Oramed nine-month net income rises to $135M
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Oramed Pharmaceuticals Inc. (ORMP) reported $134.876 million in net income for the nine months ended September 30, 2026, versus $54.007 million a year earlier; third-quarter net income was $18.410 million versus $48.389 million. Nine-month revenue was $0, compared with $2.000 million. After transferring its oral insulin technology and related intellectual property to OraTech in the Lifeward transaction, Oramed had no revenue-generating operations.
Nine-month financial income, net was $180.489 million, including a $174.500 million unrealized gain on the Alpha Tau investment. Operating activities used $2.689 million of cash, compared with $8.679 million in the prior-year period. Cash and equivalents were $28.934 million as of September 30, 2026, versus $45.947 million as of December 31, 2025.
The Lifeward transaction closed March 25, 2026: Lifeward acquired OraTech, and Oramed received 1,250,363 Lifeward shares, representing 45.0% of shares at closing, plus warrants and a revenue share. Oramed continues managing OraTech’s oral-insulin study using funds transferred before closing and is evaluating strategic alternatives; it has entered no definitive agreement.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointNine-month net income: $134.876 million versus $54.007 million in 2025.
- Moderate pointOperating cash used: $2.689 million versus $8.679 million in 2025.
Negative
- Moderate pointNine-month revenue: $0 versus $2.000 million in 2025.
- Minor pointThird-quarter net income: $18.410 million versus $48.389 million in 2025.
Filing Explained
Executive awards add issued shares; Oramed also has a CRO contract for up to $11,577 thousand and bears any study costs above $6,500 thousand.
Form 10-Q is an unaudited quarterly report; Oramed reports issuing 1,629,715 restricted stock awards as common shares on September 24, subject to forfeiture until vested.
Because the awards were issued as shares, they increase the share count and, absent offsetting changes, reduce existing holders’ percentage ownership; Oramed reported 43,485,942 common shares outstanding on November 11.
Of the awards, 1,031,734 vested immediately and 597,981 vest in eight equal quarterly installments from
Separately, Oramed remains contractually obligated under a clinical research organization services agreement for up to
Key Figures
Key Terms
unrealized gain financial
fair value option financial
variable interest entity financial
pre-funded warrants financial
beneficial ownership limitation financial
antidilutive financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did ORMP earn in the third quarter of 2026?
What did Oramed receive from Lifeward for OraTech?
What are the terms of Oramed’s Hapisga loan extension?
Who covers oral-insulin study costs above $6.5 million?
How much is Oramed’s Alpha Tau investment worth?
AI-generated analysis. How Rhea-AI works. Not financial advice.
| (1) | For the nine months ended September 30, 2026, includes revaluation gains of $88 on the Lifeward shares and $3,655 on the Lifeward warrants, offset by a revaluation loss of $1,144 on the Initial Note and a loss of $1,459 recognized upon the conversion of the Secured Promissory Note and the additional note into the Initial Note. |
For the three months ended September 30, 2026, includes revaluation losses of $1,325 on the Lifeward shares and $1,448 on the Lifeward warrants, and a revaluation loss of $1,154 on the Initial Note (see note 8).
In May 2026, the Company entered into a Simple Agreement for Future Equity (the “SAFE”) with Hopec Pharma Ltd. (“Hopec”), pursuant to which the Company agreed to invest up to $1,000 in Hopec. The Company invested $500 upon entering into the SAFE and, at the Company’s discretion, may invest an additional $500 following receipt of written notice of the successful results from the Week 14 cystoscopy assessment of the third patient in the first cohort of Hopec’s clinical study.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
|
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||
| The Tel Aviv Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of November 11, 2026, there were
ORAMED PHARMACEUTICALS INC.
FORM 10-Q
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION | 1 | |
| ITEM 1 - FINANCIAL STATEMENTS | 1 | |
| ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 41 | |
| ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 53 | |
| ITEM 4 - CONTROLS AND PROCEDURES | 53 | |
| PART II - OTHER INFORMATION | 54 | |
| ITEM 1 - LEGAL PROCEEDINGS | 54 | |
| ITEM 1A - RISK FACTORS | 54 | |
| ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 55 | |
| ITEM 3 - DEFAULTS UPON SENIOR SECURITIES | 55 | |
| ITEM 4 - MINE SAFETY DISCLOSURES | 55 | |
| ITEM 5 - OTHER INFORMATION | 55 | |
| ITEM 6 - EXHIBITS | 57 |
As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Oramed” and the “Company” mean Oramed Pharmaceuticals Inc. and our wholly-owned subsidiaries, unless otherwise indicated. All dollar amounts refer to U.S. Dollars unless otherwise indicated.
On September 30, 2026, the exchange rate between the New Israeli Shekel, or NIS, and the dollar, as quoted by the Bank of Israel, was NIS 3.063 to $1.00. Unless indicated otherwise by the context, statements in this Quarterly Report on Form 10-Q that provide the dollar equivalent of NIS amounts or provide the NIS equivalent of dollar amounts are based on such exchange rate.
i
Cautionary Statement Regarding Forward-Looking Statements
The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws and the Israeli securities law. Words such as “expects,” “anticipates,” “intends,” “plans,” “planned expenditures,” “believes,” “seeks,” “estimates,” “considers” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Quarterly Report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements, or industry results, expressed or implied by such forward-looking statements. Such forward-looking statements include, among other statements, statements regarding the following:
| ● | our plan to evaluate potential strategic opportunities; |
| ● | our potential repurchases of shares of our common stock; |
| ● | our ability to recover the proceeds and/or collateral under the Tranche A Note and Tranche B Note (as defined herein) and related agreements from Scilex Holding Company (“Scilex”); |
| ● | the fluctuating market price and liquidity of the securities of Scilex, Alpha Tau and Lifeward that we hold, including the shares underlying the warrants we hold; |
| ● | our loan agreements in real estate projects, including, but not limited to, agreements to finance a real estate project, or Profit Sharing Loan Agreement, expose us to potential market, liquidity, and execution risks; |
| ● | our various real estate investments involve significant risks and might not provide long-term value appreciation and potential income streams that we expect to receive; |
| ● | our exposure to potential litigation; |
| ● | our ability to enhance value for our stockholders; |
| ● | the expected benefits, risks and impact of the Lifeward transactions, including the transfer of our POD™ technology platform to OraTech Pharmaceuticals Ltd. (“OraTech”), and our ability to recover the value of our investment in Lifeward, including through the senior secured convertible notes, equity consideration, warrants, and revenue-sharing payments to be received in connection with the Lifeward transactions; |
| ● | we may not realize a return on our investments in marketable securities that we own; |
| ● | we are subject to foreign currency exchange rate fluctuations, primarily related to the New Israeli Shekel, which may affect our operating expenses, financial results, and cash flows; |
| ● | risks related to our investment in Ruby Capital Investment Fund Sapphire II, Limited Partnership, including illiquidity, capital call obligations, uncertainty regarding the timing and amount of any returns, and the potential loss of invested capital; |
ii
| ● | the development of the POD™ technology by OraTech, a subsidiary of Lifeward, including the timing and results of its clinical trials and our management of the clinical study under the Clinical Trial Management Agreement, and the effect thereof on the value of our investment in Lifeward; |
| ● | our expectations regarding our short- and long-term capital requirements; |
| ● | our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; |
| ● | information with respect to any other plans and strategies for our business; | |
| ● | a decline in the market price of Alpha Tau’s ordinary shares, or our inability to sell those shares at favorable prices, would materially adversely affect our financial condition and results of operations; | |
| ● | we may be unable to recover the amounts owed to us or to realize the value of our collateral; | |
| ● | our NIS-denominated loan to Hapisga and our other NIS-denominated assets and commitments expose us to foreign currency exchange rate fluctuations and to concentration risk; and | |
| ● | we may be deemed to be an investment company under the Investment Company Act of 1940, as amended, and we could be required to register as an investment company or to substantially change the way we conduct our business, either of which could materially adversely affect our business, financial condition and results of operations. |
Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission, or the SEC, on March 26, 2026, and under “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q, as well as those discussed elsewhere in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q and expressed from time to time in our other filings with the SEC. In addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would not suggest different conclusions. Also, historic results referred to in this Quarterly Report on Form 10-Q could be interpreted differently in light of additional research, clinical and preclinical trials results. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report on Form 10-Q which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
iii
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2026
TABLE OF CONTENTS
| Page | ||
| CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: | ||
| Condensed Consolidated Balance sheets | 2 | |
| Condensed Consolidated Statements of Comprehensive Income | 3 | |
| Condensed Consolidated Statements of Stockholders’ equity | 4 | |
| Condensed Consolidated Statements of Cash Flows | 6 | |
| Notes to Condensed Consolidated Financial Statements | 7-40 |
1
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term deposits | - | |||||||
| Marketable securities | ||||||||
| Investments at fair value | ||||||||
| Convertible note | - | |||||||
| Related parties receivable | - | |||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| LONG-TERM ASSETS: | ||||||||
| Deposits | ||||||||
| Marketable securities | ||||||||
| Investments at fair value | ||||||||
| Investment in associates at fair value | ||||||||
| Loan to an equity method investee | ||||||||
| Investment in real estate | ||||||||
| Other non-marketable equity securities | ||||||||
| Amounts funded in respect of employee rights upon retirement | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Total long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Payable to related parties | ||||||||
| Deferred income | ||||||||
| Dividend Payable | ||||||||
| Operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Deferred revenues | - | |||||||
| Deferred income | ||||||||
| Employee rights upon retirement | ||||||||
| Operating lease liabilities | ||||||||
| Dividend Payable | ||||||||
| Deferred tax liabilities | ||||||||
| Total long-term liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES (note 9) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings (accumulated deficit) | ( | ) | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
2
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
| Nine months ended | Three months ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| REVENUES | $ | - | $ | - | - | |||||||||||
| COST OF REVENUE | - | ( | ) | - | - | |||||||||||
| GROSS PROFIT | - | - | - | |||||||||||||
| RESEARCH AND DEVELOPMENT EXPENSES | ( | ) | ( | ) | - | ( | ) | |||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OPERATING LOSS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME, NET | ||||||||||||||||
| FINANCIAL INCOME, NET | ||||||||||||||||
| INCOME BEFORE TAX EXPENSES | $ | $ | ||||||||||||||
| TAX EXPENSES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET INCOME | $ | $ | ||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO: | ||||||||||||||||
| NON-CONTROLLING INTERESTS | - | ( | ) | - | ( | ) | ||||||||||
| COMPANY’S STOCKHOLDERS | ||||||||||||||||
| BASIC INCOME PER SHARE OF COMMON STOCK | $ | $ | $ | $ | ||||||||||||
| DILUTED INCOME PER SHARE OF COMMON STOCK | $ | $ | $ | $ | ||||||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC INCOME PER SHARE OF COMMON STOCK | ||||||||||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING DILUTED INCOME PER SHARE OF COMMON STOCK | ||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
3
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
U.S. Dollars in thousands
(UNAUDITED)
| Retained | ||||||||||||||||||||
| Additional | earnings | Total | ||||||||||||||||||
| Common Stock | paid-in | (accumulated | stockholders’ | |||||||||||||||||
| Shares | $ | capital | deficit) | equity | ||||||||||||||||
| In thousands | ||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2025 | ( | ) | ||||||||||||||||||
| CHANGES DURING THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2026: | ||||||||||||||||||||
| STOCK-BASED COMPENSATION | - | |||||||||||||||||||
| EXERCISE OF STOCK OPTIONS | * | - | ||||||||||||||||||
| TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS | - | - | ( | ) | - | ( | ) | |||||||||||||
| FORFEITED DIVIDEND | - | - | - | |||||||||||||||||
| NET INCOME | - | - | - | |||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2026 | $ | $ | $ | $ | ||||||||||||||||
| * |
| Common Stock | Additional paid-in |
Accumulated | Total stockholders’ |
Non- controlling |
Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| CHANGES DURING THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2025: | ||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION | - | - | ||||||||||||||||||||||||||
| REPURCHASE AND RETIREMENT OF COMMON STOCK | ( | ) | ( | ) | ( | ) | - | ( | ) | - | ( | ) | ||||||||||||||||
| NET INCOME | - | - | - | ( | ) | |||||||||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
4
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
U.S. Dollars in thousands
(UNAUDITED)
| Retained | ||||||||||||||||||||
| Additional | earnings | Total | ||||||||||||||||||
| Common Stock | paid-in | (accumulated | stockholders’ | |||||||||||||||||
| Shares | $ | capital | deficit) | equity | ||||||||||||||||
| In thousands | ||||||||||||||||||||
| BALANCE AS OF JUNE 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| CHANGES DURING THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2026: | ||||||||||||||||||||
| STOCK-BASED COMPENSATION | - | |||||||||||||||||||
| EXERCISE OF STOCK OPTIONS | * | - | ||||||||||||||||||
| TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS | - | - | ( | ) | - | ( | ) | |||||||||||||
| NET INCOME | - | - | - | |||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2026 | $ | $ | $ | $ | ||||||||||||||||
| * | Represents an amount lower than $1. |
| Common Stock | Additional paid-in |
Accumulated | Total stockholders’ |
Non- controlling |
Total | |||||||||||||||||||||||
| Shares | $ | capital | deficit | equity | interests | equity | ||||||||||||||||||||||
| In thousands | ||||||||||||||||||||||||||||
| BALANCE AS OF JUNE 30, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| CHANGES DURING THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2025: | ||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION | - | - | ||||||||||||||||||||||||||
| REPURCHASE AND RETIREMENT OF COMMON STOCK | ( | ) | ( | ) | ( | ) | - | ( | ) | - | ( | ) | ||||||||||||||||
| NET INCOME | - | - | - | ( | ) | |||||||||||||||||||||||
| BALANCE AS OF SEPTEMBER 30, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
5
ORAMED PHARMACEUTICALS INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(UNAUDITED)
| Nine months ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments required to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Exchange differences and interest on deposits | ||||||||
| Changes in fair value of investments | ( | ) | ( | ) | ||||
| Stock-based compensation | ||||||||
| Gain on amounts funded in respect of employee rights upon retirement | ( | ) | ( | ) | ||||
| Gain on sale of IP | ( | ) | - | |||||
| Deferred Taxes | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable, accrued expenses and related parties | ( | ) | ( | ) | ||||
| Net changes in operating lease | ||||||||
| Deferred revenues | ( | ) | ( | ) | ||||
| Deferred income | ( | ) | ( | ) | ||||
| Liability for employee rights upon retirement | ||||||||
| Other liabilities | - | ( | ) | |||||
| Total net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of restricted deposits | ( | ) | - | |||||
| Purchase of non-marketable securities | ( | ) | - | |||||
| Purchase of marketable securities | ( | ) | ( | ) | ||||
| Proceeds from sale of marketable securities and related options | - | |||||||
| Investments at fair value | ( | ) | ( | ) | ||||
| Proceeds from redemption of short-term deposits | ||||||||
| Proceeds from loan to an equity method investee | - | |||||||
| Loan to investment in equity method | - | ( | ) | |||||
| Real estate investment | - | ( | ) | |||||
| Equity method investee | - | ( | ) | |||||
| Lifeward transaction | ( | ) | - | |||||
| Proceeds from investments | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Total net cash provided by (used in) investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repurchase and retirement of common stock | - | ( | ) | |||||
| Tax withholdings related to stock-based compensation settlements | ( | ) | - | |||||
| Proceeds from exercise of stock options | - | |||||||
| Dividend paid | ( | ) | - | |||||
| Total net cash used in financing activities | ( | ) | ( | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| DECREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | $ | ||||||
| (A) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS - | ||||||||
| Interest received | $ | $ | ||||||
| Taxes paid on income | $ | ( | ) | $ | ( | ) | ||
| (B) SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES - | ||||||||
| Investment in investee | - | |||||||
| Investment in associate at fair value- Lifeward | - | |||||||
| Forfeited dividends | - | |||||||
| Recognition of operating lease right-of-use assets and liabilities | ||||||||
| Warrants received from Alpha Tau | - | |||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
6
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 1 - GENERAL:
Incorporation and Operations
Oramed Pharmaceuticals Inc. (collectively with its subsidiaries, the “Company”, unless the context indicates otherwise), a Delaware corporation, was incorporated on
On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd. (the “Subsidiary”), which is engaged in research and development. Following the transaction with Lifeward, the development activities related to the POD™ technology are expected to continue through OraTech Pharmaceuticals Ltd. (“OraTech”).
