche A Note’s maturity from March 21, 2025 to December 31, 2025 (the “Extended Maturity Date”). Interest will continue to accrue and be payable on the Extended Maturity Date. In consideration of the extension, the Company received 92,858 shares of Scilex common stock.

As per the Tranche A Note terms, if the Tranche A Note is not repaid in full on or prior to March 21, 2024, an exit fee of $3,056 is due. Since the Tranche A Note was not repaid by that date, the Company is entitled to the above-mentioned exit fee at the Extended Maturity Date of the Tranche A Note. No payments were received from Scilex in connection with Tranche A note during the nine months ended on September 30, 2025. As of September 30, 2025, Scilex has repaid $69,200 of the amount due under the Tranche A Note.

The Tranche A Note constitutes senior secured indebtedness of Scilex and is guaranteed by all existing or future formed, direct and indirect, domestic subsidiaries of Scilex and is secured by a first priority security interest and liens on all of the assets of Scilex, subject to customary and mutually agreed permitted liens and except for certain specified exemptions.

On October 30, 2024, the Company exercised 128,572 Closing Penny Warrants and 57,143 Subsequent Penny Warrants. See details below for the remaining Subsequent Penny Warrants under the Option Agreement.

NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued)

2023 Scilex Transaction and 2024 Refinancing

2023 Scilex Transaction (continued)

Following the 2024 Refinancing (as defined and described below), on October 8, 2024, Scilex used $12,500 of the net proceeds from the proceeds of the Tranche B Note (as defined below) for the partial repayment of the outstanding balance under the Tranche A Note.

The Company elected the fair value option for the Tranche A Note and the Penny Warrants in order to reduce operational complexity of bifurcating embedded derivatives. Changes in value are recorded under financial income (loss), net and include interest income on the Tranche A Note.

The valuation was performed based on several scenarios. Each scenario took into consideration the present value of the Tranche A Note’s cash flows and the Warrants’ value. The total value of the 2023 Scilex Transaction (and of each of its components) was valued on a weighted average of the different scenarios.

The discount rate of the Tranche A Note was based on the B- rating zero curve in addition to a risk premium which takes into account the credit risk of Scilex and ranged between 128.1 % to 128.4%.

Until March 31, 2025 the fair value of the Subsequent Penny Warrants was calculated based on the closing price of the Scilex common stock on the Nasdaq Capital Market. However, from June 30, 2025 and forward, the Company used a fair value methodology. For more information see note 2(d).

The table below represents the fair value composition of the Tranche Note A:

As of September 30, 2025 and December 31, 2024, the Tranche A Note is included under Investments at fair value, current assets.

As of December 31, 2024, and September 30, 2025, the fair value of the Tranche A Note was less than the aggregate unpaid principal balance (which includes interest payable on maturity) by $8,114 and $4,805, respectively.

In October 2024, the Company entered into the following transactions (collectively, the “2024 Refinancing”) pursuant to which Scilex issued to the Company:

a. Convertible Notes SPA

The Company entered into a securities purchase agreement (the “Convertible Notes SPA”) with the other Tranche Note B holders (together with the Company, the “Buyers”) and Scilex to refinance a portion of the Tranche A Note and pay off certain other indebtedness of Scilex. Pursuant to the Convertible Notes SPA, the Buyers purchased in a registered offering by Scilex (i) a new tranche B of senior secured convertible notes of Scilex in the aggregate principal amount of $50,000 (the “Tranche B Note”) repayable on a quarterly basis for 2 years, which Tranche B Note is convertible into shares of Scilex common stock and (ii) warrants to purchase up to 214,286 shares of Scilex common stock with an exercise price of $36.4 (the “Tranche B Warrants”). The Company purchased 50% of Tranche B Note and Tranche B Warrants and therefore purchased an aggregate principal amount of $25,000 of the Tranche B Note and 107,143 Tranche B Warrants.

