UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-QSB
x
QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the
quarterly period ended February
29, 2008
o
TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For
the
transition period from ________________ to ________________
Commission
file number 000-50298
ORAMED
PHARMACEUTICALS INC.
(Exact
name of small business issuer as specified in its charter)
Nevada
|
98-0376008
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
2
Elza Street, Jerusalem, Israel 93706
(Address
of principal executive offices)
972-54-7909058
(Issuer's
telephone number)
N/A
(Former
name, former address and former fiscal year, if changed since last
report)
Check
whether the issuer: (1) filed all reports required to be filed by Section 13
or
15(d) of the Exchange Act during
the
past
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. Yes
x
No
o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
o
No
x
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check
whether the registrant filed all documents and reports required to be filed
by
Section 12, 13 or 15(d) of the
Exchange
Act after the distribution of securities under a plan confirmed by a court.
Yes
o No o
APPLICABLE
ONLY TO CORPORATE ISSUERS
State
the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable
date:
46,034,804
common
shares issued and outstanding as at February
29, 2008.
Transitional
Small Business Disclosure Format (Check one): Yes o No x
ORAMED
PHARMACEUTICALS INC.
Table
of Contents
|
Page
|
PART
I- FINANCIAL INFORMATION
|
2
|
Item
1.
|
Financial
Statements
|
2
|
|
Balance
Sheets as of February 29, 2008 and August 31, 2007
|
2
|
|
Statements
of Operations for the periods of six and three months ended
February
29, 2008 and February 28, 2007 and the cumulative period from
April
12, 2002 (inception) to February 29, 2008
|
3
|
|
Statements
of Changes in Capital Equity (Deficit) for the period from April
12,
2002
to February 29, 2008
|
4
|
|
Statements
of Cash Flows for the period of six months ended February 29,
2008
and
February 28, 2007 and the cumulative period from April 12, 2002
(inception)
to
February 29, 2008
|
5
|
|
Notes
to Interim Financial Statements
|
6
|
Item
2.
|
Management’s
Discussion and Analysis and Plan of Operation
|
12
|
Item
3.
|
Controls
and Procedures
|
23
|
|
|
PART
II- OTHER INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
24
|
Item
2.
|
Recent
Sales of Unregistered Securities and Use of Proceeds
|
24
|
Item
3.
|
Defaults
Upon Senior Securities
|
24
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
24
|
Item
5.
|
Other
Information
|
24
|
Item
6.
|
Exhibits
|
25
|
Signatures
|
|
PART
I
Item
1. Financial
Statements
Our
financial statements are stated in thousands United States Dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
ORAMED
PHARMACEUTICALS INC.
(A
development stage company)
CONDENSED
CONSOLIDATED BALANCE SHEETS
U.S.
dollars in thousands
|
|
|
February
29,
|
|
|
August
31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
Unaudited
|
|
|
Audited
|
|
Assets
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
1,145
|
|
$
|
1,918
|
|
Prepaid
expenses and other current assets
|
|
|
84
|
|
|
12
|
|
Total
current assets
|
|
|
1,229
|
|
|
1,930
|
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT,
net
|
|
|
83
|
|
|
2
|
|
DEPOSITS
|
|
|
7
|
|
|
5
|
|
Total
assets
|
|
$
|
1,319
|
|
$
|
1,937
|
|
|
|
|
|
|
|
|
|
Liabilities
and stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
|
111
|
|
$
|
341
|
|
Account
payable with former shareholder
|
|
|
47
|
|
|
47
|
|
Convertible
notes payable
|
|
|
275
|
|
|
275
|
|
Stock
payable
|
|
|
506
|
|
|
761
|
|
Total
current liabilities
|
|
|
939
|
|
|
1,424
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
|
|
Common
stock of $ 0.001 par value - Authorized: 200,000,000 shares at
February 29, 2008 and August 31, 2007; Issued and outstanding: 46,034,804
at February 29, 2008 and 45,231,779
shares
at August 31, 2007, respectively
|
|
|
46
|
|
|
45
|
|
Additional
paid-in capital
|
|
|
5,502
|
|
|
4,947
|
|
Deficit
accumulated during the development stage
|
|
|
(5,168
|
)
|
|
(4,479
|
)
|
Total
stockholders' equity
|
|
|
380
|
|
|
513
|
|
Total
liabilities and stockholders' equity
|
|
$
|
1,319
|
|
$
|
1,937
|
|
The
accompanying notes are an integral part of the consolidated financial
statements.
ORAMED
PHARMACEUTICALS INC.
(A
development stage company)
CONDENSED
CONSOLIDATED STATEMENTS OF EXPENSES
U.S.
dollars in thousands, except share and per share data
|
|
|
|
|
|
|
|
|
|
From
April 12, 2002 (inception)
|
|
|
|
Six
months ended
|
|
Three
months ended
|
|
through
|
|
|
|
February
29
|
|
February
28
|
|
February
29
|
|
February
28
|
|
February
29,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development
|
|
$
|
192
|
|
$
|
136
|
|
$
|
97
|
|
$
|
108
|
|
$
|
2,604
|
|
Loss
from Impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
435
|
|
General
and administrative
|
|
|
534
|
|
|
208
|
|
|
255
|
|
|
161
|
|
|
2,059
|
|
|
|
|
726
|
|
|
344
|
|
|
352
|
|
|
269
|
|
|
5,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expenses (income) - net
|
|
|
(37
|
)
|
|
64
|
|
|
(26
|
)
|
|
63
|
|
|
70
|
|
Net
loss
|
|
$
|
689
|
|
$
|
408
|
|
$
|
326
|
|
$
|
332
|
|
$
|
5,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per share
|
|
$
|
0.01
|
|
$
|
0.01
|
|
$
|
0.01
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in computing basic and diluted net
loss per
share
|
|
|
46,021,061
|
|
|
41,508,022
|
|
|
46,034,804
|
|
|
41,558,702
|
|
The
accompanying notes are an integral part of the consolidated financial
statements.
ORAMED
PHARMACEUTICALS INC.
(A
development stage company)
CONDENSED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
U.S.
dollars in thousands, except share data
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
during
the
|
|
|
stockholders'
|
|
|
|
|
Common
Stock
|
|
|
paid-in
|
|
|
development
|
|
|
equity
|
|
|
|
|
Shares
|
|
|
$
|
|
|
capital
|
|
|
stage
|
|
|
(deficit)
|
|
BALANCE
AS OF APRIL 12, 2002 (Inception)
|
|
|
34,828,200
|
|
$
|
35
|
|
$
|
19
|
|
|
|
|
$
|
54
|
|
NET
LOSS
|
|
|
|
|
|
|
|
|
|
|
$
|
(65
|
)
|
|
(65
|
)
|
BALANCE
AS OF AUGUST 31, 2003
|
|
|
34,828,200
|
|
|
35
|
|
|
19
|
|
|
(65
|
)
|
|
(11
|
)
|
SHARES
CANCELLED
|
|
|
(19,800,000
|
)
|
|
(20
|
)
|
|
20
|
|
|
|
|
|
-
|
|
SHARES
ISSUED FOR INVESTMENT IN ISTI-NJ
|
|
|
1,144,410
|
|
|
1
|
|
|
434
|
|
|
|
|
|
435
|
|
SHARES
ISSUED FOR OFFERING COSTS
|
|
|
1,752,941
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
-
|
|
SHARES
ISSUED CASH
|
|
|
550,000
|
|
|
|
|
|
274
|
|
|
|
|
|
274
|
|
CONTRIBUTIONS
TO PAID IN CAPITAL
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
19
|
|
NET
LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(717
|
)
|
|
(717
|
)
|
BALANCE
AS OF AUGUST 31, 2004
|
|
|
18,475,551
|
|
|
18
|
|
|
764
|
|
|
(782
|
)
|
|
-
|
|
IMPUTED
INTEREST
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
NET
LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(46
|
)
|
|
(46
|
)
|
BALANCE
AS OF AUGUST 31, 2005
|
|
|
18,475,551
|
|
|
18
|
|
|
765
|
|
|
(828
|
)
|
|
(45
|
)
|
SHARES
ISSUED FOR CASH
|
|
|
22,981,228
|
|
|
23
|
|
|
|
|
|
|
|
|
23
|
|
IMPUTED
INTEREST
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
NET
LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(415
|
)
|
|
(415
|
)
|
BALANCE
AS OF AUGUST 31, 2006
|
|
|
41,456,779
|
|
|
41
|
|
|
769
|
|
|
(1,243
|
)
|
|
(433
|
)
|
SHARES
ISSUED FOR CASH
|
|
|
3,650,000
|
|
|
4
|
|
|
1,821
|
|
|
|
|
|
1,825
|
|
SHARES
ISSUED FOR SERVICES
|
|
|
125,000
|
|
|
|
|
|
99
|
|
|
|
|
|
99
|
|
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND
DIRECTORS
|
|
|
|
|
|
|
|
|
2,146
|
|
|
|
|
|
2,146
|
|
DISCOUNT
ON CONVERTIBLE NOTE RELATED TO BENEFICIAL CONVERSION
FEATURE
|
|
|
|
|
|
|
|
|
108
|
|
|
|
|
|
108
|
|
IMPUTED
INTEREST
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
NET
LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(3,236
|
)
|
|
(3,236
|
)
|
BALANCE
AS OF AUGUST 31, 2007
|
|
|
45,231,779
|
|
|
45
|
|
|
4,947
|
|
|
(4,479
|
)
|
|
513
|
|
SHARES
ISSUED FOR CASH
|
|
|
510,000
|
|
|
1
|
|
|
254
|
|
|
|
|
|
255
|
|
SHARES
ISSUED FOR SERVICES
|
|
|
293,025
|
|
|
|
|
|
173
|
|
|
|
|
|
173
|
|
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND
DIRECTORS
|
|
|
|
|
|
|
|
|
126
|
|
|
|
|
|
126
|
|
IMPUTED
INTEREST
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
NET
LOSS
|
|
|
|
|
|
|
|
|
|
|
|
(689
|
)
|
|
(689
|
)
|
BALANCE
AS OF FEBRUARY 29, 2008 (unaudited)
|
|
|
46,034,804
|
|
$
|
46
|
|
$
|
5,502
|
|
$
|
(5,168
|
)
|
$
|
380
|
|
The
accompanying notes are an integral part of the consolidated financial
statements.
