ORAMED PHARMACEUTICALS INC. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and the related notes included elsewhere herein and in our audited consolidated financial statements. In addition to our audited consolidated financial statements, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.” Overview of Operations We are a pharmaceutical company engaged in the research and development of innovative pharmaceutical solutions with a technology platform that allows for the oral delivery of therapeutic proteins. In addition, we allocate capital to strategic investments in healthcare and life sciences companies that we believe complement our long-term business objectives and technology focus. For additional information regarding our business and operations, please refer to Item 1 – Business. Reportable Segment Our single reportable segment is focused on research and development activities related to our proprietary products and technologies. Recent Developments Scilex Warrant Agreement In October 2025, we agreed to defer an amortization payment due from Scilex on October 1, 2025 under the amortization schedule included in the Tranche B Notes. The deferred amortization payment was subsequently paid to us in November 2025. In consideration for this deferral, Scilex agreed to issue to us warrants to purchase 100,000 shares of Scilex’s common stock, par value $0.0001 per share with an exercise price of $20. The warrants were issued on February 19, 2026. Lifeward Share Purchase Agreement On January 12, 2026, we entered into a Share Purchase Agreement or, the “Lifeward Share Purchase Agreement” with Lifeward and OraTech pursuant to which Lifeward acquired all of the outstanding equity interests of OraTech from us or’ the “Share Purchase Transaction”. Prior to the closing, we transferred to OraTech all intellectual property and related assets relating to our POD™ (Protein Oral Delivery) technology platform, together with cash to fund the next planned clinical trial and related development activities. As a result, commencing on the closing date of March 25, 2026, research and development expenses will be borne by Oratech. 38 In consideration for the acquisition of Oratech, Lifeward issued to us: (i) Lifeward Ordinary Shares and pre-funded warrants to purchase Lifeward Ordinary Shares representing up to 49.99% of Lifeward’s fully diluted equity capitalization at closing, subject to adjustments, which represents less than 45.0% of the outstanding Lifeward Ordinary Shares at closing; (ii) warrants to purchase Lifeward Ordinary Shares equal to the quotient of Lifeward’s net cash at closing divided by an exercise price of $5.40 per share, reflecting Lifeward’s 12-for-1 reverse share split effected on February 24, 2026 (which adjusted the original exercise price of $0.45 per share), subject to adjustments or, the “Share Purchase Warrants”; and (iii) revenue-sharing payments equal to 4% of the net revenue from Lifeward’s ReWalk Personal Exoskeleton products and related extended warranties for up to 10 years following closing, subject to certain caps and early termination upon the occurrence of specified events. The closing of the Share Purchase Transaction was subject to customary closing conditions, including the approval of Lifeward’s shareholders for the issuance of more than 19.99% of Lifeward Ordinary Shares in accordance with Nasdaq listing standards. Such shareholder approval was obtained on March 12, 2026. The closing of the Share Purchase Transaction took place on March 25, 2026. In connection with the transaction, Lifeward agreed to file a resale registration statement with the SEC covering the Lifeward Ordinary Shares issued in the transaction and those issuable upon exercise of the pre-funded warrants and warrants described above as soon as practicable following closing, but no later than 75 days after closing, and to use commercially reasonable efforts to have such registration statement declared effective within 75 days after closing (or 105 days in the event of a full SEC review). Pre-Funded Warrants and Share Purchase Warrants The Share Purchase Warrants were immediately exercisable upon issuance at an initial exercise price of $5.40 per share, reflecting Lifeward’s 12-for-1 reverse share split effected on February 24, 2026 (which adjusted the original exercise price of $0.45 per share), and expire five years from the date of issuance. The exercise price is subject to customary anti-dilution adjustments. The Pre-Funded Warrants have an exercise price of $0.0012 per share (reflecting the reverse-split adjusted price of the original $0.0001 per share), subject to customary adjustments, and will remain exercisable until exercised in full. We may not exercise any portion of the Pre-Funded Warrants or Share Purchase Warrants to the extent that, after giving effect to such exercise, we and our affiliates would beneficially own more than 45.0% of the outstanding Lifeward Ordinary Shares. This limitation will automatically increase to 49.99% once (i) the Investors no longer hold any Notes and (ii) the Investors have sold all Note Shares issued or issuable upon conversion of the Notes and related warrants. We may increase the beneficial ownership limitation upon at least 61 days’ prior notice to Lifeward; provided that, for so long as certain Lifeward warrants outstanding as of the issuance date remain outstanding, any such increase will require Lifeward’s consent, which may not be unreasonably withheld, conditioned or delayed. In connection with the execution of the Lifeward Share Purchase Agreement, we entered into a lock-up agreement for a period of 120 days after the Closing, without the prior written consent of Lifeward. 