ORAMED PHARMACEUTICALS INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective. Management’s Annual Report on Internal Control over Financial Reporting Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. The Company’s internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions; ● provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and ● provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the current framework for Internal Control-Integrated Framework (2013) set forth by The Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024 at a reasonable assurance level. 45 Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. (a) Disclosure Pursuant to Item 5.03 of Form 8-K. Amendments to Bylaws On March 27, 2025, the Board amended and restated our by-laws, or the Amended and Restated By-Laws. The Amended and Restated By-Laws became effective as of March 27, 2025. The changes to the Amended and Restated By-Laws include (i) in a contested election, a director nominee shall be elected by a plurality of the votes cast by the stockholders entitled to vote at the election on such election of directors (an election shall be considered contested if, as of the last date on which nominees for director may be submitted in accordance with the Amended and Restated By-laws, the nominees for election to the Board of Directors exceed the number of positions on the Board to be filled by election at that meeting); and (ii) clarification that the officers of the Company shall be a Chief Executive Officer, a President, a Secretary and a Treasurer. This description of the amendments to the Amended and Restated By-Laws is qualified in its entirety by reference to the text of the Amended and Restated By-Laws filed as Exhibit 3.2 to this Annual Report on Form 10-K. (b) Termination of Rule 10b5–1 Trading Arrangements Not applicable . ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 46 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Directors and Executive Officers The name and age of each of our directors and executive officers, his or her position with us and the period during which such person has served as a director or executive officer of the Company are set forth below. Name Age Position Serving Since Nadav Kidron 50 President, Chief Executive Officer, Director and Chairman (effective as of June 30, 2022) 2006 Dr. Miriam Kidron 84 Chief Scientific Officer and Director 2006 Avraham Gabay 40 Chief Financial Officer and Treasurer 2024 Joshua Hexter 54 Chief Operating & Business Officer 2019 Daniel Aghion 43 Director 2024 Dr. Arie Mayer 68 Director 2019 Yehuda Reznick 77 Director 2024 Leonard Sank 59 Director 2007 Benjamin Shapiro 41 Director 2023 Mr. Derovan, our former Chief Legal Officer and Secretary, ended his service with the Company on March 5, 2024. Mr. Silberman, our former Chief Financial Officer, Treasurer and Secretary, ended his service with the Company on July 11, 2024. Dr. Miriam Kidron is Mr. Nadav Kidron’s mother. There are no other directors or officers of the Company who are related by blood or marriage. Business Experience The following is a brief account of the education and business experience during at least the past five years of each of our directors and of our executive officers who are not also directors, indicating the principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out. Mr. Nadav Kidron was appointed President, Chief Executive Officer and director in March 2006, and Chairman of the Board effective as of June 30, 2022. He is also Chairman of the board of MDG Real Estate Global, Ltd., director of Israel Advanced Technology Industries organization and until 2016 was a director of Entera Bio Ltd. In 2009, he was a fellow at the Merage Foundation for U.S.-Israel Trade Programs for executives in the life sciences field. From 2003 to 2006, he was the managing director of the Institute of Advanced Jewish Studies at Bar Ilan University. From 2001 to 2003, he was a legal intern at Wine, Mishaiker & Ernstoff Law Offices in Jerusalem, Israel. Mr. Kidron holds an LL.B. and an International MBA from Bar Ilan University, Israel. We believe that Mr. Kidron’s qualifications to serve on our Board include his familiarity with the Company as its founder, his experience in capital markets, as well as his knowledge and familiarity with corporate management. Dr. Miriam Kidron was appointed Chief Scientific Officer and director in March 2006. Dr. Kidron is a pharmacologist and a biochemist with a Ph.D. in biochemistry. From 1990 to 2007, Dr. Kidron was a senior researcher in the Diabetes Unit at Hadassah University Hospital in Jerusalem, Israel. Dr. Kidron was formerly a visiting professor at the Medical School at the University of Toronto (Canada), and is a member of the American, European and Israeli Diabetes Associations. Dr. Kidron is a recipient of the Bern Schlanger Award. We believe that Dr. Kidron’s qualifications to serve on our Board include her expertise in the Company’s technology, as it is based on her research, as well as her experience and relevant education in the fields of pharmacology and diabetes. 47 Mr. Avraham Gabay was appointed Chief Financial Officer, Treasurer and Secretary in June 2024. Prior to his appointment, Mr. Gabay served as interim chief financial officer of BiomX Inc. (NYSE American: PHGE) during 2023. From 2021 until 2023, Mr. Gabay served as the chief financial officer at Oravax Inc., a 63% owned subsidiary of the Company. From 2019 until 2021, Mr. Gabay was the chief financial officer of the Company. From 2015 to 2019, Mr. Gabay served as VP Finance at Orcam Technologies Ltd. From 2014 to 2015, Mr. Gabay provided economic services in the advisory department of KPMG Israel, a certified public accounting firm, and from 2013 to 2014, he worked in the tax department of the law firm Gornitzky & Co. In addition, Mr. Gabay serves as a director on the board of Iintoo Ltd. (TASE: INTO). Mr. Gabay holds a bachelor’s degree in law and accounting (magna cum-laude) from Tel-Aviv University and is a certified public accountant in Israel and a member of the Israeli Bar Association. Mr. Joshua Hexter was appointed Chief Operating and Business Officer in September 2019. Prior to his appointment, Mr. Hexter served as Chief Business Officer at BrainsWay Ltd. (Nasdaq/TASE: BWAY) from 2018 to 2019, a commercial stage medical device company focused on the development and sale of non-invasive neuromodulation products. From 2013 to 2018, Mr. Hexter served as Chief Operating Officer and VP Business Development of the Company and from 2007 to 2013, Mr. Hexter was a Director or Executive Director of BioLineRx Ltd. (Nasdaq/TASE: BLRX), a biopharmaceutical development company dedicated to identifying, in-licensing and developing innovative therapeutic candidates. Prior to his employment with BioLineRx, Mr. Hexter was a member of the board of directors and Chief Executive Officer of Biosensor Systems Design, Inc., a company developing market-driven biosensors. Mr. Hexter holds a bachelor’s degree from the University of Wisconsin and a master’s degree in management from Boston University. Dr. Daniel Aghion became a director in January 2024. Dr. Aghion has been a neurosurgeon at Memorial Neuroscience Institute in Florida since 2016, where he treats patients with a wide array of spine disorders, including severe degenerative spine diseases, spine trauma, cancer in the spine, spine tumors, peripheral nerve surgery and more. Dr. Aghion holds a Bachelor of Science degree from the University of Michigan and an MD from the Sackler School of Medicine at Tel Aviv University. He completed his residency at Rhode Island Hospital in 2015, and a complex spine fellowship at Johns Hopkins University in Baltimore in 2016. We believe that Dr. Aghion’s qualifications to serve on the Board include his extensive practical and academic medical background. Dr. Arie Mayer became a director in December 2019. Dr. Mayer is currently the Managing Director and Chairman of the Board of Sigma-Aldrich Israel Ltd. and has held that position since January 2010. Dr. Mayer has held various roles with Sigma-Aldrich Israel Ltd. since 1995 and was instrumental in introducing and developing the Cell Culture and Molecular Biology business for Sigma Aldrich Israel Ltd. Dr. Mayer holds a Bachelor of Science degree in chemistry from Hebrew University and a Ph.D. in biochemistry from Israel Institute of Technology. We believe that Dr. Mayer’s qualifications to serve on our Board include his experience as an executive in the biotechnology industry, with knowledge in managing large organizations, as well as his experience and relevant education in the fields of chemistry and biochemistry. Mr. Yehuda Reznick became a director in April 2024. Mr. Reznick served as an audit partner at Kesselman & Kesselman CPA, a member of PricewaterhouseCoopers International Limited, from 1999 until 2014. Prior to joining Kesselman & Kesselman, he was a tax and audit partner at Shachak, Peer Reznick CPA for sixteen years. Mr. Reznick currently serves on the board of directors of Oravax Medical Inc., an affiliate of the Company. Since 2019, Mr. Reznick has also served on the board of directors of Hiron-Trade Investments & Industrial Buildings Ltd (TASE: HRON). Mr. Reznick previously served on the board of directors of Bonus Biogroup Ltd (OTC: BBIXF) from 2017 to 2023. 48 We believe that Mr. Reznick’s qualifications to serve on the Board include his extensive operational experience and his business background and acumen. Mr. Leonard Sank became a director in October 2007. Mr. Sank is a South African entrepreneur and businessman, whose interests lie in entrepreneurial endeavors and initiatives, with over 30 years’ experience of playing significant leadership roles in developing businesses. Mr. Sank serves on the boards of a few national businesses and local non-profit charity organizations in Cape Town, where he resides. We believe that Mr. Sank’s qualifications to serve on our Board include his years of experience in development stage businesses, as well as his experience serving as a director of many entities. Mr. Benjamin Shapiro became a director in May 2023. Mr. Shapiro is a successful entrepreneur and business professional who co-founded The Daily Wire, a successful, industry leading, international media outlet in June 2015. Since May 2015, he has been host of “The Ben Shapiro Show,” a popular podcast, and he is the author of numerous New York Times best-selling books. Mr. Shapiro earned a B.A. in Political Science from UCLA in 2004, summa cum laude, and a law degree from Harvard Law School in 2007, cum laude. We believe that Mr. Shapiro’s qualifications to serve on the Board include his extensive operational experience and his business background and acumen. Board of Directors There are no agreements with respect to the election of directors. Each director is currently elected for a period of one year at our annual meeting of stockholders and serves until the next such meeting and until his or her successor is duly elected or until his or her earlier resignation or removal. The Board may also appoint additional directors. A director so chosen or appointed will hold office until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until his or her earlier resignation or removal. The Board has determined that Dr. Daniel Aghion, Dr. Arie Mayer, Yehuda Reznick, Leonard Sank and Benjamin Shapiro are independent as defined under the rules promulgated by the Nasdaq. Except for Dr. Arie Mayer and Mr. Reznick, each of whom serves on the board of directors of Oravax, a company 63% owned by us, none of the independent directors has any material relationship with us besides serving on our Board. We have determined that each of the directors is qualified to serve as a director of the Company based on a review of the experience, qualifications, attributes and skills of each director. In reaching this determination, we have considered a variety of criteria, including, among other things: character and integrity; ability to review critically, evaluate, question and discuss information provided, to exercise effective business judgment and to interact effectively with the other directors; and willingness and ability to commit the time necessary to perform the duties of a director. Board Meeting Attendance During the year ended December 31, 2024, our Board held six meetings and took action by written consent on nine occasions. Except Mr. Benjamin Shapiro, all of our directors attended at least 75% of the aggregate number of meetings of the Board and the committees that were held during the period such director served on the Board. Board members are encouraged to attend our annual meetings of stockholders. Board Evaluation Process Our Board is committed to continuous improvement and conducts a board and committee evaluation process each year, to ensure that our Board maintains optimal composition and functions effectively. As part of this process, the members of our Board complete a confidential written assessment of the performance, oversight and composition of the Board and its committees that is submitted to the Company secretary. The results are then reported back to the full Board. After the evaluations, the Board and management work to improve upon any issues presented during the evaluation process and to identify opportunities that may lead to further improvement. 49 Committees Audit Committee and Audit Committee Financial Expert The members of our Audit Committee are Dr. Daniel Aghion, Dr. Arie Mayer and Yehuda Reznick. Our Board has determined that Mr. Reznick is an “audit committee financial expert” as set forth in Item 407(d)(5) of Regulation S-K based on his experience as set forth above, and that all members of the Audit Committee are “independent” as defined by the rules of the SEC and the Nasdaq rules and regulations. The Audit Committee operates under a written charter that is posted on the “Investors” section of our website, www.oramed.com. The primary responsibilities of our Audit Committee include: ● Overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company; ● Appointing, compensating and retaining our registered independent public accounting firm; ● Overseeing the work performed by any outside accounting firm; ● Assisting the Board in fulfilling its responsibilities by reviewing: (i) the financial reports provided by us to the SEC, our stockholders or to the general public and (ii) our internal financial and accounting controls; ● Reviewing the Company’s policies with respect to cyber security risks and relevant contingent liabilities and risks that may be material to the Company; ● Recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations; and ● Reviewing major financial risk exposures and the steps management has taken to monitor and control such exposures, and discussing the guidelines and polices to govern the process by which risk assessment and management is undertaken. Our Audit Committee met four times and took action by written consent on four occasions during the year ended December 31, 2024. Compensation Committee The members of our Compensation Committee are Dr. Daniel Aghion, Yehuda Reznick and Leonard Sank. The Board has determined that all of the members of the Compensation Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Compensation Committee operates under a written charter that is posted on the “Investors” section of our website, www.oramed.com. The primary responsibilities of our Compensation Committee include: ● Reviewing, negotiating and approving, or recommending for approval by our Board the salaries and incentive compensation of our executive officers; ● Administering our equity based plans and making recommendations to our Board with respect to our incentive-compensation plans and equity-based plans; ● Making recommendations to our Board with respect to director compensation; and ● Authority to exercise all rights, authority and functions of the Board under our Clawback Policy. The Compensation Committee meets as often as it deems necessary, without the presence of any executive officer when approving compensation, except that the Company’s Chief Executive Officer, at the discretion of the Compensation Committee, may be present during the approval of, or deliberations with respect to, the compensation of other executive officers. The Compensation Committee may delegate any authority granted to it to one or more subcommittees of the Compensation Committee, in its sole discretion. 50 Our Compensation Committee met two times and took action by written consent on four occasions during the year ended December 31, 2024. Nominating Committee The members of our Nominating Committee are Dr. Arie Mayer and Leonard Sank. The Board has determined that all of the members of the Nominating Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Nominating Committee operates under a written charter that is posted on the “Investors” section of our website, www.oramed.com. The primary responsibilities of our Nominating Committee include: ● Overseeing the composition and size of the Board, developing qualification criteria for Board members based on background, skills, experience and diversity, and actively seeking, interviewing and screening individuals qualified to become Board members for recommendation to the Board; ● Recommending the composition of the Board for each annual meeting of stockholders; and ● Reviewing periodically with the Chairman of the Board and the Chief Executive Officer the succession plans relating to positions held by directors, and making recommendations to the Board with respect to the selection and development of individuals to occupy those positions. Our Nominating Committee met once and took one action by written consent during the year ended December 31, 2024. Code of Ethics We have adopted a Code of Ethics and Business Conduct for our senior officers, directors and employees. A copy of the Code of Ethics and Business Conduct is located at our website at www.oramed.com. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver from, a provision of the Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer or controller, or persons performing similar functions and that relates to the Code of Ethics by posting such information on our website, www.oramed.com . Insider Trading Policy We have adopted an insider trading policy, or the Policy, governing the purchase, sale and other transactions in our securities that applies to our directors, officers, employees, including part-time and temporary employees, and other covered persons, including immediate family members and entities controlled by any of the foregoing persons, as well as by the Company itself. The Policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales, buying put and selling call options and other hedging or derivative transactions in our securities) and establishes a regular blackout period schedule during which directors, executive officers, employees, and other covered persons may not trade in the Company’s securities, as well as certain pre-clearance procedures that directors and executive officers must observe prior to effecting any transaction in our securities. The Company believes that the Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Policy is filed as Exhibit 19.1 to this Form 10-K. ITEM 11. EXECUTIVE COMPENSATION. Compensation Discussion and Analysis This section explains the policies and decisions that shape our executive compensation program, including its specific objectives and elements, as it relates to our “named executive officers,” or NEOs. 51 Our NEOs for the year ended December 31, 2024 are those three individuals listed in the “Summary Compensation Table” below. The Compensation Committee believes that our executive compensation is appropriately designed to incentivize our NEOs to work for our long-term prosperity, is reasonable in comparison with the levels of compensation provided by comparable companies and reflects a reasonable cost. We believe our NEOs are critical to the achievement of our corporate goals, through which we can drive stockholder value. The Compensation Committee of our Board is comprised solely of independent directors as defined by Nasdaq and non-employee directors as defined by Rule 16b-3 under the Exchange Act. The Compensation Committee has the authority and responsibility to review and approve the compensation of our President and Chief Executive Officer and other executive officers. Other information concerning the structure, roles and responsibilities of our Compensation Committee is set forth in “Board Meetings and Committees—Compensation Committee” section. Our executive compensation program and our NEOs’ compensation packages are designed around the following objectives: ● attract, hire, and retain talented and experienced executives; ● motivate, reward and retain executives whose knowledge, skills and performance are critical to our success; ● ensure fairness among the executive management team via recognizing the contributions of each executive to our success; ● focus executive behavior on achievement of our corporate objectives and strategy; and ● align the interests of management and stockholders by providing management with longer-term incentives through equity ownership. The Compensation Committee reviews the allocation of compensation components regularly to ensure alignment with strategic and operating goals, competitive market practices and legislative changes. The Compensation Committee does not apply a specific formula to determine the allocation between cash and non-cash forms of compensation. Certain compensation components, such as base salaries, benefits and perquisites, are intended primarily to attract, hire, and retain well-qualified executives. Other compensation elements, such as long-term incentive opportunities, are designed to motivate and reward performance. Long-term incentives are intended to reward NEOs for our long-term performance and executing our business strategy, and to strongly align NEOs’ interests with those of stockholders. With respect to equity compensation, the Compensation Committee makes awards to executives under our Amended and Restated 2019 Incentive Plan, or the 2019 Plan. Executive compensation is paid or granted based on such matters as the Compensation Committee deems appropriate, including our financial and operating performance and the alignment of the interests of the executive officers and our stockholders. Elements of Compensation Our executive officer compensation program is comprised of: (i) base salary or monthly compensation; (ii) discretionary bonus; (iii) long-term equity incentive compensation in the form of stock option and RSU grants; and (iv) benefits and perquisites. In establishing overall executive compensation levels and making specific compensation decisions for our NEOs in the year ended December 31, 2024, the Compensation Committee considered a number of criteria, including the executive’s position, scope of responsibilities, prior base salary and annual incentive awards and expected contribution. Generally, our Compensation Committee reviews and, as appropriate, approves compensation arrangements for the NEOs from time to time but not less than once each year. The Compensation Committee also takes into consideration the President and Chief Executive Officer’s recommendations for executive compensation of the other NEOs. The President and Chief Executive Officer generally presents these recommendations at the time of our Compensation Committee’s review of executive compensation arrangements. 52 During the year ended December 31, 2024, the Compensation Committee received consulting services from Aon Solutions UK Limited., or Aon, with regard to management compensation. The Compensation Committee engaged the consultant to review the Company’s current compensation plans for its management and collect and analyze data regarding management compensation at other companies comparable to the Company, in order to provide a competitive compensation benchmark. Aon collected SEC filings data regarding U.S. and Israeli compensation practices and developed a peer group of the following U.S. and Israeli companies: ALX Oncology Holdings Inc., AN2 Therapeutics, Inc., Anavex Life Sciences Corp., Atossa Therapeutics Inc., aTyr Pharma, Inc., Chimerix, Inc., Compugen Ltd., Fulcrum Therapeutics, Inc., Immunic, Inc., Marinus Pharmaceuticals, Inc., MediciNova, Inc., Pluri Biotech Ltd., Rani Therapeutics, Inc., Relmada Therapeutics, Inc., Rezolute, Inc., Vistagen Therapeutics, Inc., vTv Therapeutics Inc. and Zevra Therapeutics, Inc.. Following its review, Aon provided recommendations for cash and equity compensation at various percentiles for the Compensation Committee’s consideration. Base Salary The Compensation Committee performs a review of base salaries and monthly compensation for our NEOs from time to time as appropriate. In determining salaries, the Compensation Committee members also take into consideration the scope of the NEOs’ responsibilities and independent third-party market data, such as compensation surveys to industry, individual experience and performance and contribution to our clinical, regulatory, commercial and operational performance. None of the factors above has a dominant weight in determining the compensation of our NEOs, and our Compensation Committee considers the factors as a whole when considering such compensation. In addition, our Compensation Committee uses comparative data regarding compensation paid by peer companies in order to obtain a general understanding of current trends in compensation practices and ranges of amounts being awarded by other public companies, and not as part of an analysis or a formula. We believe that a competitive base salary and monthly compensation is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. We also believe that attractive base salaries can motivate and reward executives for their overall performance. Base salary and monthly compensation are established in part based on the individual experience, skills and expected contributions to our performance, as well as such executive’s performance during the prior year. Generally, we believe that executives’ base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities, experience and performance at comparable companies. Compensation adjustments are made occasionally based on changes in an executive’s level of responsibility, company progress or on changed local and specific executive employment market conditions. In November 2024, our Compensation Committee increased the base salary of our NEOs by 15% (effective July 1, 2024 as it deemed this to be a reasonable rate based on, among other factors, such NEO’s responsibilities and the report from Aon, as it determined the salaries were not in line with market compensation. Performance Based Bonus Our NEOs are eligible to receive discretionary annual bonuses based upon performance. The amount of annual bonus to our NEOs is based on various factors, including, among others, the achievement of scientific and business goals and our financial and operational performance. The Compensation Committee takes into account the overall performance of the individuals, as well as the overall performance of the Company over the period being reviewed and the recommendation of management. For any given year, the compensation objectives vary, but relate generally to strategic factors such as developments in our clinical path, the execution of a license agreement for the commercialization of product candidates, the establishment of key strategic collaborations, the build-up of our pipeline and financial factors such as capital raising. Bonuses are awarded generally based on corporate performance, with adjustments made within a range for individual performance, at the discretion of the Compensation Committee. The Compensation Committee determines, on a discretionary basis, the size of the entire bonus pool and the amount of the actual award to each NEO. The overall payment is also based on historic compensation of the NEOs. 53 We believe that annual bonuses payable based on the achievement of short-term corporate goals incentivize our NEOs to create stockholder value and attain short-term performance objectives. Long-Term Equity Incentive Compensation Long-term incentive compensation allows the NEOs to share in any appreciation in the value of our common stock. The Compensation Committee believes that stock participation aligns executive officers’ interests with those of our stockholders. Equity incentive awards are generally made at the commencement of employment and following a significant change in job responsibilities, or to meet other special retention or performance objectives. The amounts of the awards are designed to reward past performance and create incentives to meet long-term objectives. Awards are made at a level expected to be competitive within the biotechnology industry, as well as with Israeli-based companies. Awards are made on a discretionary basis and not pursuant to specific criteria set out in advance. In determining the amount of each grant, the Compensation Committee also takes into account the number of shares held by the executive prior to the grant. The vesting schedule for NEOs generally provides for annual installments for new grants, though the Compensation Committee also utilizes quarterly vesting from time to time, as well as performance-based vesting. The Compensation Committee believes that time-based vesting encourages recipients to build stockholder value over a long period of time and that performance-based vesting encourages recipients to achieve goals that benefit the Company. As part of its engagement in the year ended December 31, 2024 described above, Aon also provided consulting services in connection with grants of equity awards to our executive officers. Aon reviewed annual long-term incentive grants at peer companies, as well as such grants made by companies in the broader market, based on a blend of Black-Scholes valuations and grants as a percentage of the applicable company’s capitalization. Following such consultation, the Compensation Committee is considering alternative models and equity vehicles for future equity-based grants. Benefits and Perquisites Generally, benefits available to NEOs are available to all employees on similar terms and include welfare benefits, paid time-off, life and disability insurance and other customary or mandatory social benefits in Israel. We provide some of our NEOs with a phone and a company car, which are customary benefits in Israel to managers and officers. We do not believe that the benefits and perquisites described above deviate materially from the customary practice for compensation of executive officers by other companies similar in size and stage of development in Israel. These benefits represent a relatively small portion of the executive officers’ total compensation. Say-on-Pay Vote Our stockholders approved, on an advisory basis, our executive compensation program at our annual meeting of stockholders held on August 1, 2024. Over 90% of votes cast were voted “for” the compensation of our named executive officers as described in the proxy statement for last year’s annual meeting of stockholders. The Compensation Committee did not specifically rely on the results of the prior vote in making any compensation-related decisions during the year ended December 31, 2024. 54 SUMMARY COMPENSATION TABLE The following table sets forth the compensation earned by our NEOs for the years ended December 31, 2024 and 2023. Name and Principal Position Year Salary ($) (1) Bonus ($) (1)(2) RSUs and PSUs Awards ($) (3) All Other Compensation ($) (1)(4) Total ($) Nadav Kidron 2024 540,145 270,767 1,224,760 62,017 2,097,689 President, Chief Executive Officer and Chairman 2023 462,988 242,576 904,920 48,738 1,659,222 Dr. Miriam Kidron 2024 408,104 155,291 951,545 19,607 1,534,547 Chief Scientific Officer and director (5) 2023 347,405 139,123 605,480 17,423 1,109,431 Avraham Gabay (6) 2024 119,925 49,623 450,084 28,583 648,215 Chief Financial Officer (1) Amounts paid for Salary, Bonus and All Other Compensation that were originally denominated in NIS were translated into U.S. Dollars at the then average exchange rate for the period. (2) Bonuses were granted at the discretion of the Compensation Committee. (3) For RSU and performance stock unit, or PSU, awards, the amounts reflect the grant date fair value, as calculated pursuant to ASC Topic 718 “Compensation–Stock Compensation.” The assumptions used to determine the fair value of the RSU awards are set forth in note 10 to our audited consolidated financial statements. Our NEOs will not realize the value of these awards in cash unless and until the awards vest and the underlying shares are issued and subsequently sold. On January 2, 2025, we granted 328,500 PSUs that shall veste upon at the earliest of (1) the closing of a JV transaction with HTIT; or (2) the repayment to us of the value of our principal investment in Scilex plus 10%. We modified 294,000 outstanding PSUs that were granted, adjusting the vesting criteria and performance targets. As of March 27, 2025, all PSUs that granted achieved the first updated performance target. (4) See “All Other Compensation Table” below. (5) Dr. Kidron receives compensation from Oramed Ltd. through KNRY, Ltd., or KNRY. See “—Employment and Consulting Agreements” below. (6) Mr. Gabay was appointed as Chief Financial Officer, effective June 18, 2024. 55 All Other Compensation Table The “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following: Name Year Automobile- Related Expenses ($) Manager’s Insurance (1)($) Education Fund ($) Total ($) Nadav Kidron 2024 30,505 25,158 6,354 62,017 2023 21,191 21,711 5,836 48,738 Dr. Miriam Kidron 2024 19,607 - - 19,607 2023 17,423 - - 17,423 Avraham Gabay 2024 8,854 17,822 1,907 28,583 (1) Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance premiums. An education fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes. Employment and Consulting Agreements On July 1, 2008, Oramed Ltd. entered into a consulting agreement with KNRY whereby Dr. Miriam Kidron, through KNRY, provides services as Chief Scientific Officer of both the Company and Oramed Ltd., or the Miriam Kidron Consulting Agreement. The Miriam Kidron Consulting Agreement is terminable by either party upon 140 days prior written notice. The agreement, as amended, provides that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the agreement. Pursuant to the agreement, each of KNRY and Dr. Miriam Kidron agreed that during the term of the agreement and for a 12-month period thereafter, none of them will compete with Oramed Ltd. nor solicit employees of Oramed Ltd. Starting January 1, 2024, Dr. Miriam Kidron receives a monthly consulting fee of NIS 117,040. Effective as of July 1, 2024, the monthly consulting fee is NIS 134,550. Effective November 1, 2022, the Company entered into a consulting agreement with Shnida Ltd., whereby Nadav Kidron, through Shnida Ltd., 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 Ltd. will be reimbursed for reasonable expenses incurred in connection with performance of the agreement. Effective as of January 1, 2024, Nadav Kidron receives a monthly consulting fee of NIS 96,825. Effective as of July 1, 2024, the monthly consulting fee is NIS 111,349. Pursuant to the agreement, Shnida Ltd. and Nadav Kidron 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, we, through Oramed Ltd., have entered into an employment agreement with Nadav Kidron, effective as of November 1, 2022, pursuant to which, effective as of January 1, 2024, Mr. Kidron receives gross monthly salary of NIS 51,591 in consideration for his services as President and Chief Executive Officer of Oramed Ltd. Effective as of July 1, 2024, Mr. Kidron receives gross monthly salary of NIS 59,330 in consideration for his services as President and Chief Executive Officer of Oramed Ltd. In addition, Mr. Kidron is provided with a phone and a company car pursuant to the terms of his agreement. We, through Oramed Ltd., have entered into an employment agreement with Avraham Gabay as of June 6, 2024, pursuant to which Mr. Gabay was appointed as Chief Financial Officer, Treasurer and Secretary of the Company and Oramed Ltd., effective June 18, 2024. In accordance with the employment agreement, as amended, Mr. Gabay’s current gross monthly salary is NIS 68,000, and he will be provided with a company car allowance pursuant to the terms of his agreement. 56 We have entered into indemnification agreements with our directors and officers pursuant to which we agreed to indemnify each director and officer for any liability he or she may incur by reason of the fact that he or she serves as our director or officer, to the maximum extent permitted by law. Potential Payments upon Termination or Change-in-Control We have no plans or arrangements in respect of remuneration received or that may be received by our NEOs to compensate such officers in the event of termination of employment (as a result of resignation or retirement). According to our NEOs’ employment agreements, upon a termination in connection with a change-in-control that occurs during the period that is three months prior and 12 months after the event, the following “double trigger” change-in-control provisions shall apply: ● The President and Chief Executive Officer will be entitled to receive 18 months severance. ● All other NEOS will be entitled to receive 12 months severance. ● Severance shall be defined as base salary plus bonuses over the severance period. For U.S.-based persons, COBRA payments equivalent to healthcare benefits values will be provided over the severance period. ● Full vesting acceleration of all outstanding unvested equity incentives. Pension, Retirement or Similar Benefit Plans We have no arrangements or plans under which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options, RSUs or restricted shares at the discretion of our Compensation Committee in the future. Policy Relating to Recovery of Erroneously Awarded Compensation Our Board has adopted an executive compensation clawback policy, administered by our Compensation Committee, which provides for the recoupment (or clawback) from current and former executive officers of certain compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws of the United States. In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material non-compliance with any financial reporting requirement under the securities laws, the Compensation Committee will require prompt reimbursement or forfeiture of any excess incentive compensation (as defined in the clawback policy) received by any covered executive officer during the three completed years immediately preceding the date on which the Company is required to prepare an accounting restatement. 57 OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2024 The following table sets forth information concerning stock options and stock awards held by the NEOs as of December 31, 2024. Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of shares that have not vested (#) Market value of shares that have not vested ($) Nadav Kidron 49,000 (1) - 7.77 6/30/27 97,000 (2) - 8.14 1/31/28 196,500 (3)(4) - 3.16 2/26/29 190,000 (5) - 4.80 1/8/30 150,000 (6) 10.40 2/3/31 53,500 (7) 53,500 (7) 13.89 1/3/32 116,127 (8) 3.91 9/17/32 792,082 (11)(12)(13)(14)(15)(16) 1,916,838 Dr. Miriam Kidron 69,999 (17) - 7.77 6/30/27 47,000 (18) - 8.14 1/31/28 104,000 (19)(4) - 3.16 2/26/29 100,000 (20) 4.80 1/8/30 100,000 (21) 10.40 2/3/31 36,000 (22) 36,000 (22) 13.89 1/3/32 32,079 (23) 3.91 9/17/32 570,085 (24)(25)(26)(27)(29)(30) 1,379,606 Avraham Gabay 174,040 (31)(32) 421,177 (1) On June 30, 2017, 147,000 options were granted to Nadav Kidron under the 2008 Plan at an exercise price of $7.77 per share; 49,000 of such options vested on December 31, 2017 and the remainder vested in two equal installments of 49,000 on each of December 31, 2018 and December 31, 2019, subject to the Company share price reaching the target of $9.50 and $12.50 per share, respectively. The options expire on June 30, 2027. As of December 31, 2021, 98,000 of these options were forfeited. (2) On January 31, 2018, 97,000 options were granted to Nadav Kidron under the 2008 Plan at an exercise price of $8.14 per share; 97,000 of such options vested in four equal installments of 24,250 on each of January 1, 2019, January 1, 2020, January 1, 2021 and January 1, 2022. The options expire on January 31, 2028. (3) On February 26, 2019, 196,500 options were granted to Nadav Kidron under the 2008 Plan at an exercise price of $3.16 per share; 196,500 of such options vested in four equal installments of 49,125 on each of December 31, 2019, December 31, 2020, December 31, 2021 and December 31, 2022. The options expire on February 26, 2029. For additional information, see footnote 5 below. 58 (4) On September 11, 2019, these options were canceled and re-granted under the 2019 Plan in the same amounts and under the same terms as the original grants. (5) On January 8, 2020, 190,000 options were granted to Nadav Kidron under the 2019 Plan at an exercise price of $4.80 per share. 190,000 of the options vested in four equal installments of 47,500 on each of December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023. The options expire on January 8, 2030. (6) On February 3, 2021, 150,000 options were granted to Nadav Kidron under the 2019 Plan at an exercise price of $10.40 per share. 112,500 of the options vested in four equal installments of 37,500 on each of December 31, 2021, December 31, 2022 and December 31, 2023, and December 31, 2024. The options expire on February 3, 2031. (7) On January 3, 2022, 107,000 options were granted to Nadav Kidron under the 2019 Plan at an exercise price of $13.89 per share. 53,500 options vested in two equal installments of 26,750 on each of January 1, 2023, January 1, 2024, and the remainder shall vest in two equal installments of 26,750 on January 1, 2025 and January 1, 2026. The options expire on January 3, 2032. (8) On September 18, 2022, 116,127 options were granted to Nadav Kidron under the Oravax Medical Inc. 2021 Long-Term Incentive Plan at an exercise price of $3.91 per share. 116,127 of the options vested in four installments on each of September 18, 2022, December 31, 2022, December 31, 2023 and December 31, 2024. The options expire on September 17, 2032. (9) On November 13, 2014, 9,788 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Nadav Kidron. The RSUs vested in two equal installments, each of 4,894 shares, on November 30 and December 31, 2014. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (10) On February 23, 2015, 79,848 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Nadav Kidron. The RSUs vested in 23 installments consisting of one installment of 6,654 shares on February 28, 2015 and 22 equal monthly installments of 3,327 shares each, commencing March 31, 2015. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (11) On February 3, 2021, 300,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Nadav Kidron. 100,000 RSUs vested on August 31, 2021 and the remainder shall vest per the following: 100,000 shares shall vest upon our common stock achieving a specified price per share, and 100,000 shall vest upon our achievement of certain business objectives. (12) On January 3, 2022, 63,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Nadav Kidron. The RSUs vested in two equal installments, each of 15,750 shares on January 1, 2023 and on January 1, 2024. The shares of common stock underlying the RSUs will be issued upon request of the grantee. The remainder shall vest in two equal installments of 15,750 on each of January 1, 2025 and January 1, 2026. (13) On July 28, 2022, 126,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Nadav Kidron. 42,000 RSUs vested on January 1, 2024. The shares of common stock underlying the RSUs will be issued upon request of the grantee. The remainder shall vest in two equal installments of 42,000 on each of January 1, 2025 and January 1, 2026. (14) On April 17, 2023, 279,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Nadav Kidron. 162,750 RSUs vested in seven equal quarterly installments of 23,250 starting May 1, 2023 and the remainder of 116,250 shall vest in five equal quarterly installments of 23,250 starting February 1, 2025. 59 (15) On January 4, 2024, 329,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Nadav Kidron. 109,668 RSUs vested in twelve equal quarterly installments of 27,417 starting January 8, 2024. (16) On January 4, 2024, 141,000 PSUs representing a right to receive shares of the Company’s common stock were granted to Nadav Kidron. The total amount of the PSUs shall vest when the closing price per share of Common Stock of the Company on the Nasdaq Capital Market reaches an average of $4.00 over any 10-trading day period. The total fair value of these PSUs on the date of grant was $691, using the Monte-Carlo model, based on the quoted closing market share price of $2.39 on the Nasdaq Capital Market on the date of grant. (17) On June 30, 2017, 69,999 options were granted to Dr. Miriam Kidron under the 2008 Plan at an exercise price of $7.77 per share; Such options vested in three equal installments of 23,333 on each of December 31, 2017, December 31, 2018 and December 31, 2019. The options have an expiration date of June 30, 2027. (18) On January 31, 2018, 47,000 options were granted to Dr. Miriam Kidron under the 2008 Plan at an exercise price of $8.14 per share; 47,000 of such options vested in four equal installments of 11,750 on each of January 1, 2019, January 1, 2020, January 1, 2021 and January 1, 2022. The options expire on January 31, 2028. (19) On February 26, 2019, 104,000 options were granted to Dr. Miriam Kidron under the 2008 Plan at an exercise price of $3.16 per share; 104,000 of such options vested in four equal installments of 26,000 on each of December 31, 2019, December 31, 2020, December 31, 2021 and December 31, 2022. The options expire on February 26, 2029. For additional information, see footnote 4 above. (20) On January 8, 2020, 100,000 options were granted to Dr. Miriam Kidron under the 2019 Plan at an exercise price of $4.80 per share. 100,000 of the options vested in four equal installments of 25,000 on each of December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023. The options expire on January 8, 2030. (21) On February 3, 2021, 100,000 options were granted to Dr. Miriam Kidron under the 2019 Plan at an exercise price of $10.40 per share. 100,000 of such options vested in four equal installments of 25,000 on each of December 31, 2021, December 31, 2022 and December 31, 2023 and December 31, 2024. The options expire on February 3, 2031. (22) On January 3, 2022, 72,000 options were granted to Dr. Miriam Kidron under the 2019 Plan at an exercise price of $13.89 per share. 36,000 of such options vested in two equal installments of 25,000 on each of January 1, 2023 and January 1, 2024. The remaining 36,000 of the options shall vest in two equal installments of 25,000 on each of January 1, 2025 and January 1, 2026. The options expire on January 3, 2032. (23) On September 18, 2022, 32,079 options were granted to Dr. Miriam Kidron under the Oravax Medical Inc. 2021 Long-Term Incentive Plan at an exercise price of $3.91 per share. 32,079 of the options vested in four installments on each of September 18, 2022, December 31, 2022, December 31, 2023 and December 31, 2024. The options expire on September 17, 2032. (24) On February 3, 2021, 200,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Dr. Miriam Kidron. 66,666 RSUs vested in one installment on August 31, 2021 and the remainder shall vest per the following: 66,667 shares shall vest upon our common stock achieving a specified price per share, and 66,667 shall vest upon our achievement of certain business objectives. (25) On January 3, 2022, 42,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Dr. Miriam Kidron. 21,000 vested on two equal installments of 10,500 on each of January 1, 2023 and January 1, 2024. The remaining 21,500 shall vest in two equal installments of 10,500 on each of January 1, 2025 and January 1, 2026. (26) On July 28, 2022, 84,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Dr. Miriam Kidron. 28,000 vested on one installment on January 1, 2024. The remaining 56,000 shall vest in two equal installments of 28,000 on each of January 1, 2025 and January 1, 2026. 60 (27) On April 17, 2023, 213,000 RSUs representing a right to receive shares of the Company’s common stock were granted to Dr. Miriam Kidron. 124,249 RSUs vested in seven equal quarterly installments of 17,750 starting May 1, 2023 and the remainder of 88,751 shall vest in five equal quarterly installments of 17,750 starting February 1, 2025. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (28) On April 17, 2023, 53,500 performance-based RSUs representing a right to receive shares of the Company’s common stock were granted to Dr. Miriam Kidron. 120,000 RSUs vested in one installment on May 26, 2023, upon our common stock achieving a specified price per share. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (29) On January 4, 2024, 295,500 RSUs representing a right to receive shares of the Company’s common stock were granted to Dr. Miriam Kidron. The RSUs vested in twelve equal quarterly installments of 24,625 starting January 8, 2024. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (30) On January 4, 2024, 74,000 PSUs representing a right to receive shares of the Company’s common stock were granted to Dr. Miriam Kidron. The total amount of the PSUs shall vest when the closing price per share of Common Stock of the Company on the Nasdaq Capital Market reaches an average of $4.00 over any 10-trading day period. The total fair value of these PSUs on the date of grant was $691, using the Monte-Carlo model, based on the quoted closing market share price of $2.39 on the Nasdaq Capital Market on the date of grant. (31) On June 21, 2024, 140,040 RSUs representing a right to receive shares of the Company’s common stock were granted to Avraham Gabay. 93,360 shall vest in one installment on June 18, 2026 and 46,680 shall vest in four equal quarterly installments of 11,670 starting September 18, 2026. (32) On June 20, 2024, the Company granted 34,000 PSUs representing a right to receive shares of the Company’s common stock to Avraham Gabay. The total amount of the PSUs shall vest upon the later of (i) June 18, 2026 and (ii) when the closing price per share of Common Stock of the Company on the Nasdaq Capital Market reaches an average of $4.00 over any 10-trading day period. The total fair value of these PSUs on the date of grant was $73, using the Monte-Carlo model, based on the quoted closing market share price of $2.21 on the Nasdaq Capital Market on the date of grant. On January 2, 2025, we granted 1,023,000 RSUs representing a right to receive shares of the Company’s common stock to the Company’s executive officers. The total amount of the RSUs shall vest in equal quarterly installments of approximately 85,249 over a three year period starting with the first quarterly vesting on January 1, 2025. Also on January 2, 2025, we granted 328,500 PSUs representing a right to receive shares of the Company’s common stock to our executive officers. The total amount of the PSUs shall vest upon at the earliest of (1) the closing of OraTech 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 $2.41 on the Nasdaq Capital Market on the date of grant. As of March 27, 2025, all PSUs that were granted to the Company’s executive officers achieved the first updated performance target. 61 DIRECTOR COMPENSATION The following table provides information regarding compensation earned by, awarded or paid to each person for serving as a director who is not an executive officer during the year ended December 31, 2024: Name of Director Fees Earned or Paid in Cash ($) Stock Awards (1)(2)($) Option Awards (1)(2)($) All Other Compensation ($) Total ($) Daniel Aghion (6) 39,645 94,992 - - 134,637 Dr. Arie Mayer 41,963 93,987 - - 135,950 Yehuda Reznik (3) 29,537 71,091 - - 100,628 Yadin Rozov (5) 1,913 92,780 - - 94,693 Leonard Sank 41,117 93,987 - - 135,104 Benjamin Shapiro 30,000 83,817 - - 113,817 (1) As of December 31, 2024, our non-employee directors then in office held options to purchase shares of our common stock and RSUs as follows: Name of Director Aggregate Number of Shares Underlying Stock Awards Aggregate Number of Shares Underlying Option Awards Daniel Aghion (6) 32,204 - Dr. Arie Mayer (4) 55,831 45,398 Yehuda Reznik (3) 25,314 15,398 Yadin Rozov (5) - - Leonard Sank 55,831 46,773 Benjamin Shapiro 39,600 - (2) The amounts reflect the grant date fair value, as calculated pursuant to ASC 718, of these option awards. The assumptions used to determine the fair value of the option awards are set forth in note 10 to our audited consolidated financial statements included in the Annual Report. Our directors will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold. (3) Mr. Reznik joined the Board effective on April 1, 2024. (4) Includes 15,398 option awards granted by Oravax for Dr. Mayer’s service as a member of the Board of Directors of Oravax. (5) Mr. Rozov resigned from the Board on January 17, 2024 and forfeited his unvested RSUs and Options. (6) Mr. Aghion joined the Board on January 1, 2024. 62 Our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our Board. Based on a report provided to the Compensation Committee by Aon in 2023, effective as of January 1, 2024, each independent director is entitled to receive as remuneration for his or her service as a member of the Board a sum equal to $30,000 and a grant of 5,070 RSUs per annum. The Chairman of our Board is entitled to receive an additional sum equal to $25,500, other than if the Chairman is an executive officer. The members of our Audit Committee are each entitled to receive an additional sum equal to $6,000 and a grant of 2,230 RSUs. The members of our Compensation Committee are each entitled to receive an additional sum equal to $4,500 and a grant of 1,520 RSUs. The members of our Nominating Committee are each entitled to receive an additional sum equal to $4,000 and a grant of 505 RSUs. All cash remuneration is to be paid quarterly after the close of each quarter. The RSUs vest on April 1, July 1, October 1 and January 1 of each year, subject to Compensation Committee approval each year. Our executive officers did not receive additional compensation for service as directors. The Board may award special remuneration to any director undertaking any special services on behalf of us other than services ordinarily required of a director. On January 2, 2025 the Compensation Committee, approved that in addition to the current annual compensation for the board members, a flat cash fee of $500 per meeting will be paid to each director for attendance at every meeting beyond six meetings per year, and an additional $2,000 in cash will be paid to each director per meeting of over three hours which he or she attends, regardless of the number of meetings. Other than as described above, we have no present formal plan for compensating our directors for their service in their capacity as directors. Other than indicated above, no director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments during the year ended December 31, 2024. In addition, during 2024 the directors granted an aggregate of 142,500 RSUs that will vest in three equal annual installments starting January 1, 2025. The Company’s Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We do not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation at certain times. We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates. The timing of any equity grants to executive officers or directors in connection with new hires, promotions, or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment or promotion effective date). During the year ended December 31, 2024, there were no equity grants made to our executive officers during any period beginning four business days before the filing of a periodic report or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report with the SEC. 63 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Stock Option Plans Our Board adopted the 2008 Plan and the 2019 Plan in order to attract and retain quality personnel. The 2008 Plan, which is no longer utilized for new grants, provided for the grant of stock options, restricted stock, RSUs, and stock appreciation rights, collectively referred to as “awards.” Under the 2008 Plan, as amended, 2,400,000 shares were reserved for the grant of awards. As of December 31, 2024, options with respect to 2,287,989 shares had been granted, of which 275,673 had been forfeited, 308,804 had been exercised and 1,420,504 have expired. As of December 31, 2024, 525,824 RSUs had been granted, none of them have vested and the shares of common stock underlying those RSUs have not been issued and 34,118 have been forfeited. The 2019 Plan provides for the grant of stock options, restricted stock, RSUs, and stock appreciation rights, collectively referred to as “awards.” Under the 2019 Plan, 1,000,000 shares were initially reserved for the grant of awards. On June 29, 2020, and August 3, 2020, respectively, our Board and stockholders approved to amend and restate the 2019 Plan, the principal change being an increase in the number of shares of common stock available under the 2019 Plan from 1,000,000 shares to 3,000,000 shares. On June 30, 2022, our Board and stockholders approved to amend and restate the 2019 Plan, the principal change being an increase in the number of shares of common stock available under the 2019 Plan from 3,000,000 shares to 7,500,000 shares. Stock options granted under the 2019 Plan may be either incentive stock options under the provisions of Section 422 of the Code, or non-qualified stock options. Under the amended 2019 Plan, 7,500,000 shares are reserved for the grant of awards, which may be issued at the discretion of our Board from time to time. As of December 31, 2024, options with respect to 1,863,646 shares have been granted, of which 282,043 had been forfeited, 66,978 had been exercised and none of them were expired. As of December 31, 2024, 4,808,060 RSUs had been granted, of which 290,125 have vested and the shares of common stock underlying those RSUs have not been issued and 808,196 have been forfeited. Since the Company had granted options during the time after the 2008 Plan allegedly terminated, and out of an abundance of caution, the Company canceled these grants and re-granted certain of the options under 2019 Plan in the same amounts and under the same terms as the original grants. The following table sets forth additional information with respect to our equity compensation plans as of December 31, 2024: Plan category Number of securities to be issued upon exercise of outstanding options, RSUs and rights (a) Weight- average exercise price of outstanding options, RSUs and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 3,947,562 $ 2.80 2,148,993 Equity compensation plans not approved by security holders - - - Total 3,947,562 $ 2.80 2,148,993 Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 27, 2025 by: (1) each person who is known by us to own beneficially more than 5% of our common stock; (2) each of our current directors; (3) each of our NEOs; and (4) all of our directors and executive officers as a group. On such date, we had 40,850,455 shares of common stock outstanding. 