ORAMED
PHARMACEUTICALS INC.
(A
development stage company)
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
U.S.
dollars in thousands
|
|
|
|
|
|
From
April 12, 2002 (inception date)
|
|
|
|
Six
months ended
|
|
through
|
|
|
|
February
29,
|
|
February
28,
|
|
February
29,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
|
|
Unaudited
|
|
Unaudited
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(689
|
)
|
$
|
(408
|
)
|
$
|
(5,168
|
)
|
Adjustments
required to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1
|
|
|
|
|
|
1
|
|
Amortization
of debt discount
|
|
|
|
|
|
60
|
|
|
108
|
|
Stock
option expense
|
|
|
126
|
|
|
94
|
|
|
2,272
|
|
Common
stock issued for services
|
|
|
3
|
|
|
99
|
|
|
102
|
|
Loss
on impairment of investment
|
|
|
|
|
|
|
|
|
435
|
|
Imputed
interest
|
|
|
2
|
|
|
2
|
|
|
11
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses and other current assets
|
|
|
(72
|
)
|
|
|
|
|
(84
|
)
|
Accounts
payable and accrued expenses
|
|
|
(60
|
)
|
|
(14
|
)
|
|
279
|
|
Total
net cash used in operating activities
|
|
|
(689
|
)
|
|
(167
|
)
|
|
(2,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment
|
|
|
(82
|
)
|
|
|
|
|
(84
|
)
|
Lease
deposits
|
|
|
(2
|
)
|
|
|
|
|
(7
|
)
|
Total
net cash used in investing
|
|
|
|
|
|
|
|
|
|
|
activities
|
|
|
(84
|
)
|
|
|
|
|
(91
|
)
|
CASH
FLOWS FROM FINANCING
|
|
|
|
|
|
|
|
|
|
|
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from sales of common stock
|
|
|
|
|
|
|
|
|
2,433
|
|
Cash
received for stock payable
|
|
|
|
|
|
|
|
|
506
|
|
Proceeds
from convertible notes
|
|
|
|
|
|
125
|
|
|
275
|
|
Proceeds
from short term note payable
|
|
|
|
|
|
20
|
|
|
120
|
|
Payments
of short term note payable
|
|
|
|
|
|
(20
|
)
|
|
(120
|
)
|
Shareholder
advances
|
|
|
|
|
|
|
|
|
66
|
|
Net
cash provided by financing activities
|
|
|
|
|
|
125
|
|
|
3,280
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
(773
|
)
|
|
(42
|
)
|
|
1,145
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
|
|
1,918
|
|
|
176
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF
|
|
|
|
|
|
|
|
|
|
|
PERIOD
|
|
$
|
1,145
|
|
$
|
134
|
|
$
|
1,145
|
|
|
|
|
|
|
|
|
|
|
|
|
Non
cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services rendered
|
|
$
|
170
|
|
|
|
|
$
|
170
|
|
Stock
issued for stock payable
|
|
$
|
255
|
|
|
|
|
|
|
|
Discount
on convertible note from BCF
|
|
|
|
|
$
|
60
|
|
|
108
|
|
Shares
issued for offering costs
|
|
|
|
|
|
|
|
|
2
|
|
Forgiveness
of debt by shareholder
|
|
|
|
|
|
|
|
$
|
19
|
|
The
accompanying notes are an integral part of the consolidated financial
statements.
ORAMED
PHARMACEUTICULS, Inc.
(formerly
Integrated Securities Technologies, Inc.)
(A
development stage company)
NOTES
TO
INTERIM FINANCIAL STATEMENTS
NOTE
1 - SIGNIFICANT ACCOUNTING POLICIES:
|
1.
|
Oramed
Pharmaceuticals, Inc. (“Oramed”) was
incorporated on April 12, 2002, under the laws of the State of Nevada.
From incorporation until March 3, 2006, Oramed was an exploration
stage
company engaged in the acquisition and exploration of mineral properties.
On February 17, 2006, Oramed entered into an agreement with Hadasit
Medical Services and Development Ltd. to acquire the provisional
patent
related to a method of preparing insulin so that it may be taken
orally to
be used for the treatment of individuals with diabetes. Oramed has
been in
the development stage since its formation and has not yet realized
any
revenues from its planned
operations.
|
On
May
14, 2007, Oramed incorporated a wholly-owned subsidiary in Israel, Oramed Ltd.
("the subsidiary"), which is engaged in research and development.
|
2.
|
The
accompanying unaudited interim consolidated financial statements
as of
February 29, 2008 and for the six and three months then ended, have
been
prepared in accordance with accounting principles generally accepted
in
the United States relating to the preparation of financial statements
for
interim periods. Accordingly, they do not include all the information
and
footnotes required for annual financial statements. In the opinion
of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating
results for the six months ended February 29, 2008, are not necessarily
indicative of the results that may be expected for the year ending
August
31, 2007.
|
|
3.
|
Going concern
considerations |
Oramed
has incurred losses since inception and has no revenues through February 29,
2008. The process of developing commercial products will require significant
additional expenditures for research and development, maintaining the key
technology license, pre-clinical testing and clinical trials, as well as
obtaining regulatory approval. These activities, together with general and
administrative expenses, are expected to result in substantial operating losses
in the foreseeable future.
In
the
event Oramed is unable to successfully raise capital and generate revenues,
it
is unlikely that Oramed will have sufficient cash flows and liquidity to finance
its business operations as currently contemplated. Accordingly, Oramed will
likely reduce general and administrative expenses and cease or delay development
projects until it is able to obtain sufficient financing. There can be no
assurance that additional funds will be available on terms acceptable to Oramed,
or at all.
These
conditions raise substantial doubt about Oramed's ability to continue to operate
as a going concern. The accompanying financial statements do not include any
adjustments to reflect the possible future effect on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.
ORAMED
PHARMACEUTICULS, Inc.
(formerly
Integrated Securities Technologies, Inc.)
(A
development stage company)
NOTES
TO
INTERIM FINANCIAL STATEMENTS
NOTE
1 - SIGNIFICANT ACCOUNTING POLICIES (continued):
|
|
The
Company implements Statement of Financial Accounting Standards
No. 123 (revised 2004) “Share-based Payment” (“FAS 123(R)”). FAS
123(R) requires awards classified as equity awards be accounted for
using
the grant-date fair value method. The fair value of share-based payment
transactions is recognized as expense over the requisite service
period,
net of estimated forfeitures. The company recognizes compensation
cost for
an award with only service conditions that has a graded vesting schedule
using the accelerated method of amortization under FAS 123(R) over
the
requisite service period for the entire
awards.
|
On
March
2005, the Securities and Exchange Commission issued Staff Accounting Bulletin
No. 107 (“SAB 107”). SAB 107 provides supplemental implementation guidance
on FAS 123(R), including guidance on valuation methods, inventory capitalization
of share-based compensation cost, income statement effects, disclosures and
other issues. SAB 107 requires share-based payment to be classified in the
same
expense line items as cash compensation. The company has applied the provisions
of SAB 107 in its adoption of FAS 123(R).
