Nevada
|
98-0376008
|
|
(State
or other jurisdiction of
incorporation or organization) |
(IRS
Employer
Identification
No.) |
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
(Do not check if a smaller
reporting company)
|
Smaller
reporting company x
|
PART
I – FINANCIAL INFORMATION
|
1
|
ITEM
1 - FINANCIAL STATEMENTS
|
1
|
ITEM
2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
11
|
ITEM
3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
21
|
ITEM
4T - CONTROLS AND PROCEDURES
|
21
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PART
II – OTHER INFORMATION
|
23
|
ITEM
1 - LEGAL PROCEEDINGS
|
23
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ITEM
6 - EXHIBITS
|
24
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Page
|
||
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS:
|
||
Balance sheets
|
2
|
|
Statements of
operations
|
3
|
|
Statements of changes in
stockholders’ equity
|
4
|
|
Statements of cash
flows
|
5
|
|
Notes to financial
statements
|
6-10
|
November
30,
|
August
31,
|
|||||||
2008
|
2008
|
|||||||
Unaudited
|
Audited
|
|||||||
Assets
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | 2,190,950 | $ | 2,267,320 | ||||
Short
term investments
|
1,728,000 | 2,728,000 | ||||||
Prepaid
expenses and other current assets
|
297,694 | 402,574 | ||||||
Total current
assets
|
4,216,644 | 5,397,894 | ||||||
|
||||||||
LONG
TERM DEPOSITS
|
11,776 | 10,824 | ||||||
PROPERTY AND EQUIPMENT,
net
|
92,268 | 98,296 | ||||||
Total assets
|
$ | 4,320,688 | $ | 5,507,014 | ||||
|
||||||||
Liabilities
and stockholders' equity
|
||||||||
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 612,902 | $ | 866,702 | ||||
Account
payable with former shareholder
|
47,252 | 47,252 | ||||||
Total current
liabilities
|
660,154 | 913,954 | ||||||
|
||||||||
COMMITMENTS
|
||||||||
|
||||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Common
stock of $ 0.001 par value - Authorized: 200,000,000 shares at
November 30, 2008 and August 31, 2008; Issued and outstanding: 56,456,710
at November 30, 2008 and 56,252,806 shares at August 31, 2008,
respectively
|
56,456 | 56,252 | ||||||
Additional
paid-in capital
|
12,040,328 | 11,785,012 | ||||||
Deficit
accumulated during the development stage
|
(8,436,250 | ) | (7,248,204 | ) | ||||
Total stockholders'
equity
|
3,660,534 | 4,593,060 | ||||||
Total liabilities
and stockholders' equity
|
$ | 4,320,688 | $ | 5,507,014 |
Period
|
||||||||||||
from
April
|
||||||||||||
12,
2002
|
||||||||||||
(inception)
|
||||||||||||
Three
months ended
|
through
|
|||||||||||
November
30
|
November
30
|
|||||||||||
2008
|
2007
|
2008
|
||||||||||
Unaudited
|
||||||||||||
RESEARCH
AND DEVELOPMENT EXPENSES
|
$ | 818,680 | $ | 95,674 | $ | 4,406,514 | ||||||
IMPAIRMENT
OF INVESTMENT
|
434,876 | |||||||||||
GENERAL
AND ADMINISTRATIVE EXPENSES
|
383,361 | 266,296 | 3,413,819 | |||||||||
OPERATING
LOSS
|
1,202,041 | 361,970 | 8,255,209 | |||||||||
INTEREST
INCOME
|
(22,144 | ) | (17,145 | ) | (119,650 | ) | ||||||
INTEREST
EXPENSE
|
8,149 | 8,677 | 138,527 | |||||||||
LOSS
BEFORE TAXES ON INCOME
|
1,188,046 | 353,502 | 8,274,086 | |||||||||
TAXES
ON INCOME
|
- | - | 162,164 | |||||||||
NET
LOSS FOR THE PERIOD
|
$ | 1,188,046 | $ | 353,502 | $ | 8,436,250 | ||||||
BASIC
AND DILUTED LOSS PER
|
||||||||||||
COMMON
SHARE
|
$ | (0.02 | ) | $ | (0.01 | ) | ||||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||||||||
STOCK
USED IN COMPUTING BASIC AND
|
||||||||||||
DILUTED
LOSS PER COMMON STOCK
|
56,363,714 | 45,609,417 |
Deficit
|