64 As used in the table below and elsewhere in this form, the term “beneficial ownership” with respect to a security consists of sole or shared voting power, including the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship or otherwise, including a right to acquire such power(s) during the 60 days following March 27, 2025. Inclusion of shares in the table does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, (1) each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of common stock listed as owned by that person or entity and (2) the address of each of the individuals named below is: c/o Oramed Pharmaceuticals Inc., 1185 Avenue of the Americas, Third Floor, New York, New York 10036. Name and Address of Beneficial Owner Number of Shares Percentage of Shares Beneficially Owned Nadav Kidron #+ 3,193,699 (1) 7.6 % Dr. Miriam Kidron #+ 1,256,332 (2) 3.0 % Avraham Gabay+ 137,340 (3) * Dr. Daniel Aghion # 18,820 * Dr. Arie Mayer # 90,634 (4) * Yehuda Reznik# 15,560 * Leonard Sank # 109,294 (5) * Benjamin Shapiro # 1,930,070 (6) 4.7 % All current executive officers and directors, as a group (nine persons) 7,533,336 (7) 18.2 % Greater than 5% holders BML Investment Partners, L.P. 2,643,907 (8) 6.6 % * Less than 1% # Director + NEO (1) Includes 953,884 shares of common stock issuable upon the exercise of outstanding stock options, 86,791 shares of common stock issuable upon the vesting of RSUs. Mr. Nadav’s beneficial ownership includes the 218,603 shares of common stock held by Xiaopeng Li, a former director of the Company, over which he holds a proxy. (2) Includes 474,999 shares of common stock issuable upon the exercise of outstanding stock options, 59,625 shares of common stock issuable upon the vesting of RSUs, and 610,917 shares of common stock underlying vested RSUs that are issuable upon request. (3) Includes 15,666 shares of common stock issuable upon the vesting of RSUs. (4) Includes 27,500 shares of common stock issuable upon the exercise of outstanding stock options and 2,500 shares of common stock issuable upon the vesting of RSUs. (5) Includes 44,273 shares of common stock issuable upon the exercise of outstanding stock options and 2,500 shares of common stock issuable upon the vesting of RSUs. (6) Includes 1,666 shares of common stock issuable upon the vesting of RSUs. (7) Includes 1,677,656 shares of common stock issuable upon the exercise of options beneficially owned by the referenced persons, 208,997 shares of common stock issuable upon the vesting of RSUs and 610,917 shares of common stock underlying vested RSUs that are issuable upon request. (8) Based on Schedule 13G/A, filed on February 13, 2025. BML Investment Partners, L.P. is a Delaware limited partnership whose sole general partner is BML Capital Management, LLC. The managing member of BML Capital Management, LLC is Braden M. Leonard. As a result, Braden M. Leonard is deemed to be the indirect owner of the shares held directly by BML Investment Partners, L.P. Despite such shared beneficial ownership, the reporting persons disclaim that they constitute a statutory group within the meaning of Rule 13d-5(b)(1) of the Exchange Act. The address of BML Investment Partners, L.P. is 65 E Cedar, Suite 2 Zionsville, IN 46077. 65 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. During the years ended December 31, 2024 and 2023, except for compensation arrangements described elsewhere herein, we did not participate in any transaction, and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed years, and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct or indirect material interest. Our policy is to enter into transactions with related persons on terms that, on the whole, are no less favorable than those available from unaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred. All related person transactions are approved by our Board. The Board has determined that Dr. Daniel Aghion, Dr. Arie Mayer, Yehuda Reznick, Leonard Sank and Benjamin Shapiro are independent as defined under the rules promulgated by Nasdaq. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The aggregate fees billed by Kesselman & Kesselman, Certified Public Accountants (Isr.), a member of PricewaterhouseCoopers International Limited, independent registered public accounting firm, for services rendered to us during the years ended December 31, 2024 and 2023: 2024 2023 Audit Fees (1) $ 124,882 $ 132,501 Audit-Related Fees (2) 1,500 1,500 Tax Fees (3) 17 ,986 31,363 All Other Fees - - Total Fees $ 144 ,368 $ 165,364 (1) Amount represents fees paid for professional services for the audit of our consolidated financial statements, review of our interim condensed consolidated financial statements included in quarterly reports and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements. (2) Represents fees paid for services rendered in connection with the IIA requirements. (3) Represents fees paid for tax consulting services. SEC rules require that before the independent registered public accounting firm are engaged by us to render any auditing or permitted non-audit related service, the engagement be: (1) pre-approved by our Audit Committee; or (2) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management. The Audit Committee pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees were reviewed and approved by the Audit Committee before the services were rendered. 66 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Index to Financial Statements The following consolidated financial statements are filed as part of this Annual Report on Form 10-K: Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name: Kesselman & Kesselman C.P.A.s, PCAOB ID: 1309 and Auditor Location: Tel Aviv, Israel) F-1 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets F-3 Consolidated Statements of Comprehensive Income (Loss) F-4 Consolidated Statements of Changes in Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated financial Statements F-7 - F-43 67 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Oramed Pharmaceuticals Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Oramed Pharmaceuticals Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income (loss), changes in equity and cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F- 1 Investments at fair value As described in Note 4 to the consolidated financial statements, the Company has approximately $34,808 thousand investments at fair value recorded as of December 31, 2024 relating to Tranche A note, Tranche B note, warrants and royalty purchase agreement payment issued to the Company by Scilex Holding Company. Management applied significant judgment in estimating the fair value of the investments recorded, which also impacted the results of operations of the Company by approximately $4,359 thousand for the change in fair value of such investments in the year ended December 31, 2024. The fair value estimation involved the use of significant estimates and assumptions with respect to the repayment dates and amounts of the notes and royalties. The principal considerations for our determination that performing procedures relating to investments at fair value is a critical audit matter are (i) the high degree of auditor judgment and subjectivity in performing procedures relating to the fair value measurement of the investments recorded, due to significant judgment by management when developing the estimate; (ii) significant audit effort in evaluating the significant assumptions relating to the repayment dates and amounts of the notes and royalties; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) reading the related agreements and (ii) testing management’s process for estimating the fair value of the investments. Testing management’s process included evaluating the appropriateness of the valuation methods, testing the completeness and accuracy of the data provided by management, and evaluating the reasonableness of significant assumptions related to the repayment dates and amounts of the notes and royalties. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s models. /s/ Kesselman & Kesselman Certified Public Accountants (Isr.) A member firm of PricewaterhouseCoopers International Limited Tel Aviv, Israel March 27, 2025 We have served as the Company’s auditor since 2008. Kesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel, P.O Box 50005 Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il F- 2 ORAMED PHARMACEUTICALS INC. CONSOLIDATED BALANCE SHEETS In thousands (except share and per share data) December 31, 2024 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 54,420 $ 9,055 Short-term deposits (note 2) 55,281 95,279 Marketable securities (note 3) 3,441 - Investments at fair value (note 4) 28,788 57,713 Prepaid expenses and other current assets 1,291 537 Total current assets 143,221 162,584 LONG-TERM ASSETS: Long-term deposits 2 7 Investments at fair value (note 4) 7,387 51,035 Marketable securities (note 3) - 1,807 Other non-marketable equity securities (note 5) 3,524 3,524 Amounts funded in respect of employee rights upon retirement 32 27 Property and equipment, net 698 873 Operating lease right of use assets 414 694 Total long-term assets 12,057 57,967 Total assets $ 155,278 $ 220,551 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses (note 6) $ 5,140 $ 1,609 Short-term borrowings (note 7) - 51,013 Payable to related parties (note 14b) 329 325 Operating lease liabilities 216 267 Total current liabilities 5,685 53,214 LONG-TERM LIABILITIES: Long-term deferred revenues 4,000 4,000 Employee rights upon retirement 30 28 Provision for uncertain tax position (note 12f) - 11 Operating lease liabilities 156 342 Other liabilities 60 63 Total long-term liabilities 4,246 4,444 COMMITMENTS (note 8) EQUITY EQUITY ATTRIBUTABLE TO COMPANY’S STOCKHOLDERS: Common stock, $ 0.012 par value ( 60,000,000 authorized shares as of December 31, 2024 and December 31, 2023; 39,919,545 and 40,338,979 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively) 480 485 Additional paid-in capital 322,401 320,892 Accumulated deficit ( 176,616 ) ( 157,556 ) Total stockholders’ equity 146,265 163,821 Non-controlling interests ( 918 ) ( 928 ) Total equity 145,347 162,893 Total liabilities and equity $ 155,278 $ 220,551 The accompanying notes are an integral part of the consolidated financial statements. F- 3 ORAMED PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) In thousands (except share and per share data) Year ended December 31, Year ended December 31, 2024 2023 REVENUES $ - $ 1,340 RESEARCH AND DEVELOPMENT EXPENSES ( 6,324 ) ( 8,971 ) SALES AND MARKETING - 287 GENERAL AND ADMINISTRATIVE EXPENSES ( 6,457 ) ( 8,425 ) OPERATING LOSS ( 12,781 ) ( 15,769 ) INTEREST EXPENSES (note 11b) ( 853 ) ( 2,037 ) FINANCIAL INCOME (EXPENSES), NET (note 11a) ( 2,286 ) 22,894 INCOME (LOSS) BEFORE TAX EXPENSES ( 15,920 ) 5,088 TAX EXPENSES ( 3,183 ) - NET INCOME (LOSS) $ ( 19,103 ) $ 5,088 NET INCOME (LOSS) ATTRIBUTABLE TO: COMPANY’S STOCKHOLDERS ( 19,060 ) 5,525 NON-CONTROLLING INTERESTS ( 43 ) ( 437 ) NET INCOME (LOSS) $ ( 19,103 ) $ 5,088 BASIC INCOME (LOSS) PER SHARE OF COMMON STOCK $ ( 0.48 ) $ 0.14 DILUTED INCOME (LOSS) PER SHARE OF COMMON STOCK $ ( 0.48 ) $ 0.14 WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC INCOME (LOSS) PER SHARE OF COMMON STOCK 40,828,380 40,315,068 WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING DILUTED INCOME (LOSS) PER SHARE OF COMMON STOCK 40,828,380 40,566,901 The accompanying notes are an integral part of the consolidated financial statements. F- 4 ORAMED PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY in thousands Attributable to Company’s Stockholders Additional Total Non- Common Stock paid-in Accumulated stockholders’ controlling Total Shares $ capital deficit equity interests Equity In thousands BALANCE AS OF JANUARY 1, 2024 40,339 485 320,892 ( 157,556 ) 163,821 ( 928 ) 162,893 STOCK-BASED COMPENSATION 618 7 3,991 - 3,998 - 3,998 STOCK-BASED COMPENSATION OF SUBSIDIARY - - - - 53 53 REPURCHASE AND RETIREMENT OF COMMON STOCK ( 1,037 ) ( 12 ) ( 2,482 )    ( 2,494 )   ( 2,494 ) NET LOSS ( 19,060 ) ( 19,060 ) ( 43 ) ( 19,103 ) BALANCE AS OF DECEMBER 31, 2024 39,920 480 322,401 ( 176,616 ) 146,265 ( 918 ) 145,347 Attributable to Company’s Stockholders Additional Total Non- Common Stock paid-in Accumulated stockholders’ controlling Total Shares $ capital deficit equity interests Equity In thousands BALANCE AS OF JANUARY 1, 2023 39,564 476 314,417 ( 163,081 ) 151,812 ( 656 ) 151,156 SHARES ISSUED FOR SERVICES 3 * 9 - 9 - 9 ISSUANCE OF COMMON STOCK, NET 193 2 2,426 - 2,428 - 2,428 STOCK-BASED COMPENSATION 579 7 4,040 - 4,047 - 4,047 STOCK-BASED COMPENSATION OF SUBSIDIARY - - - - - 165 165 NET INCOME (LOSS) - - - 5,525 5,525 ( 437 ) 5,088 BALANCE AS OF DECEMBER 31, 2023 40,339 485 320,892 ( 157,556 ) 163,821 ( 928 ) 162,893 * Represents an amount of less than $1. The accompanying notes are an integral part of the consolidated financial statements. F- 5 ORAMED PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands Year ended December 31, Year ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ ( 19,103 ) $ 5,088 Adjustments required to reconcile net income (loss) to net cash used in operating activities: Depreciation 193 196 Exchange differences, accrued interest on deposits and held to maturity bonds ( 2,700 ) ( 2,172 ) Changes in fair value of investments 7,413 ( 16,392 ) Stock-based compensation 4,053 4,212 Shares issued for services - 9 Funds in respect of employee rights upon retirement ( 5 ) ( 3 ) Change in accrued interest on short-term borrowings to maturity ( 1,463 ) 1,463 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 356 ) 852 Accounts payable, accrued expenses and related parties 3,525 ( 2,225 ) Net changes in operating lease 43 8 Deferred revenues - ( 1,340 ) Liability for employee rights upon retirement 2 7 Other liabilities ( 14 ) 2 Total net cash used in operating activities ( 8,412 ) ( 10,295 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 18 ) ( 254 ) Purchase of short-term deposits ( 54,450 ) ( 91,369 ) Proceeds from redemption of short-term deposits 97,152 109,760 Exercise of Closing Penny Warrants and Subsequent Penny Warrants ( 65 ) - Long-term investments ( 1,307 ) ( 99,550 ) Proceeds from long-term deposits 5 - Proceeds from long-term investments 64,500 5,000 Proceeds from maturity of held to maturity securities - 3,375 Total net cash provided by (used in) investing activities 105,817 ( 73,038 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock, net of issuance costs - 2,428 Repurchase and retirement of common stock ( 2,484 ) - Loans received - 99,550 Loans repaid ( 49,550 ) ( 50,000 ) Tax withholdings related to stock-based compensation settlements ( 2 ) - Total net cash provided by (used in) financing activities ( 52,036 ) 51,978 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS ( 4 ) ( 54 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 45,365 ( 31,409 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 9,055 40,464 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 54,420 $ 9,055 (A) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS: Interest paid $ 2,316 $ 574 Interest received $ 7,376 $ 5,156 (B) SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: 2024 Refinancing Tranche A ( 21,575 ) - 2024 Refinancing Tranche B 25,000 - Excise tax for repurchase and retirement of common stock ( 10 ) - Recognition of operating lease right-of-use assets and liabilities 58 - Derecognition of right-of-use asset ( 26 ) - Derecognition of lease liability 23 - The accompanying notes are an integral part of the consolidated financial statements F- 6 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: a. General Oramed Pharmaceuticals Inc. (collectively with its subsidiaries, the “Company,” unless the context indicates otherwise), a Delaware corporation, was incorporated on April 12, 2002. On February 17, 2006, the Company entered into an agreement with Hadasit Medical Services and Development Ltd. to acquire the provisional patent related to an orally ingestible insulin capsule to be used for the treatment of individuals with diabetes. 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 the issued and outstanding share capital of Oravax, 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 intends to serve as the company for the joint venture with Hefei Tianhui Biotech Co., Ltd. (“HTIT”), see note 15 (b) On January 11, 2023, the Company announced that the ORA-D-013-1 Phase 3 trial did not meet its primary or secondary endpoints. As a result, the Company terminated this trial and a parallel Phase 3, ORA-D-013-2 clinical trial. As these results are considered a triggering event, the Company evaluated all of its long lived assets which include fixed assets and operating lease right-of-use assets in the first quarter of 2023 and concluded that no impairment was required. In 2023, the Company completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters, such as body mass index (BMI), baseline HbA1c and age, responded well to oral insulin. These subsets exhibited an over 1 % placebo adjusted, statistically significant, reduction in HbA1c. Based on this analysis, on September 12, 2024 the Company submitted protocol ORA-D-013-3 Phase 3 to focus on the subpopulations with the higher probability to show efficacy. The Company intends to initiate a study during 2025. Moreover, the Company is examining its existing pipeline and has commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for the Company’s stockholders. See note 4 regarding 2023 Scilex Transaction and 2024 Refinancing. See note 7 regarding Short-Term Borrowings. See note 15 regarding JV Supplemental Agreement. F- 7 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): b. Basis of presentation The consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). c. Use of estimates in the preparation of financial statements The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financial statements date and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to stock-based compensation and to the investments at fair value (for further details, see note 4). d. Functional currency The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the U.S. dollar (“$” or “dollar”). Therefore, the functional currency of the Company and its subsidiaries is the dollar. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in foreign currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For foreign transactions and other items reflected in the statements of operations, the following exchange rates are used: (1) for transactions – exchange rates at transaction dates or average rates and (2) for other items (derived from non-monetary balance sheet items such as depreciation) – historical exchange rates. The resulting transaction gains or losses are carried to financial income or expenses, as appropriate. e. Repurchase and retirement of common stock The Company debited the common stock account by the par value of the shares retired and allocated the excess of the repurchase price over the par value of the shares to additional paid in capital. F- 8 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): f. Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. g. Cash equivalents The Company considers all short-term, highly liquid investments, which include short-term deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash, to be cash equivalents. h. Fair value measurement: 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: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. F- 9 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): h. Fair value measurement (continued): 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: December 31, 2024 Level 1 Level 2 Level 3 Fair Value Assets: Marketable Securities DNA 424 - - 424 Entera 248 - - 248 Scilex 2,769 - - 2,769 Subsequent Penny Warrants (see note 4) - 2,772 - 2,772 Warrants Note B (see note 4) - - 548 548 Tranche A Note (see note 4) - - 13,714 13,714 Tranche B Note (see note 4) - - 15,798 15,798 Royalty Purchase Agreement (see note 4) - - 1,976 1,976 Profit Sharing Loan Agreement (see note 4 (e)) - - 1,367 1,367 $ 3,441 $ 2,772 $ 33,403 $ 39,616 December 31, 2023 Level 1 Level 2 Level 3 Fair Value Assets: Marketable Securities DNA 297 - - 297 Entera 70 - - 70 Transferred Warrants (see note 4) 1,440 - - 1,440 Closing Penny Warrant (see note 4) - 9,180 - 9,180 Subsequent Penny Warrants (see note 4) - - 6,502 6,502 The Note (see note 4) - - 93,066 93,066 $ 1,807 $ 9,180 $ 99,568 $ 110,555 As of December 31, 2024, and December 31, 2023, the carrying amounts of cash equivalents, short-term deposits, Short-Term Borrowings (as defined in Note 7), 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. F- 10 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): i. Marketable securities The Company measured the securities (investments in equity securities of DNA group (T.R.) Ltd. (“DNA”), Entera Bio Ltd. (“Entera”) and Scilex Holding Company (“Scilex”) at fair value, with changes in fair value recognized in earnings. The Company intends to exercise these investments during 2025, and has classified the marketable securities as short-term accordingly. j. Other non-marketable equity securities The Company also invested in non-marketable equity securities, through an investment in a privately held company. This equity investment does not have a readily determinable fair value. The investment is measured under the measurement alternative in Accounting Standards Codification (“ASC”) 321 “Investments – Equity Securities” to the extent such an investment is not subject to consolidation or the equity method. Under the measurement alternative, this equity investment is carried at cost, less any impairment, adjusted for changes resulting from observable price changes in transactions for an identical or similar investment of the same issuer. The investment would be impaired in accordance with the provisions of ASC 820 “Fair Value Measurement” if, based on a qualitative assessment of impairment indicators, the fair value of the investment is less than its carrying amount. If considered impaired, the difference between the carrying amount and fair value would be recorded in the consolidated statement of income (loss). For further details, see note 5. k. Investments, at fair value The Company invested in the Tranche A Note (as defined in note 4), Tranche B Note (as defined in note 4) (collectively the “Notes”), Penny Warrants and Royalty Purchase Agreement issued by Scilex, for which it has elected the fair value option. Under the Fair Value Option Subsections of ASC Subtopic 825-10, Financial Instruments – Overall, the Company has the irrevocable option to report financial assets at fair value on an instrument-by-instrument basis. Scilex also issued to the Company the Note A Transferred Warrants and Note B Warrants (as defined in note 4) that meet the definition of a derivative under ASC 815 “Derivatives and Hedging”. Therefore, the Warrants will be measured at fair value initially and on every reporting period. The Company entered into a loan agreement to finance a real estate project. The Company decided to designate the Profit Sharing Loan Agreement (as define in note 4) as a whole under the Fair-Value option in accordance with ASC Topic 825 “Financial Instruments”. Changes in the fair value are recorded under financial income (expenses), net. l. Concentration of credit risks Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, short and long-term deposits, which are deposited in major financial institutions, Profit Sharing Loan Agreement, Royalty Purchase Agreement and the Notes. The Company is of the opinion that the credit risk in respect of these balances is remote, except for the Profit Sharing Loan Agreement, Royalty Purchase Agreement and the Notes for which the Company is of the opinion there is a credit risk, which is reflected in its fair value measurement (for further details, see note 4). F- 11 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): m. Income taxes 1. Deferred taxes Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using the tax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has provided a full valuation allowance with respect to its deferred tax assets. See note 12. Taxes that would apply in the event of disposal of investments in the Israeli subsidiary have not been taken into account in computing deferred taxes, as it is the Company’s intention to hold this investment, not to realize it. 2. Uncertainty in income tax The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50 % likely of being realized upon ultimate settlement. Such liabilities are classified as long-term, unless the liability is expected to be resolved within 12 months from the balance sheet date. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income tax expenses. F- 12 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): n. Revenue recognition HTIT On November 30, 2015, the Company entered into a Technology License Agreement, 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, 2023, the Company recognized revenue associated with this agreement in the aggregate amount of $ 20,382 , of which $ 1,340 was recognized in the year ended December 31, 2023, and deferred the remaining amount of $ 2,000 , which is presented as long-term deferred revenues on the consolidated balance sheet. The Company did not recognize revenue related to the HTIT License Agreement in the year ended December 31, 2024. See note 15 regarding the JV Supplemental Agreement. Medicox On November 13, 2022, the Company entered into a distribution license agreement (“Medicox License Agreement”) with Medicox Co., Ltd. (“Medicox”). The Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea. For further details, see note 8b. Under ASC 606 “Revenue from Contracts with Customers,” the Company identified Medicox as a customer and the Medicox License Agreement as a contract with a customer. The Company identified a performance obligation in the Medicox License Agreement to stand-ready and provide Medicox with support in its commercialization efforts in the Republic of Korea. This performance obligation includes a non-distinct distribution license for ORMD-0801, which the Company views a predominant item in the combined performance obligation. The Company concluded that the license is not distinct, as no party other than the Company is capable of providing related services to Medicox, and both the license and related services are necessary for the customer to obtain a regulatory approval in the Republic of Korea. In addition, the agreement covers the terms of future manufacturing services, that are contingent on the completion and success of the commercialization efforts. The Medicox License Agreement contains a fixed consideration of $ 2,000 , which was received by the Company during the year ended December 31, 2022 and is currently presented under long-term deferred revenues. It also contains variable consideration of contractual milestone payments and sales-based royalties. The Company’s obligation to stand-ready and support Medicox will be recognized on a straight-line basis over the period the Company expects to provide support to Medicox. As of December 31, 2024, this support has not commenced, and no revenue was recognized from the Medicox License Agreement. If Medicox proceeds with the regulatory approval process in the Republic of Korea, the Company expects most of the revenue to be recognized at a later stage, going forward. The Company notes that its Phase 3 trial did not meet its primary or secondary endpoints (see note 1a.1). If Medicox chooses to terminate the agreement as a result of the outcome of the Phase 3 trials, the Company will accelerate revenue recognition and recognize it at such time. F- 13 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): o. Research and development Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, stock-based compensation, employee benefits, the cost of supplies, the cost of services provided by outside contractors, including services related to the Company’s clinical trials, clinical trial expenses and the full cost of manufacturing drug for use in research and preclinical development. All costs associated with research and development are expensed as incurred. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. The Company outsources a substantial portion of its clinical trial activities, utilizing external entities such as Clinical Research Organizations (“CROs”), independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical trials. For each clinical trial that the Company conducts, clinical trial costs are expensed immediately. p. Stock-based compensation Equity awards granted to employees are accounted for using the grant date fair value method. The grant date fair value is determined as follows: for stock options with an exercise price and only service conditions using the Black Scholes pricing model, for stock options and restricted stock units (“RSUs”) with market conditions using a Monte Carlo model and for RSUs with service conditions based on the grant date share price. The fair value of share based payment awards is recognized as an expense over the requisite service period. The expected term is the length of time until the expected dates of exercising the award and is estimated using the simplified method due to insufficient specific historical information of employees’ exercise behavior, unless the award includes a market condition, in which case the contractual term is used. The volatility is based on a historical volatility, by statistical analysis of the weekly share price for past periods. The Company elected to recognize compensation cost for awards granted to employees that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. For awards with market conditions, compensation expense is not reversed if the market conditions are not satisfied. The Company elects to account for forfeitures as they occur. F- 14 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): q. Income (loss) per share of common stock Basic net earnings (loss) per common share are computed by dividing the net earnings (loss) attributable to stockholders for the period by the weighted average number of shares of common stock outstanding for each period, including vested RSUs. Outstanding stock options, warrants and unvested RSUs have been excluded from the calculation of the diluted loss per share for the year ended December 31, 2024 because all such securities are anti-dilutive for the year ended December 31, 2024. For the diluted earnings per share calculation for the year ended December 31, 2023, the weighted average number of shares outstanding during the year 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 251,833 RSUs. The weighted average number of stock options, warrants and RSUs excluded from the calculation of diluted income (loss) per share was 4,582,421 and 1,227,506 for the years ended December 31, 2024 and December 31, 2023, respectively. r. Leases The Company leases real estate and cars for use in its operations, which are classified as operating leases. In addition to rent, the leases may require the Company to pay directly for fees, insurance, maintenance and other operating expenses. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right of use assets and operating lease liabilities in the consolidated balance sheets. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. Lease expenses are recognized on a straight-line basis over the lease term. The Company elected the practical expedient to not separate lease and non-lease components for all of its leases. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will either exercise or not exercise the option to renew or terminate the lease. The Company’s lease agreements have remaining lease terms ranging from 4 months to 2.5 years. Some of these agreements include options to extend the leases for up to an additional 5 years and some include options to terminate the leases immediately. See Note 8d. F- 15 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): s. New accounting pronouncements Recently adopted accounting pronouncements In November 2023, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures.” This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280 “Segment Reporting”. The Company adopted this standard in the current period retrospectively to all prior periods presented in its financial statements, see note 13. Recently issued accounting pronouncements, not yet adopted In December 2023, the FASB issued 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 years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. 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. F- 16 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 2 - SHORT-TERM DEPOSITS: Composition : December 31, 2024 2023 Annual interest rate Amount Annual interest rate Amount Dollar deposits 5.65 - 5.75 % 55,281 6.35 - 6.81 % $ 95,279 NOTE 3 - MARKETABLE SECURITIES: a. Composition: The Company’s marketable securities include investments in equity securities of DNA, Entera and Scilex. December 31, 2024 2023 Short-term: DNA (see b below) $ 424 $ - Entera (see c below) 248 - Scilex (see d below) 2,769 - $ 3,441 - Long-term: DNA (see b below) $ - $ 297 Entera (see c below) - 70 Transferred Warrants (see note 4) - 1,440 $ - $ 1,807 b. DNA DNA’s ordinary shares are traded on the Tel Aviv Stock Exchange. The fair value of those securities is measured at the quoted prices of the securities on the measurement date. During the years ended December 31, 2024 and 2023, the Company did not sell any of DNA’s ordinary shares. As of December 31, 2024, the Company owns approximately 1.4 % of DNA’s outstanding ordinary shares. The cost of the securities as of both December 31, 2024 and 2023 was $ 595 . c. Entera Entera ordinary shares have been traded on the Nasdaq Capital Market since June 28, 2018. The Company measures the investment at fair value from such date, since it has a readily determinable fair value. F- 17 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 3 - MARKETABLE SECURITIES (continued): d. Scilex Scilex 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. On November 4, 2024 the Company exercised 6,500,000 of the Penny Warrant to shares. (for more details, see note 4). NOTE 4 - INVESTMENTS, AT FAIR VALUE: 2023 Scilex Transaction and 2024 Refinancing 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: a. A senior secured promissory note (the “Tranche A Note”), with a principal amount of $ 101,875 , maturing on March 21, 2025 and bearing interest of SOFR plus 8.5 %, payable in-kind. Scheduled principal payments are due on December 21, 2023, March 21, 2024, June 21, 2024, September 21, 2024, and December 21, 2024, with the balance due on March 21, 2025. In January 2025, the Company extended Tranche A Note maturity from March 21, 2025 to December 31, 2025. 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 maturity date of the Tranche A Note. As of December 31, 2024, Scilex has repaid $ 69,200 of the amount due under the Tranche A Note. See the description of the Extension Agreement (as defined below). 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 in and liens on all of the assets of Scilex, subject to customary and mutually agreed permitted liens and except for certain specified exemptions. b. Warrants to purchase up to 4,500,000 shares of Scilex common stock with an exercise price of $ 0.01 per share (the “Closing Penny Warrants”) and four additional warrants (the “Subsequent Penny Warrants”) each for 2,125,000 shares of Scilex common stock with an exercise price of $ 0.01 per share. The Closing Penny Warrants were vested on September 21, 2023, and each of the Subsequent Penny Warrants vested quarterly during 2024. The Closing Penny Warrants and the Subsequent Penny Warrants shall become exercisable on the earliest of (i) March 14, 2025 and (ii) the date on which the Tranche A Note has been repaid in full. As of December 31, 2024, 4,500,000 Closing Penny Warrants were vested according to the terms of Tranche A Note, 8,500,000 Subsequent Penny Warrants were vested according to the terms of the Tranche A Note and as per the Extension Agreement (as defined below). According to the Extension Agreement (as defined below), 4,500,000 Closing Penny Warrants and 2,000,000 Subsequent Penny Warrants have become exercisable. On October 30, 2024, the Company exercised 4,500,000 Closing Penny Warrants and 2,000,000 Subsequent Penny Warrants that were exercisable at such time. As a result the Company holds 6,500,000 shares of common stock of Scilex. c. Transferred warrants (the “Transferred Warrants”) to purchase 4,000,000 shares of Scilex common stock with an exercise price of $ 11.50 per share, fully exercisable and expiring on November 10, 2027 . On September 20, 2024, the Company sold the Transferred Warrants for consideration of $ 300 (see below). As a result, as of December 31, 2024 the Company does not hold any Transferred Warrants. F- 18 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued): 2023 Scilex Transaction and 2024 Refinancing (continued) 2023 Scilex Transaction (continued) The Company accounted for the Transferred Warrants as derivatives measured at fair value. 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 (expense), 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 (including the exit fee and the prepayment premium) 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 112 % to 113 %. The fair value of the Transferred Warrants was based on their closing price on the Nasdaq Capital Market. The fair value of the Penny Warrants was calculated based on the closing price of the Scilex common stock on the Nasdaq Capital Market. 