The
Company accounts for equity instruments issued to third party service providers
(non-employees) in accordance with the fair value based on an option-pricing
model, pursuant to the guidance in EITF 96-18 “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling Goods or Services”. The fair value of the options granted is revalued
over the related service periods and recognized over the vesting
period.
|
c.
|
Recently Issued Accounting
Pronouncements |
|
1.
|
In
December 2007, the FASB issued Statement of Financial Accounting
Standards
No. 141 (revised 2007), "Business Combinations" ("SFAS 141(R)". SFAS
141(R) changes the accounting for business combinations, including
the
measurement of acquirer shares issued in consideration for a business
combination, the recognition of contingent consideration, the accounting
for contingencies, the recognition of capitalized in-process research
and
development, the accounting for acquisition-related restructuring
cost
accruals, the treatment of acquisition related transaction costs
and the
recognition of changes in the acquirer’s income tax valuation allowance
and income tax uncertainties. SFAS 141(R) applies prospectively to
business combinations for which the acquisition date is on or after
the
beginning of the first annual reporting period beginning on or after
December 15, 2008. Early application is prohibited. The Company will
be
required to adopt SFAS 141(R) on September 1,
2009.
|
ORAMED
PHARMACEUTICULS, Inc.
(formerly
Integrated Securities Technologies, Inc.)
(A
development stage company)
NOTES
TO
INTERIM FINANCIAL STATEMENTS
NOTE
1 - SIGNIFICANT ACCOUNTING POLICIES (continued):
|
2.
|
In
December 2007, the FASB issued FAS No. 160, “Noncontrolling Interests
in Consolidated Financial Statements - an amendment of Accounting
Research
Bulletin No. 51” (“FAS No. 160”). FAS No. 160 establish
accounting and reporting standards for non-controlling interests
in a
subsidiary and deconsolidation of a subsidiary. Early adoption is
not
permitted. As applicable to the Company, these statements will be
effective as of the year beginning September 1, 2009. The Company is
currently evaluating the potential impact, if any, the adoption of
FAS
No. 160 would have on its consolidated financial
statements.
|
|
3.
|
In
September 2006, the FASB issued Statement of Financial
Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”).
SFAS 157 defines fair value, establishes a framework and gives guidance
regarding the methods used for measuring fair value, and expands
disclosures about fair value measurements. SFAS 157 is effective for
financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years
(September 1, 2008, for the Company). The Company is currently assessing
the impact that SFAS 157 may have on its results of operations and
financial position.
|
|
4.
|
In
February 2007, the FASB issued Statement of Financial
Accounting Standards No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities - including an amendment of FASB
Statement No. 115” (“SFAS 159”). SFAS 159 is expected to expand the
use of fair value accounting but does not affect existing standards
which
require certain assets or liabilities to be carried at fair value.
The
objective of SFAS 159 is to improve financial reporting by providing
companies with the opportunity to mitigate volatility in reported
earnings
caused by measuring related assets and liabilities differently without
having to apply complex hedge accounting provisions. Under SFAS 159,
a
company may choose, at its initial application or at other specified
election dates, to measure eligible items at fair value and report
unrealized gains and losses on items for which the fair value option
has
been elected in earnings at each subsequent reporting date. SFAS 159
is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal
years (September 1, 2008, for the Company). If the Company is to
elect the
fair value option for its existing assets and liabilities, the effect
as
of the adoption date, shall be reported as a cumulative-effect adjustment
to the opening balance of retained earnings. The Company is currently
assessing the impact that SFAS 159 may have on its financial
position.
|
ORAMED
PHARMACEUTICULS, Inc.
(formerly
Integrated Securities Technologies, Inc.)
(A
development stage company)
NOTES
TO
INTERIM FINANCIAL STATEMENTS
NOTE
1 - SIGNIFICANT ACCOUNTING POLICIES (continued):
|
5.
|
In
December 2007, the FASB ratified EITF Issue No. 07-01, "Accounting
for
Collaborative Arrangements" ("EITF 07-01"). EITF 07-01 defines
collaborative arrangements and establishes reporting requirements
for
transactions between participants in a collaborative arrangement
and
between participants in the arrangement and third parties. EITF 07-01
also
establishes the appropriate income statement presentation and
classification for joint operating activities and payments between
participants, as well as the sufficiency of the disclosures related
to
these arrangements. EITF 07-01 is effective for fiscal years beginning
after December 15, 2008 (September 1, 2009, for the Company). EITF
07-01
shall be applied using modified version of retrospective transition
for
those arrangements in place at the effective date. An entity should
report
the effects of applying this Issue as a change in accounting principle
through retrospective application to all prior periods presented
for all
arrangements existing as of the effective date, unless it is impracticable
to apply the effects the change retrospectively. The Company is currently
assessing the impact that EITF 07-01 may have on its results of operations
and financial position.
|
NOTE
2 - CONVERTIBLE NOTES:
In
February 2007, Oramed borrowed $125,000 on a convertible note without interest,
due on demand and unsecured. The note is convertible at $0.50 per share.
Oramed
analyzed the conversion option of the note and determined it did not require
derivative treatment under FAS 133 and EITF 00-19. Oramed also analyzed the
note
under EITF 98-5 and EITF 00-27 to determine if it contained a beneficial
conversion feature. It was determined that the note did contain a beneficial
conversion feature with an intrinsic value of $60,000. Because the note is
due
on demand, the entire amount of the beneficial conversion feature was amortized
immediately to interest expense.
In
May
2007, Oramed borrowed $150,000 on a convertible note without interest, due
on
demand and unsecured. The note is convertible at $0.50 per share. Oramed
analyzed the conversion option of the note and determined it did not require
derivative treatment under FAS 133 and EITF 00-19. Oramed also analyzed the
note
under EITF 98-5 and EITF 00-27 to determine if it contained a beneficial
conversion feature. It was determined the note did contain a beneficial
conversion feature with an intrinsic value of $48,000. Because the note is
due
on demand, the entire amount of the beneficial conversion feature was amortized
immediately to interest expense.
|
|
|
February
29,
|
|
|
|
|
2008
|
|
|
|
|
In
thousands
|
|
|
|
|
|
|
Principal
|
|
$
|
275,000
|
|
Less:
beneficial conversion feature
|
|
|
(108,000
|
)
|
Add:
amortization
|
|
|
108,000
|
|
Carrying
value
|
|
$
|
275,000
|
|
ORAMED
PHARMACEUTICULS, Inc.
(formerly
Integrated Securities Technologies, Inc.)
(A
development stage company)
NOTES
TO
INTERIM FINANCIAL STATEMENTS
NOTE
3 - STOCK PAYABLE:
During
fiscal 2006, Oramed sold 1,012,317 shares of common stock for $506,000. As
of
February 29, 2008 the shares sold in these transactions had not been issued
and
are recorded as a stock payable.
NOTE 4
- COMMON STOCK
Stocks
issued for stock payable
During
the six months ended February 29, 2008, Oramed issued 510,000 shares of common
stock at a price per share of $0.5, for cash received in the prior year.
Stocks
issued for services
On
September 7, 2007, Oramed issued 283,025 shares of common stock valued at
$170,000 to a third party, for services rendered in the prior year. On November
8, 2007, Oramed also issued 10,000 shares as a finder’s fee to a placement agent
valued at $3,000.
Stock
options issued for services
Oramed
estimates the fair value of stock options granted using the Black-Scholes
option-pricing model. The option-pricing model requires a number of assumptions,
of which the most significant are, expected stock price volatility and the
expected option term. Expected volatility used is 115% and was calculated based
upon actual historical stock price movements over the most recent periods ending
on February 29, 2008, equal to the expected option term. The expected option
term represents the period that Oramed's stock options are expected to be
outstanding. Oramed has historically not paid dividends and has no foreseeable
plans to issue dividends. The risk-free interest rate is 2.25% and is based
on
the yield from U.S. Treasury zero-coupon bonds with an equivalent term.
ORAMED
PHARMACEUTICULS, Inc.
(formerly
Integrated Securities Technologies, Inc.)
(A
development stage company)
NOTES
TO
INTERIM FINANCIAL STATEMENTS
NOTE 4
- COMMON STOCK (continued):
On
September 4, 2007, Oramed granted 300,000 warrants to two consultants for
services with a fair value of $97,000. The warrants are exercisable at $0.45
per
share for two years and vest monthly over one year. Oramed recognized $48,000
of
expense during the six months ended February 29, 2008 related to options
granted. On October 30, 2007, Oramed granted to an advisory board member options
to purchase 100,000 shares of Oramed's common stock at an exercise price of
$
0.76 per share with a fair value of $25,000. The options vest in one and a
half
years on a monthly basis. Oramed recognized $11,000 of expense during the six
months ended February 29, 2008 related to options granted.
Oramed
recognized $67,000 of expense during the six months ended February 29, 2008
related to options granted in prior years.
Item
2. Management's
Discussion and Analysis and Plan of Operation.
