NOTE 9 - INVESTMENT IN LIFEWARD

Investment in Lifeward Ltd.

In connection with the Lifeward Ordinary Shares (see Note 1 above), the Company received an aggregate of 1,250,363 Lifeward ordinary shares, representing 45% of Lifeward’s outstanding ordinary shares as of the Lifeward Closing Date.

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 Lifeward’s ordinary shares on the Nasdaq Capital Market on the Lifeward Closing Date. The resulting initial carrying value of the investment was $8,165.

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:

Pre-Funded Warrants

The fair value of the Pre-Funded Warrants is determined based on the quoted price of Lifeward’s ordinary shares, adjusted to reflect probability-weighted scenarios considered by management, and is classified as a Level 3 fair value measurement. As of March 31, 2026, the fair value of the Pre-Funded Warrants was $2,449 and is presented within “Investment in Lifeward” as a long-term asset in the consolidated balance sheet.

Share Purchase Warrants

The fair value of the Share Purchase 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 March 31, 2026, the fair value of the Share Purchase Warrants was $2,285 and is presented within “Investment in Lifeward” as a long-term asset in the consolidated balance sheet. 

The following table summarizes the assumptions and estimates used to value the Share Purchase Warrants as of March 25, 2026 and March 31, 2026:

In connection with the Lifeward Revenue Share (see Note 1 above), the estimate is based on Oramed’s forecast. As of March 31, 2026, the balance related to the Lifeward Revenue Share amounted to $472 and is presented within “Investment in Lifeward” in the consolidated balance sheet.

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 $3,000 in exchange for a senior secured promissory note (the “Secured Promissory Note”) bearing interest at 15% per annum and maturing on May 14, 2026, unless earlier repaid or converted in accordance with its terms. The Secured Promissory Note was secured by a lien on Lifeward’s cash and accounts receivable, and the principal and accrued interest thereunder were convertible into Lifeward ordinary shares at a conversion price of $5.40 per share. As of December 31, 2025, the fair value of the Secured Promissory Note was $4,637.

On February 12, 2026, the Company agreed to provide Lifeward with an additional secured promissory note with an initial principal amount of $525, which could be increased by up to an additional $975, bearing interest at 24% per annum and secured by a lien on Lifeward’s cash. As of the Lifeward Closing Date, the Company had funded an aggregate of $1,025 under the additional note.

On the Lifeward Closing Date, the outstanding balance of the Secured Promissory Note and the additional note, including accrued interest thereon, was converted into the Initial Note. The Company funded the remaining principal amount of the Initial Note through an additional cash payment of $4,398. In connection with the transaction, the Company recognized a loss of $1,459.

Initial Note

The valuation of the Initial Note was performed based on a binomial model, using a discount rate of 32%, adjusted to reflect probability-weighted scenarios considered by management over the expected term of the instrument.

The following table summarizes the assumptions and estimates used to value the Initial Note as of March 25, 2026 and March 31, 2026:

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 March 31, 2026 are the same as those used to value the Share Purchase Warrants.

As of March 31, 2026, the fair value of the Initial Note and the Note Warrants was $9,121.

For the three months ended March 31, 2026, the Company recognized a gain of $119 related to changes in the fair value of the Initial Note and the Note Warrants, which is included in financial income (expense), net in the consolidated statements of comprehensive income (loss).