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 is 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. The table below represents the fair value composition of the Tranche Note A: December 31, 2024 December 31, 2023 Short term Long term Total Short term Long term Total Tranche Note A $ 13,714 - $ 13,714 $ 57,713 $ 35,353 $ 93,066 Closing Penny Warrant - - - - $ 9,180 $ 9,180 Subsequent Penny Warrants $ 2,772 - $ 2,772 - $ 6,502 $ 6,502 Transferred Warrants - - - - $ 1,440 $ 1,440 Total $ 16,486 - $ 16,486 $ 57,713 $ 52,475 $ 110,188 As of December 31, 2023, the fair value of the Tranche A Note was less than the aggregate unpaid principal balance (which includes interest payable on maturity) by $ 7,801 . As of December 31, 2024, 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 . F- 19 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued): 2024 Refinancing In October 2024, the Company entered into the 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 certain institutional investors (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 Notes”) repayable on a quarterly basis for 2 years, which Tranche B Notes are convertible into shares of Scilex common stock and (ii) warrants to purchase up to 7,500,000 shares of Scilex common stock (the “Tranche B warrants”). The Company purchased 50 % of Tranche B Notes and Tranche B Warrants and therefore holds an aggregate principal amount of $ 25,000 of the Tranche B Notes and 3,750,000 Tranche B Warrants. Scilex received from the Company, in consideration for the Tranche B Notes 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 certain institutional investors (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 (the “ROW License Term Sheet”), regarding a license and development agreement (the: “Lido License 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. F- 20 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued): 2024 Refinancing (continued) c. ZTLido Rest of the World Binding Agreement (continued): Subject to determination of a final structure for the transactions contemplated by the ROW License Term Sheet, it is anticipated that the Company and such institutional investors will hold the Lido License Agreement through a joint venture, RoyaltyVest, Inc. (“RoyaltyVest”). In consideration for the rights to be provided under the proposed Lido License Agreement, as more fully described in the ROW License Term Sheet, (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 (the “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. The term sheet is subject to entering into a definitive agreement (see note 15) and subject to the consent of Oishi and Itochu to the Lido License Agreement. As of December 31, 2024, the fair value of the ROW License was immaterial, inter alia, as it remains contingent upon third-party approvals and the future execution of agreements. The institutional investors who are parties to the Convertible Notes SPA, Royalty Purchase Agreement and ROW License Term Sheet are all inter-related. Following the refinancing as described above, on October 8, 2024, Scilex used $ 12,500 of the net proceeds from the proceeds of the Tranche B Note for the partial repayment of the outstanding balance under the Tranche A Note. 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 (expense), net and include interest income on the Tranche B Note. The valuation of the Tranche B Note’s was performed based on the binomial model , using a discount rate of 110.33 %. Presented below is the summary of the assumptions and estimates that were used for the valuation: Parameters and Assumptions Share Price $ 0.43 Conversion Rate 1.04 Floor Rate 1.04 Expected Term 1.77 Years Volatility 61.99 % Risk Free Rate 4.16 % The fair value of the Note B Warrants was calculated based on Black and Scholes model. F- 21 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued): 2024 Refinancing (continued) c. ZTLido Rest of the World Binding Agreement (continued): Presented below is the summary of the assumptions and estimates that were used for the valuation of the Warrants: Parameters and Assumptions Share Price $ 0.43 Exercise Price $ 1.04 Expected Term 4.77 Years Volatility 63.14 % Risk Free Rate 4.33 % Dividend Rate 0 % 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 110.33 %. As of December 31, 2024, the fair value of the Tranche B Note was less than the aggregate unpaid principal balance (which includes interest payable on maturity) is $ 9,833 . The table below represents the fair value composition of the Tranche B Note: December 31, 2024 Short term Long term Total Tranche B Note $ 11,263 $ 4,535 $ 15,798 Warrant - $ 548 $ 548 Royalty Purchase Agreement $ 1,039 $ 937 $ 1,976 Total $ 12,302 $ 6,020 $ 18,322 F- 22 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued): 2024 Refinancing (continued) c. ZTLido Rest of the World Binding Agreement (continued): The table below represents the fair value cycle of 2023 Scilex Transaction and 2024 Refinancing Transaction throughout December 31, 2023 and December 31, 2024: Tranche A Tranche B Total Balance as of December 31, 2022 - - - 2023 Scilex Transaction 101,875 - 101,875 Cash received from note repayment ( 5,000 ) - ( 5,000 ) Change in fair value 13,313 - 13,313 Balance as of December 31, 2023 110,188 - 110,188 2024 Refinancing (*) ( 21,575 ) 25,000 3,425 Proceeds from the sale of Transferred Warrants ( 300 ) - ( 300 ) Cash received from Tranche A Note repayment ( 64,200 ) - ( 64,200 ) Exercised warrants (**) ( 6,123 ) - ( 6,123 ) Amounts receivable from the royalty agreement (***) - ( 398 ) ( 398 ) Change in fair value ( 1,504 ) ( 6,280 ) ( 7,784 ) Balance as of December 31, 2024 16,486 18,322 34,808 (*) The amount was recorded as part of the financial income (expenses), net. (**) On October 30, 2024 the Company exercised 4,500,000 Closing Penny Warrants, and 2,000,000 Subsequent Penny Warrants into 6,500,000 shares of common stock of Scilex and as a result, these shares are not part of the Tranche A Note and presented under fair value investment. (***) The amount is included under prepaid expenses and other current assets. Financial income (expenses) recognized in respect of 2023 Scilex Transaction and 2024 Refinancing, for the years ended December 31, 2024 and 2023, were ($ 4,359 ) and $ 13,313 , respectively. F- 23 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued): 2024 Refinancing (continued) c. ZTLido Rest of the World Binding Agreement (continued): The table below represents the fair value breakdown as of December 31, 2024: Tranche A Note Tranche B Note Total Amount Fair Value Amount Fair Value Fair Value The Notes 7,675 13,714 25,000 15,798 29,512 Warrants 6,500 2,772 3,750 548 3,320 Royalty Purchase Agreement payment - - - 1,976 1,976 December 31, 2024 - 16,486 - 18,322 34,808 For more details see note 15, subsequent events. e. 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 ($ 216 ) will be loaned upon certain milestones which are expected to occur in the first half of 2025. 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. The Company decided to designate the Profit Sharing Loan Agreement as a whole under the Fair-Value option in accordance with ASC Topic 825 “Financial Instruments”. The valuation of the Profit Sharing Loan Agreement was based on various project profit scenarios derived from the appraiser’s report. The Company used the Wang Transform model, a risk-neutral probabilities method, with an expected term of 4.01 years, a curve rate of 13.9 % and a risk spread of 0.43 %. F- 24 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 5 - OTHER NON-MARKETABLE EQUITY SECURITIES: On August 26, 2022, the Company entered into a stock purchase agreement with Diasome Pharmaceuticals, Inc. (“Diasome”), a privately-held company, pursuant to which the Company purchased shares of Series B preferred stock of Diasome for an aggregate purchase price of approximately $ 2,700 . Following the purchase, the Company holds less than 5 % of the issued and outstanding stock of Diasome. The stock purchase agreement provides the Company with the option to purchase additional preferred shares of stock on a pro rata basis at similar terms to the terms and conditions of the current round contingent upon Diasome achieving certain milestones. The Company’s non-marketable equity securities are an investment in a company without a readily determinable fair value. The Company accounts for this investment under the measurement alternative in ASC 321, whereby the equity investment is recorded at cost, less impairment. The carrying amount is subsequently remeasured to its fair value in accordance with the provisions of ASC 820 when observable price changes occur as of the date the transaction occurred, or it is impaired. Any adjustments to the carrying amount are recorded in the consolidated statements of comprehensive income (loss). During the year ended December 31, 2023, the Company recorded an $ 824 increase in value due to the closing in June 2023 of a Series C preferred investment round in Diasome. The change was recorded using the transaction price of similar securities issued by Diasome, adjusted for contractual rights and obligations of the securities held by the Company. During the year ended December 31, 2024, there was no change in the value of the Diasome investment. NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Composition: December 31, 2024 2023 Accounts payable $ 789 $ 551 Payroll and related accruals 407 453 Income tax 3,204 - Accrued liabilities 740 605 $ 5,140 $ 1,609 NOTE 7 - SHORT-TERM BORROWINGS: On August 8, 2023, the Company borrowed an aggregate of $ 99,550 pursuant to loan agreements from Israel Discount Bank Ltd. (the “Short-Term Borrowings”). The Short-Term Borrowings mature on dates ranging from August 11, 2023 to May 24, 2024, bear interest ranging from 6.66 % to 7.38 %, and are secured by certificates of deposits issued by Israel Discount Bank Ltd. having an aggregate face amount of $ 99,550 . The net proceeds of the Short-Term Borrowings were used to fund the Tranche A Note (for further details, see note 4). The Short-Term Borrowings are paid in one payment of principal and interest at each respective maturity. As of December 31, 2024, the Company repaid the entire Short-Term Borrowings amount. F- 25 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - COMMITMENTS: a . On August 21, 2020, the Company received a letter from HTIT, disputing certain pending payment obligations of HTIT under the Technology License Agreement (“TLA”). The payment obligation being disputed is $ 6,000 , out of which only an amount of $ 2,000 has been received and has been included in deferred revenue in each of the consolidated balance sheets as of the years ended December 31, 2024, and December 31, 2023. On February 7, 2025, the Company and HTIT entered into a JV Agreement (as defined in note 15). Pursuant to the terms of the JV Agreement, each of the Company, the Subsidiary and HTIT irrevocably released and waived (i) any claims and demands against each other party in connection with the TLA; and (ii) all rights, obligations and liabilities set out and arising with respect to the performance of the TLA. For more details see note 15. b. On November 13, 2022, the Company entered the Medicox License Agreement with Medicox. The Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea. The Medicox License Agreement is for ten years, but the parties have the right to terminate it with a 180 days-notice. Medicox will comply with agreed distribution targets and will purchase ORMD-0801 at an agreed upon transfer price per capsule. In addition, Medicox will pay the Company up to $ 15,000 in developmental milestones, $ 2,000 of which were received by the Company in 2022, and up to 15 % royalties on gross sales. Medicox will also be responsible for obtaining a regulatory approval in the Republic of Korea. For the Company’s revenue recognition policy, see note 1m. c. Grants from the Israel Innovation Authority (“IIA”) 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 that was received through December 31, 2024 was $ 2,214 ($ 2,587 including interest). All grants were received before the year ended August 31, 2020 and recorded as a reduction of research and development expenses at that time. As of December 31, 2024, the liability to the IIA was $ 59 . The royalty expenses which are related to the funded project were recognized in cost of revenues in the relevant periods. As of December 31, 2024, the Company has paid a total amount of $ 556 to the IIA. For additional details see note 15. F- 26 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - COMMITMENTS (continued): d. Leases On August 2, 2020, the Subsidiary entered into a lease agreement for its facilities in Israel. The lease agreement is for a period of 60 months commencing September 1, 2020. The Subsidiary has the option to extend the period for another 60 months. The annual lease payment, including management fees, as of December 31, 2024 is approximately NIS 435 ($ 119 ). As security for its obligation under this lease agreement, the Company provided a bank guarantee in an amount equal to three monthly lease payments. For accounting purposes, the lease period is 60 months. On December 2, 2021, the Subsidiary entered into an addendum (the “Addendum”) to the current lease agreement for its facilities in Israel. The Addendum refers to the lease of an additional space of 264 square meters for a period of 60 months commencing February 1, 2022. The Subsidiary has the option to extend the period for another 60 months. The annual lease payment, including management fees, is approximately NIS 435 ($ 119 ). As security for its obligation under the Addendum, the Company provided a bank guarantee in an amount equal to three monthly lease payments. For accounting purposes, the lease commenced on February 1, 2022 as the Subsidiary did not have access to the space until that date. For accounting purposes, the lease period is 60 months. The total expenses related to leases were $ 265 for the year ended December 31, 2024, and $ 236 for the year ended December 31, 2023. The Company has various operating leases for office space and vehicles that expire through 2027. Below is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Operating right-of-use assets $ 414 $ 694 Operating lease liabilities, current 216 267 Operating lease liabilities long-term 156 342 Total operating lease liabilities $ 372 $ 609 Weighted Average of Remaining Lease Term Operating leases 1.8 2.5 Weighted Average Discount Rate Operating leases 3.52 % 3.15 % Operating cash flows from operating lease for the years Ended December 31, 2024 and 2023 were $ 264 and $ 267 , respectively. Lease payments for the Company’s right-of-use assets over the remaining lease periods as of December 31, 2024 are as follows: December 31, 2024 2025 $ 225 2026 141 2027 18 Total undiscounted lease payments 384 Less: Interest* ( 12 ) Present value of lease liabilities $ 372 * Future lease payments were discounted by 3 %- 7 % interest rate. F- 27 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - COMMITMENTS (continued): e . Clinical Research Organization Services Agreement 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 $ 775 recognized in research and development expenses through December 31, 2024. NOTE 9 - STOCKHOLDERS’ EQUITY: The following are the significant capital stock transactions that took place during the years ended December 31, 2024 and 2023: a. On September 1, 2021, the Company entered into a controlled equity offering agreement (the “Cantor Equity Distribution Agreement”) with Cantor Fitzgerald & Co., as agent, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 100,000 , through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus dated July 26, 2021 and prospectus supplement dated September 1, 2021. The Company paid the sales agent a cash commission of 3.0 % of the gross proceeds of the sale of any shares sold through the sales agent under the Cantor Equity Distribution Agreement. As of December 31, 2023 1,971,447 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $ 26,253 , no shares were issued in 2024. The agreement terminated on March 17, 2024. b. On March 18, 2024, the Company entered into an at the market offering (the “StockBlock ATM Agreement”) with Rodman & Renshaw LLC and StockBlock Securities LLC, as agent, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 75,000 , through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus dated March 18, 2024 and prospectus supplement dated September 1, 2021. The Company will pay the sales agent a cash commission of 3.0 % of the gross proceeds of the sale of any shares sold through the sales agent under the StockBlock ATM Agreement. As of December 31, 2024 no shares had been issued under the StockBlock ATM Agreement. c. As of December 31, 2024, the Company had outstanding warrants exercisable starting February 25, 2020 for 20,000 shares of common stock at an exercise price of $ 4.13 per share and expiring on April 15, 2029. F- 28 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 9 - STOCKHOLDERS’ EQUITY (continued): The following table presents the warrant activity for the years ended December 31, 2024 and 2023: Year ended December 31, 2024 2023 Warrants Weighted- Average Exercise Price Warrants Weighted- Average Exercise Price Warrants outstanding at beginning of year 20,000 $ 4.13 150,705 $ 4.71 Issued - $ - - $ - Exercised - $ - - $ - Expired - $ - ( 130,705 ) $ 4.80 Warrants outstanding at end of year 20,000 $ 4.13 20,000 $ 4.13 Warrants exercisable at end of year 20,000 $ 4.13 20,000 $ 4.13 d. 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. The stock buyback program does not obligate the Company to purchase any shares and expires in 12 months. 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. During 2024, the Company repurchased and retired 1,036,976 shares of its common stock under this program for approximately $ 2,494 , including $ 10 excise tax, at an average price of $ 2.36 per share. All repurchases were funded with cash on hand. F- 29 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - STOCK-BASED COMPENSATION: The Company makes awards only under the 2019 Plan, under which, the Company had reserved a pool of 7,500,000 shares of the Company’s common stock which may be issued at the discretion of the board of directors from time to time. Under this 2019 Plan, each option or RSU is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with vesting schedules which will be determined by the board of directors for each grant. The maximum term of the options and RSUs is 10 years. The following are the significant stock options, RSUs transactions with employees and board members made during the years ended December 31, 2024 and 2023: a. On April 17, 2023, the Company granted an aggregate of 868,500 RSUs representing a right to receive shares of the Company’s common stock to executive officers and board members of the Company. The RSUs will vest in twelve equal quarterly installments starting May 1, 2023. The total fair value of these RSUs on the date of grant was $ 1,980 , using the quoted closing market share price of $ 2.28 on the Nasdaq Capital Market on the date of grant. b. On April 17, 2023, the Company granted an aggregate of 245,500 performance based RSUs (“PSUs”) representing a right to receive shares of the Company’s common stock to executive officers of the Company. The PSUs vested on May 26, 2023, upon the Company’s common stock achieving and maintaining a specified price per share. The total fair value of these PSUs on the date of grant was $ 550 , using the Monte-Carlo model. c. On May 1, 2023, the Company granted an aggregate of 20,000 RSUs representing a right to receive shares of the Company’s common stock to a new board member. The RSUs will vest in twelve quarterly installments starting May 1, 2023. The total fair value of these RSUs on the date of grant was $ 49 , using the quoted closing market share price of $ 2.45 on the Nasdaq Capital Market on the date of grant. d. On January 4, 2024, the Company granted an aggregate of 941,500 RSUs representing a right to receive shares of the Company’s common stock to executive officers of the Company. The RSUs will vest in twelve equal quarterly installments starting January 8, 2024. The total fair value of these RSUs on the date of grant was $ 2,250 using the quoted closing market share price of $ 2.39 on the Nasdaq Capital Market on the date of grant. F- 30 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - STOCK-BASED COMPENSATION (continued): e. On January 4, 2024, the Company granted 294,000 PSUs representing a right to receive shares of the Company’s common stock to executive officers of the Company. The total amount of the PSUs shall vest when the closing price per share of Common Stock of the Company on the Nasdaq Capital Market reaches an average of $ 4.00 over any 10-trading day period. The total fair value of these PSUs on the date of grant was $ 691 , using the Monte-Carlo model, based on the quoted closing market share price of $ 2.39 on the Nasdaq Capital Market on the date of grant. f. On January 4, 2024, the Company granted an aggregate of 187,610 RSUs representing a right to receive shares of the Company’s common stock to board members of the Company. 