Scilex received from the Company, in consideration of the Tranche B Note and the Tranche B Warrants issued to the Company, an exchange and reduction of the principal outstanding balance under the Tranche A Note of $22,500.

b. Royalty Purchase Agreement

The Company and the other Tranche Note B holders (together with the Company, the “RPA Purchasers”) entered into a Purchase and Sale Agreement (the “Royalty Purchase Agreement”) with Scilex and Scilex Pharmaceuticals Inc. (“Scilex Pharma”). Pursuant to the Royalty Purchase Agreement, the RPA Purchasers acquired the right to receive, in the aggregate,8% of net sales worldwide for 10 years (the “Purchased Receivables”) with respect to ZTLido (lidocaine topical system)1.8%, SP-103 (lidocaine topical system)5.4%, and any related, improved, successor, replacement or varying dosage forms of the foregoing. The Company acquired the right to receive 50% of the Purchased Receivables and therefore holds the right to receive 4% royalties.

In consideration for its interest in the Purchased Receivables, the Company exchanged and reduced $2,500 of the principal balance under the Tranche A Note.

c. ZTLido Rest of the World Binding Agreement

The Company and certain other institutional investors and Scilex entered into a binding term sheet (“ROW License Term Sheet”), regarding a license and development agreement, with respect to services, compositions, products, dosages and formulations comprising lidocaine, including without limitation, the product and any future product defined as a “Product” under Scilex Pharma’s existing (i) Product development agreement, dated as of May 11, 2011, with Oishi Koseido Co., Ltd. (“Oishi”), and Itochu Chemical Frontier Corporation (“Itochu”), as amended, and (ii) the associated commercial supply agreement, dated February 16, 2017, between Scilex, Oishi and Itochu, as amended.

The Company and such institutional investors hold this license through RoyaltyVest. See note 6 for additional information about RoyaltyVest.

The institutional investors who are parties to the Convertible Notes SPA, Royalty Purchase Agreement and the ZTLido License Agreement are all inter-related.

Tranche B Note Consent

On January 2, 2025, the Company and other Tranche B Note holders entered into deferral and consent agreements with Scilex (the “Tranche B Consent”), deferring Scilex’s first amortization payment under the Tranche B Note to October 8, 2026. In consideration, the Company received $877 ($500 of the principal amount and $372 accrued interest), and 71,429 shares of Scilex common stock.

In addition, as part of the Tranche B Consent and contingent upon certain conditions that were met:

The Company elected the fair value option for the Tranche B Note and the Royalty Purchase Agreement, the Note B Warrants meet the definition of a derivative and therefore will be measured at fair value. Changes in value are recorded under financial income (loss), net and include interest income on the Tranche B Note.

The valuation of the Tranche B Note was performed based on the binomial model, using a discount rate of 124.6%. Presented below is the summary of the assumptions and estimates that were used for the valuation as of September 30, 2025:

The fair value of the Note B Warrants was calculated based on Black-Scholes model.

Presented below is the summary of the assumptions and estimates that were used for the valuation of the Warrants as of September 30, 2025:

The value of the Royalty Purchase Agreement was calculated according to the royalty payment schedule and the aggregation of discounted cash flows derived from the royalty payments, using a discount rate of between 122.31% to 125.64%.

As of December 31, 2024, and September 30, 2025, the fair value of the Tranche B Note was less than the aggregate unpaid principal balance by $9,833 and $4,086, respectively.

In April 2025, and in accordance with Tranche B Note terms, the Company received from Scilex repayment of $3,722 ($3,125 of the principal amount and $597 accrued interest).

In July 2025, and in accordance with Tranche B Note terms, the Company received from Scilex repayment of $3,626 ($3,125 of the principal amount and $501 accrued interest).

The table below represents the fair value composition of the Tranche B Note:

Scilex Transaction Summary

The table below represents the fair value cycle of 2023 Scilex Transaction and 2024 Refinancing transaction throughout December 31, 2024 and September 30, 2025:

Scilex Transaction Summary (continued)

Financial income recognized in respect of the 2023 Scilex Transaction and the 2024 Refinancing, for the nine and three months ended September 30, 2025, were $38,567 and $32,283, respectively.

Financial expenses recognized in respect of the 2023 Scilex Transaction, for the nine and three months ended September 30, 2024, were $108 and $16,648, respectively.