||||||||||||||||||||
accumulated
|
||||||||||||||||||||
Additional
|
during
the
|
Total
|
||||||||||||||||||
Common
Stock
|
paid-in
|
development
|
stockholders'
|
|||||||||||||||||
Shares
|
$
|
capital
|
stage
|
equity
|
||||||||||||||||
BALANCE AS OF APRIL 12,
2002 (inception)
|
34,828,200 | $ | 34,828 | $ | 18,872 | $ | 53,700 | |||||||||||||
CHANGES DURING THE PERIOD FROM
APRIL 12, 2002 THROUGH AUGUST 31, 2007
(audited):
|
||||||||||||||||||||
SHARES
CANCELLED
|
(19,800,000 | ) | (19,800 | ) | 19,800 | - | ||||||||||||||
SHARES
ISSUED FOR INVESTMENT IN ISTI-NJ
|
1,144,410 | 1,144 | 433,732 | 434,876 | ||||||||||||||||
SHARES
ISSUED FOR OFFERING COSTS
|
1,752,941 | 1,753 | (1,753 | ) | - | |||||||||||||||
SHARES
ISSUED FOR CASH
|
27,181,228 | 27,181 | 2,095,800 | 2,122,981 | ||||||||||||||||
SHARES
ISSUED FOR SERVICES
|
125,000 | 125 | 98,625 | 98,750 | ||||||||||||||||
CONTRIBUTIONS
TO PAID IN CAPITAL
|
18,991 | 18,991 | ||||||||||||||||||
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND
DIRECTORS
|
1,968,547 | 1,968,547 | ||||||||||||||||||
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO
CONSULTANTS
|
177,782 | 177,782 | ||||||||||||||||||
DISCOUNT
ON CONVERTIBLE NOTE RELATED TO BENEFICIAL CONVERSION
FEATURE
|
108,000 | 108,000 | ||||||||||||||||||
COMPREHENSIVE
LOSS
|
(16 | ) | (16 | ) | ||||||||||||||||
IMPUTED
INTEREST
|
8,437 | 8,437 | ||||||||||||||||||
NET
LOSS
|
(4,478,917 | ) | (4,478,917 | ) | ||||||||||||||||
BALANCE
AS OF AUGUST 31, 2007 (audited)
|
45,231,779 | 45,231 | 4,946,833 | (4,478,933 | ) | 513,131 | ||||||||||||||
RECEIPTS
ON ACCOUNT OF SHARES AND
WARRANTS
|
6,061 | 6,061 | ||||||||||||||||||
SHARES
ISSUED FOR CONVERSION OF CONVERTIBLE NOTE
|
550,000 | 550 | 274,450 | 275,000 | ||||||||||||||||
SHARES
AND WARRANTS ISSUED FOR CASH – NET OF ISSUANCE EXPENSES
|
10,178,002 | 10,178 | 5,774,622 | 5,784,800 | ||||||||||||||||
SHARES
ISSUED FOR SERVICES
|
293,025 | 293 | 115,817 | 116,110 | ||||||||||||||||
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND
DIRECTORS
|
459,467 | 459,467 | ||||||||||||||||||
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO
CONSULTANTS
|
203,982 | 203,982 | ||||||||||||||||||
IMPUTED
INTEREST
|
3,780 | 3,780 | ||||||||||||||||||
NET
LOSS
|
(2,769,271 | ) | (2,769,271 | ) | ||||||||||||||||
BALANCE
AS OF AUGUST 31, 2008 (audited)
|
56,252,806 | 56,252 | 11,785,012 | (7,248,204 | ) | 4,593,060 | ||||||||||||||
SHARES
ISSUED FOR SERVICES
|
203,904 | 204 | 152,724 | 152,928 | ||||||||||||||||
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND
DIRECTORS
|
103,168 | 103,168 | ||||||||||||||||||
STOCK
BASED COMPENSATION RELATED TO OPTIONS GRANTED TO
CONSULTANTS
|
(1,521 | ) | (1,521 | ) | ||||||||||||||||
IMPUTED
INTEREST
|
945 | 945 | ||||||||||||||||||
NET
LOSS
|
(1,188,046 | ) | (1,188,046 | ) | ||||||||||||||||
BALANCE
AS OF NOVEMBER 30, 2008 (unaudited)
|
56,456,710 | $ | 56,456 | $ | 12,040,328 | $ | (8,436,250 | ) | $ | 3,660,534 |
Three
months ended
|
Period
from April
12,
2002
(inception
date)
through
|
|||||||||||
November
30
|
November
30,
|
|||||||||||
2008
|
2007
|
2008
|
||||||||||
Unaudited
|
||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (1,188,046 | ) | $ | (353,502 | ) | $ | (8,436,250 | ) | |||
Adjustments
required to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Depreciation
|
7,497 | 470 | 22,951 | |||||||||
Amortization
of debt discount
|
- | - | 108,000 | |||||||||
Exchange
differences on long term deposits
|
967 | (336 | ) | (675 | ) | |||||||
Stock