On March 18, 2021, the Company entered into a license agreement with Oravax Medical Inc. (“Oravax”) and holds
On March 4, 2026, the Company incorporated a wholly-owned subsidiary in Israel, OraTech Pharmaceuticals Ltd., which served as a corporate vehicle for the transaction with Lifeward (see note 8).
Following the transfer of the Company’s oral insulin (POD™) technology and related intellectual property to OraTech and the closing of the Lifeward transaction, the Company no longer conducts clinical development activities directly and has no revenue-generating operations. The Company is evaluating a range of strategic alternatives, including expanding into additional therapeutic and technology areas, acquiring or investing in additional businesses or assets, and continuing to actively manage its portfolio of holdings in publicly traded and privately held companies. As of the date of these financial statements, no definitive agreement has been entered into with respect to any such alternative, and there is no assurance that any transaction will be consummated.
Lifeward Transaction
On January 12, 2026, the Company entered into a Share Purchase Agreement with Lifeward Ltd. (“Lifeward”) (Nasdaq: LFWD) and OraTech, pursuant to which Lifeward agreed to acquire all of the outstanding equity interests of OraTech from the Company (the “Share Purchase Agreement”). Prior to the closing, the Company transferred to OraTech all intellectual property and related assets relating to the Company’s POD™ (Protein Oral Delivery) technology platform, together with $
7
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 1 - GENERAL (continued):
In consideration for the acquisition of OraTech, Lifeward issued to the Company:
(i)
(ii)
(iii)
(iv) revenue-sharing payments equal to
In addition to the Share Purchase Agreement, on the Lifeward Closing Date, the Company entered into a securities purchase agreement (the “Lifeward Notes Purchase Agreement”), pursuant to which, on March 25, 2026, following satisfaction of closing conditions set forth in the Lifeward Notes Purchase Agreement, Lifeward issued to the Company $
Under the Lifeward Notes Purchase Agreement, Lifeward also has the right to require the Company to fund a second tranche of $
On June 30, 2026, Lifeward entered into an additional securities purchase agreement with certain investors, pursuant to which Lifeward agreed to issue approximately $
Under the terms of the Pre-Funded Warrants, the Share Purchase Warrants, the Notes and the Note Warrants, in each case as amended and restated, the Company may not exercise or convert any of such instruments to the extent that the Company, together with its affiliates, would beneficially own more than
8
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
| a. | Interim condensed consolidated financial statements preparation |
The interim condensed consolidated financial statements included herein have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”). These interim condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results of the periods presented. Certain information and disclosures normally included in annual consolidated financial statements have been omitted in this interim period report pursuant to the rules and regulations of the Securities and Exchange Commission. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by U.S. GAAP for annual financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the 2025 Form 10-K. The results for interim periods are not necessarily indicative of a full fiscal year’s results.
| b. | Recently issued accounting pronouncements adopted |
In July 2025, the FASB issued ASU 2025-05 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”. The ASU introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. Under the practical expedient, when developing a reasonable and supportable forecast as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The ASU is effective for annual reporting periods beginning after December 15, 2025 and interim reporting within those annual reporting periods. The adoption of ASU 2025-05 did not have a material impact on the Company’s consolidated financial statements.
| c. | Recently issued accounting pronouncements, not yet adopted |
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.
9
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| c. | Recently issued accounting pronouncements, not yet adopted (continued): |
In September 2025, the FASB issued ASU No. 2025-07 (“ASU 2025-07”), Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The guidance refines the scope of Topic 815 by clarifying which contracts are subject to derivative accounting and expands the scope exception for certain contracts not traded on an exchange to include contracts for which settlement is based on operations or activities specific to one of the parties to the contract. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. The amendments in ASU 2025-07 are effective for annual periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments may be applied prospectively or on a modified retrospective basis. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements.
| d. | Fair value |
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. |
10
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| d. | Fair value (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:
| September 30, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Marketable Securities (see note 3): | ||||||||||||||||
| DNA | - | - | ||||||||||||||
| Nano | - | - | ||||||||||||||
| Investments at fair value (see note 4): | ||||||||||||||||
| Ruby Capital | - | - | ||||||||||||||
| Scilex Royalty Purchase Agreement | - | - | ||||||||||||||
| Scilex Tranche A Note | - | - | ||||||||||||||
| Scilex Tranche B Note | - | - | ||||||||||||||
| Scilex Warrants Note B | - | - | ||||||||||||||
| Lifeward’s A&R Warrants (see note 8) | - | - | ||||||||||||||
| Lifeward’s A&R Note and Note Warrants (see note 8) | - | - | ||||||||||||||
| Alpha Tau’s warrants | - | - | ||||||||||||||
| Warren at Bay Loan | - | - | ||||||||||||||
| 83 Wythe Loan | - | - | ||||||||||||||
| Profit Sharing Loan Agreement | - | - | ||||||||||||||
| Loan agreement measured in fair value (see note 7) | - | - | ||||||||||||||
| Loan to an Equity Method Investee (see note 6) | - | - | ||||||||||||||
| Investment in associates at fair value (see note 8): | ||||||||||||||||
| Alpha Tau’s shares | - | - | ||||||||||||||
| Lifeward’s shares | - | - | ||||||||||||||
| Lifeward’s A&R Pre-Funded Warrants | - | - | ||||||||||||||
| $ | $ | $ | $ | |||||||||||||
11
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| d. | Fair value (continued): |
| December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: | ||||||||||||||||
| Marketable Securities (see note 3): | ||||||||||||||||
| DNA | - | - | ||||||||||||||
| Entera | - | - | ||||||||||||||
| Pelthos | - | - | ||||||||||||||
| Nano | - | - | ||||||||||||||
| Investments at fair value (see note 4): | ||||||||||||||||
| Scilex Royalty Purchase Agreement | - | - | ||||||||||||||
| Scilex Tranche A Note | - | - | ||||||||||||||
| Scilex Warrants Note B | - | - | ||||||||||||||
| Scilex Tranche B Note | - | - | ||||||||||||||
| Loan agreement measured in fair value (see note 7) | - | - | ||||||||||||||
| Investment in Alpha Tau’s warrants (see note 8) | - | - | ||||||||||||||
| Profit Sharing Loan Agreement | - | - | ||||||||||||||
| Investment in Alpha Tau’s shares (see note 8) | - | - | ||||||||||||||
| Loan to an equity method investee (see note 6) | - | - | ||||||||||||||
| Convertible note (see note 8) | - | - | ||||||||||||||
| $ | $ | - | $ | $ | ||||||||||||
As of September 30, 2026 and December 31, 2025, the carrying amounts of cash equivalents, short-term deposits, other current assets, related parties 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.
12
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| e. | Other income: |
1. Alpha Tau
The Company recognizes income from its Services Agreement with Alpha Tau for investor relations and public relations on a straight-line basis. Under the Services Agreement, the Company received non-cash consideration of Alpha Tau Warrants (as defined below) to purchase up to
During the nine and three months ended September 30, 2026, the Company recognized income of $
2. Capital Gain from Sale of IP
In connection with the Share Purchase Agreement (see note 1 above), the Company recognized a gain of $
3. Clinical Trial Management Agreement with OraTech
In connection with the Share Purchase Agreement, the Company entered into a Clinical Trial Management Agreement with OraTech (the “Clinical Trial Management Agreement”), pursuant to which the Company is contractually obligated to manage the clinical study of OraTech’s investigational oral insulin capsule product (the “Study”), including the provision of clinical trial management and administrative services through completion of the Study (the “Services”). The Clinical Trial Management Agreement will terminate upon completion of the Study, unless earlier terminated in accordance with its terms.
Prior to the Lifeward Closing Date, the Company funded OraTech with $
13
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| e. | Other income (continued): |
3. Clinical Trial Management Agreement with OraTech (continued):
During the period from March 25, 2026 (the Lifeward Closing Date) through September 30, 2026 and during the three months ended September 30, 2026, the Company charged OraTech $
To the extent the actual cost of the Study exceeds $
During the nine and three months ended September 30, 2026, the Company recognized $
4. Medicox
On November 13, 2022, the Company entered into a ten-year distribution license agreement (“Medicox License Agreement”) with Medicox Co., Ltd. (“Medicox”), pursuant to which the Company granted Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea.
The Medicox License Agreement contains a fixed non-refundable consideration of $
As such support had not commenced, the consideration was presented as long-term deferred revenue on the consolidated balance sheet as of December 31, 2025.
Following the Lifeward transaction (see note 8) the expected clinical development timeline for the approval of ORMD-0801 was extended beyond the term contemplated under the Medicox License Agreement. Consequently, the Company concluded that the agreement was no longer commercially viable and that there was no remaining performance obligation to fulfill under it.
14
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
| e. | Other income (continued): |
4. Medicox (continued)
Accordingly, during the nine months ended September 30, 2026, the Company recognized income associated with the Medicox License Agreement in an amount of $
5. Lifeward Revenue Share
The Company has determined that the Lifeward Revenue Share payments represent variable consideration associated with the transfer of intellectual property and accounts for these amounts by analogy to the variable consideration guidance in ASC 606. The Company concluded that the sales- or usage-based royalty exception under ASC 606 does not apply, as the underlying transaction represents a sale of intellectual property rather than a license of intellectual property. Accordingly, amounts are included in the measurement of consideration only to the extent that it is probable that a significant reversal of cumulative consideration recognized will not occur when the underlying sales-based uncertainty is subsequently resolved.
| f. | Investment in associate at fair value- Lifeward |
In connection with the Share Purchase Agreement and the Lifeward Notes Purchase Agreement (see Note 1 above), Lifeward issued the following components to the Company, each of which is accounted for as described below:
1. Lifeward Ordinary Shares and other financial instruments
The Company has determined that Lifeward is a variable interest entity (“VIE”) for which the Company is not the primary beneficiary, as it does not have the power to direct the activities that most significantly impact Lifeward’s economic performance. Accordingly, the Company does not consolidate Lifeward. The Company has significant influence over Lifeward. The Company elected the fair value option under ASC 825 for this investment.
The investment was initially measured at fair value based on the quoted closing price of Lifeward’s Ordinary Shares on the Lifeward Closing Date, with subsequent changes in fair value recognized in financial income, net, in the consolidated statements of comprehensive income.
As of September 30, 2026, the carrying amount of the Company’s interests in unconsolidated VIEs was $
Because the Company elected the fair value option for the investment in Lifeward’s Ordinary Shares that would otherwise be accounted for under the equity method, the Company has applied the fair value option to all of its eligible financial interests in Lifeward in accordance with ASC 825. As a result, all of the Company’s financial interests in Lifeward that are eligible items (A&R Pre-Funded Warrants, A&R Warrants, A&R Note and Note Warrants, Additional Notes and the Additional Note Warrants) are measured at fair value recognized in financial income, net, in the consolidated statements of comprehensive income.