The table below represents the fair value breakdown as of September 30, 2025:

During the nine and three months ended September 30, 2025, the Company sold 350,000 and 164,286, respectively, shares of common stock of Scilex. As of September 30, 2025, the Company no longer holds any shares of Scilex common stock.

As of June 30, 2025, the Company held 6,500,000 Subsequent Penny Warrants which are fully vested and exercisable. The Subsequent Penny Warrants were not subject to the Reverse Split, and accordingly, continue to entitle the Company to purchase 6,500,000 shares of Scilex common stock. The Subsequent Penny Warrants are subject to significant limitations on monetization, including restrictions under Nasdaq Listing Rule 5635.

On July 22, 2025, the Company entered into an option agreement (the “Option Agreement”) with Scilex, granting Scilex the right to repurchase the Company’s remaining 6,500,000 Subsequent Penny Warrants for a total purchase price of $27,000. In exchange for the Option Agreement, Scilex agreed to pay to the Company a non-refundable fee of $1,500 in two equal installments. The repurchase is structured in two tranches: $13,000 for 3,130,000 Subsequent Penny Warrants on or before September 30, 2025, and $14,000 for 3,370,000 Subsequent Penny Warrants on or before December 31, 2025. If Scilex completes the full repurchase and pays the associated option fee, the maturity of the Tranche A Note will be extended to March 31, 2026. Until the earlier of the expiration or termination of the Option Agreement, the Company has agreed not to exercise the Subsequent Penny Warrants. The fulfilment of the Option Agreement is subject to the ability of Scilex to have sufficient cash. If the agreement is terminated without completion, the Company may exercise the Subsequent Penny Warrants, subject to applicable Nasdaq shareholder approval thresholds.

Scilex Transaction Summary (continued)

On August 6, 2025, Scilex paid the initial option fee of $750. On September 30, 2025, Scilex repurchased 3,130,000 Subsequent Penny Warrants for a purchase price of $13,000, representing the first tranche the Option Agreement. Pursuant and subject to the terms of the Option Agreement, Scilex continues to have the option to repurchase the remaining 3,370,000 Subsequent Penny Warrants from the Company for a purchase price of $14,000 on or before December 31, 2025.

All Scilex securities described above are subject to a beneficial ownership limitation, which restricts the Company’s holdings to a maximum of 9.99% of Scilex’s outstanding shares at any time.

For additional information regarding the measurement of the Subsequent Penny Warrants, see note 2(d).

Profit Sharing Loan Agreement

On September 4, 2024, the Company entered into a loan agreement (the “Profit Sharing Loan Agreement”) with Rabi Binyamin 4 Tama 38 Ltd. (the “Borrower”) to finance a real estate project (the “Project”). According to the terms of the Profit Sharing Loan Agreement, Oramed agreed to loan NIS 5.5 million ($1,523) (the “Loan Principal”) to the Borrower. NIS 4.7 million ($1,307) was loaned upon signing the Profit Sharing Loan Agreement and an additional NIS 0.8 million ($237) will be loaned upon achievement of certain milestones. On October 28, 2025, the Borrower met the milestones and became entitled to the additional payment.

Upon completion of the Project, the Company is entitled to receive the Loan Principal and the greater of: (i)20% annual interest of the Loan Principal and (ii)40% of the Project profits.

On September 14, 2025, the Company loaned an additional NIS 0.5 million ($150) to the Borrower (“Additional Loan”). The Additional Loan bears an annual interest of 6% and shall be repaid by December 31, 2025. According to the Additional Loan agreement, the Company shall be entitled to instruct the Borrower that instead of repaying the Additional Loan on the maturity date, the principal amount of the loan, as well as any accrued interest up to the date of such notice, shall be deemed to constitute a loan amount provided by the Company, as part of the remaining portion of the Profit-Sharing Loan Agreement.

The Company decided to designate the Profit Sharing Loan Agreement as a whole under the Fair-Value option in accordance with Accounting Standards Codification (“ASC”) Topic 825 “Financial Instruments”. The valuation of the Profit Sharing Loan Agreement was based on various project profit scenarios. The Company used the Wang Transform model, a risk-neutral probabilities method, with an expected term of 2.5 years, a curve rate of 17.56% and a risk spread of 0.43%. The value of the Profit Sharing Loan Agreement and the Additional Loan as of September 30, 2025 was $1,830.