based compensation
|
101,647 | 82,552 | 2,911,425 | |||||||||
Common
stock issued for services
|
- | *- | 367,788 | |||||||||
Impairment
of investment
|
- | - | 434,876 | |||||||||
Imputed
interest
|
945 | 945 | 13,162 | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Prepaid
expenses and other current assets
|
104,880 | (60,533 | ) | (297,694 | ) | |||||||
Accounts
payable and accrued expenses
|
(100,872 | ) | *(101,684 | ) | 612,902 | |||||||
Total net cash used in
operating activities
|
(1,072,982 | ) | (432,088 | ) | (4,263,515 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase
of property and equipment
|
(1,469 | ) | (7,221 | ) | (115,219 | ) | ||||||
Acquisition
of short-term investments
|
- | - | (2,728,000 | ) | ||||||||
Proceeds
from sale of Short term investments
|
1,000,000 | 1,000,000 | ||||||||||
Lease
deposits
|
(1,919 | ) | - | (11,101 | ) | |||||||
Total net cash provided by
(used in) in investing activities
|
996,612 | (7,221 | ) | (1,854,320 | ) | |||||||
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
||||||||||||
Proceeds
from sales of common stocks and warrants
- net of issuance expenses
|
- | - | 7,967,542 | |||||||||
Proceeds
from convertible notes
|
- | - | 275,000 | |||||||||
Proceeds
from short term note payable
|
- | - | 120,000 | |||||||||
Payments
of short term note payable
|
- | - | (120,000 | ) | ||||||||
Shareholder
advances
|
- | - | 66,423 | |||||||||
Net cash provided by financing
activities
|
- | - | 8,308,785 | |||||||||
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
(76,370 | ) | (439,309 | ) | 2,190,950 | |||||||
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
2,267,320 | 1,918,229 | - | |||||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 2,190,950 | $ | 1,478,920 | $ | 2,190,950 | ||||||
Non
cash investing and financing activities:
|
||||||||||||
Shares
issued for offering costs
|
$ | 1,753 | ||||||||||
Contribution
to paid in capital
|
$ | 18,991 | ||||||||||
Stock
issued for receipts on account of shares issuance
|
$ | 255,000 | ||||||||||
Shares
issued for services rendered
|
$ | 152,928 | $ | 172,202 |
|
a.
|
General:
|
|
1.
|
Oramed
Pharmaceuticals, Inc. (the “Company”) was incorporated on April 12, 2002,
under the laws of the State of Nevada. From incorporation until March 3,
2006, the Company was an exploration stage company engaged in the
acquisition and exploration of mineral properties. On February 17, 2006,
the Company entered into an agreement with Hadasit Medical Services and
Development Ltd (the “First Agreement”). to acquire the provisional patent
related to orally ingestible insulin pill to be used for the treatment of
individuals with diabetes. The Company has been in the development stage
since its formation and has not yet realized any revenues from its planned
operations.
|
|
On
May 14, 2007, the Company 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
November 30, 2008 and for the 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 three months ended November 30, 2008, are not necessarily
indicative of the results that may be expected for the year ending August
31, 2009.
|
|
3.
|
Going
concern considerations
|
|
b.
|
Share-based
payment:
|
|
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.
|
|
c.
|
Recently
Issued Accounting Pronouncements
|
|
1.
|
In
June 2007, the Emerging Issues Task Force (EITF) reached Issue No. 07-03,
"Accounting for
Nonrefundable Advance Payments for Goods or Services Received to Be Used
in Future Research and Development Activities" (EITF No.