This
quarterly report contains forward-looking statements as that term is defined
in
the Private Securities Litigation Reform Act of 1995. These statements relate
to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks and uncertainties
related to the progress, timing, cost, and results of clinical trials and
product development programs; difficulties or delays in obtaining regulatory
approval for our product candidates; competition from other pharmaceutical
or
biotechnology companies; the company’s ability to obtain additional funding
required to conduct its research, development and commercialization activities;
and the risks in the section entitled "Risk Factors," that may cause our or
our
industry's actual results, levels of activity, performance or achievements
to be
materially different from any future results, levels of activity, performance
or
achievements expressed or implied by these forward-looking
statements.
Although
we believe that the expectations reflected in the forward-looking statements
are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our
financial statements are stated in United States Dollars (US$) and are prepared
in accordance with United States Generally Accepted Accounting Principles.
In
this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "common shares" refer
to
the common shares in our capital stock.
As
used
in this quarterly report, the terms "we", "us", "our", and "Oramed" means Oramed
Pharmaceuticals Inc., unless otherwise indicated.
Our
Business
We
are a
pharmaceutical company engaged in the research and development of innovative
pharmaceutical solutions, including an orally ingestible insulin pill to be
used
for the treatment of individuals with diabetes, rectal application of insulin,
flu vaccines, use of oral ingestible pills for delivery other polypeptides
and
use of rectal application for delivery of other polypeptides.
On
March
8, 2006 we executed an agreement with Hadasit Medical Services and Development
Ltd. (“Hadasit”) to acquire provisional patent application No. 60/718716 and
related intellectual property. The provisional patent application No. 60/718716
related to a method of preparing insulin so that it may be taken orally to
be
used in the treatment of individuals with diabetes. Based on provisional patent
application No. 60/718716, we filed a patent application under the Patent
Cooperation Treaty at the Israel Patent Office for "Methods and Compositions
for
Oral Administration of Proteins" on August 31, 2006.
The
provisional patent application No. 60/718716 was set to expire on September
6,
2006. On August 31, 2006, we filed a formal patent application under the Patent
Cooperation Treaty at the Israel Patent Office for "Methods and Compositions
for
Oral Administration of Proteins" and claimed priority based on provisional
patent application No. 60/718716. All countries were designated and the United
States Patent and Trademark Office was designated as the Search and Examination
Authority.
On
October 26, 2006, we executed an agreement with Swiss Caps AG. Under the terms
of the agreement Swiss Caps AG agreed to manufacture oral gel capsules for
clinical testing of our oral insulin product. All amounts due in payment to
Swiss Caps AG have been paid in shares of our common stock.
On
January 30, 2007 we formed a scientific advisory committee to provide scientific
advice to our board of directors. Our advisory committee does not have authority
to make decisions, carry out any functions or bind us to any obligations.
Currently, members of our scientific advisory committee include Dr. Harold
Jacob, Dr. Nir Barzilai, Dr. Itamar Raz, Prof. Ele Ferrannini, Dr. Derek LeRoith
and Dr. John Ziemniak.
|
·
|
Dr.
Harold Jacob has a background in medical sciences as well as in
biotechnology and medical devices. He practiced clinical gastroenterology
in New York and served as Chief of Gastroenterology at St. Johns
Episcopal
Hospital and South Nassau Communities Hospital, and was a Clinical
Assistant Professor of Medicine at SUNY.
|
|
·
|
Dr.
Barzilai is the Director of the Institute for Aging Research at the
Albert
Einstein College of Medicine. He is currently an Associate Professor
in
the Department of Medicine, Molecular genetics and the Diabetes Research
Center and is a member of the Divisions of Endocrinology and Geriatrics.
He is also the Director of the Montefiore Hospital Diabetes
Clinic.
|
|
·
|
Dr.
Itamar Raz, is a professor of Internal Medicine at Hadassah University
Medical Center and the head of the Diabetes Unit at Hadassah. During
1992-2005 he served as the President of the Israel Diabetes Association.
He is the head of the Israel National Council of Diabetes and president
of
D-Cure, a foundation that supports research in the field of diabetes.
|
|
·
|
Professor
Ele Ferrannini has worked with various institutions including the
Department of Internal Medicine, University of Pisa School of Medicine,
and CNR (National Research Council) Institute of Clinical Physiology,
Pisa, Italy; Diabetes Division, Department of Medicine, University
of
Texas Health Science Center at San Antonio, Texas, USA. He also has
published over 350 original papers and 50 book chapters.
|
|
·
|
Dr.
Derek LeRoith has served as the Chief of the Diabetes Branch at the
National Institute of Diabetes, Digestive and Kidney Diseases in
the
National Institute of Health in Maryland, and he is now serving as
the
Chief of the Division of Endocrinology, Diabetes and Bone Diseases.
He is
a prominent member in over 15 professional societies globally, including
the Society for Endocrinology, Metabolism and Diabetes of South Africa,
the European Association for the Study of Diabetes, and the American
Diabetes Association.
|
|
·
|
Dr.
John Ziemniak has over 20 years experience in the pharmaceutical
industry.
He has worked extensively in drug development having been involved
in the
conception, filing, and approval of over 13 NDAs and greater then
20 INDs
covering a wide variety of drugs and
indications.
|
Orally
Ingestible Insulin
On
May 1,
2007, we commenced Phase I of our clinical trials of our orally ingestible
insulin pill. These trials were conducted in Jerusalem, Israel on a small group
of healthy human volunteers in order to evaluate safety studies. The United
States of America Food and Drug Administration recognizes clinical trials in
Israeli hospitals.
On
June
19, 2007, we approved a proposal with the Encorium Group Inc., a contract
research organization, which provides comprehensive clinical and drug
development solutions, to assist us in the design, implementation, advancement,
and oversight of a scientific and regulatory strategic plan for the filing
and
approval of our orally ingestible insulin pill capsule. Under the terms of
the
Proposal, Encorium Group Inc. is paid hourly fees ranging from US $283 to US
$450 for their services, depending on level of expertise of the medical
personnel.
On
August
14, 2007, we successfully completed our exploratory Phase 1A clinical trial
with
our oral insulin capsule. The study was intended to assess both the
safety/tolerability and absorption properties of our proprietary oral insulin
delivery technology. Based on the pharmacokinetic and pharmacologic outcomes
of
this early stage trial, we decided to continue the development of our oral
insulin product.
On
November 15, 2007, we successfully completed animal studies for Phase 1B trials
of our oral insulin capsule. On January 22, 2008 we commenced Phase 1B of our
clinical trials of our oral insulin capsule, using a group of healthy human
volunteers to assess the optimization of dosage for the formulation of our
proprietary oral insulin delivery technology. On March 11, 2008, we successfully
completed our Phase 1B clinical trials.
On
March
18, 2008, we were granted approval by the Institutional Review Board Committee
of Hadassah Medical Center in Jerusalem to conduct a Phase 2A study, which
we
commenced on April 13, 2008, to evaluate the safety and efficacy of
our oral insulin capsule on Type II diabetic volunteers.
Rectal
Application of Insulin
On
May 2,
2007 we filed two additional provisional patents for a suppository application
to our technology portfolio. The first patent focuses on a rectal application
for insulin. The second patent focuses on the usage of this rectal application
to other polypeptides that at present are required to be injected.
On
January 30, 2008, we entered into a master service agreement with OnQ
Consulting, a clinical research organization located in Johannesburg, South
Africa, to conduct Phase 1 clinical trials for the rectal application of
insulin. The trials are expected to be completed by the third quarter of
2008.
Plan
of Operation in the Next Twelve Months
For
the
next twelve months, we plan to conduct further research and development on
the
technology covered by the patent application "Methods and Composition for Oral
Administration of Proteins", which we acquired from Hadasit, as well as the
other patents we have filed since. Through our research and development efforts,
we intend to develop a pill that will not break down in the stomach or
intestines and will be effective in delivering insulin to the bloodstream for
the treatment of diabetes. The enzymes and compounds that are added to the
insulin to make the pill must not change the composition of the insulin once
it
is absorbed into the bloodstream and the pill must be safe to ingest. We plan
to
continue to conduct clinical trials to show the effectiveness of our technology.
Specifically, we intend to conduct the clinical trials necessary to file an
Investigational New Drug Application with the Food and Drug Administration.
We
also plan to conduct research and development of other innovative pharmaceutical
solutions, including rectal application of insulin, flu vaccines, use of oral
ingestible pills for delivery other polypeptides and use of rectal application
for delivery of other polypeptides.
Governmental
Approval and Effect of Regulations
Our
business is subject to extensive regulation by the Food and Drug Administration,
other governmental authorities in the United States and governmental authorities
in other countries.