Summarized financial information for Lifeward, as determined in accordance with Rule 8-03(b)(3) of Regulation S-X is included in note 8.
| g. | Income per share of common stock |
Basic income per common stock is computed by dividing the net income attributable to stockholders for the period by the weighted average number of shares of common stock outstanding for each period, including vested restricted stock units (“RSUs”). The Company applies the two-class method in calculating net income per common stock. The two-class method is an earnings allocation formula that calculates basic and diluted net income per share for each class of common stock separately based on participation rights in undistributed earnings. Unvested share-based payment awards that contain nonforfeitable rights to dividends are treated as participating securities and therefore included in computing net income per share using the two-class method. The net income available to common stockholders is reduced by dividend equivalents declared on unvested RSUs, as such awards are not considered participating securities and are excluded from the basic share count.
For the diluted income per common stock calculation. The weighted average number of shares outstanding during the period is adjusted for the potential dilution that could occur in connection with employee share-based payment, using the treasury stock method. Other options to purchase common stock and warrants were considered antidilutive and therefore excluded from the calculation of diluted weighted average shares outstanding. For further details, see Note 13.
15
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 3 - MARKETABLE SECURITIES
The Company’s marketable securities include investments in equity securities of IC Hotels (“DNA”) and Nano Dimension Ltd. (“Nano”) at fair value with changes in fair value recognized in income.
Composition:
| September 30, 2026 | December 31, 2025 | |||||||
| Short -term: | ||||||||
| DNA (*) | $ | $ | ||||||
| Entera (**) | - | |||||||
| Pelthos (***) | - | |||||||
| $ | $ | |||||||
| September 30, 2026 | December 31, 2025 | |||||||
| Long-term: | ||||||||
| Nano (****)(*****) | $ | |||||||
| (*) |
| (**) |
| (***) |
| (****) |
|
| (*****) |
| During the nine and the three months ended September 30, 2026, the Company recognized a loss of $ |
16
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - INVESTMENTS, AT FAIR VALUE:
| a. | Investment in Scilex |
Background
The Company holds the following instruments issued by Scilex, acquired in the 2023 Scilex Transaction and the 2024 Refinancing. For a full description of the terms of these instruments, see Note 4 to the Company’s consolidated financial statements included in the 2025 Form 10-K.
| a. | Tranche A Note – a senior secured promissory note (original principal amount of $ |
| b. | Tranche B Note – the Company’s $ | |
| c. | Tranche B Warrants – warrants to purchase an aggregate of |
| d. | Royalty Purchase Agreement – the right to receive |
All Scilex securities held by the Company are subject to a beneficial ownership limitation that restricts the Company’s holdings to a maximum of
Developments during the nine months ended September 30, 2026
During the period, the maturity of Scilex’s outstanding obligations under the Tranche A Note and the Tranche B Note was extended several times, in consideration of which Scilex agreed to pay the Company an extension fee of $
Subsequent to September 30, 2026, the date for payment in full of the outstanding obligations under the Tranche A Note and the Tranche B Note was extended to November 9, 2026. See Note 19a.
17
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued):
| a. | Investment in Scilex (continued): |
Accounting treatment and fair value measurement
The table below presents the fair value breakdown as of September 30, 2026:
| Tranche A Note | Tranche B Note | Total | ||||||||||||||||||||||||||
| Amount | Accrued Interest | Fair Value | Amount | Accrued Interest | Fair Value | Fair Value | ||||||||||||||||||||||
| Notes | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Warrants | - | - | - | - | $ | $ | ||||||||||||||||||||||
| Royalty Purchase Agreement payment | - | - | - | - | - | $ | $ | |||||||||||||||||||||
| September 30, 2026 | $ | - | $ | $ | ||||||||||||||||||||||||
Tranche A Note
The Company elected the fair value option for the Tranche A Note and changes in value are recorded under financial income, net.
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 from
Tranche B Note, Warrants and Royalty Purchase Agreement
The Company elected the fair value option for the Tranche B Note and the Royalty Purchase Agreement, the Tranche B Warrants meet the definition of a derivative and therefore will be measured at fair value. Changes in value are recorded under financial income, net and include interest income on the Tranche B Note.
The valuation of the Tranche B Note was performed based on the discounted value of the Tranche B Note’s liability component, using a probability-weighted average of scenarios for the expected repayment date and discount rates ranging from
The fair value of the Tranche B Warrants was calculated based on Black and Scholes model.
18
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued):
| a. | Investment in Scilex (continued): |
The following table summarizes the assumptions and estimates used to value the Warrants as of September 30, 2026:
| Parameters and Assumptions | Warrants | |||
| Share Price | $ | |||
| Conversion Rate | - | |||
| Floor Rate | - | |||
| Expected Term | ||||
| Volatility | % | |||
| Risk Free Rate | % | |||
| Yield | - | |||
| Exercise Price | $ | |||
| Dividend Rate | % | |||
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 ranging from
As of September 30, 2026, and December 31, 2025, the fair value of the Tranche B Note was less than the aggregate unpaid principal balance (which includes interest payable on maturity) by $
The table below represents the fair value composition of the Tranche B Note:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Short term | Long term | Total | Short term | Long term | Total | |||||||||||||||||||
| Tranche B Note | $ | $ | - | $ | $ | $ | - | $ | ||||||||||||||||
| Warrant | $ | - | $ | $ | $ | - | $ | $ | ||||||||||||||||
| Royalty Purchase Agreement | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
19
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued):
| a. | Investment in Scilex (continued): |
Scilex Transaction Summary
The table below represents the fair value cycle of 2023 Scilex Transaction and 2024 Refinancing throughout December 31, 2025 and September 30, 2026:
| Tranche A | Tranche B | Total | ||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | |||||||||
| Amounts receivable from the royalty agreement (*) | - | ( | ) | ( | ) | |||||||
| Principal payments | - | ( | ) | ( | ) | |||||||
| Proceeds from the sale of Subsequent Penny Warrants | ( | ) | - | ( | ) | |||||||
| Interest payments | - | ( | ) | ( | ) | |||||||
| Change in fair value | ||||||||||||
| Balance as of December 31, 2025 | ||||||||||||
| Amounts receivable from the royalty agreement (*) | - | ( | ) | ( | ) | |||||||
| Principal payments | - | ( | ) | ( | ) | |||||||
| Interest payments | - | ( | ) | ( | ) | |||||||
| Change in fair value (**) | ( | ) | ( | ) | ||||||||
| Balance as of September 30, 2026 | $ | $ | $ | |||||||||
| (*) |
| (**) |
Financial income recognized in respect of the 2023 Scilex Transaction and the 2024 Refinancing for the nine and three months ended September 30, 2026 and 2025 was a loss of $
20
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued):
| b. | 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
Upon completion of the Project, the Company is entitled to receive the Loan Principal and the greater of: (i)
On July 1, 2026, the Company amended the Profit Sharing Loan Agreement to increase the total loan amount to NIS
On September 9, 2026, the Company provided a bank guarantee in the amount of NIS
The Company decided to designate the Profit Sharing Loan Agreement as a whole under the Fair-Value option in accordance with Accounting Standards Codification (“ASC”) Topic 825 “Financial Instruments”. The valuation of the Profit Sharing Loan Agreement was based on various project profit scenarios. The Company used the Wang Transform model, a risk-neutral probabilities method, with an expected term of
As of September 30, 2026 and December 31, 2025, the fair value of the Profit Sharing Loan Agreement, including the additional amounts advanced thereunder, was $
Financial income (loss) recognized in respect of the Profit Sharing Loan Agreement was income of $
| c. | Ruby Sapphire II |
On December 29, 2025, the Company entered into an agreement and committed to invest NIS
21
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 4 - INVESTMENTS, AT FAIR VALUE (continued):
| c. | Ruby Sapphire II (continued): |
The Company has elected the fair value option, in accordance with ASC Topic 825, Financial Instruments, to measure its investment in Ruby Sapphire II. The fair value is determined based on the Company’s pro-rata share of the fund’s net asset value as reported by the fund on a quarterly basis (with a one-quarter lag). As of September 30, 2026, the fair value of the investment in Ruby Sapphire II was $
| d. | Junior Participation Interest in 83 Wythe Loan |
On April 15, 2026, the Company invested $
The Company has elected the fair value option, in accordance with ASC Topic 825, Financial Instruments, to measure its investment in 83 Wythe Loan. The fair value of the investment is determined using a discounted cash flow methodology, based on estimated contractual cash flows and a market-based discount rate. As of September 30, 2026, the fair value of the investment in the 83 Wythe Loan was $
| e. | Participation Interest — Warren at Bay Loan
On May 13, 2026, the Company invested $
The Company has elected the fair value option, in accordance with ASC Topic 825, Financial Instruments, to measure its investment in Warren at Bay Loan. The fair value of the investment is determined using a discounted cash flow methodology, based on estimated contractual cash flows and a market-based discount rate. As of September 30, 2026, the fair value of the investment in the Warren at Bay Loan was $ |
22
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 5 - INVESTMENT IN REAL ESTATE
Real Estate – Castel
In January 2025, the Company entered into an agreement to acquire a parcel of land in Mevaseret Zion, Israel for a total purchase price of NIS
NOTE 6 - LOAN TO AN EQUITY METHOD INVESTEE
On October 8, 2024, the Company and certain other investors (the “Additional Holders of Note B”) entered into a refinancing agreement with Scilex, pursuant to which the parties were granted rights to receive royalties from certain Scilex products. In connection with these rights, the Additional Holders of Note B incorporated RoyaltyVest Ltd. (“RoyaltyVest”) in the British Virgin Islands on January 2, 2025, and on February 12, 2025, transferred
There are no guarantees or commitments related to RoyaltyVest. Since the loan is measured at fair value, it is not subject to impairment assessment, and the decrease in its carrying value reflects changes in its fair value. In addition to its original investment, the Company uses RoyaltyVest as a potential investment vehicle for additional transactions conducted in collaboration with the other shareholders.
As such, on March 4, 2025, the Company entered into a loan agreement with RoyaltyVest pursuant to which the Company made a loan to RoyaltyVest in the amount of $
23
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 7 - LOAN AGREEMENT MEASURED IN FAIR VALUE
On March 24, 2025, the Company entered into a loan agreement with Hapisga Project – New Talpiot Ltd. (“Hapisga”) to finance a purchase of a real estate asset in Jerusalem, Israel in the amount of up to $
In March 2025, the Company also entered into an additional loan agreement in the amount of $
On March 31, 2026, the Company and Hapisga entered into an extension of the loan agreement (the “Loan Extension”). Under the Loan Extension: (i) the maturity date of the loan was extended for an additional 24-month period, from April 2, 2026 to April 2, 2028; (ii) effective April 2, 2026, the principal balance of the loan was converted into NIS and fixed at NIS
In connection with the Loan Extension, the additional party was removed from the loan agreement and related security documents, and the Company refunded a $
The Company decided to designate the loan agreement as a whole under the fair-value option in accordance with ASC Topic 825 “Financial Instruments”. The valuation of the loan agreement was calculated in accordance with the weighted average expected cashflows of the loan. The predicted weighted average cash flows of the loan were discounted at a rate of
As of September 30, 2026 and December 31, 2025, the fair value of the loan was $
Financial income recognized in respect of the loan agreement for the nine months and three months ended September 30, 2026 was $
24
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE
| a. | Investment in Associate at Fair Value – Alpha Tau |
On April 24, 2025, the Subsidiary entered into a share purchase agreement with Alpha Tau (“Alpha Tau SPA”), pursuant to which the Subsidiary purchased
Concurrently, the Subsidiary and Alpha Tau entered into that certain services agreement (the “Services Agreement”), pursuant to which the Subsidiary will provide Alpha Tau with investor relations and public relations services. As consideration, Alpha Tau agreed to pay the Subsidiary a fee of $
Due to the Company’s significant influence over operating and financial policies, Alpha Tau is considered a related party of the Company.
The following presents summarized financial information related to Alpha Tau for the nine months ended September 30, 2026, based on the most recent information available from the underlying investment.
| nine months ended September 30, 2026 | ||||
| Net loss | $ | |||
As of September 30, 2026 and December 31, 2025, the fair value of the Company’s investment in Alpha Tau ordinary shares was $
The fair value of the Alpha Tau ordinary shares held by the Company was determined by reference to the closing price of Alpha Tau’s ordinary shares, which was $
As of each of September 30, 2026 and December 31, 2025, the Company held approximately
The Alpha Tau Warrants issued under the Services Agreement are accounted for as a separate transaction from the Alpha Tau SPA. The fair value of the warrants is calculated based on Black-Scholes model.
