8-K: Oramed Sells First Tranche of Scilex Warrants for $13M

Oramed Pharmaceuticals Inc. announced Scilex Holding Company repurchased the first tranche of warrants for $13 million, part of a larger $27 million agreement.

Summary

• Oramed Pharmaceuticals Inc. (the Company) previously entered into an Option Agreement for the Repurchase of Warrants with Scilex Holding Company (Scilex) on July 22, 2025.
• Under this agreement, Oramed granted Scilex an option to repurchase warrants for an aggregate of 6,500,000 shares of Scilex common stock at an exercise price of $0.01 per share.
• The total aggregate purchase price for all warrants was set at $27,000,000, to be executed in two tranches.
• On September 30, 2025, Scilex repurchased the first tranche of Subject Warrants, totaling 3,130,000 shares of Scilex Common Stock.
• The purchase price for this first tranche was $13,000,000.
• Scilex retains an option to repurchase the remaining 3,370,000 Subject Warrants from Oramed for a purchase price of $14,000,000.
• This remaining option must be exercised on or before December 31, 2025.

Sentiment

Score: 7

Explanation: The execution of the first tranche of the warrant repurchase agreement provides Oramed with a significant cash inflow as planned, reflecting a positive step in managing its investment portfolio and improving liquidity. This is a positive, expected event.

Positives

• Oramed received a significant cash inflow of $13,000,000 from the first tranche repurchase.
• The execution of this tranche demonstrates progress on a previously disclosed agreement, providing financial certainty.
• The company has a potential future cash inflow of $14,000,000 if Scilex exercises the option for the second tranche.

Negatives

• Oramed relinquishes potential future upside from the 3,130,000 Scilex warrants that were repurchased, should Scilex's stock price appreciate significantly beyond the repurchase terms.

Risks

• Scilex Holding Company may choose not to exercise its option to repurchase the remaining 3,370,000 Subject Warrants by the December 31, 2025 deadline, which would impact Oramed's expected cash inflow.

Future Outlook

Scilex Holding Company retains an option to repurchase the remaining 3,370,000 Subject Warrants from Oramed Pharmaceuticals Inc. for $14,000,000, which must be exercised on or before December 31, 2025.

Management Comments

• Nadav Kidron, President and CEO, signed the report on behalf of Oramed Pharmaceuticals Inc.

Industry Context

This transaction is a specific corporate finance event related to Oramed's investment portfolio and liquidity management, rather than a direct reflection of broader pharmaceutical industry trends. It impacts Oramed's balance sheet by converting an equity-linked asset into cash.

Stakeholder Impact

• Shareholders of Oramed Pharmaceuticals Inc. benefit from the increased cash on the company's balance sheet, which can be used for operations, investments, or other corporate purposes.

Next Steps

• Scilex Holding Company has until December 31, 2025, to exercise its option to repurchase the remaining 3,370,000 Subject Warrants for $14,000,000.

Key Dates

Recommendation

The transaction represents the execution of a previously announced agreement, providing Oramed with a substantial cash infusion. While positive for liquidity, it does not introduce new fundamental drivers for a 'buy' recommendation. The remaining option for Scilex adds a future potential cash event, but the core business operations and long-term outlook are not addressed in this specific filing. Therefore, a 'hold' recommendation is appropriate as investors await further operational updates.

Keywords

Oramed Pharmaceuticals, Scilex Holding Company, Warrants, Repurchase Agreement, Option Agreement, ORMP, Nasdaq Capital Market, Tel Aviv Stock Exchange, Corporate Finance