37,610 RSUs will vest in three equal quarterly installments starting April 1, 2024. 150,000 RSUs will vest in three equal annual installments starting January 1, 2025. The total fair value of these RSUs on the date of grant was $ 448 , using the quoted closing market share price of $ 2.39 on the Nasdaq Capital Market on the date of grant. g. On January 30, 2024, the Company granted an aggregate of 3,750 RSUs representing a right to receive shares of the Company’s common stock to board member of the Company. The RSUs will vest in four equal quarterly installments starting April 1, 2024. The total fair value of these RSUs on the date of grant was $ 11 , using the quoted closing market share price of $ 2.98 on the Nasdaq Capital Market on the date of grant. h. On April 17, 2024, the Company granted an aggregate of 29,800 RSUs representing a right to receive shares of the Company’s common stock to board member of the Company. 7,300 RSUs will vest in three equal quarterly installments starting July 1, 2024. 22,500 RSUs will vest in three equal annual installments starting January 1, 2025. The total fair value of these RSUs on the date of grant was $ 69 , using the quoted closing market share price of $ 2.33 on the Nasdaq Capital Market on the date of grant. i. On June 20, 2024, the Company granted 34,000 PSUs representing a right to receive shares of the Company’s common stock to the Company’s Chief Financial Officer. The total amount of the PSUs shall vest upon the later of (i) June 18, 2026 and (ii) when the closing price per share of Common Stock of the Company on the Nasdaq Capital Market reaches an average of $ 4.00 over any 10-trading day period. The total fair value of these PSUs on the date of grant was $ 73 , using the Monte-Carlo model, based on the quoted closing market share price of $ 2.21 on the Nasdaq Capital Market on the date of grant. j. On June 21, 2024, 140,040 RSUs representing a right to receive shares of the Company’s common stock were granted to executive officer. 93,360 shall vest in one installment on June, 18 2026 and 46,680 shall vest in four equal quarterly installments starting September 9, 2026. The total fair value of these RSUs on the date of grant was $ 305 , using the quoted closing market share price of $ 2.18 on the Nasdaq Capital Market on the date of grant. k. On November 11, 2024, the Company granted an aggregate of 135,000 RSUs representing a right to receive shares of the Company’s common stock to executive officers of the Company. The RSUs vested on the date of grant. The total fair value of these RSUs on the date of grant was $ 321 , using the quoted closing market share price of $ 2.38 on the Nasdaq Capital Market on the date of grant. F- 31 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - STOCK-BASED COMPENSATION (continued): l. Options to employees, directors and non-employees A summary of the status of the stock options granted to employees and directors as of December 31, 2024 and 2023 and changes during the years ended on those dates, is presented below: Year ended December 31, 2024 2023 Number of options Weighted average exercise price Number of options Weighted average exercise price $ $ Options outstanding at beginning of year 1,909,676 8.03 2,041,676 8.47 Changes during the year: Granted - - - - Forfeited ( 49,125 ) 13.92 ( 132,000 ) 14.81 Expired ( 199,543 ) 13.40 - - Exercised - - - - Options outstanding at end of year 1,661,008 7.21 1,909,676 8.03 Options exercisable at end of year 1,442,258 6.91 1,479,426 7.15 Expenses recognized in respect of stock options granted to employees and directors, for the years Ended December 31, 2024 and 2023, were $ 213 and $ 811 , respectively. F- 32 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - STOCK-BASED COMPENSATION (continued): m. Options to employees, directors and non-employees The following table presents summary information concerning the options granted to employees and directors outstanding as of December 31, 2024: Exercise prices $ Number outstanding Weighted Average Remaining Contractual Life Years Weighted average exercise price $ 1-6 840,500 4.83 3.94 6.23-9.12 283,008 2.80 7.96 10.40-20.19 537,500 6.50 11.94 1,661,008 5.02 7.21 As of December 31, 2024, there were $ 122 of unrecognized compensation costs related to non-vested options previously granted to employees and directors. The unrecognized compensation costs are expected to be recognized over a weighted average period of 0.6 years. 47,000 options granted to non-employees were outstanding and exercisable as of December 31, 2024 and 2023. The Company recorded no stock-based compensation related to non-employees’ awards during the years ended December 31, 2024 and 2023. During the years ended December 31, 2024 and 2023, no options were exercised. As of December 31, 2024, there were no unrecognized compensation costs related to non-vested options previously granted to non-employees. F- 33 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - STOCK-BASED COMPENSATION (continued): m. Options to employees, directors and non-employees (continued): The following table presents summary information concerning the options granted to non-employees outstanding as of December 31, 2024: Range of exercise prices $ Number outstanding Weighted Average Remaining Contractual Life Years Weighted Average Exercise Price $ 3.74-5.08 47,000 4.98 4.31 n. Restricted stock units The following table summarizes the activities for unvested RSUs and PSUs granted to employees and directors for the years ended December 31, 2024 and 2023: Year ended December 31, 2024 2023 Number of RSUs Outstanding at the beginning of year 1,834,362 1,561,570 Changes during the year: Granted 1,792,460 1,134,000 Issued ( 617,542 ) ( 574,791 ) Forfeited ( 405,945 ) ( 286,417 ) Expired ( 50,770 ) - Outstanding at the end of the year 2,552,565 1,834,362 Vested during the year 925,937 521,625 Vested and unissued at year end 520,531 212,136 The Company recorded compensation expenses related to RSUs of $ 3,787 for the year ended December 31, 2024 and $ 3,210 for the year ended December 31, 2023. As of December 31, 2024, there were unrecognized compensation costs of $ 1,630 related to RSUs. The unrecognized compensation costs are expected to be recognized over a weighted average period of 0.68 year. F- 34 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - STOCK-BASED COMPENSATION (continued): n. Restricted stock units (continued): The Company recorded compensation expenses related to RSUs granted to non-employees of $ 26 for the year ended December 31, 2023. No compensation expenses recorded for the year ended December 31, 2024. As of December 31, 2024, there were no unrecognized compensation costs related to RSUs. The Company recorded total compensation expenses of $ 4,053 and $ 4,212 for the years ended December 31, 2024 and 2023, respectively. $ 1,998 and $ 1,718 were included in Research and Development expenses, $ 2,055 and $ 2,933 were included in General and Administrative expenses and $ 0 and $( 440 ) were included in Sales and Marketing for the years ended December 31, 2024 and 2023, respectively. For additional information regarding RSUs and PSUs granted in 2025, see note 15. NOTE 11 - FINANCIAL INCOME AND EXPENSES: a. Financial income Year ended December 31, 2024 2023 Income from interest on deposits $ 4,128 $ 8,016 Exchange rate differences, net 174 - Income from interest on corporate bonds - 10 Revaluation of investments, net - 16,461 Money Market Interest Income 870 143 Other 67 - $ 5,239 $ 24,630 b. Financial expenses Year ended December 31, 2024 2023 Exchange rate differences, net $ - $ 124 Bank and broker commissions 15 29 Revaluation of securities, net 3,114 69 Revaluation of investments, net (see note 4) 4,302 - Fees regarding Scilex transaction 94 1,514 Interest expenses 853 2,037 $ 8,378 $ 3,773 F- 35 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 12 - TAXES ON INCOME: Taxes on income included in the consolidated statements of comprehensive income (loss) represent current taxes due to taxable income of the Company. a. Corporate taxation in the U.S. The applicable corporate tax rate for the Company is 21 %. As of December 31, 2024, the Company has utilized all of its outstanding net operating loss (“NOL”). Oravax had an accumulated tax loss carryforward of approximately $ 3,386 (as of December 31, 2023, $ 3,374 ). Under U.S. tax laws, subject to certain limitations, carryforward tax losses originating in tax years beginning after January 1, 2018, have no expiration date, but they are limited to 80 % of the company’s taxable income in any given tax year. Carryforward tax losses originating in tax years beginning prior to January 1, 2018, expire 20 years after the year in which incurred. b. Corporate taxation in Israel The Subsidiary is taxed in accordance with Israeli tax laws. The corporate tax rate applicable to 2024 and 2023 is 23 %. As of December 31, 2024, the Subsidiary and Oravax Medical Ltd. had an accumulated tax loss carryforward of approximately $ 114,000 (as of December 31, 2023, approximately $ 102,000 ). Under the Israeli tax laws, carryforward tax losses have no expiration date. c. Deferred income taxes December 31, 2024 2023 In respect of: Net operating loss carryforward $ 26,797 $ 27,757 Research and development expenses 1,220 2,731 Revaluation of investments 5,608 ( 2,611 ) Other temporary differences 2,495 596 Less - valuation allowance ( 36,120 ) ( 28,473 ) Net deferred tax assets $ - $ - Deferred taxes are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a full valuation allowance. F- 36 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 12 - TAXES ON INCOME (continued): d. Income (Loss) before taxes on income and income taxes included in the consolidated statements of comprehensive income (loss) Year ended December 31, 2024 2023 Income (loss) before taxes on income: U.S. $ ( 8,853 ) $ 11,604 Outside U.S. ( 7,067 ) ( 6,516 ) $ ( 15,920 ) $ 5,088 Taxes on income (tax benefit): Current: U.S. (*) 3,183 - Outside U.S. - - $ 3,183 $ - (*) Based on anticipated gains from the 2023 Scilex Transaction and 2024 Refinancing, the Company anticipates taxable income for the year ending December 31, 2024. As a result, the Company fully utilized its tax loss carryforward and incurred associated tax expenses. During the year ended December 31, 2024, the Company recognized tax expenses of $ 3,194 . Tax provision of $ 3,194 has been classified to Accounts payable and accrued expenses. e. Reconciliation of the statutory tax benefit to effective tax expense Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies in the United States, and the actual tax expense: Year ended December 31, 2024 2023 Income (loss) before income taxes as reported in the consolidated statement of comprehensive income (loss) $ ( 15,920 ) $ 5,088 Statutory tax (benefit) expense – 21 % ( 3,343 ) 1,068 Increase (decrease) in income taxes resulting from: Change in the balance of the valuation allowance for deferred tax 7,647 ( 4,332 ) Disallowable deductions ( 878 ) 731 Influence of different tax rate applicable to the Subsidiary and Oravax Medical Ltd. ( 219 ) ( 305 ) Prior year adjustments ( 13 ) 2,838 Uncertain tax position ( 11 ) - Taxes on income for the reported year $ 3,183 $ - F- 37 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 12 - TAXES ON INCOME (continued): f. Uncertainty in Income Taxes ASC 740, “Income Taxes” requires significant judgment in determining what constitutes an individual tax position as well as assessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax rate and consequently, affect the operating results of the Company. The Company recognizes interest and penalties related to its tax contingencies as income tax expense. The following table summarizes the activity of the Company unrecognized tax benefits: Year ended December 31, 2024 2023 Balance at Beginning of Year $ 11 $ 11 Decrease in uncertain tax positions for the current year ( 11 ) - Balance at End of Year $ - $ 11 The Company does not expect unrecognized tax expenses to change significantly over the next 12 months. The Company is subject to U.S. Federal income tax examinations for the tax years of 2020 through 2023. The Subsidiary is subject to Israeli income tax examinations for the tax years of 2019 through 2023. g. Valuation Allowance Rollforward Year ended Balance at beginning of year Additions (deductions) Balance at end of year Allowance in respect of carryforward tax losses: Year ended December 31, 2024 $ 28,473 $ 7,647 $ 36,120 Year ended December 31, 2023 32,805 ( 4,332 ) 28,473 F- 38 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 13 - 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 (loss), which is reported in the consolidated statements of comprehensive income (loss). The Company has determined that it operates in a single reportable segment, focused on research and development activities related to its proprietary products and technologies. The CODM monitors budgeted versus actual net income (loss), 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, see note 4. The CODM monitors these investments separately from operational performance. Income and expenses related to financial instruments are reported as finance income (expenses) in the consolidated statements of comprehensive income (loss), reflecting their distinct nature from core business operations. NOTE 14 - RELATED PARTY TRANSACTIONS: a. On July 1, 2008, the Subsidiary entered into two consulting agreements with KNRY Ltd. (“KNRY”), an Israeli company owned by the Chief Scientific Officer, whereby the President and Chief Executive Officer and the Chief Scientific Officer, through KNRY, provide services to the Company (the “Consulting Agreements”). The Consulting Agreements are both terminable by either party upon 140 days, prior written notice. The Consulting Agreements, as amended, provide that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreements and that the monthly consulting fee paid to the President and Chief Executive Officer and the Chief Scientific Officer is NIS 146,705 ($ 40 ) and NIS 106,400 ($ 29 ), respectively. Following the relocation of the President and Chief Executive Officer to the State of Israel, the Company entered into two agreements with the President and Chief Executive Officer, replacing his above-mentioned consulting agreement through KNRY, substantially on the same terms, in order to allocate his time and services between the Company and the Subsidiary. Effective as of January 1, 2024, the monthly consulting fee of the Chief Scientific Officer is NIS 117,040 ($ 32 ). Effective as of July 1, 2024, the monthly consulting fee of the Chief Scientific Officer is NIS 134,550 ($ 37 ). Effective November 1, 2022, the Company entered into a consulting agreement with Shnida Ltd. (“Shnida”), whereby the 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 96,825 ($ 26 ). Effective as of July 1, 2024, the monthly consulting fee of the President and Chief Executive Officer is NIS 111,349 ($ 31 ). 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 November 1, 2022, pursuant to which, effective as of January 1, 2024, the President and Chief Executive Officer receives gross monthly salary of NIS 51,591 ($ 14 ) in consideration for his services as President and Chief Executive Officer of the Subsidiary. Effective as of July 1, 2024, the President and Chief Executive Officer receives gross monthly salary of NIS 59,330 ($ 16 ) in consideration for his services as President and Chief Executive Officer of the Subsidiary. In addition, the President and Chief Executive Officer is provided with a phone and a company car pursuant to the terms of his agreement. F- 39 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 14 - RELATED PARTY TRANSACTIONS (continued): b. Balances with related parties: December 31, 2024 2023 Accounts payable and accrued expenses - Shnida $ 175 $ 160 Accounts payable and accrued expenses - KNRY 154 165 Total payable to related parties $ 329 $ 325 c. Expenses to related parties: Year ended December 31, 2024 2023 KNRY $ 563 $ 486 Shnida 514 445 Nadav Kidron (President and Chief Executive Officer) $ 297 $ 296 NOTE 15 - SUBSEQUENT EVENTS: A. RSUs granted On January 2, 2025, the Company granted 1,023,000 RSUs representing a right to receive shares of the Company’s common stock to the Company’s executive officers. The total amount of the RSUs shall vest in equal quarterly installments of approximately 85,249 over a three year period starting with the first quarterly vesting on January 1, 2025. The total fair value of these RSUs on the date of grant was $ 2,465 based on the quoted closing market share price of $ 2.41 on the Nasdaq Capital Market on the date of grant. B. 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 (“JV”) 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. F- 40 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 15 - SUBSEQUENT EVENTS (continued): B. PSUs granted (continued): The Company modified 294,000 outstanding PSUs that were granted to the Company’s Executive Officers, adjusting the vesting criteria and performance targets. The Company will recognize stock-based compensation expense equal to the unrecognized grant-date fair value of the original award plus any incremental fair value arising from the modification over the remaining requisite service period. As of March 27, 2025, all PSUs that granted to the Company’s Executive Officers achieved the first updated performance target. C. Scilex investment Tranche B Note Consent On January 2, 2025, the Company and other Tranche B Noteholders 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 ($ 555 of the principal amount and $ 322 accrued interest), and 2,500,000 Scilex Common Stock shares. In addition, as part of the Tranche B Consent and contingent upon certain conditions that were met: ● Scilex and the Tranche B Noteholders agreed to a 10-year, assignable 4 % royalty on global net sales of Gloperba and Elyxyb, excluding Elyxyb sales in Canada, with the Company entitled to 2 %. Gloperba, an oral liquid colchicine formulation for gout, and Elyxyb, an oral solution for acute migraine treatment, represent key assets in Scilex’s portfolio. The agreement was signed on February 28, 2025. ● The Tranche B Noteholders have the option to fund up to 50 % of the cash purchase price for Ex-US Product Rights to Gloperba and Elyxyb (excluding Elyxyb in Canada) and will receive proportional revenues from commercialization and licensing. ● Scilex granted the Tranche B Noteholders exclusive rights to develop and commercialize Elyxyb in Canada, entitling them to 50 % of net revenue. Tranche A Note Maturity Date Extension Amendment On January 21, 2025, the Company entered into an amendment to the Tranche A Note (the “Tranche A Extension Amendment”), extending the maturity date 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 3,250,000 shares of Scilex Common Stock. Lidocaine License Agreement As part of the binding term sheet signed with Scilex under the Tranche B Note, on February 22, 2025, the Company, through its 50 % ownership in RoyaltyVest, entered into an additional License Agreement with Scilex. Under this 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. Given the Company’s 50 % ownership in RoyaltyVest, Oramed effectively holds a 25 % share in the profits generated under this agreement. F- 41 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 15 - SUBSEQUENT EVENTS (continued): D. 