25
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE (continued):
| a. | Investment in Associate at Fair Value – Alpha Tau (continued): |
The following table summarizes the assumptions and estimates used to value the Alpha Tau Warrants as of September 30, 2026 and December 31, 2025:
| As of | ||||||||
| Parameters and Assumptions | September 30, 2026 | December 31, 2025 | ||||||
| Share Price | $ | $ | ||||||
| Exercise Price | $ | | $ | |||||
| Expected Term | ||||||||
| Volatility | % | % | ||||||
| Risk Free Rate | % | % | ||||||
| Dividend Rate | % | % | ||||||
As of September 30, 2026, and December 31, 2025, the fair value of the Alpha Tau Warrants was $
For the nine and three months ended September 30, 2026, the Company recognized an unrealized gain of $
| b. | Investment in Associate at Fair Value – Lifeward |
| 1. | Investment |
Investment in associate at fair value- Lifeward
In connection with the Lifeward Ordinary Shares (see Note 1 above), the Company received an aggregate of
Measurement of the Cost of the Investment
In accordance with ASC 610-20, the cost of the investment was measured at the fair value of the consideration received on Lifeward Closing Date. The fair value of the Lifeward Ordinary Shares received was determined by reference to the closing price of the Lifeward Ordinary Shares on the Nasdaq Capital Market on the Lifeward Closing Date. The resulting initial carrying value of the investment was $
The fair value of the Lifeward Ordinary Shares is determined based on the quoted price of the Lifeward Ordinary Shares. As of September 30, 2026, the fair value of the Lifeward Ordinary Shares was $
26
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE (continued):
| b. | Investment in Associate at Fair Value – Lifeward (continued): |
| 1. | Investment (continued): |
For the nine months and three months ended September 30, 2026, the Company recognized an unrealized gain of $
| 2. | Pre-Funded Warrants and Share Purchase Warrants |
In connection with the Share Purchase Agreement (see note 1 above), the following components issued by Lifeward to the Company are measured at fair value:
A&R Pre-Funded Warrants
The fair value of the A&R Pre-Funded Warrants is determined based on the quoted price of the Lifeward Ordinary Shares, and is classified as a Level 2 fair value measurement. As of September 30, 2026, the fair value of the A&R Pre-Funded Warrants was $
A&R Warrants
The fair value of the A&R Warrants is determined using a Black-Scholes option pricing model, adjusted to reflect probability-weighted scenarios considered by management, and is classified as a Level 3 fair value measurement. As of September 30, 2026, the fair value of the A&R Warrants was $
The following table summarizes the assumptions and estimates used to value the A&R Warrants as of March 25, 2026 and September 30, 2026:
| Parameters and Assumptions | September 30, 2026 | March 25, 2026 | ||||||
| Share Price | $ | $ | ||||||
| Exercise Price | ||||||||
| Expected Term | ||||||||
| Volatility | % | % | ||||||
| Risk Free Rate | % | % | ||||||
| Dividend Rate | % | % | ||||||
For the nine and three months ended September 30, 2026, the Company recognized an unrealized gain of $
27
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE (continued):
| b. | Investment in Associate at Fair Value – Lifeward (continued): |
| 3. | Lifeward Revenue Share |
In connection with the Lifeward Revenue Share (see Note 1 above), the estimate is based on Oramed’s forecast. As of September 30, 2026, the balance related to the Lifeward Revenue Share amounted to $
| 4. | Convertible Note |
On November 14, 2025, in anticipation of the transactions contemplated by the Share Purchase Agreement and the Lifeward Notes Purchase Agreement described above, the Company entered into a loan agreement with Lifeward pursuant to which the Company loaned Lifeward $
On February 12, 2026, the Company agreed to provide Lifeward with an additional secured promissory note with an initial principal amount of $
On the Lifeward Closing Date, the outstanding balance of the Secured Promissory Note and the additional note, including accrued interest thereon, were converted into the Initial Note. The Company funded the remaining principal amount of the Initial Note through an additional cash payment of $
Initial Note
The valuation of the Initial Note and A&R Note was performed based on a binomial model, using a discount rate of
28
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE (continued):
| b. | Investment in Associate at Fair Value – Lifeward (continued): |
| 4. | Convertible Note (continued) |
The following table summarizes the assumptions and estimates used to value the Initial Note as of March 25, 2026 and the A&R Note as of September 30, 2026:
| Parameters and Assumptions | September 30, 2026 | March 25, 2026 | ||||||
| Share Price | $ | $ | ||||||
| Exercise Price | ||||||||
| Expected Term | ||||||||
| Volatility | % | % | ||||||
| Risk Free Rate | % | % | ||||||
| Yield | % | % | ||||||
Note Warrants
The fair value of the Note Warrants is determined using a Black-Scholes option pricing model, adjusted to reflect probability-weighted scenarios considered by management over the expected term of the instrument.
The assumptions and estimates used to value the Note Warrants as of March 25, 2026 and September 30, 2026 are the same as those used to value the Share Purchase Warrants.
As of September 30, 2026, the fair value of the A&R Note and the Note Warrants was $
As of September 30, 2026, the fair values of the Additional Notes and the Additional Note Warrants were immaterial.
For the nine and three months ended September 30, 2026, the Company recognized an unrealized loss of $
29
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 8 - INVESTMENT IN ASSOCIATE AT FAIR VALUE (continued):
| b. | Investment in Associate at Fair Value – Lifeward (continued): |
| 5. | Financial information related to Lifeward |
The following presents summarized financial information related to Lifeward for the six-month period ended June 30, 2026, based on its publicly available financial information as of November 12, 2026. Lifeward is a publicly traded company listed on the Nasdaq Capital Market, and its financial information is based on publicly available filings.
| Six months ended June 30, 2026 | ||||
| Net loss | $ | |||
NOTE 9 - COMMITMENTS AND CONTINGENCIES:
| a. | 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 (the “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 in connection with its Phase 3 clinical trial. As consideration for these services, the Company is obligated to pay the CRO an aggregate amount of up to $
The Company’s obligations under the Clinical Research Organization Services Agreement remain in effect notwithstanding the Lifeward transaction. However, in light of the change in the planned clinical protocol from a Phase 3 trial to a Phase 2 trial , the Company is engaged in discussions with the CRO to revise the scope of services and reduce the overall cost of the agreement.
30
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 9 – COMMITMENTS AND CONTINGENCIES (continued):
| b. | LEASES: |
The Company has various operating leases for office space and vehicles that expire through 2032.
On August 1, 2026, the Company extended the lease of the second floor of its offices in Israel from January 31, 2027 to January 31, 2032. As a result, the Company recorded an increase of approximately NIS
Below is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | |||||||
| Operating right-of-use assets | $ | $ | ||||||
| Operating lease liabilities, current | ||||||||
| Operating lease liabilities long-term | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Lease payments for the Company’s right-of-use assets over the remaining lease periods as of September 30, 2026 and December 31, 2025 are as follows:
| September 30, 2026 | December 31, 2025 | |||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 and thereafter | ||||||||
| Total undiscounted lease payments | ||||||||
| Less: Interest* | ( | ) | ( | ) | ||||
| Present value of lease liabilities | $ | $ | ||||||
Future lease payments were discounted by
31
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 9 – COMMITMENTS AND CONTINGENCIES (continued):
| c. | INVESTMENT COMMITMENT – RUBY SAPPHIRE II: |
As described in Note 4, on December 29, 2025, the Company committed to invest NIS
| d. | LIFEWARD ADDITIONAL NOTES: |
As described in Note 1, under the Lifeward Notes Purchase Agreement, Lifeward has the right to require the Company to fund Additional Notes in an aggregate principal amount of $
NOTE 10 – OTHER NON-MARKETABLE EQUITY SECURITIES:
| September 30, 2026 | December 31, 2025 | |||||||
| Diasome | $ | $ | ||||||
| Hopec Pharma Ltd. (1) | - | |||||||
| Other | ||||||||
| $ | $ | |||||||
| (1) | Hopec Pharma Ltd. |
In May 2026, the Company entered into a Simple Agreement for Future Equity (the “SAFE”) with Hopec Pharma Ltd. (“Hopec”), pursuant to which the Company agreed to invest up to $
32
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Composition:
| September 30, 2026 | December 31, 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Payroll and related accruals | ||||||||
| Income tax | ||||||||
| Accrued liabilities – Legal Fee | ||||||||
| Accrued liabilities – Other | ||||||||
| $ | $ | |||||||
NOTE 12 - STOCKHOLDERS’ EQUITY:
| a. | Stock -based compensation |
Below is a table summarizing all the grants of restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) to employees made during the nine months ended September 30, 2026.
| No. of RSUs and RSAs granted | Exercise price | Vesting period | Fair value at grant (*) | |||||||||||||
| Employees | - | (** | ) | $ | ||||||||||||
| (*) |
| (**) |
Performance restricted stock units (“PSUs”) granted
On December 31, 2025, the Company granted
The total fair value of these PSUs on the date of grant was $
During January 2026, the applicable market condition related to
33
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 12 - STOCKHOLDERS’ EQUITY (continued):
| a. | Stock -based compensation (continued) |
Net-Settlement of RSUs
In March 2026, an aggregate of
In May 2026, an aggregate of
In July 2026, an aggregate of
Exercise of Stock Options
In July 2026, options to purchase
34
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 12 - STOCKHOLDERS’ EQUITY (continued):
| a. | Stock -based compensation (continued) |
RSAs granted
On September 24, 2026, the Company granted
Of the RSAs granted,
Of the RSAs granted presented above,
| b. | Dividends to Shareholders |
On December 31, 2025, the Company’s Board of Directors declared a special cash dividend of $
Dividend equivalents declared on unvested RSUs are subject to the same vesting conditions as the underlying awards and are forfeited if the awards do not vest. Such dividend equivalents are deferred and will be paid to RSU holders upon vesting of the underlying award. In accordance with ASC 718, forfeitable dividend equivalents on equity-classified awards are recognized as a charge to retained earnings at the date of declaration, with a corresponding liability recorded in dividends payable.
During the nine months ended September 30, 2026, the Company paid dividends of $
As of September 30, 2026, dividends payable of $
35
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 13 - INCOME PER SHARE OF COMMON STOCK:
The following table summarizes the calculation of basic and diluted income per common stock (in thousands, except for share and per share amounts):
| Nine months ended | Three months ended | |||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Basic income per common stock (numerator): | ||||||||||||||||
| Net income | ||||||||||||||||
| Adjustment for earnings allocated to participating unvested RSAs | ( | ) | - | ( | ) | - | ||||||||||
| Net income applicable to common stock – basic | ||||||||||||||||
| common stock (denominator): | ||||||||||||||||
| Weighted average number of common stock – basic | ||||||||||||||||
| Basic income per common stock | ||||||||||||||||
| Diluted income per common stock (numerator): | ||||||||||||||||
| Net income | ||||||||||||||||
| Adjustment for earnings allocated to participating unvested RSAs | ( | ) | ( | ) | ||||||||||||
| Net income applicable to common stock – Diluted | ||||||||||||||||
| common stock (denominator): | ||||||||||||||||
| Weighted average number of common stock – basic | ||||||||||||||||
| Diluted effect of Options, RSUs, PSUs and RSAs | ||||||||||||||||
| Weighted average number of common stock – diluted | ||||||||||||||||
| Diluted income per common stock | ||||||||||||||||
For the nine months and three months ended September 30, 2026, options to purchase common stock and warrants totaling
36
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 14 – OTHER INCOME, NET:
| Nine months ended | Three months ended | |||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Alpha Tau Warrants and Services Agreement | $ | $ | $ | $ | ||||||||||||
| Clinical Trial Management Agreement | - | - | ||||||||||||||
| Capital Gain from Sale of IP | - | - | - | |||||||||||||
| Medicox License Agreement | - | - | - | |||||||||||||
| Total Other Income, Net | ||||||||||||||||
NOTE 15 - FINANCIAL INCOME, NET:
| Nine months ended | Three months ended | |||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Revaluation of investments: | ||||||||||||||||
| Revaluation of Scilex, net (see note 4) | ( | ) | ( | ) | ||||||||||||
| Revaluation of Hapisga, net (see note 7) | ( | ) | ||||||||||||||
| Revaluation of Alpha Tau, net (see note 8) | ||||||||||||||||
| Revaluation of RoyaltyVest loan, net (see note 6) | ( | ) | ( | ) | ||||||||||||
| Revaluation of Profit Sharing Loan Agreement (see note 4) | ||||||||||||||||
| Revaluation of Ruby Capital (see note 4) | ( | ) | - | ( | ) | - | ||||||||||
| Revaluation of Lifeward (see note 8) (1) | - | ( | ) | - | ||||||||||||
| Revaluation of 83 Wythe Loan and Warren at Bay Loan (see note 4) | ( | ) | - | ( | ) | - | ||||||||||
| Revaluation of Marketable Securities (see note 3) | ( | ) | ||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Loan extension fee income – Scilex (see note 4) | - | - | ||||||||||||||
| Interest Income | ||||||||||||||||
| Exchange rate | ( | ) | ( | ) | ( | ) | ||||||||||
| Other | ( | ) | ||||||||||||||
| (1) | For the nine months ended September 30, 2026, includes revaluation gains of $ |
For the three months ended September 30, 2026, includes revaluation losses of $
37
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 16 - TAXES ON INCOME:
The following table summarizes the Company’s taxes on income:
| Nine months ended | Three months ended | |||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Current taxes on income | $ | $ | $ | ( | ) | $ | ||||||||||
| Deferred taxes on income (*) | ||||||||||||||||
| Total taxes on income | ||||||||||||||||
| (*) |
NOTE 17 - SEGMENT REPORTING:
The CODM uses consolidated net income to assess segment performance and to decide how to allocate resources, including to the Company’s investment activities. The Company’s investment activities are managed as part of its single reportable segment, and income and expenses related to these investments are presented within “Financial income, net” in the consolidated statements of comprehensive income.
The significant segment expenses and other segment items regularly provided to the CODM are research and development expenses, general and administrative expenses (including stock-based compensation), other income, net, financial income, net and taxes on income, each as presented in the consolidated statements of comprehensive income. The measure of segment assets is total consolidated assets, as reported in the consolidated balance sheets.
38
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 18 - RELATED PARTY TRANSACTIONS:
a. Chief Scientific Officer
On July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY Ltd. (“KNRY”), an Israeli company owned by the Company’s Chief Scientific Officer, whereby the Chief Scientific Officer, through KNRY, provides services to the Company (the “Consulting Agreement”). The Consulting Agreement is terminable by either party upon 140 days prior written notice. The Consulting Agreement, as amended, provides that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreement.