07-03). EITF No. 07-03 requires that nonrefundable
advance payments for goods or services that will be used or rendered for
future research and development activities be deferred and amortized over
the period that the goods are delivered or the related services are
performed, subject to an assessment of recoverability. The
provisions of EITF 07-03 will be effective for financial statements issued
for fiscal years beginning after December 15, 2007, and interim periods
within those fiscal years (September 1, 2009, for the Company). The
provisions of this EITF are applicable for new contracts entered into on
or after the effective date. Earlier application is not
permitted.
|
|
2.
|
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.
|
|
3.
|
In
April 2008, the FASB issued Staff Position No. FAS 142-3,
“Determination of the Useful Life of Intangible Assets. ("FSP FAS
142-3")”. FSP FAS 142-3 amends the factors that should be considered
in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142, “Goodwill
and Other Intangible Assets.” The intent of the position is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS No. 142 and the period of expected cash flows used to measure the
fair value of the asset under FAS 141(R), and other U.S. generally
accepted accounting principles. The provisions of FSP FAS 142-3 are
effective for the fiscal year beginning September 1, 2009, early
adoption is prohibited. The Company is currently evaluating the impact of
the provisions of FSP FAS
142-3..
|
|
a.
|
On
May 1, 2008, the Company entered into a consulting agreement with a third
party (“the Consultant”) for a period of twelve months, pursuant to which
the Consultant will assist the Company’s efforts to complete the FDA
approval process for its oral insulin capsule. On October 3, 2008 the
Company and the Consultant agreed to amend the agreement effective July 1,
2008. The Consultant is entitled to a fixed monthly fee of $16,666 (for
the period from May 1, 2008 through June 30, 2008 the monthly fee was
$8,333) and reimbursement of pre-approved out of pocket
expenses.
|
|
b.
|
On
September 8, 2008, the Company entered into Clinical Research agreement
with ETI Karle Clinical Pvt. Ltd. (“ETI”), pursuant to the agreement ETI
will be conducting clinical trials for the Company in India. In
consideration for the services provided under the agreement ETI will be
entitled to an estimated cash compensation of
$227,604.
|
|
a.
|
On
October 30, 2006 the Company entered into a Clinical Trial Manufacturing
Agreement with Swiss Caps AG (“Swiss”), pursuant to
which Swiss would manufacture and deliver the oral insulin capsule
developed by the Company. In consideration for the services being provided
to the Company by Swiss, the Company agreed to pay a certain predetermined
amounts which are to be paid in common stocks of the Company, the number
of stocks to be issued is based on the invoice received from Swiss, and
the stock market price 10 days after the invoice was issued. The Company
accounted the transaction with Swiss according to FAS 150 "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity".
|
|
b.
|
On
October 12, 2008, 828,000 options were granted to an employee of our
Subsidiary, at an exercise price of $0.47 per share (equivalent to the
traded market price on the date of grant), the options vest in three equal
annual instalments commencing on November 1, 2009 and expire on July 11,
2018. The fair value of these options on the date of grant was $330,699,
using the Black Scholes option-pricing model and was based on the
following assumptions: dividend yield of 0% for all years; expected
volatility of 113%; risk-free interest rates of 3.27%; and the remaining
contractual life of 6.00 years.
|
|
c.
|
On
October 12, 2008, 56,000 options were granted to an employee of our
Subsidiary, at an exercise price of $0.47 per share (equivalent to the
traded market price on the date of grant), the options vest in two equal
annual instalments commencing on May 1, 2009 and expire on July 11, 2018.