39 Clinical Trial Management Agreement In connection with the Lifeward Share Purchase Agreement, we agreed to enter into a clinical trial management or, the “Clinical Trial Management Agreement” with Oratech, pursuant to which we agreed to manage the clinical study of Oratech’s investigational oral insulin capsule product or, the “Study”, including providing clinical trial management and administrative services through study completion or, the “Services”. In consideration for the Services, OraTech will reimburse us for all reasonable out-of-pocket expenses actually incurred by us in providing the Services and payments made on behalf of OraTech to third parties and vendors, such as clinical sites, if applicable, subject to certain limitations and maximum payments as set forth in the Clinical Trial Management Agreement. The Clinical Trial Management Agreement will terminate upon completion of the Study unless earlier terminated in accordance with the terms set forth therein. Notes Securities Purchase Agreement On January 12, 2026, we entered into a Securities Purchase Agreement or, the “Lifeward Notes Purchase Agreement” with Lifeward and other investors pursuant to which we agreed to purchase, in a private placement, up to $18,000,000 of senior secured convertible notes issued by Lifeward, together with accompanying warrants to purchase Lifeward Ordinary Shares. At the initial closing, we purchased $9,000,000 aggregate principal amount of such notes or, the “Initial Notes”. The Initial Notes bear interest at 8% per annum, payable semi-annually, and mature three years from the date of issuance. The Initial Notes are convertible into Lifeward Ordinary Shares at an initial conversion price of $5.40 per share, reflecting Lifeward’s 12-for-1 reverse share split effected on February 24, 2026 (which adjusted the original conversion price of $0.45 per share), subject to customary anti-dilution adjustments. We also agreed to purchase an additional $9,000,000 aggregate principal amount of notes or, the “Additional Notes” and together with the Initial Notes, or, the “Notes”, together with accompanying warrants, on substantially the same terms as the Initial Notes. The closing of the Additional Notes is subject to customary closing conditions and either: (i) Lifeward achieving at least a 150% increase in ReWalk unit sales compared to the trailing twelve-month period immediately preceding the Additional Closing; or (ii) the closing price of Lifeward Ordinary Shares equaling or exceeding $13.80 per share , reflecting Lifeward’s 12-for-1 reverse share split (which adjusted the original $1.15 threshold), for 10 consecutive trading days immediately prior to the Additional Closing. The closing of the Initial Notes was subject to customary closing conditions, including the approval of Lifeward’s shareholders for the issuance of more than 19.99% of Lifeward Ordinary Shares in accordance with Nasdaq listing standards. Such shareholder approval was obtained on March 12, 2026. In connection with the transaction, Lifeward agreed to file a resale registration statement with the SEC covering the Lifeward Ordinary Shares issuable upon conversion of the Notes and exercise of the related warrants within 30 days after the Initial Closing , and to use commercially reasonable efforts to have the registration statement declared effective within 45 days thereafter (or 75 days in the event of a full SEC review). 40 Results of Operations The table and discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2025 and December 31, 2024. For a comparison of our results of operations and financial condition for the year ended December 31, 2024 and the year ended December 31, 2023, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 27, 2025. Year ended December 31, 2025 2024 (dollar amounts in thousands, except per share data) Revenues $ 2,000 $ - Cost of revenue (1,987 ) - Gross profit 13 - Research and development expenses (6,381 ) (6,324 ) General and administrative expenses (8,720 ) (6,457 ) Other income, net 958 - Interest expenses - (853 ) Financial income (expenses), net 89,454 (2,286 ) Income (loss) before tax expenses 75,324 (15,920 ) Tax expenses (11,308 ) (3,183 ) Net income (loss) for the Year 64,016 (19,103 ) Net income (loss) attributable to: Non-controlling interest (34 ) (43 ) Company’s stockholders 64,050 (19,060 ) Basic income (loss) per share of common stock $ 1.53 $ (0.48 ) Diluted income (loss) per share of common stock $ 1.50 $ (0.48 ) Weighted average number of shares of common stock used in computing basic income (loss) per share of common stock 41,402,997 40,850,446 Weighted average number of shares of common stock used in computing diluted income (loss) per share of common stock 42,418,644 40,850,446 Revenues On November 30, 2015, we 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 or, the “HTIT License Agreement”. On February 7, 2025, we and HTIT entered into the JV Agreement, amending the Initial JV Agreement. Pursuant to the terms of the JV Agreement, we and HTIT irrevocably agreed to the mutual release and waiver of (i) any claims and demands against each party in connection with the HTIT License Agreement, and (ii) all rights, obligations and liabilities set out and arising with respect to the performance of the HTIT License Agreement. We recognized $2,000,000 revenue related to the HTIT License Agreement for the year ended December 31, 2025, while there were no revenues for the year ended December 31, 2024. 