Effective as of July 1, 2024, the monthly consulting fee of the Chief Scientific Officer is NIS
On April 1, 2025, the Company entered into a new consulting agreement with KNRY, whereby the Chief Scientific Officer, through KNRY, provides services as Chief Scientific Officer of the Company. The agreement is terminable by either party upon 140 days prior written notice. The agreement provides that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the agreement. Under the agreement, the initial monthly consulting fee of the Chief Scientific Officer was NIS
Effective as of January 1, 2026 and September 1, 2026, the monthly consulting fee of the Chief Scientific Officer was increased to NIS
On April 1, 2025, the Company, through the Subsidiary, also entered into an employment agreement with the Chief Scientific Officer, pursuant to which the initial gross monthly salary of the Chief Scientific Officer was NIS
Effective as of January 1, 2026 and September 1, 2026, the gross monthly salary of the Chief Scientific Officer was increased to NIS
b. President and Chief Executive Officer
On July 1, 2024, the Company entered into a consulting agreement with Shnida Ltd. (“Shnida”), whereby the Company’s President and Chief Executive Officer, through Shnida, provides services as President and Chief Executive Officer of the Company. The agreement is terminable by either party upon 140 days prior written notice. The agreement provides that Shnida will be reimbursed for reasonable expenses incurred in connection with performance of the agreement. Under the agreement, the initial monthly consulting fee of the President and Chief Executive Officer was NIS
39
ORAMED PHARMACEUTICALS INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. Dollars in thousands (except share and per share data)
(UNAUDITED)
NOTE 18 - RELATED PARTY TRANSACTIONS (continued):
b. President and Chief Executive Officer (continued)
Effective as of January 1, 2026 and September 1, 2026, the monthly consulting fee of the President and Chief Executive Officer was increased to NIS
In addition, the Company, through the Subsidiary, has entered into an employment agreement with the President and Chief Executive Officer, effective as of July 1, 2024, pursuant to which, effective as of January 1, 2024, the President and Chief Executive Officer receives a gross monthly salary of NIS
Effective as of January 1, 2026, the gross monthly salary of the President and Chief Executive Officer was increased to NIS
c. Alpha Tau
The Company holds an investment in Alpha Tau that grants it significant influence over the investee and, accordingly, Alpha Tau is a related party of the Company. For details regarding the Services Agreement with Alpha Tau and the income recognized thereunder, see Note 2e1.
d. OraTech
Following the closing of the Lifeward transaction, OraTech is a subsidiary of Lifeward, in which the Company holds an investment (see Note 8) and, accordingly, OraTech is a related party of the Company. For details regarding the Clinical Trial Management Agreement with OraTech and the amounts charged and recognized thereunder, see Note 2e3.
e. Lifeward
The Company holds an investment in Lifeward that grants it significant influence over the investee (see Notes 2g1 and 8b) and, accordingly, Lifeward is a related party of the Company. For details regarding the Lifeward Revenue Share and the balance recognized thereunder, see Note 8b3.
NOTE 19 - SUBSEQUENT EVENTS:
| a. | Investment in Scilex | |
| On October 16, 2026, the Company and Scilex entered into a letter agreement (the “Extension Agreement”) extending the date for payment in full of all obligations under the Tranche A Note and the Tranche B Note to November 2026, in consideration of a non-refundable extension fee of $ |
| b. | Net-Settlement of RSUs | |
| In October 2026, an aggregate of |
| c. | Guarantee of MAR Bailey Avenue LLC Loan | |
| The Company entered into an agreement with MAR Development LLC (“MAR”) to establish a joint venture with MAR for the development of self-storage projects. As of November 12, 2026, the Company had invested $ |
40
ITEM 2 - 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 condensed consolidated financial statements and the related notes included elsewhere herein and in our consolidated financial statements, accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on March 26, 2026 (our “Annual Report”).
Overview of Operations
Oramed has transformed into a strategic healthcare operating company focused on building long-term value through active ownership and operational leadership. We selectively acquire meaningful strategic positions in companies where we can leverage our expertise across corporate strategy, clinical and regulatory development, commercialization, capital markets, and business growth. By partnering closely with management and providing hands-on operational guidance, we seek to accelerate innovation and unlock the full potential of our portfolio companies. Our value creation is driven by operating and growing these businesses, with a focus on long-term strategic development and real-world impact.
Recent Developments
Investment in Scilex
On October 16, 2026, we entered into a letter agreement with Scilex extending the date for payment in full of all obligations under the Tranche A Note and the Tranche B Note to November 9, 2026. In consideration of the extension, Scilex agreed to pay us a non-refundable extension fee of $1.0 million, of which $250,000 was paid upon execution of the letter agreement and received by us and $750,000 is payable on November 9, 2026. The extension fee does not reduce the amounts outstanding under the notes. If any portion of the extension fee is not paid when due, the extension terminates automatically and all obligations under the notes become immediately due and payable. Interest under the Tranche A Note continues to accrue until paid in full.
Impact of Current Events
On October 7, 2023, the State of Israel was attacked by Hamas, a group designated as a terrorist organization by the United States, and the State of Israel subsequently declared war on Hamas. Since that time, Israel has been engaged in a multi-front armed conflict with combatants located in Gaza, the West Bank, Syria, Iran, Lebanon and Yemen. The situation in the region remains volatile and the possibility of renewed conflicts persists. As of November 12, 2026, we believe that there is no immediate risk to our business operations related to these events. For further information, see “Item 1A. Risk Factors,” under “We are affected by the political, economic and military risks of having operations in Israel” in our Annual Report.
41
Results of Operations
Comparison of nine and three months ended September 30, 2026 and 2025
The following table summarizes certain statements of operations data of the Company for the nine and three months ended September 30, 2026 and 2025 (in thousands of dollars except share and per share data):
| Nine months ended | Three months ended | |||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||
| Revenues | $ | - | $ | 2,000 | $ | - | $ | - | ||||||||
| Cost of revenue | - | (1,987 | ) | - | - | |||||||||||
| Gross profit | - | 13 | - | - | ||||||||||||
| Research and development expenses | (1,594 | ) | (4,393 | ) | - | (1,153 | ) | |||||||||
| General and administrative expenses | (8,935 | ) | (5,036 | ) | (4,104 | ) | (1,274 | ) | ||||||||
| Operating loss | (10,529 | ) | (9,416 | ) | (4,104 | ) | (2,427 | ) | ||||||||
| Other income, net | 9,347 | 665 | 487 | 408 | ||||||||||||
| Financial income, net | 180,489 | 74,278 | 31,897 | 61,470 | ||||||||||||
| Income before tax expenses | 179,307 | 65,527 | 28,280 | 59,451 | ||||||||||||
| Tax expenses | (44,431 | ) | (11,520 | ) | (9,870 | ) | (11,062 | ) | ||||||||
| Net income | 134,876 | 54,007 | 18,410 | 48,389 | ||||||||||||
| Net income (loss) attributable to: | ||||||||||||||||
| Non-controlling interests | - | (34 | ) | - | (6 | ) | ||||||||||
| Company’s stockholders | 134,876 | 54,041 | 18,410 | 48,395 | ||||||||||||
| Basic income per share of common stock | 3.28 | 1.30 | 0.44 | 1.16 | ||||||||||||
| Diluted income per share of common stock | 3.17 | 1.26 | 0.43 | 1.13 | ||||||||||||
| Weighted average number of shares of common stock outstanding used in computing basic income per share of common stock | 41,168,426 | 41,569,359 | 41,664,380 | 41,756,301 | ||||||||||||
| Weighted average number of shares of common stock outstanding used in computing diluted income per share of common stock | 42,504,437 | 42,969,519 | 43,015,317 | 42,774,504 | ||||||||||||
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Revenues
We did not recognize any revenue in the nine months ended September 30, 2026, compared to $2,000,000 revenue recognized related to the Technology License Agreement, dated November 30, 2015, with Hefei Tianhui Biotech Co., Ltd. (“HTIT”), as amended (the “HTIT License Agreement”), for the nine months ended September 30, 2025. The decrease in recognized revenue is attributable to the full recognition of all deferred revenue under the HTIT License Agreement in prior periods.
We did not recognize any revenue in the three months ended September 30, 2026 or the three months ended September 30, 2025.
Cost of Revenues
There was no cost of revenue during the nine months ended September 30, 2026, compared to approximately $1,987,000 cost of revenue for the nine months ended September 30, 2025. Cost of revenue for the nine months ended September 30, 2025 reflected the fulfillment of our payment obligation to the Israel Innovation Authority (the “IIA”) through a remittance of approximately $2,046,000, partially offset by an expense reversal of approximately $59,000. We have no further obligations to the IIA.
There was no cost of revenue during the three months ended September 30, 2026, and three months ended September 30, 2025.
Research and Development Expenses
Research and development expenses for the nine months ended September 30, 2026 decreased by 64% to approximately $1,594,000, compared to approximately $4,393,000 for the nine months ended September 30, 2025. The decrease was primarily attributable to the transfer of the POD™ technology platform activity to OraTech on March 25, 2026. Since that date, all research and development costs related to such activity have been charged to OraTech, and accordingly we recorded no research and development expenses in the second and third quarters of 2026.
There were no research and development expenses during the three months ended September 30, 2026, compared to approximately $1,153,000 for the three months ended September 30, 2025. This is due to the transfer of the POD™ technology platform activity to OraTech on March 25, 2026, following which all research and development costs related to such activity have been charged to OraTech.
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 nine months ended September 30, 2026, increased by 77% to approximately $8,935,000 compared to approximately $5,036,000 for the nine months ended September 30, 2025. The increase was mainly attributable to an increase of approximately $3,184,000 in non-cash stock-based compensation expenses. Excluding stock-based compensation expenses, general and administrative expenses increased by 27%, mainly due to increases in salary expenses and professional fees. Commencing in the second quarter of 2026, stock-based compensation expenses of our Chief Scientific Officer and Chief Operating Officer are recorded within general and administrative expenses rather than research and development expenses.
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General and administrative expenses for the three months ended September 30, 2026, increased by 222% to approximately $4,104,000 compared to approximately $1,274,000 for the three months ended September 30, 2025. The increase was mainly attributable to an increase of approximately $2,635,000 in non-cash stock-based compensation expenses, as well as an increase in salary expenses. Commencing in the second quarter of 2026, stock-based compensation expenses of our Chief Scientific Officer and Chief Operating Officer are recorded within general and administrative expenses rather than research and development expenses.
Operating Loss
Operating loss was approximately $10,529,000 for the nine months ended September 30, 2026, compared to approximately $9,416,000 for the nine months ended September 30, 2025. The increase of approximately 12% was primarily attributable to an increase in general and administrative expenses, partially offset by a decrease in research and development expenses, as described above.
Operating loss was approximately $4,104,000 for the three months ended September 30, 2026, compared to approximately $2,427,000 for the three months ended September 30, 2025. The increase of approximately 69% was primarily attributable to an increase in general and administrative expenses, partially offset by a decrease in research and development expenses, as described above.
Other Income, Net
| Nine months ended | Three months ended | |||||||||||||||
| (U.S. dollars in thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||
| Alpha Tau Warrants and Services Agreement | $ | 1,256 | $ | 665 | $ | 409 | $ | 408 | ||||||||
| Clinical Trial Management Agreement | 270 | - | 78 | - | ||||||||||||
| Capital Gain from Sale of IP to OraTech | 5,821 | - | - | - | ||||||||||||
| Medicox License Agreement | 2,000 | - | - | - | ||||||||||||
| Total Other Income, Net | 9,347 | 665 | 487 | 408 | ||||||||||||
On November 13, 2022, we entered into a ten-year distribution license agreement (“Medicox License Agreement”) with Medicox Co., Ltd. (“Medicox”), pursuant to which we granted Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea.
Following the Lifeward transaction, the expected clinical development timeline for ORMD-0801 was extended beyond the term contemplated under the Medicox License Agreement. As a result, we determined that the agreement was no longer commercially viable and that we have no remaining performance obligation thereunder. We recognized $2,000,000 income related to the Medicox License Agreement in the three months ended March 31, 2026.
Net other income was approximately $9,347,000 for the nine months ended September 30, 2026, compared to approximately $665,000 for the nine months ended September 30, 2025. The increase was primarily due to the gain on sale of IP to OraTech, income related to the Medicox License Agreement and an increase in other income related to Alpha Tau. During the nine months ended September 30, 2026, other income related to Alpha Tau amounted to approximately $1,432,000 (consisting of approximately $750,000 under the Services Agreement and approximately $682,000 in respect of the Alpha Tau Warrants), which was partially offset by IR expenses related to Alpha Tau of approximately $176,000, resulting in net other income related to Alpha Tau of approximately $1,256,000.
Net other income was approximately $487,000 for the three months ended September 30, 2026, compared to approximately $408,000 for the three months ended September 30, 2025. The increase was primarily due to income related to the Clinical Trial Management Agreement with OraTech.
Financial Income, Net
Net financial income was approximately $180,489,000 for the nine months ended September 30, 2026, compared to financial income of approximately $74,278,000 for the nine months ended September 30, 2025. The increase was primarily due to revaluation gains on the investments in Alpha Tau of approximately $174,500,000, as well as revaluation gains on the investments in Hapisga, mainly attributable to the appreciation of the NIS against the U.S. dollar, and Lifeward, and a fee received from Scilex in consideration for the extension of the maturity of the Scilex notes. The increase was partially offset by revaluation losses on the investment in Scilex of approximately $3,428,000, compared to revaluation gains of approximately $38,457,000 in the corresponding period of 2025, revaluation losses on other marketable securities and lower interest income. Financial income for the period is largely unrealized, as it primarily reflects changes in the fair value of investments we hold.