The
duration of the governmental approval process for marketing new pharmaceutical
substances, from the commencement of preclinical testing to the receipt of
governmental approval for marketing a new product, varies with the nature of
the
product and with the country in which such approval is sought. For new chemical
entities, the approval process could take eight to ten years or more. For
reformulations of existing drugs, as management believes our potential product
should be considered, typically the process is shorter. In either case, the
procedures required to obtain governmental approval to market new drug products
will be costly and time-consuming for us, requiring rigorous testing of the
new
drug product. Even after such time and effort, regulatory approval may not
be
obtained for our products.
Before
we
can market or even transport a new human pharmaceutical product commercially
in
the United States, regulations require that we file an Investigational New
Drug
Application, conduct clinical trials and file an Investigational New Drug
Application with the Food and Drug Administration.
In
order
to conduct the clinical investigations necessary to obtain regulatory approval
in the U.S., we must file an Investigational New Drug Application with the
Food
and Drug Administration to permit the shipment and use of the drug for
investigational purposes. The Investigational New Drug Application will state,
in part, the results of preclinical (laboratory and animal) toxicology testing
that we have conducted and our initial Phase I plans for clinical (human)
testing. Unless notified that testing may not begin, the clinical testing may
commence 30 days after filing an Investigational New Drug
Application.
Under
Food and Drug Administration regulations, the clinical testing program required
for marketing approval of a new drug typically involves three clinical phases.
In Phase I, safety studies are generally conducted on normal, healthy human
volunteers to determine the maximum dosages and side effects associated with
increasing doses of the substance being tested. In Phase II, studies are
conducted on small groups of patients, in our case those who have diabetes
or
blood sugar problems, to gain preliminary evidence of efficacy and to determine
the common short-term side effects and risks associated with the new product.
Phase III involves large-scale trials conducted on disease-afflicted patients
to
provide statistical evidence of efficacy and safety and to provide an adequate
basis for product labeling. Frequent reports are required in each phase and,
if
unwarranted hazards to patients are found, the Food and Drug Administration
may
request modification or discontinuance of clinical testing until further studies
have been conducted. Phase IV testing is sometimes conducted, either to meet
Food and Drug Administration requirements for additional information as a
condition of approval, or to gain post-approval market acceptance of the
pharmaceutical product. See “Our Business” above for a description of the
clinical trials that have been completed as of the date of this
Report.
Once
the
above phases of clinical testing have been completed, we will be required to
file an Investigational New Drug Application with the Food and Drug
Administration seeking approval for marketing the drug product. The Food and
Drug Administration will review the Investigational New Drug Application to
determine whether the drug is safe and effective, and adequately labeled, and
whether the applicant can demonstrate proper and consistent manufacture of
the
drug. The time required for Food and Drug Administration action on an
Investigational New Drug Application varies considerably, depending on the
characteristics of the drug, whether the Food and Drug Administration needs
more
information than is originally provided in the Investigational New Drug
Application and whether the Food and Drug Administration has concerns with
the
evidence submitted.
The
facilities of each company involved in the commercial manufacturing, processing,
testing, control and labeling of pharmaceutical products must be registered
with
and approved by the Food and Drug Administration. Continued registration
requires compliance with Good Manufacturing Practices regulations and the Food
and Drug Administration conducts periodic establishment inspections to confirm
continued compliance with its regulations.
We
are
subject to various federal, state and local laws, regulations and
recommendations relating to such matters as laboratory and manufacturing
practices and the use, handling and disposal of hazardous or potentially
hazardous substances used in connection with our research and development work.
We do not produce any drugs at this time and are not subject to these commercial
manufacturing regulations at this time. However, it is important for the company
to be aware of these standards in case a need for compliance develops in the
future.
Research
and Development
We
have
spent approximately $2,604,000 during the last two fiscal years on the research
and development of our orally ingestible insulin pill capsules. We plan to
conduct research and development on innovative pharmaceutical solutions,
including an orally ingestible insulin pill to be used for the treatment of
individuals with diabetes, rectal application of insulin, flu vaccines, use
of
oral ingestible pills for delivery other polypeptides and use of rectal
application for delivery of other polypeptides.
Marketing,
Advertising and Promotion
We
will
not conduct any marketing, advertising or promotion activities for our potential
products in the next twelve months as the potential products are still only
in
research and development stage.
Employees
Currently
we have four employees: Nadav Kidron our President, Chief Executive Officer
and
a director; Miriam Kirdon, our Chief Medical and Technology Officer and a
director; Alex Werber, our Chief Financial Officer and Treasurer; and Tara
Horn,
who serves as our office manager in Israel. Both Mr. Nadav Kidron and Dr. Miriam
Kidron provide services to our company pursuant to employment agreements we
entered into with KNRY Ltd., an Israel company, dated August 1, 2007. In
connection with our agreement with Hadasit, dated February 17, 2006, pursuant
to
which we acquired provisional patent application 60/718716, we agreed to grant
to Dr. Miriam Kidron, the then primary researcher at Hadasit and currently
our
Chief Medical and Technology Officer and a director, an option to purchase
3,361,360 shares of our common stock at the exercise price of $0.001 per share.
On
August
1, 2007, we also entered into an employment agreement with Mr. Alex Werber
to
serve as our chief financial officer. We also intend to periodically hire
independent contractors to execute our research and development activities.
We
may hire employees when circumstances warrant. Effective January 17, 2008,
George Drazenovic resigned as director and secretary of our company. As a
result, another of our directors, Leonard Sank, was appointed to act as the
secretary of our company. Effective January 18, 2008, we entered into an expense
agreement with Mr. Sank to remunerate Mr. Sank for expenses incurred by him
in
connection with his role as a director of our company.
Competition
Our
direct competitors are those companies that are also developing methods for
administration of insulin through ingestible pills or capsules. To our
knowledge, such companies include Biocon Ltd. in India and Biodel, Inc. in
the
United States. Many other companies indirectly compete with us by developing
methods that allow for the administration of insulin through other means such
as
inhalers, into the lungs and then into the bloodstream. Eli Lilly & Co.,
Alkermes and Mannkind Corp. are developing dry powder insulin products. Novo
Nordisk and Aradigm Corp. are developing inhalable liquid insulin.
Intellectual
Property
We
have
filed the following patent applications and provisional patent applications:
Title
|
|
Jurisdiction
|
|
Patent
Application #
|
Methods
and Compositions For Oral Administration of Proteins
|
|
Patent
Cooperation Treaty, All countries were designated and the United
States
Patent and Trademark Office was designated as the Search and Examination
Authority.
|
|
PCT/IL2006/001019
(60/718716)
|
|
|
|
|
|
Provisional
patent application for methods and compositions for rectal application
for
insulin
|
|
The
United States Patent and Trademark Office
|
|
60/924.004
|
|
|
|
|
|
Provisional
patent application for methods and compositions for rectal application
of
proteins
|
|
The
United States Patent and Trademark Office
|
|
60/024.005
|
|
|
|
|
|
Provisional
patent application for method and compositions for oral administration
of
proteins
|
|
The
United States Patent and Trademark Office
|
|
11/513.343
|
Corporate
History
We
were
incorporated on April 12, 2002, under the laws of the State of Nevada. From
incorporation until March 3, 2006, we were an exploration stage company engaged
in the acquisition and exploration of mineral properties. We were unsuccessful
in that endeavor and have now become a pharmaceutical research and development
company.
Effective
April 10, 2006, we changed our name from "Integrated Security Technologies,
Inc." to "Oramed Pharmaceuticals Inc." when we merged with our newly formed
subsidiary, Oramed Pharmaceuticals Inc.
Plan
of Operations
Capital
Resource Requirements
For
the
next 12 months ending February 28, 2009, we will be required to cover a total
of
approximately $2,850,000 for our proposed research and development and business
activities. This budget includes the salaries of the research team, office
costs, cost of trials and materials, among others, all of them necessary to
execute our plan of operations. The following table provides a cost-breakdown
of
the first year of operations.
The
following table provides
a
cost-breakdown of the upcoming year of operations.
Estimated
Funding Required During the Next 12 Months
|
|
|
|
Operations
|
|
$
|
350,000
|
|
Research
and Development
|
|
$
|
1,500,000
|
|
Clinical
Studies
|
|
$
|
1,000,000
|
|
Total
|
|
$
|
2,850,000
|
|
Financial
Condition, Liquidity and Capital Resources
At
February 29, 2008, we had a working capital of $290,000. At February 29, 2008,
we had $1,145,000 in cash and cash equivalents.
We
did
not generate any revenue in the six months period ended February 29, 2008 and
we
have not generated any revenue since inception. We have incurred a loss of
$689,000 in the six months ended February 29, 2008. We do not expect any
significant changes in the number of our employees.
There
are
no assurances that we will be able to obtain the amount required for our
continued operations. In such event that we do not raise sufficient additional
funds by secondary offering or private placement, we will consider alternative
financing options, if any, or be forced to scale down or perhaps even cease
our
operations.