41 Cost of Revenues On February 18, 2025, we received approval from Israel Innovation Authority or, the “IIA”, to transfer all of our IIA-funded technology to OraTech in accordance with the terms of the JV Agreement. This approval was granted upon the condition that we pay the aggregate IIA grant amount, plus accrued interest, less all royalties paid to date. On February 27, 2025, we fulfilled our payment obligation by remitting approximately $2,046,000 to the IIA, and as result we have no further obligations to the IIA. $1,987,000 of the amount is recognized in cost of revenue for the year ended December 31, 2025. The amount of $59,000 was recognized in previous periods. There were no costs of revenue for the year ended December 31, 2024. Research and Development Expenses Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, employee benefits, costs of materials, supplies, the cost of services provided by outside contractors, including services related to our clinical trials, clinical trial expenses, the full cost of manufacturing drugs 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. We outsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-party service providers to assist us with the execution of our clinical trials. Clinical activities which relate principally to clinical sites and other administrative functions to manage our clinical trials are performed primarily by CROs. CROs typically perform most of the start-up activities for our trials, including document preparation, site identification, screening and preparation, pre-study visits, training and program management. Clinical trial and preclinical trial expenses include regulatory and scientific consultants’ compensation and fees, research expenses, purchase of materials, cost of manufacturing of the oral insulin and exenatide capsules, payments for patient recruitment and treatment, as well as salaries and related expenses of research and development staff. Research and development expenses for the year ended December 31, 2025 decreased by 1% to approximately $6,381,000, compared to approximately $6,324,000 for the year ended December 31, 2024. The decrease was primarily attributable to lower raw materials expenses, which was partially offset by an increase in CRO expenses. 42 Government Grants The Government of Israel encourages research and development projects through the IIA, pursuant to the R&D Law. Under the R&D Law, a research and development plan that meets specified criteria is generally eligible for a grant of up to 50% of certain approved research and development expenditures. Each plan must be approved by the IIA. The R&D Law generally requires that a product developed under a program be manufactured in Israel. However, when applying for a grant, the applicant may declare that part of the manufacturing will be performed outside of Israel or by non-Israeli residents and if the IIA is convinced that performing some of the manufacturing abroad is essential for the execution of the program, it may still approve the grant. This declaration will be a significant factor in the determination of the IIA as to whether to approve a program and the amount and other terms of the benefits to be granted. If a company wants to increase the volume of manufacturing outside of Israel after the grant has been approved, it may transfer up to 10% of the company’s approved Israeli manufacturing volume, measured on an aggregate basis, outside of Israel after first notifying the IIA thereof (provided that the IIA does not object to such transfer within 30 days). In addition, upon the approval of the IIA, a portion greater than 10% of the manufacturing volume may be performed outside of Israel. In any case of transfer of manufacturing out of Israel, the grant recipient is required to pay royalties at an increased rate, which may be substantial, and the aggregate repayment amount is increased up to 120% or 150% of the grant received (dollar linked) with the addition of interest at an annual rate based on the SOFR rate, depending on the portion of the total manufacturing volume that is performed outside of Israel. The approval we received from the IIA for the License Agreement was subject to payment of increased royalties and an increased ceiling, all in accordance with the provisions of the R&D Law. The R&D Law further permits the IIA, among other things, to approve the transfer of manufacturing rights outside of Israel in exchange for the import of different manufacturing into Israel as a