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Net financial income was approximately $31,897,000 for the three months ended September 30, 2026, compared to financial income of approximately $61,470,000 for the three months ended September 30, 2025. The decrease was primarily due to revaluation losses on the investment in Scilex of approximately $5,895,000, compared to revaluation gains of approximately $34,163,000 in the corresponding period of 2025, revaluation losses on the investments in Lifeward and Hapisga, the latter mainly attributable to the depreciation of the NIS against the U.S. dollar during the quarter, and lower revaluation gains on other marketable securities. The decrease was partially offset by revaluation gains on the investments in Alpha Tau of approximately $41,083,000 and a fee received from Scilex in consideration for the extension of the maturity of the Scilex notes. Financial income for the period is largely unrealized, as it primarily reflects changes in the fair value of investments we hold.
Tax on income
During the nine months ended September 30, 2026, we recognized tax expenses on income of approximately $44,431,000 compared to tax expenses on income of approximately $11,520,000 for the nine months ended September 30, 2025. The increase in income tax expense was mainly attributable to deferred tax expense of approximately $42,226,000, primarily related to the revaluation of the investment in Alpha Tau. Current tax expense of approximately $2,205,000 was mainly attributable to the gain from the sale of IP and the Scilex transaction.
During the three months ended September 30, 2026, we recognized tax expenses on income of approximately $9,870,000 compared to tax expenses on income of approximately $11,062,000 for the three months ended September 30, 2025. Income tax expense was mainly attributable to deferred tax expense of approximately $10,594,000, primarily related to the revaluation of the investment in Alpha Tau, partially offset by a current tax benefit of approximately $724,000, which was mainly attributable to the Scilex notes.
The provision for tax on income in the interim period is determined using an estimated annual effective tax rate.
Liquidity and Capital Resources
As of September 30, 2026, we had retained earnings of approximately $11,445,000, after the distribution of a dividend of approximately $10,870,000. From our inception through September 30, 2026, 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 $28,185,000 from the exercise of warrants and options. We expect to seek additional financing through similar sources in the future, as needed. As of September 30, 2026, we had approximately $28,934,000 of available cash. In addition, we hold a variety of interests in certain investments, including in Lifeward, Scilex, Alpha Tau, Hapisga and others, as further detailed in this Quarterly Report on Form 10-Q.
From inception through September 30, 2026, we have not generated significant revenues from our operations, other than the recognition of deferred revenue related to the HTIT License Agreement and the Medicox License Agreement, as described above. Following the termination of our Phase 3 clinical trials, our research and development activities were significantly reduced while we conducted a strategic review process. Following the closing of the Lifeward transaction, the development of the oral insulin platform is conducted by OraTech, and accordingly we do not expect to incur significant research and development expenses.
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.
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Material Cash Requirements and Commitments
Our material cash requirements from known contractual and other obligations as of September 30, 2026 consist primarily of the following:
Operating leases. Undiscounted lease payments for our office space and vehicles in Israel of approximately $1,795,000, of which approximately $93,000 is payable during the remainder of 2026, approximately $402,000 in 2027 and the balance through January 2032. See Note 9b.
Income taxes. Income taxes payable of approximately $5,549,000, which we expect to pay during 2027.
Ruby Sapphire II. An unfunded capital commitment of NIS 5,444,000 (approximately $1,777,000), payable upon capital calls by the fund's general partner during the fund's four year investment period, which runs through approximately mid 2029. The timing and amount of capital calls are not within our control.
Lifeward Additional Notes. Up to $9,000,000 of Additional Notes that Lifeward may require us to purchase upon satisfaction of either of the conditions described in Note 9d. As of the date of this report, neither condition has been satisfied, and we cannot predict whether or when either condition will be satisfied.
CRO agreement. Milestone-based payments under the CRO agreement described in Note 9a, which provides for aggregate payments of up to approximately $11,577,000, payable only upon achievement of specified milestones. In light of the change in the planned clinical protocol from a Phase 3 trial to a Phase 2 trial, we expect the agreement to be revised and its overall scope and cost to be significantly reduced.
We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund these requirements for at least the next 12 months.
Off-Balance Sheet Arrangements
Bank guarantee. On September 9, 2026, in connection with the Profit Sharing Loan Agreement, we caused a bank to issue a guarantee of NIS 2,000,000 (approximately $663,000) in favor of the financing entity that provides construction financing to the borrower, securing a portion of that financing. If the borrower fails to repay the guaranteed portion, we may be required to pay up to NIS 2,000,000 under the guarantee, which is valid until March 1, 2027. As security, the bank placed a lien on a U.S. dollar deposit of approximately $868,000, which is presented as a restricted deposit.
Variable interests in unconsolidated entities. We hold variable interests in Lifeward, a VIE of which we are not the primary beneficiary. As of September 30, 2026, our maximum exposure to loss was approximately $24,897,000, the carrying amount of our interests, plus up to $9,000,000 of Additional Notes we may be required to purchase. See Note 2f.
Guarantee entered into after September 30, 2026. On November 6, 2026, in connection with a $9,000,000 mortgage loan from Fieldpoint Private Bank & Trust to MAR Bailey Avenue LLC, the entity that owns the Bailey Avenue project and in which we hold an indirect interest through MAR Oramed JV LLC, we and the two principals of MAR Development LLC entered into a guaranty under which we jointly and severally guarantee payment of 100% of the outstanding indebtedness. Our guaranty will step down to 25% of the outstanding indebtedness once the borrower meets a 1.30x debt service coverage ratio, tested on its filed tax returns. We also entered into a completion guaranty and an environmental indemnity in favor of the lender. The loan has a seven year term. The maximum potential amount of future payments under the payment guaranty is $9,000,000 plus accrued interest and enforcement costs. MAR Development LLC, its two principals and certain of its affiliates have agreed, jointly and severally, to indemnify us for amounts we pay under these guarantees, subject to limited exceptions. As of November 12, 2026, no event has occurred that would require us to make any payment under these guarantees.
Other than as described above, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Cash Flows
As of September 30, 2026, our total current assets were approximately $57,376,000 and our total current liabilities were approximately $9,446,000. On September 30, 2026, we had a working capital surplus of approximately $47,930,000 and retained earnings of approximately $11,445,000. 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. The decrease in working capital surplus was mainly due to the reclassification of the Hapisga loan, in the amount of approximately $27,943,000, from current assets to long-term assets following the extension of its maturity to April 2028; the use of current assets to fund long-term investments, mainly the Lifeward transaction (approximately $11,924,000, including the funding of OraTech prior to the closing) and the investments in the Warren at Bay Loan, the 83 Wythe Loan and the Profit Sharing Loan Agreement; the conversion of the Lifeward convertible note of approximately $4,636,000 into the A&R Note, which is classified as a long-term asset; revaluation losses on the Scilex notes; cash used in operating activities; and an increase in income tax payable of approximately $2,263,000.
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During the nine months ended September 30, 2026, cash and cash equivalents decreased to approximately $28,934,000 from approximately $45,947,000 as of December 31, 2025. The decrease was mainly due to the reasons described below.
Operating Activities
Operating activities used cash of approximately $2,689,000 in the nine months ended September 30, 2026, compared to approximately $8,679,000 used in the nine months ended September 30, 2025. Cash used in operating activities primarily consisted of cash used in general and administrative expenses, partially offset by interest received of approximately $1,170,000 and receipts from Alpha Tau.
Investing Activities
Investing activities used cash of approximately $1,986,000 in the nine months ended September 30, 2026, compared to cash provided of approximately $7,127,000 in the nine months ended September 30, 2025. Cash used in investing activities in the nine months ended September 30, 2026 consisted primarily of purchases of marketable securities, the Lifeward transaction and investments in the Warren at Bay Loan, the 83 Wythe Loan and the Profit Sharing Loan Agreement, which were partially offset by proceeds from the sale of marketable securities, redemption of short-term deposits and repayments by Scilex. Cash provided by investing activities in the nine months ended September 30, 2025 was mainly due to redemption of short-term deposits and proceeds from investments, partially offset by investments at fair value in Alpha Tau and Hapisga.
Financing Activities
Financing activities used cash of approximately $12,273,000 in the nine months ended September 30, 2026, compared to approximately $732,000 in the nine months ended September 30, 2025. Cash used by financing activities in the nine months ended September 30, 2026 consisted of the payment of dividends and tax withholdings related to stock-based compensation settlements, partially offset by proceeds from the exercise of stock options, while cash used in the nine months ended September 30, 2025 consisted of the repurchase and retirement of common stock.
Alpha Tau Transaction
On April 24, 2025, our wholly-owned subsidiary, Oramed Ltd., entered into a share purchase agreement with Alpha Tau Medical Ltd. (“Alpha Tau”), a clinical-stage oncology company developing the Alpha DaRT™ alpha-radiation cancer therapy platform, under which, and through additional purchases since then, we have in the aggregate invested approximately $38.2 million to purchase 14,469,335 Alpha Tau ordinary shares (an average price of approximately $2.64 per share), representing approximately 17% of Alpha Tau’s outstanding share capital as of November 12, 2026. Concurrently, we entered into a three-year services agreement to provide Alpha Tau investor relations and public relations services in exchange for a non-refundable fee of $3,000,000 and warrants to purchase up to 3,237,000 Alpha Tau ordinary shares at exercise prices ranging from $3.474 to $3.90 per share, subject to limited termination rights. As of September 30, 2026, the fair value of our investment in Alpha Tau, including the warrants, was approximately $252.4 million. In addition, we have the right to nominate two out of eight directors to Alpha Tau’s board of directors, subject to certain conditions.
Dual Listing on the Tel Aviv Stock Exchange and Inclusion in the TA-90 and TA-125 Indices
In August 2026, Alpha Tau’s ordinary shares became dual-listed for trading on the Tel Aviv Stock Exchange (“TASE”), in addition to the Nasdaq, where they trade under the symbol DRTS (Hebrew symbol דרטס), allowing investors to trade Alpha Tau ordinary shares in both U.S. dollars and New Israeli Shekels during the trading hours of each market.
On October 29, 2026, within months of its dual listing, Alpha Tau announced that its ordinary shares will be included in the TASE’s TA-90 and TA-125 indices, effective November 5, 2026. The TA-125 index, considered by many Israeli investors to be the benchmark index of the TASE, comprises the 35 companies in the TA-35 index and the 90 companies in the TA-90 index, and according to Alpha Tau, it will be one of only three biomedical companies included in the TA-125. Index funds that track the TA-90 and TA-125 indices are expected to add Alpha Tau ordinary shares to their holdings.
Alpha DaRT™ Platform and Technology
Alpha Tau’s Alpha DaRT platform is designed to deliver highly localized alpha radiation through intratumoral insertion of radium-224 impregnated sources into solid tumors. When the radium decays, its short-lived daughters are released and disperse while emitting high-energy alpha particles aimed at destroying tumor cells while sparing surrounding healthy tissue. This approach potentially offers a novel treatment solution for patients with otherwise difficult-to-treat cancers where conventional external beam radiation may be limited.
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Clinical Development Progress
Alpha Tau is currently conducting an extensive clinical program with five concurrent FDA-approved trials in the United States, alongside additional trials in France, Italy, Israel, Japan, and planned studies in the UK. In October 2026, Alpha Tau also signed a memorandum of understanding with Samsung Medical Center in Seoul, South Korea, regarding a potential clinical trial of Alpha DaRT in pancreatic cancer patients, which would be subject to regulatory and ethics committee approvals. Alpha Tau’s U.S. clinical trials are summarized below:
| ● | ReSTART Pivotal Trial (Recurrent SCC Treatment with Alpha DaRT Radiation Therapy): A multi-center pivotal study in patients with recurrent cutaneous squamous cell carcinoma (cSCC), the second most common form of skin cancer. Alpha Tau has begun submitting modules of its Modular Pre-Market Approval (PMA) application to the FDA and has finished treating patients in its ReSTART pivotal trial, with top-line data from the trial expected in late 2026 or early 2027. |
| ● | IMPACT Study (Intratumoral Pancreatic Alpha Combination Trial): A multi-center pilot study combining Alpha DaRT with chemotherapy in patients with newly diagnosed unresectable locally advanced or metastatic pancreatic adenocarcinoma. In a pooled analysis of its first-in-human trials in Canada and Israel presented at DDW 2026, Alpha DaRT showed a 100% local disease control rate with a favorable safety profile, and a pooled analysis of three Phase I/II EUS-guided studies presented at the 2026 ASCO Annual Meeting reported median overall survival longer than historical standard-of-care benchmarks across all examined sub-groups, with no treatment-related deaths. The FDA approved an IDE supplement adding a second standard-of-care regimen alongside mFOLFIRINOX and expanding enrollment. Alpha Tau completed enrollment on August 31, 2026, with 48 patients at 10 clinical centers in the United States, Canada and Israel. Initial data are targeted for early 2027 and are intended to inform the design of a planned pivotal study. |
| ● | GBM Feasibility Study: A study in patients with recurrent glioblastoma multiforme (GBM), a highly aggressive malignant brain tumor. Alpha Tau treated the first patient in its REGAIN (Recurrent Glioblastoma Alpha-DaRT Intratumoral Therapy) trial at Ohio State University’s Comprehensive Cancer Center. Interim results from the first three patients, treated between December 2025 and March 2026, demonstrated a 100% local disease control rate and a 67% complete response rate under Response Assessment in Neuro-Oncology (RANO) criteria, with a single associated grade 3 serious adverse event that resolved and no local or distant recurrences as of the data cut-off. On June 11, 2026, following its review of a pre-specified interim safety report, the FDA cleared Alpha Tau to complete enrollment of the final seven patients (up to ten in total) and authorized two additional leading U.S. academic cancer centers to join the trial. On October 19, 2026, Alpha Tau announced that the FDA approved an IDE supplement expanding REGAIN to up to 20 patients across the three authorized U.S. centers, opening the study to patients with IDH-mutant grade 4 tumors, adding progression-free survival as a secondary endpoint and regular quality-of-life assessments, and providing for an additional interim analysis. An abstract including new REGAIN trial data has been accepted for presentation at the Society for Neuro-Oncology (SNO) 2026 Annual Meeting in November 2026. Alpha DaRT previously received FDA Breakthrough Device Designation in recurrent GBM (October 2021) and was selected for the FDA’s Total Product Life Cycle Advisory Program (TAP). Separately, in June 2026, Alpha Tau treated the first recurrent glioblastoma patient outside the United States—and the first in Israel—at Hadassah University Medical Center in Jerusalem under its broad-access ALL clinical protocol, marking the first international application of Alpha DaRT’s brain-specific delivery system. |
| ● | Recurrent Prostate Cancer Pilot Study: A pilot study in patients with locally recurrent prostate cancer. Alpha Tau has treated prostate cancer patients in Israel and secured an FDA Investigational Device Exemption (IDE) for a U.S. trial. In June 2026, Alpha Tau entered into a strategic collaboration with Tolmar International Ltd. to commercialize Alpha DaRT for prostate cancer in the United States, as described under Regulatory and Commercial Progress below. |
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| ● | Immunocompromised cSCC Study (ADMIRE – Alpha DaRT Management for Immunocompromised patients with REcurrent cSCC): A multi-center study in immunocompromised patients with cSCC. On July 15, 2026, Alpha Tau announced the successful treatment of the first patient in the ADMIRE study, performed at Banner MD Anderson Cancer Center in Gilbert, Arizona. |
In addition, Alpha Tau is engaged in pre-clinical research partnerships with leading academic institutions including Mayo Clinic, McGill University, Emory University, and MD Anderson Cancer Center, exploring combinations with immunotherapy. Alpha Tau has also reported positive results from a clinical study in Israel examining the combination of Alpha DaRT with the checkpoint inhibitor pembrolizumab (Keytruda®) for patients with locally advanced or metastatic head and neck squamous cell carcinoma. As presented at the American Head and Neck Society’s 12th International Conference on Head and Neck Cancer in July 2026, the combination produced a 100% objective response rate and a median overall survival of 18.2 months among nine evaluable patients, with no Alpha DaRT-associated serious adverse events, surpassing the study’s pre-specified threshold for success. Alpha Tau is exploring the possibility of conducting a sixth U.S. trial in this indication.
