NOTE 4 - INVESTMENTS, AT FAIR VALUE:

2023 Scilex Transaction

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

2024 Refinancing

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

The Company purchased 50% interest in a new tranche B of senior secured convertible notes issued by Scilex (the “Tranche B Note”), with the Company’s share equal to an aggregate principal amount of $25,000, repayable quarterly over two years and maturing on October 8, 2026. The Company also received 107,143 warrants to purchase Scilex common stock at an exercise price of $36.4 per share (the “Tranche B Warrants”). In consideration, the principal balance of the Tranche A Note was reduced by $22,500.

As of March 31, 2026, Scilex has repaid $13,000 of the principal amount outstanding under the Tranche B Note, leaving a remaining principal balance of $12,000 with accrued interest of $390.

The Company acquired the right to receive 4% of worldwide net sales of ZTLido, SP-103, and related products for ten years, in exchange for a $2,500 reduction in the principal balance of the Tranche A Note.

The Company, together with other institutional investors, entered into a binding term sheet for an ex-U.S. license and development arrangement covering certain lidocaine-based products. This license is held through RoyaltyVest (see Note 6).

On January 2, 2025, the Company and the other Tranche B Note holders agreed to defer Scilex’s first amortization payment under the Tranche B Note to October 8, 2026. In consideration, the Company received $877 in cash ($500 principal and $377 accrued interest), 71,429 shares of Scilex common stock, a 2% ten-year royalty on global net sales of Gloperba and Elyxyb (excluding Elyxyb in Canada), and an option (exercised in 2025 through RoyaltyVest) to acquire ex-U.S. rights to Gloperba for $500. See Note 6.

In October 2025, in consideration for deferring an October 1, 2025 amortization payment under the Tranche B Note (which was subsequently paid in November 2025), Scilex agreed to issue the Company warrants to purchase 100,000 shares of Scilex common stock at an exercise price of $20 per share. The warrants were issued on February 19, 2026.

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 (loss), net and include interest income on the Tranche B Note.

The valuation of the Tranche B Note was performed based on the binomial model, using a discount rate of 107.47%.

The following table summarizes the assumptions and estimates used to value the Tranche B Note as of March 31, 2026:

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

The following table summarizes the assumptions and estimates used to value the Note B Warrants as of March 31, 2026:

The value of the Royalty Purchase Agreement was calculated according to the royalty payment schedule and the aggregation of discounted cash flows derived from the royalty payments, using a discount rate of between 107.43% to 114.44%.

As of March 31, 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 $2,909 and $4,488, respectively.

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

Scilex Transaction Summary

The table below represents the fair value cycle of 2023 Scilex Transaction and 2024 Refinancing throughout December 31, 2025 and March 31, 2026:

Financial income (loss) recognized in respect of the 2023 Scilex Transaction and the 2024 Refinancing, for the three months ended March 31, 2026 and 2025, was income of $3,616 and loss of $4,007, respectively.

The table below presents the fair value breakdown as of March 31, 2026:

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

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

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

On September 14, 2025, the Company loaned an additional NIS 0.5 million ($150) to the Borrower (“Additional Loan”). The Additional Loan bears interest at an annual rate of 6% and originally matured on December 31, 2025. The maturity date was subsequently extended to June 30, 2026. According to the Additional Loan agreement, the Company shall be entitled to instruct the Borrower that instead of repaying the Additional Loan on the maturity date, the principal amount of the loan, as well as any accrued interest up to the date of such notice, shall be deemed to constitute a loan amount provided by the Company, as part of the remaining portion of the Profit-Sharing Loan Agreement.

The Company decided to designate the Profit Sharing Loan Agreement as a whole under the Fair-Value option in accordance with Accounting Standards Codification (“ASC”) Topic 825 “Financial Instruments”. The valuation of the Profit Sharing Loan Agreement was based on various project profit scenarios. The Company used the Wang Transform model, a risk-neutral probabilities method, with an expected term of 2.76 years, a curve rate of 16.22% and a risk spread of 0.43%.

As of March 31, 2026 and December 31, 2025, the fair value of the Profit Sharing Loan Agreement and the Additional Loan was $1,933 and $1,890, respectively.

On December 29, 2025, the Company entered into an agreement and committed to invest NIS 7,000 ($2,185) as a limited partner in Ruby Capital Investment Fund Sapphire II, Limited Partnership (“Ruby Sapphire II”), an Israeli private investment fund. The Company’s commitment may be drawn down over time in accordance with the fund’s partnership agreement, and the investment is subject to the risks inherent in private investment funds, including illiquidity and the potential loss of invested capital. On February 5, 2026, the Company had funded NIS 1,556 ($499) under this commitment.

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 March 31, 2026, the fair value of the investment in Ruby Sapphire II was $492.