substitute, in lieu of the increased royalties. The R&D Law also provides that know-how developed under an approved research and development program and any derivatives thereof may not be transferred or licensed to third parties in Israel without the approval of the research committee, which approval may be subject to the payment of royalties from the sale. Such approval is not required for the sale or export of any products resulting from such research or development. The R&D Law further provides that the know-how developed under an approved research and development program and any derivatives thereof may not be transferred or licensed to any third parties outside Israel absent IIA approval which may be granted in certain circumstances as follows: (a) the grant recipient pays to the IIA a portion of the sale or license price paid in consideration for the purchase or license of such IIA-funded know-how or the price paid in consideration for the sale of the grant recipient itself, as the case may be, in accordance with certain formulas included in the tracks published under the R&D Law; (b) the grant recipient receives know-how from a third party in exchange for its IIA-funded know-how; or (c) such transfer of IIA-funded know-how is made in the context of IIA approved research and development cooperation projects or consortia. The R&D Law imposes reporting requirements with respect to certain changes in the ownership of a grant recipient. The R&D Law requires the grant recipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the recipient that results in a non-Israeli entity or person becoming an interested party in the recipient, and requires the new non-Israeli interested party to undertake to the IIA to comply with the R&D Law. In addition, the rules of the IIA may require the provision of additional information or representations in respect of certain such events. For this purpose, “control” is defined as the ability to direct the activities of a company other than any ability arising solely from serving as an officer or director of the company. A person is presumed to have control if such person holds 50% or more of the means of control of a company. “Means of control” refers to voting rights or the right to appoint directors or the chief executive officer. An “interested party” of a company includes a holder of 5% or more of its outstanding share capital or voting rights, its chief executive officer and directors, someone who has the right to appoint its chief executive officer or at least one director, and a company with respect to which any of the foregoing interested parties holds 25% or more of the outstanding share capital or voting rights or has the right to appoint 25% or more of the directors. 43 Failure to meet the R&D Law’s requirements may subject us to mandatory repayment of grants received by us (together with interest and penalties), as well as expose us to criminal proceedings. In addition, the Israeli government may from time to time audit sales of products which it claims incorporate technology funded through IIA programs which may lead to additional royalties being payable on additional products. 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. All grants were received before the year ended August 31, 2020, and recorded as a reduction of research and development expenses at that time. 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, 2025, was approximately $2,213,000 ($2,570,000 including interest). General and Administrative Expenses General and administrative expenses include the salaries and related expenses of our management, consulting expenses, legal and professional fees, travel expenses, business development expenses, insurance expenses and other general expenses. General and administrative expenses for the year ended December 31, 2025 increased by 35% to approximately $8,720,000, compared to approximately $6,457,000 for the year ended December 31, 2024. The increase was mainly due to an increase in stock-based compensation expenses and an increase in professional fees, which were partially offset by a decrease in D&O insurance expenses. Interest Expenses There were no interest expenses for the year ended December 31, 2025, compared to approximately $853,000 for the year ended December 31, 2024, since the Short-Term Borrowings (as defined below) received from Discount Bank Ltd. were terminated during the second quarter of 2024. Financial Income, Net Net financial income was approximately $89,454,000 for the year ended December 31, 2025, compared to approximately $3,139,000 net financial expenses for the year ended December 31, 2024. The increase was primarily due to the revaluation of the investment in Alpha Tau and Scilex. Tax on income During the year ended December 31, 2025, we recognized tax expenses on income of approximately $11,308,000, compared to tax expenses on income of approximately $3,183,000 for year ended December 31, 2024. The increase in tax expense is primarily attributable to deferred tax expenses of approximately $8,095,000, mainly related to our investment in Alpha Tau, while the current tax expense is primarily attributable to Scilex. 