NOTE 5 – INVESTMENT IN REAL ESTATE

Real Estate – Castel

In January 2025, the Company entered into an agreement to acquire a parcel of land in Mevaseret Zion, Israel for a total purchase price of NIS 5,800 ($1,586). The transaction was structured as installments payments, and as of September 30, 2025, the Company had paid the full purchase price and presented the asset within real estate investment. The Company intends to pursue value-enhancing activities in connection with the land, with the goal of increasing its potential return upon future sale. The total paid amount is included under real estate investment.

As of September 30, 2025, the asset is registered under the Company’s ownership, therefore the Company reclassified its holding form advance payments for real estate to investment in real estate.

NOTE 6 - EQUITY METHOD INVESTEE

On October 8, 2024, the Company and certain other investors (“Additional Holders of Note B”) entered into a refinance agreement with Scilex. As part of the refinancing, the Company and the Additional Holders of Note B were granted rights to receive royalties from certain Scilex products. In connection with these rights, on January 2, 2025, the Additional Holders of Note B established RoyaltyVest Ltd. (“RoyaltyVest”), a company incorporated in the British Virgin Islands. On February 12, 2025, the Additional Holders of Note B transferred to the Company 50% of the issued and outstanding capital stock of RoyaltyVest.

As of September 30, 2025, the Company held a 50% equity interest in RoyaltyVest. The Company accounts for this investment using the equity method.

There are no unrecognized losses, guarantees, or commitments related to RoyaltyVest. In addition, no impairment losses were recorded during the reporting periods.

In addition to its original investment in RoyaltyVest, the Company is using RoyaltyVest as a potential investment vehicle for additional transactions conducted in collaboration with the other shareholders of RoyaltyVest.

As such, On March 4, 2025, the Company entered into a loan agreement with RoyaltyVest pursuant to which the Company made a loan to RoyaltyVest in the amount of $7,000 to purchase shares of by BioXcel Therapeutics, Inc. (Nasdaq: BTAI) (“BioXcel”). The loan is non-interest bearing and is non-recourse to the BioXcel shares. Repayment of the outstanding principal and yield shall be made from the proceeds of sales of BioXcel shares and warrants. The Company elected to measure the loan under the fair value option, and as such it is presented at fair value. During the nine months ended September 30, 2025, the Company received $6,251 of the principal amount from RoyaltyVest from the sales of BioXcel. For further details, see below in note 6c.

The transactions below were carried out by RoyaltyVest:

As part of the ROW License Term Sheet signed with Scilex under the Tranche B Note, on February 22, 2025, RoyaltyVest, entered into an additional License Agreement with Scilex (“ZTLido License Agreement”). Under the ZTLido License Agreement, RoyaltyVest acquired exclusive rights to develop, manufacture, and commercialize lidocaine-based products, including ZTLido (lidocaine topical system 1.8%) and SP-103, outside the United States. As part of the arrangement, RoyaltyVest and Scilex will each receive 50% of the net profits from the commercialization of these products.

In consideration for the rights to be provided under the proposed ZTLido License Agreement, as more fully described in the ZTLido License Agreement, (a) RoyaltyVest will invest (whether through cash consideration or in-kind payment through the provision of services) $200 per year toward expanding the Product, (b) Scilex will grant RoyaltyVest a worldwide, exclusive right, license and interest to all products rights for the development, out-licensing, commercialization of any Product outside of the United States and other territories, other than certain excluded designated territories ( “ROW Territory”), and (c) each of RoyaltyVest and Scilex will receive 50% percent of the net revenue (less expenses) generated from any product in the ROW Territory.