The fair value of these options on the date of grant was $21,988, using
the Black Scholes option-pricing model and was based on the following
assumptions: dividend yield of 0% for all years; expected volatility of
113%; risk-free interest rates of 2.77%; and the remaining contractual
life of 5.67 years.
|
|
Level
1:
|
Quoted
prices (unadjusted) in active markets that are accessible at the
measurement date for assets or liabilities. The fair value hierarchy gives
the highest priority to Level 1
inputs.
|
|
Level
2:
|
Observable
prices that are based on inputs not quoted on active markets, but
corroborated by market data.
|
|
Level
3:
|
Unobservable
inputs are used when little or no market data is available. The fair value
hierarchy gives the lowest priority to Level 3
inputs.
|
|
a.
|
On
January 7, 2009, the Company entered into an agreement with Hadasit (the
“Second Agreement”) to provide for the closing referenced in the First
Agreement. In the Second Agreement, Hadasit confirms that it has conveyed,
transferred and assigned all of its ownership rights in the patents
acquired under the First Agreement and certain other patents filed by the
Company after the First Agreement as a result of the collaboration between
the Company and Hadasit (the “Patents”). Hadasit further
acknowledges that the 4,141,532 shares of common stock issued to Hadasit
by the Company in connection with the First Agreement constitute complete
compensation for the Patents.
|
|
b.
|
On
January 11, 2009, an aggregate of 300,000 options were granted to three
Scientific Advisory Board members at an exercise price of $0.76 per share.
The options vest in four equal quarterly installments commencing on April
1, 2009 and will expire on January 10,
2019.
|
|
c.
|
On
January 11, 2009, 150,000 options were granted to an employee of the
subsidiary at an exercise price of $0.43 per share. The options vest in
three equal annual installments commencing on January 1, 2010 and will
expire on January 10, 2019.
|
|
d.
|
On
January 11, 2009, an aggregate of 600,000 options were granted to two
Board of Directors members at an exercise price of $0.43 per share. The
options vest in three equal annual installments commencing on January 1,
2010 and will expire on January 10,
2019.
|
Three months ended
|
||||||||
Operating Data:
|
November 30, 2008
|
November 30, 2007
|
||||||
Research
and development costs
|
$ | 818,680 | $ | 95,674 | ||||
General
and administrative expenses
|
383,361 | 266,296 | ||||||
Financial
(income) expense, net
|
(13,995 | ) | (8,468 | ) | ||||
Net
loss for the period
|
$ | 1,188,046 | $ | 353,502 | ||||
Loss
per common share – basic and diluted
|
$ | (0.02 | ) | $ | (0.01 | ) | ||
Weighted
average common shares outstanding
|
56,363,714 | 45,609,417 |
|
·
|
On
October 17, 2008, Oramed issued 203,904 shares of common stock valued at
$152,928 to a third party, for services rendered in the prior
year.
|
|
·
|
On
October 12, 2008 we granted options under the 2008 Stock Incentive Plan to
purchase up to 828,000 shares of our common stock at an exercise price of
$0.47 to Chaime Orlev our Chief Financial
Officer.
|
|
·
|
On
October 12, 2008 we granted options under the 2008 Stock Incentive Plan to
purchase up to 56,000 shares of our common stock at an exercise price of
$0.47 to an employee of our
subsidiary.
|
|
·
|
On
January 11, 2009 we granted options under the 2008 Stock Incentive Plan to
purchase up to 100,000 shares of our common stock at an exercise price of
$0.76 to each of Dr. Nir Barzilai, Prof. Ele Ferrannini and Dr. Derek
LeRoith, three members of our Scientific Advisory
Board.
|
|
·
|
On
January 11, 2009 we granted options under the 2008 Stock Incentive Plan to
purchase up to 150,000 shares of our common stock at an exercise price of
$0.43 to an employee of our
subsidiary.
|
|
·
|
On
January 11, 2009 we granted options under the 2008 Stock Incentive Plan to
purchase up to 300,000 shares of our common stock at an exercise price of
$0.43 to each of Leonard Sank and Dr. Harold Jacob, two Board of Directors
members.
|
Operating
Data:
|
Amount
|
|||
Research
and development costs
|
$ | 3,650,000 | ||
General
and administrative expenses
|
1,505,000 | |||
Financial
income, net
|
(58,000 | ) | ||
Taxes
on income
|
35,000 | |||
Total
|
$ | 5,132,000 |
|
·
|
pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect our transactions and asset
dispositions;
|
|
·
|
provide
reasonable assurance that transactions are recorded as necessary to permit
the preparation of our financial statements in accordance with generally
accepted accounting principles, and that our receipts and expenditures are
being made only in accordance with authorizations of our management and
directors; and
|
|
·
|
provide
reasonable assurance regarding the prevention or timely detection of
unauthorized acquisition, use or disposition of assets that could have a
material effect on our financial
statements.