Regulatory and Commercial Progress
In addition to the ongoing FDA engagement for its U.S. clinical programs, on February 24, 2026, Alpha Tau received Shonin marketing approval from Japan’s Ministry of Health, Labour and Welfare (“MHLW”) for Alpha DaRT in the treatment of unresectable locally advanced or locally recurrent head and neck cancer. Shonin is the most rigorous regulatory pathway for medical devices in Japan and is granted following review and recommendation by Japan’s Pharmaceuticals and Medical Devices Agency (“PMDA”). The approval marks the first regulatory clearance of the Alpha DaRT platform outside of Israel. As a condition of approval, Alpha Tau will conduct a post-market surveillance (PMS) study enrolling 66 patients across five leading clinical centers in Japan to further evaluate Alpha DaRT’s safety and clinical performance in real-world settings and generate additional clinical evidence in collaboration with Japanese physicians and treatment centers.
On the manufacturing front, Alpha Tau has received a radioactive materials license for the first phase of its Hudson, New Hampshire facility and is currently equipping the facility for Alpha DaRT manufacturing to support commercial readiness and scale-up operations.
On June 2, 2026, Alpha Tau entered into a strategic collaboration with Tolmar International Ltd. to develop and commercialize Alpha DaRT for the treatment of prostate cancer in the United States. The agreement grants Tolmar exclusive U.S. commercialization rights for prostate cancer, with an option to expand into bladder cancer subject to additional payments. Under the collaboration, Tolmar committed an initial $15 million manufacturing investment and a $20 million equity investment at $11.99 per share (a 25% premium to the 30-day VWAP), with up to $161.5 million in clinical, regulatory and commercial milestones for the first indication. Under the collaboration, Alpha Tau will manufacture and supply Alpha DaRT to Tolmar at 60% of the onward net sales price (subject to certain adjustments).
Strategic Overview Rationale
Alpha Tau has reported clinical progress across multiple difficult-to-treat cancer types, including pancreatic cancer, head and neck cancer, and skin cancer, including a 100% local disease control rate and favorable safety profile reported in a pooled analysis of its two first-in-human pancreatic adenocarcinoma trials at DDW 2026. Alpha Tau has five concurrent FDA-approved trials in the U.S., has received its first commercial approval outside Israel, in Japan, has entered into a U.S. commercialization collaboration with Tolmar for prostate cancer, and is advancing toward a PMA submission for its pivotal skin cancer trial, Alpha Tau is entering a critical phase of clinical validation and regulatory progression. Alpha Tau’s innovative alpha-radiation platform, combined with its expanding clinical footprint across multiple solid tumor types and growing manufacturing capabilities, represents what we believe to be a compelling opportunity in the oncology therapeutics space.
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Lifeward Transactions
Lifeward Share Purchase Agreement
On January 12, 2026, we entered into a Share Purchase Agreement with Lifeward Ltd. (“Lifeward”) (Nasdaq: LFWD) and OraTech, pursuant to which Lifeward agreed to acquire all of the outstanding equity interests of OraTech from us (the “Share Purchase Agreement”). 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 approximately $6,500,000 to fund the next planned clinical trial and related development activities. The transaction closed on March 25, 2026 (the “Lifeward Closing Date”), and from that date forward, OraTech will bear all research and development expenses related to the POD™ technology platform.
In consideration for the acquisition of OraTech, Lifeward issued to us: (i) 1,250,363 ordinary shares of Lifeward, no par value (the “Lifeward Ordinary Shares”), representing 45.0% of the outstanding Lifeward Ordinary Shares on the Lifeward Closing Date; (ii) 1,006,113 pre-funded warrants to purchase Lifeward Ordinary Shares at an exercise price of $0.0001 per share, exercisable and with no expiration date (“Pre-Funded Warrants”); and (iii) 1,296,296 warrants to purchase Lifeward Ordinary Shares at an exercise price of $5.40 per share (“Share Purchase Warrants”). In addition, Oramed will receive 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 (“Lifeward Revenue Share”), subject to certain caps and termination events.
In addition to the Share Purchase Agreement, on the Lifeward Closing Date, we entered into a securities purchase agreement (“Lifeward Notes Purchase Agreement”), pursuant to which, on March 25, 2026, following satisfaction of closing conditions set forth in the Lifeward Notes Purchase Agreement, Lifeward issued to us $9,000,000 aggregate principal amount of senior secured convertible notes (together with senior secured convertible notes issued to other investors, the “Initial Notes”), convertible into Lifeward Ordinary Shares at a conversion price of $5.40 per share, together with warrants to purchase up to 1,666,666 Lifeward Ordinary Shares at an exercise price of $5.40 per share (“Note Warrants”). The Note Warrants are exercisable and expire five years from the date of issuance.
Under the Lifeward Notes Purchase Agreement, Lifeward also has the right to require us to fund a second tranche of $9,000,000 aggregate principal amount of senior secured convertible notes (“Additional Notes”, and together with the Initial Notes, “Notes”), on substantially the same terms as the Initial Notes, together with warrants to purchase up to 1,666,666 Lifeward Ordinary Shares (“Additional Note Warrants”) upon the occurrence of either of the following: (i) Lifeward’s achievement of 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 the Lifeward Ordinary Shares equaling or exceeding $13.80 per share for 10 consecutive trading days immediately prior to the additional closing. As of September 30, 2026, neither of the foregoing conditions had been satisfied, and accordingly, the Additional Notes had not been funded.
On June 30, 2026, Lifeward entered into an additional securities purchase agreement with certain investors, pursuant to which Lifeward agreed to issue approximately $5,600,000 aggregate principal amount of additional senior secured convertible notes. The additional investment closed in July 2026, as announced by Lifeward on July 7, 2026. In connection with such investment, the Initial Notes held by us, the Share Purchase Warrants and the Pre-Funded Warrants were amended and restated (the “A&R Note”, “A&R Warrants” and “A&R Pre-Funded Warrants”, respectively) to, among other things, provide that the notes rank pari passu with respect to the collateral securing them.
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Under the terms of the Pre-Funded Warrants, the Share Purchase Warrants, the Notes and the Note Warrants, in each case as amended and restated, we may not exercise or convert any of such instruments to the extent that we, together with our affiliates, would beneficially own more than 45.0% of the outstanding Lifeward Ordinary Shares immediately after such exercise or conversion. We may, subject to certain conditions, increase the beneficial ownership limitation upon at least 61 days’ prior notice to Lifeward, subject to Lifeward’s prior consent, which consent shall not be unreasonably withheld, conditioned or delayed.
Strategic Overview Rationale
Lifeward is a commercial-stage medical technology company that develops and markets a portfolio of robotics and rehabilitation solutions to help individuals with physical limitations or those recovering from injury restore mobility, function, and independence. Its product portfolio spans the continuum of rehabilitation and mobility care and includes the ReWalk Personal Exoskeleton, a wearable robotic device that enables individuals with spinal cord injury to stand, walk, and climb stairs, and the AlterG Anti-Gravity treadmill, which uses patented differential air pressure technology to provide precise body-weight support for physical therapy, athletic training, and rehabilitation. Through this established and diversified platform, Lifeward generates recurring revenue from a global customer base that includes hospitals, rehabilitation clinics, sports medicine and performance facilities, the U.S. Department of Veterans Affairs, and individual home users across the United States, Europe, and other international markets.
In February 2026, Lifeward’s ReWalk Personal Exoskeleton gained Medicare Advantage coverage from Aetna, which—together with prior authorizations previously issued by UnitedHealthcare and Humana—extended coverage across three of the largest Medicare Advantage insurers, collectively representing approximately 16 million beneficiaries in the United States.
For the second quarter of 2026, Lifeward reported revenue of $6.6 million, an increase of 16% compared to the second quarter of 2025 and its strongest quarterly revenue performance since the fourth quarter of 2024. In August 2026, Lifeward launched a six-month pilot program with Ottobock Care, which operates more than 50 patient care clinics in the United States, to expand access to the ReWalk Personal Exoskeleton. In September and October 2026, two independent peer-reviewed studies were published reporting on the home use of the ReWalk Personal Exoskeleton by individuals with chronic spinal cord injury.
On August 31, 2026, Lifeward announced the appointment of Josh Hexter as Interim Chief Executive Officer, effective September 1, 2026, succeeding Mark Grant. On October 26, 2026, Lifeward’s board of directors appointed Ronen Tsimerman as Lifeward’s Chief Financial Officer, principal financial officer and principal accounting officer, effective November 1, 2026, succeeding Almog Adar.
We entered into this transaction as part of our ongoing portfolio optimization and continued focus on high-potential innovation, gaining near-term cash flow and diversified exposure through a significant equity interest in Lifeward’s revenue-generating business; we believe that prior execution challenges at Lifeward were driven primarily by strategy and management rather than by the quality of the underlying technology, and that, with a new strategic direction and leadership team in place, Lifeward is well positioned to realize the full value of its product platform. We further believe the combination delivers long-term upside from the transferred POD™ platform and its refined oral insulin program—for which we retain responsibility for managing the near-term clinical development program—alongside the near-term contribution of Lifeward’s commercial portfolio, ultimately driving meaningful growth and shareholder value.
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Clinical Trial Management Agreement
In connection with the Share Purchase Agreement, we entered into a clinical trial management agreement (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 (the “Study”), including providing clinical trial management and administrative services through completion of the Study (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. To the extent the actual cost of the Study exceeds the $6,500,000 funded to OraTech prior to the Lifeward Closing Date, we will bear such excess costs without additional consideration; based on our current estimates, we do not expect the actual cost of the Study to exceed that amount. The Clinical Trial Management Agreement will terminate upon completion of the Study unless earlier terminated in accordance with the terms set forth therein.
Critical accounting policies and estimates
Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We evaluate our estimates on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. We believe the following critical accounting estimates involve the most significant judgments and estimates used in the preparation of our condensed consolidated financial statements.
During the nine months ended September 30, 2026, the Company entered into significant transactions with Lifeward, which required significant management estimates in determining the fair value of financial instruments received and significant judgment in assessing variable interest entity (“VIE”) considerations in accordance with the applicable accounting guidance.
Fair value measurement of Level 3 financial instruments. Certain of our financial instruments are measured at fair value on a recurring basis using significant unobservable inputs (Level 3), including our investments in Scilex and Hapisga, our real estate loans, our Alpha Tau warrants and the A&R Warrants, A&R Note and Note Warrants issued to us by Lifeward. Determining the fair value of these instruments requires management to apply valuation techniques that incorporate significant judgments and assumptions, such as expected volatility, expected term, discount rates, discounts for lack of marketability and, where applicable, the probability and timing of future events. Changes in these assumptions could materially affect the fair value of these instruments and the related gains or losses recognized in financial income, net.
Deferred taxes. We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities in our financial statements and their respective tax bases, which arise primarily from unrealized gains on our investments measured at fair value. Measuring deferred taxes requires judgment, including with respect to the applicable tax rates, the expected manner and timing of realization of the underlying investments and the realizability of deferred tax assets, including the need for a valuation allowance.
Stock-based compensation – modification of awards. In September 2026, our Compensation Committee approved an exchange of certain outstanding stock options (the “Option Exchange”). We accounted for the Option Exchange as a modification of awards under ASC 718, which requires a comparison of the fair value of the modified awards with the fair value of the original awards immediately before the modification. These fair values are estimated using an option-pricing model that requires assumptions such as expected volatility, expected term and the risk-free interest rate. Based on this assessment, no incremental compensation cost was recognized in connection with the Option Exchange.