On February 28, 2025, RoyaltyVest entered into a worldwide (excluding the U.S.) license agreement for Gloperba products, as defined under the License and Commercialization Agreement between RxOmeg Therapeutics LLC and Scilex, dated June 14, 2022, as amended on January 16, 2025 (the “Gloperba License Agreement”). Under the Gloperba License Agreement, RoyaltyVest was granted an exclusive (including as to Scilex Pharma) license to all product-related rights worldwide to develop, manufacture, obtain regulatory approvals for, commercialize, and otherwise exploit the Gloperba products in the licensed territory. RoyaltyVest and Scilex will each be entitled to receive 50% of the net revenue generated from the commercialization of the Gloperba products.

NOTE 6 - EQUITY METHOD INVESTEE (continued):

On March 4, 2025, RoyaltyVest participated in a registered direct offering by BioXcel, acquiring 188,383 shares of BioXcel’s common stock,3,811,617 pre-funded warrants and accompanying warrants to purchase up to an additional 4,000,000 shares for a total consideration of $14,000. The warrants have an exercise price of $4.20 per share, are immediately exercisable, and will expire five years from the date of issuance. The pre-funded warrants have an exercise price of $0.001 per share, and are immediately exercisable with no expiration date.

As of September 30, 2025, RoyaltyVest has sold 4,000,000 shares and 2,600,000 warrants for $12,502. As of September 30, 2025, RoyaltyVest continues to hold 1,400,000 warrants and no longer holds any shares of BioXcel common stock.

NOTE 7 - LOAN AGREEMENT MEASURED IN FAIR VALUE

On March 24, 2025, the Company entered into a loan agreement with Hapisga Project – New Talpiot Ltd. to finance a purchase of a real estate asset in Jerusalem, Israel in the amount of up to $22,650 (“Hapisga”). The Company lent the amount with a one-year maturity, and a lien was registered on the property reflecting a commitment to register a first-ranking mortgage on a property, which is valued at approximately $890,000, providing significant collateral coverage. The loan bears an annual interest rate of 12%.

In addition, in March 2025, the Company entered into an additional loan agreement with Tova Chochma Im Nachala Ltd. (“Tova Chochama”) in the amount of $5,000. The loan bears an annual interest rate of 12%. The original maturity of the loan was set to be 14 days which was further extended, in April 2025, to up to 12 months. In May 2025, Tova Chochma repaid an amount of $500 to the Company, which will be offset against final repayment of the loan. The deposit amount does not accrue interest and therefore, the Company will be eligible for the entire interest on Tova Chochma’s portion of the loan’s principal. Tova Chochama can repay the loan at any time, with interest accruing until the date of actual repayment (but in no event, less than 6 months). This loan is also secured by the registration of the lien for Hapisga.

In April 2025, the Company loaned $26,921 in connection with the loans to Hapisga and to Tova Chochma.

The Company decided to designate the loan agreement as a whole under the fair-value option in accordance with ASC Topic 825 “Financial Instruments”. The valuation of the loan agreement was calculated in accordance with the weighted average expected cashflows of the loan. The predicted weighted average cash flows of the loan were discounted at a rate of 9.79%-16.31%. The value of the loan as of September 30, 2025 was $27,289. The changes in the fair value of the loan are recorded in the comprehensive income statement.

The table below represents the fair value breakdown as of September 30, 2025:

NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE

On April 24, 2025, the Subsidiary entered into a share purchase agreement with Alpha Tau (“SP Agreement”), pursuant to which the Subsidiary purchased 14,110,121 (16.65%) ordinary shares, no par value per share, of Alpha Tau in a registered direct offering at a price of $2.612 per share, for an aggregate purchase price of approximately $36,900. The closing of the transaction occurred on April 28, 2025. In connection with the investment, the Subsidiary has the right to nominate two out of eight directors to Alpha Tau’s board of directors, subject to certain conditions. In addition, since the SP Agreement date and until September 30, 2025, the Company purchased an additional 258,635 shares of Alpha Tau for an aggregate amount of $846. The Company also made an additional share purchase after September 30, 2025, as further described in Note 16b – Subsequent Events.