|
Number
|
Exhibit
|
|
(3)
|
Articles
of Incorporation and By-laws
|
|
3.1
|
Articles
of Incorporation (incorporated by reference from our Registration
Statement on Form SB-2, filed on November 29, 2002).
|
|
3.2
|
Bylaws
(incorporated by reference from our Current Report on Form 8-K filed on
April 10, 2006).
|
|
3.3
|
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).
|
|
(4)
|
Instruments
defining rights of security holders, including
indentures
|
|
4.1
|
Specimen
Stock Certificate (incorporated by reference from our Registration
Statement on Form SB-2, filed on November 29, 2002).
|
|
4.2
|
Form
of warrant certificate (incorporated by reference from our current report
on Form 8-K filed on June 18, 2007)
|
|
(10)
|
Material
Contracts
|
|
10.1
|
Agreement
between our company and Hadasit Medical Services and Development Ltd.
dated February 17, 2006 (incorporated by reference from our current report
on Form 8-K filed February 17, 2006)
|
|
10.2*
|
Agreement
between our company and Hadasit Medical Services and Development Ltd.
dated January 7, 2009
|
|
10.3
|
Consulting
Agreement, dated May 1, 2008, between Oramed Pharmaceuticals Inc. and Dr.
Ehud Arbit (incorporated by reference from our annual report on Form
10-KSB filed November 26, 2008)
|
|
10.4
|
Amended
and Restated Consulting Agreement, dated as of May 1, 2008, between
Oramed Pharmaceuticals Inc. and Dr. Ehud Arbit (incorporated by reference
from our annual report on Form 10-KSB filed November 26,
2008)
|
|
10.5
|
Amended to
Consulting Agreement, dated as of October 3, 2008, between
Oramed Pharmaceuticals Inc. and Dr. Ehud Arbit (incorporated by reference
from our annual report on Form 10-KSB filed November 26,
2008)
|
|
(31)
|
Section
302 Certification
|
|
31.1
*
|
Certification
Statement of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
|
|
31.2
*
|
Certification
Statement of the Principal Accounting Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|
|
(32)
|
Section
906 Certification
|
|
32.1
*
|
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
|
|
32.2
*
|
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
|
*
|
Filed
herewith
|
ORAMED
PHARMACEUTICALS INC.
Registrant
|
||
Date: January
13, 2009
|
By:
|
/s/
Nadav
Kidron
|
Nadav
Kidron
|
||
President,
Chief Executive Officer and Director
|
||
Date: January
13, 2009
|
By:
|
/s/ Chaime
Orlev
|
Chaime
Orlev
|
||
Chief
Financial Officer
|
1.
|
DEFINITIONS. In addition
to terms elsewhere defined in this Agreement, the following terms shall
have the meanings set forth opposite each one of
them:
|
1.1.
|
"Acquired Patents" means
the Patents set forth on Exhibit B
and all subject matters disclosed and claimed
therein.
|
1.2.
|
"Additional Patents"
means all Patents filed by OraMed as a result of the collaboration with
Hadasit as listed in Exhibit C and
all subject matters disclosed and claimed
therein
|
1.3.
|
Patents" means
(i) all patents and patent applications and any patents issuing
therefrom worldwide, (ii) any patents and patent applications claiming
priority form (i) above, (iii) any substitutions, divisions,
continuations, continuations-in-part, reissues, renewals, registrations,
confirmations, re-examinations, extensions, supplementary protection
certificates, term extensions (under patent or other law), certificates of
invention and the like, of any such patents or patent applications,
(iv) any foreign or international equivalent of any of the foregoing;
and (v) any application claiming priority of any patent in (i)-(iv)
above.
|
2.
|
ASSIGNMENT
OF PATENTS
|
2.1.
|
Consideration.