There have been no material changes to our critical accounting estimates during the nine months ended September 30, 2026, other than those described above. For additional information about our significant accounting policies, refer to the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report.
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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 4 - 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 September 30, 2026. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act or under other applicable U.S. securities laws or stock exchange rules is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have an adverse effect on our business, operating results or financial condition.
ITEM 1A - RISK FACTORS
Our business, financial condition, results of operations and future growth prospects are subject to various risks, including those described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026, which we encourage you to review. Except as set forth below, there have been no material changes to the risk factors previously disclosed.
A substantial majority of our assets consists of our investment in Alpha Tau, and a decline in the market price of Alpha Tau’s ordinary shares, or our inability to sell those shares at favorable prices, would materially adversely affect our financial condition and results of operations.
As of September 30, 2026, the fair value of the Alpha Tau ordinary shares and warrants we hold was approximately $252.4 million, representing approximately 63% of our total assets. We hold 14,469,335 Alpha Tau ordinary shares, representing approximately 17% of Alpha Tau’s outstanding ordinary shares, and warrants to purchase up to 3,237,000 additional Alpha Tau ordinary shares. Alpha Tau is a clinical-stage medical device company, and the market price of its ordinary shares depends on factors outside our control. These include the results and timing of Alpha Tau’s clinical trials, including its pivotal ReSTART trial; its ability to obtain FDA marketing approval for Alpha DaRT; its ability to manufacture Alpha DaRT at commercial scale; the performance of its collaboration with Tolmar International Ltd.; its need for additional financing and the dilutive effect of any such financing; and general market conditions for small-capitalization and Israeli life sciences companies. Adverse developments in any of these areas could cause the market price of Alpha Tau’s ordinary shares, and the value of our investment, to decline significantly.
In addition, we may be unable to sell our Alpha Tau ordinary shares when we wish to, or at prices that reflect their current quoted market price. Our position is large relative to the trading volume of Alpha Tau’s ordinary shares, and a sale of a significant portion of our holdings, or the perception that such a sale may occur, could depress the market price. We have the right to nominate two of the eight members of Alpha Tau’s board of directors. As a result, we or our nominees may from time to time possess material non-public information about Alpha Tau, and we may be deemed an affiliate of Alpha Tau, so that our ability to sell Alpha Tau shares may be restricted by applicable securities laws, including Rule 144 under the Securities Act of 1933, as amended, and by our insider trading policies. Any sale of Alpha Tau shares would also likely result in substantial taxes; as of September 30, 2026, we had recorded net deferred tax liabilities of approximately $48.0 million, primarily attributable to unrealized gains on our investment in Alpha Tau.
Scilex has not paid its obligations under the Tranche A Note and the Tranche B Note when originally due, and we may be unable to recover the amounts owed to us or to realize the value of our collateral.
As of September 30, 2026, the outstanding principal balance of the Tranche A Note was approximately $7.7 million, together with accrued interest of approximately $19.6 million and an exit fee of approximately $3.1 million, and the outstanding principal balance of the Tranche B Note was approximately $8.0 million. As of that date, the aggregate fair value of our Scilex investments, including the Tranche A Note, the Tranche B Note, the Tranche B Warrants and our rights under the Royalty Purchase Agreement, was approximately $25.2 million. During the nine months ended September 30, 2026, the date for payment of Scilex’s obligations under the notes was extended several times. On October 16, 2026, we agreed to further extend the date for payment in full of all obligations under the notes to November 9, 2026, in exchange for a non-refundable extension fee of $1.0 million, of which $250,000 was paid upon execution of the letter agreement and $750,000 was payable on November 9, 2026. The discount rate of approximately 132% used to value the Tranche A Note as of September 30, 2026 reflects the significant credit risk we believe we face with respect to Scilex.
Although the Tranche A Note is guaranteed by Scilex’s domestic subsidiaries and secured by a first-priority security interest in substantially all of Scilex’s assets, enforcing our rights would likely be costly and time-consuming, and the proceeds from any sale of the collateral may be insufficient to repay the amounts owed to us. If Scilex were to become subject to bankruptcy or insolvency proceedings, our ability to collect payments or enforce our remedies would be stayed, our claims could be challenged or delayed, and we could recover substantially less than the amounts owed to us. Our ability to receive shares of Scilex common stock under the Tranche B Note and the Tranche B Warrants is also limited by a 9.99% beneficial ownership limitation. Payments under the Royalty Purchase Agreement depend on sales of ZTLido and related products. In addition, the fair value of our Scilex investments is determined using significant unobservable (Level 3) inputs and may change materially from period to period. Any failure by Scilex to pay its obligations, or any further extension, restructuring or impairment of the notes, could result in significant losses and materially adversely affect our financial condition and results of operations.
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Our NIS-denominated loan to Hapisga and our other NIS-denominated assets and commitments expose us to foreign currency exchange rate fluctuations and to concentration risk.
Effective April 2, 2026, in connection with an extension of the maturity of our loan to Hapisga Project – New Talpiot Ltd. (“Hapisga”) to April 2, 2028, the principal balance of the loan was converted into New Israeli Shekels and fixed at NIS 100 million, bearing interest at 12% per annum calculated on the NIS-denominated principal. Our financial statements are presented in U.S. dollars. As a result, a depreciation of the NIS against the U.S. dollar reduces the U.S. dollar value of the loan, and such changes are recognized in our results of operations. As of September 30, 2026, the fair value of the Hapisga loan was approximately $37.9 million, representing approximately 9% of our total assets. By way of illustration, a 10% decrease in the U.S. dollar value of the NIS from its September 30, 2026 level would reduce the U.S. dollar fair value of the loan by approximately $3.8 million, before taking interest into account.
The Hapisga loan is also a significant exposure to a single borrower and a single real estate asset in Jerusalem, Israel. Our ability to recover the loan depends on Hapisga’s financial condition, the value of the property and our ability to enforce our security in Israel, which may be time-consuming and costly. We also have other NIS-denominated assets and commitments, including the Profit Sharing Loan Agreement (with a fair value of approximately $3.3 million as of September 30, 2026), our remaining unfunded commitment of approximately NIS 5.4 million to Ruby Sapphire II and a NIS 2 million bank guarantee provided in connection with the Profit Sharing Loan Agreement, as well as NIS-denominated operating expenses in Israel. Fluctuations in the NIS/U.S. dollar exchange rate, as well as adverse developments in the Israeli real estate market, could materially adversely affect the value of these assets and our results of operations.
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of the Company’s equity securities during the three months ended September 30, 2026, other than those previously reported in a Current Report on Form 8-K.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 – OTHER INFORMATION
Guarantee of MAR Bailey Avenue LLC Loan
On November 6, 2026, the Company, together with the principals of MAR Development LLC, entered into a joint and several guaranty of 100% of a $9,000 mortgage loan from Fieldpoint Private Bank & Trust to MAR Bailey Avenue LLC, stepping down to 25% upon satisfaction of a debt service coverage ratio, as well as a completion guaranty and an environmental indemnity. MAR Development LLC, its principals and certain of its affiliates agreed to indemnify the Company for amounts paid under these guarantees.
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Compensatory Arrangements of Certain Officers
On September 24, 2026, the Compensation Committee of the Board approved, and the Company and its wholly-owned subsidiary, Oramed Ltd., entered into, amendments to the consulting and employment agreements of certain of the Company’s executive officers, each effective as of September 1, 2026 unless otherwise noted, as follows:
| (i) | the First Amendment to Consulting Agreement with Avi Gabay, the Company’s Chief Financial Officer, increasing his gross monthly consulting fee to NIS 55,539 (plus VAT, if applicable); | |
| (ii) | the Second Amendment to Employment Agreement, between Oramed Ltd. and Mr. Gabay, providing that Oramed Ltd. will gross up 50% of the income tax attributable to the value of Mr. Gabay’s use of a company car until December 31, 2027; | |
| (iii) | the Second Amendment to Employment Agreement between Oramed Ltd. and Miriam Kidron, the Company’s Chief Scientific Officer, increasing her gross monthly salary to NIS 63,381; | |
| (iv) | the Second Amendment to Consulting Agreement with KNRY Ltd., an entity owned by Dr. Kidron, increasing the gross monthly consulting fee to NIS 82,395 (plus VAT); | |
| (v) | the Fifth Amendment to Consulting Agreement with Shnida Ltd., an entity through which Nadav Kidron, the Company’s President and Chief Executive Officer, provides services, increasing the gross monthly consulting fee to NIS 149,169; and | |
| (vi) | the Eighth Amendment to Employment Agreement between Oramed Ltd. and Joshua Hexter, the Company’s Chief Operating and Business Officer, increasing his full-time gross monthly salary by 15%, from NIS 86,761 to NIS 99,775, of which he is entitled to 5% (NIS 4,989) in light of his reduced position. |
On August 31, 2026, Oramed Ltd. and Joshua Hexter, our Chief Operating and Business Officer entered into the Seventh Amendment to Employment Agreement, effective as of September 1, 2026, which reduced the scope of Mr. Hexter’s position to 5% of a full-time position, reduced his gross monthly salary on a pro rata basis to NIS 4,338 and cancelled his company car benefit.
In addition, on September 24, 2026, the Compensation Committee approved an exchange pursuant to which three executive officers of the Company, Nadav Kidron, Miriam Kidron and Joshua Hexter, exchanged outstanding options to purchase an aggregate of 1,418,499 shares of the Company’s common stock for an aggregate of 633,077 fully vested restricted stock awards, with the number of restricted stock awards determined based on the fair value of the cancelled options (the “Option Exchange”). For further information, see Note 12 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
The foregoing descriptions are qualified in their entirety by reference to the full text of the amendments, which are filed as Exhibits 10.2 through 10.9 to this Quarterly Report on Form 10-Q and incorporated herein by reference.
Rule 10b5-1 Trading Arrangements
On August 31, 2026, Avraham Gabay, the Company’s Chief Financial Officer, adopted a written trading arrangement for the sale of shares of the Company’s common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (the “Rule 10b5-1 Trading Arrangement”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Mr. Gabay’s Rule 10b5-1 Trading Arrangement provides for the sale, from time to time, of up to 150,000 shares of the Company’s common stock issuable upon the vesting and settlement of previously granted RSUs and PSUs. The arrangement will terminate on the earlier of (i) December 31, 2027 and (ii) the date on which all shares subject to the arrangement have been sold.
Sales under the Rule 10b5-1 Trading Arrangement may not commence prior to the expiration of the cooling-off period required by Rule 10b5-1(c). Other than as described above, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
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ITEM 6 – EXHIBITS
| Number | Exhibit | |
| 4.1* | Form of Amended and Restated A&R Senior Secured Convertible Note. | |
| 4.2* | Form of Amended and Restated Ordinary Share Purchase Warrant. | |
| 4.3* | Form of Amended and Restated Pre-Funded Ordinary Share Warrant. | |
| 10.1* | Amendment to Profit Sharing Loan Agreement with Rabi Binyamin 4 Tama 38 Ltd., dated as of July 1, 2026. | |
| 10.2*# | First Amendment to Consulting Agreement, dated as of September 24, 2026 and effective as of September 1, 2026, by and between Oramed Pharmaceuticals Inc. and Avi Gabay. | |
| 10.3*# | Second Amendment to Employment Agreement, dated as of September 24, 2026, by and between Oramed Ltd. and Avi Gabay. | |
| 10.4*# | Second Amendment to Employment Agreement, dated as of September 24, 2026 and effective as of September 1, 2026, by and between Oramed Ltd. and Miriam Kidron. | |
| 10.5*# | Second Amendment to Consulting Agreement, dated as of September 24, 2026 and effective as of September 1, 2026, by and between Oramed Pharmaceuticals Inc. and KNRY Ltd. | |
| 10.6*# | Fifth Amendment to Consulting Agreement, dated as of September 24, 2026 and effective as of September 1, 2026, by and between Oramed Pharmaceuticals Inc. and Shnida Ltd. | |
| 10.7*# | Seventh Amendment to Employment Agreement, dated as of August 31, 2026 and effective as of September 1, 2026, by and between Oramed Ltd. and Joshua Hexter. | |
| 10.8*# | Eighth Amendment to Employment Agreement, dated as of September 24, 2026 and effective as of September 1, 2026, by and between Oramed Ltd. and Joshua Hexter. | |
| 10.9*# | Option Cancellation and Release Agreement between Oramed Pharmaceuticals Inc. and Nadav Kidron, dated September 24, 2026. | |
| 10.10*# | Option Cancellation and Release Agreement between Oramed Pharmaceuticals Inc. and Miriam Kidron, dated September 24, 2026. | |
| 10.11*# | Option Cancellation and Release Agreement between Oramed Pharmaceuticals Inc. and Joshua Hexter, dated September 24, 2026. | |
| 10.12* | Guaranty and Indemnity Agreement by and among MAR Development LLC, Amir Richulsky, Moshe Aronowitz, MAR DevCo LLC, MAR ConstructionCo LLC, and Oramed Pharmaceuticals, Inc., dated November 9, 2026. | |
| 31.1* | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 31.2* | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 32.1** | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350. | |
| 32.2** | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350. | |
| 101* | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements. | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith |
| ** | Furnished herewith |
| # | Indicates a management contract or compensatory plan or arrangement |
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SIGNATURES
Pursuant to the requirements 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. | ||
| Date: November 12, 2026 | By: | /s/ Nadav Kidron |
| Nadav Kidron | ||
| President and Chief Executive Officer | ||
| Date: November 12, 2026 | By: | /s/ Avraham Gabay |
| Avraham Gabay | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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