Concurrently, the Subsidiary and Alpha Tau entered into the Services Agreement, pursuant to which the Subsidiary will provide Alpha Tau with investor relations and public relations services. As consideration, Alpha Tau agreed to pay the Subsidiary a fee of $3,000 over three years and to issue to the Subsidiary warrants to purchase up to 3,237,000 ordinary shares of Alpha Tau at exercise prices ranging from $3.474 to $3.90 per share (“Alpha Tau Warrants”). The term of the Service Agreement is three years, with limited termination rights.

Due to the Company’s significant influence over operating and financial policies, Alpha Tau is considered a related party of the Company.

The following presents summarized financial information related to Alpha Tau as of September 30, 2025. This aggregate information has been compiled from the financial statements of Alpha Tau.

The amount presented above reflects Alpha Tau’s total net loss for the period and is calculated on a straight-line basis, as there were no significant transactions during the period.

On April 24, 2025 and September 30, 2025, the fair value of the Company’s investment in Alpha Tau was $36,856 and $64,483, respectively. The Company recognized an unrealized gain on its investment in Alpha Tau of $27,101 in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2025. The fair value of Alpha Tau’s ordinary shares held by the Company was determined using the closing price of Alpha Tau’s ordinary shares on April 24, 2025 and September 30, 2025 of $2.612 and $4.51, respectively. On April 24, 2025 and September 30, 2025, the Company held approximately 17%, of Alpha Tau’s ordinary shares’ voting interest.

The warrants issued under the Services Agreement are accounted as a separate transaction from the SP Agreement. The fair value of the warrants are calculated based on Black-Scholes model.

Presented below is the summary of the assumptions and estimates that were used for the valuation of the Alpha Tau warrants as of June 23, 2025, the issuance date, and September 30, 2025:

As of June 23, 2025, the issuance date, the fair value of the Alpha Tau warrants was $2,727. As of September 30, 2025, the fair value of the Alpha Tau warrants was $5,345. The change in fair value will be recognized under “financial income (loss), net”.

NOTE 9 - COMMITMENTS:

Under the terms of the Company’s funding from the IIA, royalties of 3% are payable on sales of products developed from a project so funded, up to a maximum amount equaling 100%-150% of the grants received (dollar linked) with the addition of interest at an annual rate based on SOFR.

At the time the grants were received, successful development of the related projects was not assured. The total amount received through December 31, 2024 was $2,213 ($2,570 including interest).

On February 18, 2025, the Company received approval from the IIA to transfer all of its IIA-funded technology to OraTech in accordance with the terms of the JV Agreement. This approval was granted upon the condition that the Company pays the aggregate IIA grant amount, plus accrued interest, less all royalties paid to date.

On February 27, 2025, the Company fulfilled its payment obligation by remitting $2,046 to the IIA, and as result the Company has no further obligations to the IIA. The amount of $1,987 was recognized in cost of revenue during the nine months ended September 30, 2025. The amount of $59 was recognized in previous periods.

On September 23, 2024, the Subsidiary entered into a Clinical Research Organization Services Agreement with a third party, to retain it as a clinical research organization (“CRO”). The services covered by the agreement include strategic planning, expert consultation, data processing, regulatory, clerical, project management and other research and development services requested by the Company for the Phase 3 clinical trial. As consideration for its services, the Company will pay the CRO a total amount of $11,577 during the term of the engagement and based on achievement of certain milestones, of which $1,726 recognized in research and development expenses through September 30, 2025.

Subsequent to September 30, 2025, the Company modified its clinical trial protocol and overall trial approach. The proposed new protocol is significantly smaller in scope and will enroll fewer participants than the original trial design. As a result of these changes, the Company is currently reexamining the terms and scope of the CRO Services Agreement to align with the revised trial design.

NOTE 10 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Composition:

NOTE 11 - STOCKHOLDERS’ EQUITY:

Stock -based compensation

Below is a table summarizing all of the RSU grants to employees made during the nine months ended September 30, 2025.

NOTE 11 - STOCKHOLDERS’ EQUITY (continued):

Performance restricted stock units (“PSUs”) granted

On January 2, 2025, the Company granted 328,500 PSUs representing a right to receive shares of the Company’s common stock to the Company’s executive officers. The total amount of the PSUs shall vest upon at the earliest of (1) the closing of a joint venture transaction with HTIT; or (2) the repayment to the Company of the value of its principal investment in Scilex plus 10%. The total fair value of these PSUs on the date of grant was $792 based on the quoted closing market share price of $2.41 on the Nasdaq Capital Market on the date of grant.