44 Liquidity and Capital Resources From our inception through December 31, 2025, we have incurred losses in an aggregate amount of approximately $123,436,000. During that period and through December 31, 2025, we have financed our operations through several private placements of our common stock, as well as public offerings of our common stock, raising a total of approximately $255,384,000, net of transaction costs. During that period, we also received cash consideration of approximately $28,001,000 from the exercise of warrants and options. We expect to seek additional financing through similar sources in the future, as needed. As of December 31, 2025, we had approximately $45,947,000 of available cash and approximately $10,979,000 of short-term bank deposits. In addition, we hold various of interest in certain investments, including in Scilex, Alpha Tau, Hapisga and others, as further detailed in this report. From inception through December 31, 2025, we have not generated significant revenues from our operations (other than recognizing deferred revenue related to the HTIT License Agreement, as described above). Although, we have increased the research and development activities related to the new Phase 3 clinical trial, our research and development activities have been significantly reduced while we conducted a strategic review process, following the termination of the ORA-D-013-1 and ORA-D-013-2 Phase 3 trials. Following the preparation and expected initiation of the revised oral insulin clinical trial, we expect to incur increased research and development expenses in future periods, and we will need substantial additional funds. These expenses will be incurred through OraTech, as part of the Lifeward transaction. For additional information regarding see note 21 to our consolidated financial statements included in this Annual Report on Form 10-K. However, additional financing may not be available on acceptable terms, if at all, including due to the difficult conditions in the capital markets. If we are unable to secure additional financing, we may be required to reduce our operations, divest certain assets, or take other measures that could materially adversely affect our reputation, business, financial condition or results of operations. Based on our current cash resources and commitments, we believe we will be able to maintain our current planned activities and the corresponding level of expenditures for at least the next 12 months. On August 8, 2023, we borrowed an aggregate of $99,550,000 pursuant to loan agreements from Israel Discount Bank Ltd or, 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%, were secured by certificates of deposits issued by Israel Discount Bank Ltd. having an aggregate face amount of $99,550,000. The net proceeds of the Short-Term Borrowings were used to fund the Tranche A Note. The Short-Term Borrowings were paid in one payment of principal and interest at each respective maturity. As of December 31, 2025, we repaid the entire Short-Term Borrowings amount. 45 As of December 31, 2025, our total current assets were approximately $133,271,000 and our total current liabilities were approximately $19,086,000. On December 31, 2025, we had a working capital surplus of approximately $114,185,000 and an accumulated loss of approximately $123,436,000. As of December 31, 2024, our total current assets were approximately $143,221,000 and our total current liabilities were approximately $5,685,000. On December 31, 2024, we had a working capital surplus of approximately $137,536,000 and an accumulated loss of approximately $176,616,000. The decrease in working capital surplus was mainly due to dividends payable together with a decrease in cash and cash equivalents and short-term deposits that was partially offset by an increase in investments at fair value and marketable securities. During the year ended December 31, 2025, cash and cash equivalents decreased to approximately $45,947,000 from approximately $54,420,000 as of December 31, 2024. The decrease was mainly due to the reasons described below. Operating activities used cash of approximately $9,145,000 in the year ended December 31, 2025, compared to approximately $8,412,000 used in the year ended December 31, 2024. Cash used in operating activities primarily consisted of research and development expenses, and general and administrative expenses. Investing activities provided cash of approximately $5,443,000 in the year ended December 31, 2025, compared to approximately $105,817,000 provided in the year ended December 31, 2024. Cash provided by investing activities in the year ended December 31, 2025 consisted primarily of proceeds from short-term deposits and proceeds from repayments by Scilex, partially offset by purchase of short-term deposits and investments at fair value in Alpha Tau, Hapisga, Lifeward and marketable securities. Cash provided by investing activities in the year ended December 31, 2024, consisted primarily of proceeds from short-term deposits and proceeds from repayments by Scilex under the Tranche A Note. Financing activities used cash of approximately $4,741,000 in the year ended December 31, 2025, compared to cash of approximately $52,036,000 used in the year ended December 31, 2024. Cash used for financing activities in the year ended December 31, 2025, consisted primarily of purchase of treasury shares. Cash used in financing activities in the year ended December 31, 2024, consisted primarily of repayments of the Short-Term Borrowings and repurchases of our shares. Our primary financing activities for the year ended December 31, 2025, were as follows: ● In June 2024, our Board authorized a stock buyback and retirement program pursuant to which we may, from time to time, repurchase up to $20,000,000 in maximum value of our common stock. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or otherwise in compliance with Rule 10b-18 under the Exchange Act or, the “Buy-Back Program”. The Buy-Back Program does not obligate us to purchase any shares and expires in 12 months. The authorization for the Buy-Back Program may be terminated, increased or decreased by our Board in its discretion at any time. On May 21, 2025, our board of directors authorized a one-year extension of the Buy-Back Program, which was set to expire in June 2026. ● During 2025 and 2024, we have repurchased and retired shares of our common stock under the Buy-Back Program. In 2025, we repurchased 899,609 shares for $2,155, including $6 of excise tax, at an average price of $2.39 per share and in 2024, we repurchased 1,036,976 shares for $2,494, including $10 of excise tax, at an average price of $2.4 per share. All repurchases were funded with cash on hand. ● On October 20, 2025, we entered a separate share repurchase agreement with HTIT pursuant to which HTIT sold back to us 1,155,367 shares of common stock at a purchase price of $2.23 per share for an aggregate price of $2,584,000, including $8 of excise tax. Following such repurchase, the shares were cancelled and retired. 46 Trend Information Concurrently, we are examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders. At this time, we cannot foresee how these strategic decisions will impact our financial results and operations. Planned Expenditures In previous years, we primarily invested in research and development. If we proceed to conduct a new clinical trial for our oral insulin candidate, we expect that in the upcoming years our research and development expenses will continue to be our major operating expense; however, if this clinical trial is conducted through OraTech, these costs will be borne by OraTech and not by us. In addition, consistent with our broader corporate strategy, we may allocate capital to selected strategic initiatives and collaborations intended to support long-term growth and diversification of our business. Critical Accounting Estimates Our significant accounting policies are more fully described in the notes to our accompanying consolidated financial statements. We believe that the accounting policy below is critical for one to fully understand and evaluate our financial condition and results of operations. The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Investments at fair value : On September 21, 2023 and on October 7, 2024 we entered into the 2023 Scilex Transaction and 2024 Refinancing, respectively. We elected the fair value option for each of the components under 2023 Scilex Transaction and 2024 Refinancing in order to reduce operational complexity of bifurcating embedded derivatives. Changes in value are recorded under financial income, net and include interest income on the Notes and Royalties received. Determining the fair value of the components above required significant judgment with regards to the expected repayment date of the Notes. The total value of the 2023 Scilex Transaction (and of each of its components) was valued on a weighted average of the different scenarios. 47 On September 4, 2024, we entered into a loan agreement to finance a real estate project or the Profit Sharing Loan Agreement. We decided to designate the Profit Sharing Loan Agreement as a whole under the fair-value option. The valuation of the Profit Sharing Loan Agreement was based on various project profit scenarios derived from the appraiser’s report. On March 24, 2025, we entered into a loan agreement to finance a real estate project, Hapisga. We decided to designate the loan agreement as a whole under the fair-value option. The valuation of the loan agreement was calculated in accordance with the weighted average expected cashflows of the loan. On April 24, 2025, we entered into a share purchase agreement and a services agreement with Alpha Tau (“Alpha Tau SPA”, “Services Agreement”). We decided to designate the Alpha Tau SPA and the Services Agreement as a whole under the fair-value option. The valuation of the Alpha Tau SPA was determined using the closing price of Alpha Tau’s ordinary shares, and the fair value of the warrants issued under the Services Agreement are calculated based on Black-Scholes model. On November 14, 2025, we entered into a secured note with Lifeward, pursuant to which Lifeward borrowed $3,000,000. The valuation of the note was determined using a binomial model. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934 we are not required to provide information required by this item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. See Item 15 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.