Hadasit acknowledges and agrees that the 4,141,532 common stock par value
US$0.001 of OraMed issued to Hadasit on February 17, 2006 constitute the
sole and complete compensation and consideration for the sale, transfer
and assignment of the Acquired Patents and Additional Patents and that
Hadasit is not and will not be entitled for any additional consideration
of any kind for the sale, transfer and assignment of the Acquired Patents
and the Additional Patents.
|
2.2.
|
Acquired
Patents. Hadasit confirms that it has conveyed, transferred and
assigned all if its ownership rights in the Acquired Patents and any other
rights, title and interest in and to the Acquired Patents to OraMed and
that Hadasit has no and will have no claims whatsoever regarding the
Acquired Patents. Hadasit further confirms and acknowledge that OraMed has
had the right to file the Acquired Patents in its own
name.
|
2.3.
|
Additional
Patents. Hadasit further confirms its ownership rights and any
other rights, title and interest in and to the Additional Patents have
been or will be assigned, conveyed and transferred to OraMed exclusively
immediately upon OraMed's requests and that Hadasit has no and will have
no claims whatsoever regarding these Additional
Patents.
|
2.4.
|
For
the avoidance of doubt, Hadasit acknowledges and confirms that it has
neither claims of any kind nor any rights to any of the Additional Patents
listed in Exhibit C, attached hereto, all of which were filed by OraMed
after the First Agreement. OraMed will exclusively control all
prosecution, defense, enforcement, maintenance and will fully incur all
costs of maintenance of both the Acquired Patents and the Additional
Patents. Should OraMed decides for any reason not to incur some of the
Patent costs and expenses (including, but not limited to, defense thereof
against third parties claims or prosecution of third parties infringing
same) relating to the Acquired Patents, and Hadasit shall bear such
expenses in its stead, then OraMed shall be deemed to have automatically
waived and assigned all its rights under the Acquired Patents or the
Additional Patents, and shall not be entitled to any remuneration or
compensation in respect of such rights or such assignment derived from
Hadasit incurring such expenses. OraMed shall then take all steps and/or
execute all documents necessary in order to give full force and effect to
any such agreement to assign the Acquired or Additional Patents to
Hadasit.
|
2.5.
|
In
the event that Dr. Miriam Kidron is subsequently discovered not to be the
sole inventor of the Acquired Patents or the Additional Patents and that
either of them is subject to a claim by any current or former employee of
Hadassah Medical Organization ("Hadasit Inventor"), any consideration that
may be required to be paid to any Hadasit Inventor pursuant the Hadasit's
internal guidelines or otherwise will be payable to such Hadasit Inventor
solely by Dr. Miriam Kidron. In no event, including the event described in
this subsection, shall the consideration paid to Hadasit be reduced and/or
altered in any manner in order to compensate the Hadasit Inventor. Any and
all Hadasit Inventor shall assign and will assign and transfer their
entire right, title, and interest exclusively to Oramed, subject to the
Hadasit Inventor’s entitlement to a proportionate share of Dr. Miriam
Kidron share holdings in OraMed.
|
2.6.
|
Representations and
Warranties. Hadasit hereby represents and warrants
that:
|
|
2.6.1.
|
It
has as of the Effective Date, and will have during the Term, sufficient
rights and power to grant the rights to OraMed to which it purports to
grant herein, free and clear of any and all liens and any requirements of
charges, fees, rights, conditions or restrictions of any kind;
and
|
|
2.6.2.
|
It
has not granted any third parties any rights or licenses in the Acquired
Patents and Additional Patents.
|
|
2.6.3.
|
From
November 1, 2006, Dr. Miriam Kidron is no longer an employee of Hadassa
Medical Organization or Hadasit, and no employer-employee relationship
exists as of that date between Hadassah Medical Organization or Hadasit
and Dr. Miriam Kidron. Furthermore, from November 1, 2006 any results
developed by Dr. Miriam Kidron using her funds, do not belong to Hadassah
Medical Organization or to Hadasit.
|
|
2.6.4.
|
it
will execute any further document reasonably requested by OraMed in order
to effect this Agreement and the assignment of rights
herein.
|
|
2.6.5.
|
this
Agreement is a legal and valid obligation binding upon it and enforceable
in accordance with its terms; and
|
|
2.6.6.
|
the
execution, delivery and performance of this Agreement do not conflict with
any agreement, instrument or understanding, oral or written, to which it
is a party or by which it may be bound, nor violate any law or regulation
of any court, governmental body or administrative or other agency having
jurisdiction over it.
|
2.7.
|
Disclaimer.