On January 2, 2025, the Board modified 294,000 outstanding PSUs that were granted to the Company’s executive officers adjusting the vesting criteria from market condition to performance targets, as mentioned above. The incremental fair value arising from the modification was $13.

As of September 30, 2025, the PSUs granted to the Company’s executive officers were deemed to have achieved the first updated performance target. As a result, the Company recognized stock-based compensation expense of $197 for the nine months ended September 30, 2025, equal to the unrecognized grant-date fair value of the original award plus the incremental fair value arising from the modification.

Restricted stock units (“RSUs”) granted

On June 5, 2025, the Company granted an aggregate of 150,000 RSUs representing a right to receive shares of the Company’s common stock to the Company’s board members. The RSUs granted to the board members vest in three equal annual installments on each of January 1, 2026, 2027 and 2028. The total fair value of these RSUs on the date of grant was $323, using the quoted closing market share price of $2.15 on the Nasdaq Capital Market on the date of grant.

On June 5, 2025, the Company granted an aggregate of 34,876 RSUs representing a right to receive shares of the Company’s common stock to the Company’s board members. The RSUs granted to certain board members vest in four monthly installments on each of June 5, 2025, July 1, 2025, October 1, 2025 and January 1, 2026. The total fair value of these RSUs on the date of grant was $75, using the quoted closing market share price of $2.15 on the Nasdaq Capital Market on the date of grant.

Buyback program

In June 2024, the Company’s board of directors authorized a stock buyback program pursuant to which the Company may, from time to time, repurchase and retire up to $20,000 in maximum value of its common stock. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The stock buyback program does not obligate the Company to purchase any shares and expires in June 2025. The authorization for the stock buyback program may be terminated, increased or decreased by the Company’s board of directors in its discretion at any time.

On May 21, 2025, the Company’s board of directors authorized a one-year extension of the Company’s current stock buyback program, which was set to expire in June 2026, pursuant to which the Company may, from time to time, purchase up to $20,000 in maximum value of its common stock.

During the nine and the three months ended September 30, 2025, the Company has repurchased 329,243 and 165,374, respectively, shares of its common stock under this program in the total amount of $732 and $361, respectively.

NOTE 12 - LEASES:

The Company has various operating leases for office space and vehicles. During the nine months ended September 30, 2025, the Company exercised the extension option for a portion of its office space, extending the lease term until August 31, 2030.

In connection with the extension of the lease agreement, the Company remeasured the right-of-use (ROU) asset and corresponding lease liability in accordance with ASC 842. The updated balances reflect the revised lease term and related payment obligations through August 31, 2030.

Below is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of September 30, 2025 and December 31, 2024:

Lease payments for the Company’s right-of-use assets over the remaining lease periods as of September 30, 2025 and December 31, 2024 are as follows:

NOTE 13 - FINANCIAL INCOME (LOSS), NET:

NOTE 14 - SEGMENT REPORTING:

The Company’s Chief Executive Officer, serving as the Chief Operating Decision Maker (CODM), evaluates operational performance and makes resource allocation decisions based on net income, which is reported in the condensed consolidated statements of comprehensive income. The Company has determined that it operates in asingle reportable segment, focused on research and development activities related to its proprietary products and technologies.

The CODM monitors budgeted versus actual net income, using this measure to assess segment performance and guide financial planning, which is consistent with the financial statements. In addition to its research and development activities, the Company holds financial investments, including a material investment in Scilex, Hapisga and Alpha Tau, see note 4, note 7 and note 8. The CODM monitors these investments separately from operational performance. Income and expenses related to financial instruments are reported as financial income in the consolidated statements of comprehensive income, reflecting their distinct nature from core business operations.

NOTE 15 - RELATED PARTY TRANSACTIONS:

Chief Scientific Officer

On July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY Ltd. (“KNRY”), an Israeli company owned by the Company’s Chief Scientific Officer, whereby the Chief Scientific Officer, through KNRY, provides services to the Company (the “Consulting Agreement”). The Consulting Agreement is terminable by either party upon 140 days prior written notice. The Consulting Agreement, as amended, provides that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreement.