Going
Concern
The
continuation of our business is dependent upon us raising additional financial
support. The issuance of additional equity securities by us could result in
a
significant dilution in the equity interests of our current stockholders.
Obtaining commercial or other loans, assuming those loans would be available,
will increase our liabilities and future cash commitments.
We
have
historically incurred losses, and through February 29, 2008 have incurred losses
of $5,168,000 from our inception. Because of these historical losses, we will
require additional working capital to develop our business operations.
There
are
no assurances that we will be able to either (1) achieve a level of revenues
adequate to generate sufficient cash flow for operations; or (2) obtain
additional financing through either private placements, public offerings and/or
bank financing necessary to support our working capital requirements. To the
extent that funds generated from operations are insufficient to meet our ongoing
capital requirements, we will have to raise additional working capital by means
of private placements, public offerings and/or bank financing. No assurance
can
be given that additional financing will be available, or if available, will
be
on terms acceptable to us. If adequate working capital is not available we
may
not increase our operations and if we are unable to raise additional funds
we
may cease operations.
APPLICATION
OF CRITICAL ACCOUNTING POLICIES
Our
unaudited financial statements and accompanying notes have been prepared in
conformity with generally accepted accounting principles in the United States
of
America for interim financial statements. Preparing financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue, and expenses. These estimates and
assumptions are affected by management's application of accounting policies.
We
believe that understanding the basis and nature of the estimates and assumptions
involved with the following aspects of our financial statements is critical
to
an understanding of our financials.
Accounting
for Share-based Compensation
On
September 1, 2006, we adopted Statement of Financial Accounting Standards
No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123(R)") which
requires the measurement and recognition of compensation expense based on
estimated fair values for all share-based payment awards made to employees
and
directors. SFAS 123(R) supersedes Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), for periods
beginning in fiscal 2006. In March 2005, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 107 ("SAB 107") relating to SFAS
123(R). We have applied the provisions of SAB 107 in its adoption of SFAS
123(R).
SFAS
123(R) requires companies to estimate the fair value of equity-based payment
awards on the date of grant using an option-pricing model. The value of the
portion of the award that is ultimately expected to vest is recognized as
an
expense over the requisite service periods in our consolidated statements
of
operations. Prior to the adoption of SFAS 123(R), we accounted for equity-based
awards to employees and non-employee directors using the intrinsic value
method
in accordance with APB 25 as allowed under Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").
We
adopted SFAS 123(R) using the modified prospective transition method, which
requires the application of the accounting standard starting from
September 1, 2006, the first day of our fiscal year 2007. At adoption date,
we had no unrecognized compensation cost from prior years.
Oramed
recognizes compensation expenses for the value of its awards, which have
graded
vesting based on the straight line method over the requisite service period
of
each of the awards.
Oramed
applies SFAS 123 and EITF 96-18, "Accounting for Equity Instruments That
are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services" ("EITF 96-18") with respect to options and warrants issued
to
non-employees.
RISK
FACTORS
Much
of
the information included in this quarterly report includes or is based upon
estimates, projections or other "forward-looking statements". Such
forward-looking statements include any projections or estimates made by us
and
our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based,
are
made in good faith and reflect our current judgment regarding the direction
of
our business, actual results will almost always vary, sometimes materially,
from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.
Such
estimates, projections or other "forward-looking statements" involve various
risks and uncertainties as outlined below. We caution readers of this quarterly
report that important factors in some cases have affected and, in the future,
could materially affect actual results and cause actual results to differ
materially from the results expressed in any such estimates, projections or
other "forward-looking statements". In evaluating us, our business and any
investment in our business, readers should carefully consider the following
factors.
Risks
Relating to Our Business
We
are dependent on the clinical success of our orally ingestible insulin pill.
Failure to develop, receive regulatory approval and market our orally ingestible
insulin pill will have a significant and negative effect on our ability to
continue operations.
If
we
fail to develop our orally ingestible insulin pill to completion or obtain
regulatory approval for it, either on our own or in collaboration with other
pharmaceutical companies, our ability to fund future operations from either
revenue or the issuance of additional equity is likely to be adversely affected.
We are dependent on the successful culmination of clinical trials and regulatory
approval of our orally ingestible insulin pill. The failure to develop, receive
regulatory approval and market our orally ingestible insulin pill will have
a
significant and negative effect on our ability to continue
operations.
Our
potential oral insulin product is still in the development stage and we cannot
be certain that it will be suitable for commercial purposes.
To
be
profitable, we must successfully research, develop, obtain regulatory approval
for, manufacture, introduce, market and distribute our oral insulin product
that
is currently in the development stage. The time necessary to achieve these
goals
for any individual product is long and uncertain. Before we can sell any of
our
potential oral insulin products, we will be required to demonstrate through
clinical trials that such product is safe and effective for human use in the
treatment of people with diabetes. We have never successfully commercialized
a
drug product and we cannot be certain that we will be able to begin, or
continue, planned clinical trials for our potential product, or if we are able,
that the potential product will prove to be safe and will produce the intended
effects.
Even
if safe and effective, the size of the solid dosage form, taste and frequency
of
dosage may impede the acceptance of our product by patients.
A
number
of companies in the drug delivery, biotechnology and pharmaceutical industries
have suffered significant setbacks in clinical trials, even after showing
promising results in earlier studies or trials. We cannot assure you that
favorable results in any clinical trial will mean that favorable results will
ultimately be obtained in future clinical trials. Nor can we assure you that
results of limited animal and human studies are indicative of results that
would
be achieved in future animal studies or human clinical studies, all or some
of
which will be required in order to have our potential product obtain regulatory
approval. Similarly, we cannot assure you that our potential product will be
approved by the FDA.
Our
future business success depends heavily upon regulatory approvals, which can
be
difficult to obtain for a variety of reasons, including cost.
Our
clinical trials, as well as the manufacturing and marketing of our potential
product, are subject to extensive, costly and rigorous regulation by various
governmental authorities in the United States and other countries. The process
of obtaining required approvals from the FDA and other regulatory authorities
often takes many years, is expensive and can vary significantly based on the
type, complexity and novelty of the potential product. We cannot assure you
that
we will meet the applicable regulatory criteria in order to receive the required
approvals for manufacturing and marketing. Delays in obtaining United States
or
foreign approvals for our potential product could result in substantial
additional costs to us, and, therefore, could adversely affect our ability
to
continue operations. Even if regulatory approval of our potential product is
obtained, that approval may place limitations on the intended uses of the
product, and may restrict the way in which we are allowed to market the
product.
The
regulatory approval process presents several risks to us:
|
|
In
general, clinical trials can take more than a year, and require the
expenditure of substantial resources, and the data obtained from
these
tests and trials can be susceptible to varying interpretation that
could
delay, limit or prevent regulatory
approval.
|
|
|
Delays
or rejections may be encountered during any stage of the regulatory
process based upon the failure of the clinical or other data to
demonstrate compliance with, or upon the failure of the product to
meet, a
regulatory agency's requirements for safety, efficacy and quality
or, in
the case of a product seeking an orphan drug indication, because
another
designee received approval first.
|
|
|
Requirements
for approval may become more stringent due to changes in regulatory
agency
policy, or the adoption of new regulations or
legislation.
|
|
|
The
scope of any regulatory approval, when obtained, may significantly
limit
the indicated uses for which a product may be marketed and may impose
significant limitations in the nature of warnings, precautions and
contraindications that could materially affect the profitability
of the
drug.
|
|
|
Approved
drugs, as well as their manufacturers, are subject to continuing
and
on-going review, and discovery of previously unknown problems with
these
products or the failure to adhere to manufacturing or quality control
requirements may result in restrictions on their manufacture, sale
or use
or in their withdrawal from the
market.
|
|
|
Regulatory
authorities and agencies may promulgate additional regulations restricting
the sale of our existing and proposed
products.
|
|
|
Once
a product receives marketing approval, the FDA may not permit us
to market
that product for broader or different applications, or may not grant
us
clearance with respect to separate product applications that represent
extensions of our basic technology. In addition, the FDA may withdraw
or
modify existing clearances in a significant manner or promulgate
additional regulations restricting the sale of our present or proposed
products.
|
Additionally,
we face the risk that our competitors may gain FDA approval for a product before
us. Having a competitor reach the market before us would impede the future
commercial success for our competing product because we believe that the FDA
uses heightened standards of approval for products once approval has been
granted to a competing product in a particular product area. We believe that
this standard generally limits new approvals to only those products that meet
or
exceed the standards set by the previously approved product.
Our
business will suffer if we cannot adequately protect our patent and proprietary
rights.
Although
we have submitted a patent application covering the intellectual property for
our potential oral insulin product, we cannot assure you that our patent will
be
granted and, if it is granted, whether it will be held to be valid and
enforceable and provide us with meaningful protection from competition.