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 is structured in installments, and as of March 27, 2025, the Company has paid $ 1,210 toward the acquisition price. Under the agreement, the developer is responsible for executing all development-related activities, and the company and the developer will share the profits upon the future sale of the property. The Company is currently evaluating the appropriate accounting treatment. E. JV Supplemental Agreement 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 JV was formed to advance 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 will have the technology, resources, and production capacity to bring oral insulin to market. The initial closing, set for April 30, 2025, includes an investment of $ 40,000 by HTIT and $ 7,500 by the Company into OraTech. Additionally, the Company will transfer all its intellectual property rights to OraTech. Upon completion, both HTIT and the Company will receive OraTech shares. The second closing, contingent on Nasdaq listing approval, involves a $ 20,000 investment by HTIT and an additional $ 7,500 investment by the Company. It is expected to close by May 31, 2025, but no later than September 1, 2025. The agreement also outlines the spin-off of OraTech, requiring regulatory filings and the distribution of at least 60 % of the Company’s stake in OraTech to its shareholders. Both the Company and HTIT agreed to a 120-day lock-up period post-listing, restricting share sales. As part of the JV Agreement, HTIT will receive $ 20,000 at the initial closing and $ 10,000 at the second closing under a Supply Agreement with OraTech. F. IIA Payment on February 18, 2025, the Company received approval from the Israel Innovation Authority (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 $ 2,031 to the IIA, and as result the Company has no further obligations to the IIA. F- 42 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 15 - SUBSEQUENT EVENTS (continued): G. BioXcel On March 4, 2025, the Company, through RoyaltyVest, participated in a registered direct offering by BioXcel Therapeutics, Inc. (Nasdaq: BTAI) (“BioXcel”), acquiring 2,000,000 shares of BioXcel’s common stock and accompanying warrants to purchase up to an additional 2,000,000 shares. The shares and warrants were purchased at a combined offering price of $ 3.50 per share and warrant, representing 50 % of the total 4,000,000 shares issued in the offering. The warrants have an exercise price of $ 4.20 per share, are immediately exercisable, and will expire five years from the date of issuance. BioXcel is a biopharmaceutical company leveraging artificial intelligence to develop innovative medicines in neuroscience and immuno-oncology. Its lead programs focus on treatments for agitation in neuropsychiatric disorders and other central nervous system conditions. As of March 27, 2025, the Company, through RoyaltyVest, has sold 869,992 shares and continues to hold 1,130,008 shares of BioXcel common stock. H. Real Estate Transactions On March 24, 2025, the Company entered into a loan agreement to finance a purchase of a real estate asset in Jerusalem Israel in the amount of $ 22,650 . The loan has a one-year maturity and is secured by a first-ranking mortgage on a property valued at approximately $ 800,000 , providing significant collateral coverage. The loan bears an annual interest rate of 12 %. F- 43 (b) Exhibits 3.1 Composite Copy of Certificate of Incorporation, as amended as of January 22, 2013, corrected February 8, 2013, as amended as of July 25, 2014, corrected September 5, 2017 and as further amended as of August 3, 2020 (incorporated by reference from our annual report on Form 10-K filed November 24, 2020) 3.2* Fifth Amended and Restated By-laws, adopted effective March 27, 2025. 3.3* Fifth Amended and Restated By-laws, adopted effective March 27, 2025 (marked copy). 4.1 Specimen Common Stock Certificate (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013). 4.2* Description of Securities. 10.1+ Consulting Agreement by and between Oramed Pharmaceuticals Inc. and Shnida Ltd., entered into as of November 1, 2022, for the services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed March 6, 2023). 10.2+ Amendment, dated April 27, 2023, to Consulting Agreement by and between Oramed Pharmaceuticals Inc. and Shnida Ltd., entered into as of November 1, 2022, for the services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 10.3+ Amendment, dated January 8, 2024, to Consulting Agreement by and between Oramed Pharmaceuticals Inc. and Shnida Ltd., entered into as of November 1, 2022, for the services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 10.4+ Employment Agreement by and between Oramed Ltd. and Nadav Kidron, entered into as of November 1, 2022 (incorporated by reference from our annual report on Form 10-K filed March 6, 2023). 10.5+ Amendment, dated April 27, 2023, to Employment Agreement by and between Oramed Ltd. and Nadav Kidron, entered into as of November 1, 2022 (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 10.6+ Amendment, dated January 8, 2024, to Employment Agreement by and between Oramed Ltd. and Nadav Kidron, entered into as of November 1, 2022 (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 10.7+ Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our current report on Form 8-K filed July 2, 2008). 10.8+ Amendment, dated November 13, 2014, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.9+ Amendment, dated July 13, 2013, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.10+ Amendment, dated July 21, 2015, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2015). 10.11+ Amendment, dated June 27, 2016, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 68 10.12+ Amendment, dated June 30, 2017, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 29, 2017). 10.13+ Amendment, dated January 10, 2020, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our quarterly report on Form 10-Q filed April 6, 2020). 10.14+ Amendment, dated September 19, 2021, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 24, 2021). 10.15+ Amendment, dated April 27, 2023, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 10.16+ Amendment, dated January 8, 2024, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 10.17* Employment Agreement, dated June 6, 2024, between Oramed Ltd. and Avraham Gabay (incorporated by reference from our quarterly report on Form 10-Q filed August 4, 2024). 10.18+ Representative Form of Indemnification Agreements between Oramed Pharmaceuticals Inc. and each of our directors and officers (incorporated by reference from our quarterly report on Form 10-Q filed August 14, 2024). 10.19+ Oramed Pharmaceuticals Inc. Second Amended and Restated 2008 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed August 4, 2016). 10.20+ Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.21+ Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement between the Company and the Chief Scientific Officer or Chief Executive Officer (incorporated by reference from our annual report on Form 10-K filed November 29, 2017). 69 10.22+ Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our current report on Form 8-K filed July 2, 2008). 10.23+ Oramed Pharmaceuticals Inc. 2019 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed August 6, 2019). 10.24+ Oramed Pharmaceuticals Inc. Amended and Restated 2019 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed June 30, 2020). 10.25+ Amendment to Oramed Pharmaceuticals Inc. Amended and Restated 2019 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed June 2, 2022). 10.26+ Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our annual report on Form 10-K filed November 27, 2019). 10.27+ Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement (incorporated by reference from our annual report on Form 10-K filed March 6, 2023). 10.28 Patent Transfer Agreement, dated February 22, 2011, between Oramed Ltd. and Entera Bio Ltd. (incorporated by reference from our registration statement on Form S-1 filed March 25, 2011). 10.29 Amended and Restated Technology License Agreement, dated December 21, 2015, between Hefei Tianhui Incubator of Technologies Co., Ltd., Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been granted for portions of this document) (incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2016). 10.30 Amendment to the Amended and Restated Technology License Agreement, dated June 3, 2016, between Hefei Tianhui Incubator of Technologies Co., Ltd., Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been requested for portions of this document. The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission) (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.31 Amendment to the Amended and Restated Technology License Agreement, dated July 24, 2016, between Hefei Tianhui Incubator of Technologies Co., Ltd., Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been requested for portions of this document. The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission) (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.32 Joint Venture Agreement, dated January 22, 2024, among Oramed Pharmaceuticals Inc., Oramed Ltd., Hefei Tianhui Biotech Co., Ltd. and Technowl Limited (incorporated by reference from our current report on Form 8-K filed January 23, 2024). 10.33 At the Market Offering Agreement, dated March 18, 2024, by and among the Company, Rodman & Renshaw LLC and StockBlock Securities LLC. (incorporated by reference from our current report on Form 8-K filed March 18, 2024). 10.34 License Agreement, dated as of March 18, 2021, between the Company, Oramed Ltd. and Oravax Medical Inc. (incorporated by reference from our current report on Form 8-K filed March 19, 2021). 70 10.35 Stockholders Agreement, dated as of March 18, 2021, between Oramed Pharmaceuticals Inc., Akers Biosciences Inc., Premas Biotech PVT Ltd., Cutter Mill Capital LLC, and Run Ridge LLC. (incorporated by reference from our Form 8-K filed March 19, 2021). 10.36§ Securities Purchase Agreement, dated September 21, 2023 by and between Scilex Holding Company and Oramed Pharmaceuticals Inc. (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.37 Senior Secured Promissory Note, dated September 21, 2023 issued to Oramed Pharmaceuticals Inc. by Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.38 Warrant No. ORMP CS-1 to Purchase Common Stock of Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.39 Warrant No. ORMP CS-2 to Purchase Common Stock of Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.40 Warrant No. ORMP CS-3 to Purchase Common Stock of Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.41 Warrant No. ORMP CS-4 to Purchase Common Stock of Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.42 Warrant No. ORMP CS-5 to Purchase Common Stock of Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.43 Scilex Holding Company Specimen Warrant Certificate (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.44 Registration Rights Agreement, dated September 21, 2023, by and between Oramed Pharmaceuticals Inc. and Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.45§ Subsidiary Guarantee, dated September 21, 2023, by and among Oramed Pharmaceuticals, Acquiom Agency Services LLC, Scilex Holding Company, and certain subsidiaries of Scilex Holding Company party thereto (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.46 Security Agreement, dated September 21, 2023, by and among Oramed Pharmaceuticals, Acquiom Agency Services LLC, Scilex Holding Company, and certain subsidiaries of Scilex Holding Company party thereto (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 10.47 Mutual Termination and Release Agreement, dated September 21, 2023, by and between Sorrento Therapeutics, Inc. and Oramed Pharmaceuticals, Inc. (incorporated by reference from our current report on Form 8-K filed September 26, 2023). 71 10.48+ Oravax Medical, Inc. 2021 Long-Term Incentive Plan (incorporated by reference from our annual report on Form 10-K filed March 6, 2023). 10.49+ Oravax Stock Option Agreement (incorporated by reference from our annual report on Form 10-K filed March 6, 2023). 10.50 Letter Agreement, dated as of September 20, 2024, by and between Oramed Pharmaceuticals Inc. and Scilex Holding Company (incorporated by reference from our current report on Form 8-K filed September 23, 2024). 10.51 Master Services Agreement dated September 23, 2024, between Oramed Ltd. and InClin, Inc. (incorporated by reference from our current report on Form 8-K filed September 26, 2024). 10.52 Securities Purchase Agreement, dated October 7, 2024, by and between Scilex Holding Company and the investors signatory thereto (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.53 Amendment No. 1 to Scilex-Oramed SPA, dated October 8, 2024, by and between Scilex Holding Company and Oramed Pharmaceuticals Inc (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.54 Tranche B Senior Secured Convertible Note, dated October 8, 2024, issued by Scilex Holding Company to the Company (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.55 Warrant to Purchase Common Stock, dated October 8, 2024, issued by Scilex Holding Company to the Company (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.56 Purchase and Sale Agreement, dated October 8, 2024, by and among Scilex Holding Company, Silex Pharmaceuticals Inc. and the purchasers signatory thereto (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.57 Security Agreement, dated October 8, 2024, by and among Scilex Pharmaceuticals Inc., and the purchasers signatory thereto (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.58 Subordination Agreement, dated October 8, 2024, by and among Scilex Pharmaceuticals Inc., Acquiom Agency Services LLC and other signatories thereto (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.59 Consent and Amendment, dated as of October 8, 2024, by and between Scilex Holding Company and Oramed Pharmaceuticals Inc. (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.60 Subsidiary Guarantee Amendment, dated October 8, 2024, made by certain of Scilex Holding Company subsidiaries in favor of the holders of that certain Tranche A Note (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.61 Amended and Restated Security Agreement, dated October 8, 2024, by and among Scilex Holding Company, the Subsidiaries of Scilex Holding Company party thereto, Oramed Pharmaceuticals Inc. and Acquiom Agency Services LLC (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.62 Rest of World License Term Sheet, dated October 8, 2024, between Oramed Pharmaceuticals Inc., Scilex Holding Company and the other parties signatories thereto (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.63 Agreement Among Holders, dated October 8, 2024, by and between Oramed Pharmaceuticals Inc., Acquiom Agency Services LLC and the other signatories thereto (incorporated by reference from our current report on Form 8-K filed October 8, 2024). 10.64 Deferral and Consent under Tranche B Senior Secured Convertible Note, dated January 2, 2025, by and among Scilex Holding Company, Oramed Pharmaceuticals Inc., SCLX Stock Acquisition JV LLC and Acquiom Agency Services LLC (incorporated by reference from our current report on Form 8-K filed January 3, 2025). 10.65 Amendment to Senior Secured Promissory Note, dated January 21, 2025, by and among Scilex Holding Company, Oramed Pharmaceuticals Inc., and SCLX Stock Acquisition JV LLC (incorporated by reference from our current report on Form 8-K filed January 22, 2025). 10.66 Ancillary Agreement Completion Protocol and Supplemental Agreement, dated as of February 7, 2025, by and among Oramed Pharmaceuticals Inc., Oramed NewCo, Inc., Oramed Ltd., Hefei Tianhui Biotech Co., Ltd. and Technowl Limited (incorporated by reference from our current report on Form 8-K filed February 11, 2025). 72 10.67 Form of Registration Rights Agreement, to be executed by and among Oramed Pharmaceuticals Inc., Oramed NewCo, Inc. and Technowl Limited (incorporated by reference from our current report on Form 8-K filed February 11, 2025). 10.68 Asset Transfer Agreement, dated as of February 7, 2025, by and among Oramed Pharmaceuticals Inc., Oramed NewCo, Inc. and Oramed Ltd (incorporated by reference from our current report on Form 8-K filed February 11, 2025). 10.69 Supply Agreement, dated as of February 7, 2025, by and among Oramed NewCo, Inc., Hefei Tianhui Biotech Co., Ltd. and Technowl Limited (incorporated by reference from our current report on Form 8-K filed February 11, 2025). 10.70 License Agreement, dated as of February 7, 2025, by and among Oramed NewCo, Inc., Hefei Tianhui Biotech Co., Ltd. and Technowl Limited (incorporated by reference from our current report on Form 8-K filed February 11, 2025). 10.71 Novation Agreement and Release, effective as of February 7, 2025, by and among Oramed Pharmaceuticals Inc., Oramed Ltd. Oramed NewCo Inc., and Hefei Tianhui Biotech Co., Ltd (incorporated by reference from our current report on Form 8-K filed February 11, 2025). 10.72+* Amendment, dated November 7, 2024, to Consulting Agreement by and between Oramed Pharmaceuticals Inc. and Shnida Ltd., entered into as of November 1, 2022, for the services of Nadav Kidron. 10.73+* Amendment, dated November 7, 2024, to Employment Agreement by and between Oramed Ltd. and Nadav Kidron, entered into as of November 1, 2022. 10.74+* Amendment, dated November 7, 2024, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron. 19.1* Oramed Pharmaceuticals Inc. Insider Trading Policy. 21.1* Subsidiaries. 23.1* Consent of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm. 31.1* Certification Statement of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. 31.2* Certification Statement of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. 32.1** Certification Statement of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350. 32.2** Certification Statement of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350. 97.1 Oramed Pharmaceuticals Inc. Clawback Policy, adopted November 9, 2023 (incorporated by reference from our annual report on Form 10-K filed March 6, 2024). 101.1* The following financial statements from the Company’s annual report on Form 10-K for the year ended December 31, 2024, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Loss, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail. 104.1* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith. ** Furnished herewith. + Management contract or compensation plan. § Certain exhibits and similar attachments to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit or other attachment will be furnished supplementary to the SEC upon request. ITEM 16. FORM 10-K SUMMARY. None. 73 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ORAMED PHARMACEUTICALS INC. /s/ Nadav Kidron Nadav Kidron, President and Chief Executive Officer Date: March 27, 2025 Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Nadav Kidron March 27, 2025 Nadav Kidron, President and Chief Executive Officer and Director (principal executive officer) /s/ Avraham Gabay March 27, 2025 Avraham Gabay, Chief Financial Officer (principal financial and accounting officer) /s/ Daniel Aghion March 27, 2025 Daniel Aghion, Director /s/ Miriam Kidron March 27, 2025 Miriam Kidron, Director /s/ Arie Mayer March 27, 2025 Arie Mayer, Director /s/ Yehuda Reznick March 27, 2025 Yehuda Reznick, Director /s/ Leonard Sank March 27, 2025 Leonard Sank, Director /s/ Benjamin Shapiro March 27, 2025 Benjamin Shapiro, Director 74