Effective as of July 1, 2024, the monthly consulting fee of the Chief Scientific Officer is NIS 134,550 ($40).

Effective as of April 1, 2025, the Company entered into a consulting agreement with KNRY, whereby the Chief Scientific Officer, through KNRY, provides services as Chief Scientific Officer of the Company. The agreement is terminable by either party upon 140 days prior written notice. The agreement provides that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the agreement. The Chief Scientific Officer receives a monthly consulting fee of NIS 67,275 ($20). Pursuant to the agreement, KNRY and the Chief Scientific Officer each agree that during the term of the agreement and for a 12-month period thereafter, none of them will compete with the Company nor solicit employees of the Company.

NOTE 15 - RELATED PARTY TRANSACTIONS(continued):

In addition, the Company, through the Subsidiary, has entered into an employment agreement with the Chief Scientific Officer, effective as of April 1, 2025, pursuant to which the Chief Scientific Officer receives a gross monthly salary of NIS 51,750 ($16) in consideration for her services as Chief Scientific Officer of the Subsidiary. In addition, the Chief Scientific Officer is provided with a phone and a company car pursuant to the terms of her agreement.

President and Chief Executive Officer

Effective as of July 1, 2024, the Company entered into a consulting agreement with Shnida Ltd. (“Shnida”), whereby the Company’s President and Chief Executive Officer, through Shnida, provides services as President and Chief Executive Officer of the Company. The agreement is terminable by either party upon 140 days prior written notice. The agreement provides that Shnida will be reimbursed for reasonable expenses incurred in connection with performance of the agreement. Effective as of January 1, 2024, the President and Chief Executive Officer receives a monthly consulting fee of NIS 111,349 ($34). Pursuant to the agreement, Shnida and the President and Chief Executive Officer each agree that during the term of the agreement and for a 12-month period thereafter, none of them will compete with the Company nor solicit employees of the Company.

In addition, the Company, through the Subsidiary, has entered into an employment agreement with the President and Chief Executive Officer, effective as of July 1, 2024, pursuant to which, effective as of January 1, 2024, the President and Chief Executive Officer receives gross monthly salary of NIS 59,330 ($18) in consideration for his services as President and Chief Executive Officer of the Subsidiary. In addition, the President and Chief Executive Officer are provided with a phone and a company car pursuant to the terms of his agreement.

NOTE 16 - SUBSEQUENT EVENTS:

a. Scilex - Tranche B Note

On November 12, 2025, the Company received from Scilex repayment of $3,496 ($3,125 of the principal amount and $371 accrued interest).

b. Alpha Tau

Subsequent to September 30, 2025 and through November 11, 2025, the Company purchased an additional 89,104 ordinary shares of Alpha Tau for an aggregate purchase price of $364. Following these purchases, the Company holds an aggregate of 15,319,684 ordinary shares of Alpha Tau, representing approximately 17% of its outstanding share capital as of November 11, 2025.

c. HTIT

On October 20, 2025, the Company entered into a share repurchase agreement (the “Repurchase Agreement”) with HTIT pursuant to which HTIT agreed to sell back to the Company 1,155,367 shares of common stock of the Company at a purchase price of $2.23 per share for an aggregate price of $2,576. The closing of the Repurchase Agreement occurred on October 20, 2025, and the Shares have been cancelled and retired.

Pursuant to the JV Agreement with HTIT, the initial closing of the JV Agreement, initially set on April 30, 2025, and was subsequently extended. However, HTIT was unable to satisfy the closing conditions under the JV Agreement and the supplemental agreement, and on October 23, 2025, the Company provided notice to HTIT to terminate the JV Agreement and the supplemental agreement, effective as of the date of the notice.

d. Nano Dimension Ltd.

Subsequent to September 30, 2025 and through November 11, 2025, the Company purchased 1,102,651 ordinary shares of Nano Dimension Ltd for an aggregate purchase price of $2,788.