Furthermore, we may not possess the financial resources necessary to enforce
our
patent even if our patent application is successful. Also, we cannot be certain
that any products that we or a prospective licensee develop will not infringe
upon any patent or other intellectual property right of a third
party.
We
will
also rely upon trade secrets, know-how and continuing technological advances
to
develop and maintain our competitive position. We plan to maintain a policy
of
requiring employees, scientific advisors, consultants and collaborators to
execute confidentiality and invention assignment agreements upon commencement
of
a relationship with us. We cannot assure you that these agreements will provide
meaningful protection for our trade secrets in the event of unauthorized use
or
disclosure of such information.
We
may be at risk of having to obtain a license from third parties making
proprietary improvements to our technology.
There
is
a possibility that third parties may make improvements or innovations to our
potential oral insulin product in a more expeditious manner than we do. Although
we are not aware of any such circumstance related to our product portfolio,
should such circumstances arise, we may need to obtain a license from such
third
party to obtain the benefit of the improvement or innovation. Royalties payable
under such a license would reduce our share of total revenue. Such a license
may
not be available to us at all or on commercially reasonable terms. Although
we
currently do not know of any circumstances related to potential oral insulin
product that would lead us to believe that a third party has developed any
improvements or innovation with respect to it, we cannot assure you that such
circumstances will not arise in the future. We cannot reasonably determine
the
cost to us of the effect of being unable to obtain any such
license.
We
are dependent on third parties to manufacture and, in some cases, test our
products.
We
have
no manufacturing facilities for production of our potential oral insulin
product. We have no facilities for clinical testing. The success of our program
will be dependent upon securing manufacturing capabilities and contracting
with
clinical service providers.
The
availability of manufacturers is limited by both the capacity of such
manufacturers and their regulatory compliance. Among the conditions for New
Drug
Application approval is the requirement that the prospective manufacturer's
quality control and manufacturing procedures continually conform with the FDA's
current Good Manufacturing Practice (“GMP”). GMPs are regulations established by
the FDA that govern the manufacture, processing, packing, storage and testing
of
drugs intended for human use. In complying with GMPs, manufacturers must devote
extensive time, money and effort in the area of production and quality control
and quality assurance to maintain full technical compliance.
Manufacturing
facilities and company records are subject to periodic inspections by the FDA
to
ensure compliance. If a manufacturing facility is not in substantial compliance
with these requirements, regulatory enforcement action may be taken by the
FDA,
which may include seeking an injunction against shipment of products from the
facility and recall of products previously shipped from the facility. Such
actions could severely delay our ability to obtain product from that particular
source.
The
success of our clinical trials is dependent on our future partner's capacity
and
ability to adequately manufacture drug products to meet the proposed demand
of
each respective market. Any significant delay in obtaining a supply source
could
harm our potential for success. Additionally, if a future manufacturer were
to
lose its ability to meet our supply demands during a clinical trial, the trial
may be delayed or may even need to be abandoned.
We
may face product liability claims related to participation in clinical trials
or
future products.
The
testing, manufacture and marketing of products for humans utilizing our
potential oral insulin product may expose us to product liability and other
claims. These may be claims directly by consumers or by pharmaceutical companies
or others selling our product in the future. We seek to structure development
programs with pharmaceutical companies that would complete the development,
manufacturing and marketing of the finished product in a manner that would
protect us from such liability, but the indemnity undertakings for product
liability claims that we secure from the pharmaceutical companies may prove
to
be insufficient. We do not yet have product liability insurance.
We
face rapid technological change and intense competition.
Our
success depends, in part, upon maintaining a competitive position in the
development of our potential product. Developments in insulin products are
expected to continue at a rapid pace because many pharmaceutical companies
are
in the process of developing new insulin products. If we are able to develop
our
potential oral insulin product to the point where we can sell it on the market,
we will compete with other drug delivery, biotechnology and pharmaceutical
companies, research organizations, individual scientists and non-profit
organizations engaged in the development of insulin products, especially those
who are developing insulin products that can be taken orally. Many of our
competitors will have greater research and development capabilities, experience,
and marketing, financial and managerial resources than we have, and, therefore,
will represent significant competition.
Our
products, when developed and marketed, may compete with existing insulin
products, some of which are well established in the marketplace and manufactured
by our competitors. Our potential oral insulin product, if successful, would
compete with insulin that is taken by injection and other potential orally
ingestible insulin pills or capsules developed by other companies such as
Biocon, Ltd. or Biodel, Inc. These products are marketed throughout the world
by
leading pharmaceutical companies such as Eli Lilly and Company and Pfizer,
Inc.
Our
competitors may succeed in developing competing technologies or obtaining
government approval for products before we do. Developments by others may render
our potential products non-competitive or obsolete. We cannot assure you that,
if our products are marketed, they will be preferred to existing drugs or that
they will be preferred to or available before other products in
development.
Risks
Related to our Company
We
have incurred substantial losses since inception and as we expect to continue
to
incur research and development costs to further develop our potential oral
insulin product, we are likely going to require additional capital and if
additional capital is not raised, we may have to cease business operations
and
investors will lose their entire investment.
Since
our
inception on April 12, 2002, we have generated significant losses from
operations. Now that we have departed from our former business of acquiring
and
exploring mineral properties and have become engaged in the pharmaceutical
research and development business, we anticipate that we will continue to
generate significant losses from operations for the foreseeable future. As
at
February 29, 2008, our accumulated deficit was approximately $5,168,000. Our
net
loss was approximately $689,000 for the six months ended February 29, 2008.
As
at February 29, 2008, we had cash or cash equivalents of approximately
$1,145,000. We have limited capital resources and no revenue from operations.
We
have been funded with the proceeds from equity financings. These conditions
raise substantial doubt about our ability to continue as a going concern. The
audit report prepared by our independent registered public accounting firm
relating to our consolidated financial statements for the year ended August
31,
2007 includes an explanatory paragraph expressing the substantial doubt about
our ability to continue as a going concern.
Our
existing capital resources will not enable us to continue operations without
implementing cost reductions or raising additional capital. These circumstances
may adversely affect our ability to raise additional capital. If we fail to
raise additional capital, we will be forced to cease operations. If additional
capital is raised through the sale of equity or convertible debt securities,
the
issuance of such securities would result in dilution to our existing
stockholders.
We
are dependent on our key personnel and if we cannot recruit and retain qualified
individuals to perform our research, development, manufacturing and commercial
functions, our business will likely not be successful.
We
are
highly dependent on our executive officers, especially on the consulting
services to be provided by one of our directors, Dr. Miriam Kidron. Dr. Kidron
is a pharmacist with a Ph. D. in biochemistry and is the inventor of the method
and composition of insulin that can be administered orally, which is covered
by
the provisional patent application No. 60/718716. From 1990 to the present
time,
she has been an investigator in the Diabetes Unit at Hadassah University
Hospital in Jerusalem, Israel. We would be significantly disadvantaged if Dr.
Kidron were to leave our company. The loss of other officers could have an
adverse effect as well, given their specific knowledge related to our
proprietary technology. If we are not able to retain our executive officers,
our
business may suffer. None of our key officers have announced any intention
to
leave us. We do not maintain "key-person" life insurance policies for any of
our
executive officers.
There
is
intense competition in the biotechnology industry for qualified scientists
and
managerial personnel in the development, manufacture, and commercialization
of
drugs. We may not be able to attract and retain the qualified personnel
necessary for developing our business. Additionally, because of the knowledge
and experience of our scientific personnel and their specific knowledge with
respect to our potential oral insulin product, the continued development of
our
potential product could be adversely affected by the loss of any one of our
executive officers or qualified personnel that we may engage.
All
of our assets and all of our directors and officers are outside the United
States, as a result it may be difficult for investors to enforce within the
United States any judgments obtained against us or any of our directors or
executive officers.
All
of
our assets are located outside the United States and we do not currently
maintain a permanent place of business within the United States. In addition,
all of our directors and executive officers are nationals and or residents
of
countries other than the United States, and all or a substantial portion of
such
persons' assets are located outside the United States. As a result, it may
be
difficult for investors to enforce within the United States any judgments
obtained against us or our directors or executive officers, including judgments
predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof. Consequently, you may be effectively
prevented from pursuing remedies under U.S. federal securities laws against
them.
Our
principal research and development facilities will be located in Israel and
the
unstable military and political conditions in Israel may cause interruption
or
suspension of our business operations without warning.
Our
principal research and development facilities will initially be located in
Israel. As a result, we are directly influenced by the political, economic
and
military conditions affecting Israel. Since the establishment of the State
of
Israel in 1948, a number of armed conflicts have taken place between Israel
and
its Arab neighbors and, since September 2000, involving the Palestinian
population, and a state of hostility, varying in degree and intensity, has
led
to security and economic problems for Israel and companies based in Israel.
Acts
of random terrorism periodically occur which could affect our operations or
personnel.
In
addition, Israeli-based companies and companies doing business with Israel
have
been the subject of an economic boycott by members of the Arab League and
certain other predominantly Muslim countries since Israel's establishment.
Although Israel has entered into various agreements with certain Arab countries
and the Palestinian Authority, and various declarations have been signed in
connection with efforts to resolve some of the economic and political problems
in the Middle East, we cannot predict whether or in what manner these problems
will be resolved. Also, since the end of September 2000, there has been a marked
increase in the level of terrorism in Israel, which has significantly damaged
both the Israeli economy and levels of foreign and local
investment.
Furthermore,
certain of our officers and employees may be obligated to perform annual reserve
duty in the Israel Defense Forces and are subject to being called up for active
military duty at any time. All Israeli male citizens who have served in the
army
are subject to an obligation to perform reserve duty until they are between
45
and 54 years old, depending upon the nature of their military
service.
Risks
Related to Our Common Stock
Our
stock price will likely be volatile.
The
trading price for our common stock is likely to be highly volatile. The market
prices for securities of drug delivery, biotechnology and pharmaceutical
companies have historically been highly volatile. Factors that could adversely
affect our stock price include:
|
·
|
fluctuations
in our operating results; announcements of partnerships or technological
collaborations,
|
|
·
|
innovations
or new products by us or our
competitors;
|
|
·
|
changes
in government regulations;
|
|
·
|
developments
in patent or other proprietary
rights;
|
|
·
|
public
concern as to the safety of drugs developed by us or
others;
|
|
·
|
the
results of clinical studies or trials by us, any partners we may
have or
our competitors;
|
|
·
|
general
stock market and economic
conditions;
|
|
·
|
number
of shares available for trading
(float);
|
|
·
|
inclusion
in or dropping from stock indexes.
|
Future
sales of common stock or warrants, or the prospect of future sales, may depress
our stock price.
Sales
of
a substantial number of shares of our common stock or warrants, or the
perception that sales could occur, could adversely affect the market price
of
our common stock.
We
do
not intend to pay dividends and there will be less ways in which you can make
a
gain on any investment in our company.
We
have
never paid any cash dividends and currently do not intend to pay any dividends
for the foreseeable future. Because we do not intend to declare dividends,
any
gain on an investment in our company will need to come through appreciation
of
the price of our common stock. There can be no assurance that the price of
our
common stock will increase.
Trading
of our stock may be restricted by the SEC's penny stock regulations, which
may
limit a stockholder's ability to buy and sell our stock.
The
Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00
per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on brokers
or
dealers who sell to persons other than established customers and "accredited
investors". The term "accredited investor" refers generally to institutions
with
assets in excess of $5,000,000 or individuals with a net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouse. The penny stock rules require a broker or dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document in a form prepared by the SEC, which provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker or dealer also must provide the customer with current
bid and offer quotations for the penny stock, the compensation of the broker
or
dealer and its salesperson in the transaction and monthly account statements
showing the market value of each penny stock held in the customer's account.
The
bid and offer quotations, and the broker or dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before
or
with the customer's confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules, the broker or dealer must make a special written determination that
the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of brokers or dealers to trade
our securities. We believe that the penny stock rules discourage investor
interest in and limit the marketability of our common stock. This may limit
your
ability to buy and sell our stock and cause the price of the shares to
decline
FINRA
sales practice requirements may also limit a stockholder's ability to buy and
sell our stock.
In
addition to the "penny stock" rules described above, the Financial Industry
Regulatory Authority (FINRA) has adopted rules that require that in recommending
an investment to a customer, a broker or dealer must have reasonable grounds
for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, brokers or dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low priced securities will not
be
suitable for at least some customers. FINRA requirements make it more difficult
for brokers or dealers to recommend that their customers buy our common stock,
which may prevent you from reselling your shares and may cause the price of
the
shares to decline.
Item
3. Controls and Procedures.
As
required by Rule 13a-15 under the Exchange Act, as of the end of the period
covered by this report, being February 29, 2008, we have carried out an
evaluation of the effectiveness of the design and operation of our company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our management, including our chief
executive officer, Nadav Kidron, and our chief financial officer, Alex Werber.
Based upon that evaluation, they concluded that our disclosure controls and
procedures are effective as of the end of the period covered by this report.
There have been no significant changes in our internal controls over financial
reporting that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect our internal
controls over financial reporting.
Disclosure
controls and procedures are controls and other procedures that are designed
to
ensure that information required to be disclosed in our company's reports filed
or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our president and chief
executive officer as appropriate, to allow timely decisions regarding required
disclosure.
PART
II - OTHER INFORMATION
Item
1. Legal
Proceedings.
Except
as
previously disclosed, we know of no material, active or pending legal
proceedings against us, nor are we involved as a plaintiff in any material
proceedings or pending litigation.
Item
2. Recent
Sales of Unregistered Securities and Use of Proceeds
None.
Item
3. Defaults
Upon Senior Securities.
None.
Item
4. Submission
of Matters to a Vote of Security Holders.
None.
Item
5. Other
Information.
N/A.
Item
6. Exhibits
(3)
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Articles
of Incorporation and By-laws
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3.1
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Articles
of Incorporation (incorporated by reference from our Registration
Statement on Form SB-2, filed on November 29, 2002).
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3.2
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Bylaws
(incorporated by reference from our Current Report on Form 8-K filed
on
April 10, 2006).
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3.3
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Articles
of Merger filed with the Nevada Secretary of State on March 29, 2006
(incorporated by reference to our Current Report on Form 8-K filed
on
April 10, 2006).
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(4)
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Instruments
defining rights of security holders, including
indentures
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4.1
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Specimen
Stock Certificate (incorporated by reference from our Registration
Statement on Form SB-2, filed on November 29, 2002).
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4.2
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Form
of warrant certificate (incorporated by reference from our current
report
on Form 8-K filed on June 18, 2007)
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4.3*
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Convertible
Debenture issued by the Registrant to Epsom Investment Services,
dated
February 12, 2007
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4.4*
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Convertible
Debenture issued by the Registrant to Epsom Investment Services,
dated May
31, 2007
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(10)
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Material
Contracts
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10.1
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Agreement
between the Registrant and Hadasit Medical Services and Development
Ltd.
dated February 17, 2006 concerning the acquisition of U.S. patent
application 60/718716 (incorporated by reference from our current
report
on Form 8-K filed February 17, 2006).
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10.2
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Clinical
Trial Manufacturing Agreement between the Registrant and Swiss Caps
Ag
dated October 30, 2006 (incorporated by reference from our current
report
on Form 8-K filed November 2, 2006).
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10.3
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2006
Stock Option Plan (incorporated by reference from our current report
on
Form 8-K filed on November 23, 2006).
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10.4
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Form
of Stock Option Agreement under 2006 Stock Option Plan (incorporated
by
reference from our current report on Form 8-K filed on November 23,
2006).
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10.5
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Employment
Agreement between the Registrant and Alex Werber dated August 1,
2007
(incorporated by reference from our current report on Form 8-K filed
on
August 2, 2007).
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10.6
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Employment
Agreement between the Registrant and KNRY Ltd (Nadav Kidron) dated
August
1, 2007 (incorporated by reference from our current report on Form
8-K
filed on August 28, 2007).
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10.7
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Employment
Agreement between the Registrant and KNRY Ltd (Dr. Miriam Kidron)
dated
August 1, 2007 (incorporated by reference from our current report
on Form
8-K filed on August 28, 2007).
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10.8
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Expense
Agreement between the Registrant and Leonard Sank dated January 18,
2008
(incorporated by reference from our current report on Form 8-K filed
on
February 1, 2008).
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10.9
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Encorium
Proposal dated April 27, 2007 (incorporated by reference from our
current
report on Form 8-K filed on June 19, 2007)
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10.10
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Master
Services Agreement between the Registrant and OnQ Consulting dated
January
29, 2008 2007 (incorporated by reference from our current report
on Form
8-K filed on February 1, 2008)
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(31)
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Section
302 Certification
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31.1*
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Certification
Statement of the Chief Executive Officer pursuant to Section 302
of the
Sarbanes-Oxley Act of 2002
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31.2*
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Certification
Statement of the Principal Accounting Officer pursuant to Section
302 of
the Sarbanes-Oxley Act of 2002
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(32)
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Section
906 Certification
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32.1*
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Certification
Statement of the Principal Executive Officer pursuant to 18 U.S.C.
Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
Of
2002
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32.2*
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Certification
Statement of the Principal Accounting Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act
Of 2002
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*Filed
herewith
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.
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By: |
/s/
Nadav Kidron |
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Nadav
Kidron, President, CEO and Director
(Principal
Executive Officer)
Date:
April 14, 2008
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By: |
/s/
Alex Werber |
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(Principal
Financial Officer and Principal Accounting Officer)
Date:
April 14, 2008
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