Except as expressly set forth herein, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND
EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF TITLE,
NON-INFRINGEMENT, MERCHANTIBILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
|
3.
|
CLINICAL
TRIALS
|
3.1.
|
Clinical Trial.
Hadasit further acknowledges and agrees that all the results of Clinical
Trials including currently performed clinical trials concerning the
intellectual property and technology which is the subject matter of this
Agreement, including all intellectual property right thereof, data,
information, records, notes forms and regulatory files belong exclusively
to OraMed.
|
3.2.
|
Dr. Miriam
Kidron. Dr. Kidron has retired and is not longer an employee of
Hadsit or Hadassah Medical Organization. OraMed has no outstanding
obligations for Hadasit with respect to Dr. Kidron and Hadasit has no
claims for her as they relate to the First Agreement, the Acquired Patents
and/or the Additional Patents, subject to sub-clause 2.5
above.
|
4.
|
TERM
|
4.1.
|
This
Agreement shall become effective on the Effective Date and shall continue
until the last to expire of the Acquired Patents and the Additional
Patents (the "Term").
|
5.
|
MISCELLANEOUS.
|
5.1.
|
Governing Law.
This Agreement shall be governed by and construed according to the laws of
the State of Israel without regard to the conflict of laws provisions
thereof. Any dispute arising under or in relation to this
Agreement shall be resolved in the competent courts of Tel Aviv-Jaffa
District, and each of the parties hereby submits irrevocably to the
jurisdiction of such court.
|
5.2.
|
Assignment.
Hadasit may not assign any of its rights or delegate any of its
obligations under this Agreement by operation of law or otherwise without
the prior written consent of OraMed. OraMed shall be free to
assign this Agreement in its sole discretion to its affiliates or to an
entity that acquires a majority of the assets of OraMed to which this
Agreement relates or all or substantially all of the equity of OraMed,
provided that any such Assignee fully undertakes OraMed’s obligations
under this Agreement. Any attempted assignment in violation of the
foregoing shall be null and void and of no effect. Subject to the
foregoing, this Agreement shall bind and inure to the benefit of the
Parties and their successors and
assigns.
|
5.3.
|
Headings. The
heading and captions are for convenience only and do not form part of this
Agreement and are not intended to interpret, define or limit the scope,
extent or intent of this Agreement or any provisions
hereof.
|
5.4.
|
Exhibits. The
exhibits of this Agreement form an integral part of this Agreement and
they may be changed and updated by agreement in writing of both Parties
hereto from time to time.
|
5.5.
|
Notices. Notices
to either Party to this Agreement shall be deemed given (a) four business
days after being mailed by airmail, postage prepaid, (b) the same business
day, if dispatched by facsimile and sender receives acknowledgment of
receipt. Mail shall be addressed as first set forth above, or
to either Party at such other address as it shall have notified the other
pursuant to the provisions of this subsection 5.5.
|
5.6.
|
Entire
Agreement. This Agreement constitutes the entire
agreement between OraMed and Hadasit with respect to the subject matter
hereof superseding any prior agreement, including, the First Agreement,
which is hereby no longer valid and shall be null and void. In
the event of a contradiction between the body of this Agreement and any
one of the exhibits thereto, the provisions contained in this Agreement
shall prevail.
|
5.7.
|
Amendment. This
Agreement may not be altered, amended or modified, except by formal
agreement in writing signed by duly authorized representatives of both
Parties.
|
5.8.
|
Independent
Contractors. The Parties hereto are and shall remain
independent contractors. Nothing herein shall be deemed to establish a
partnership, joint venture, or agency relationship between the Parties.
Neither Party shall have the right to obligate or bind the other Party in
any manner to any third party.
|
5.9.
|
No
Waiver. Neither Party shall, by mere lapse of time,
without giving notice thereof, be deemed to have waived any breach by the
other Party of any terms or provisions of this Agreement. The
waiver by either Party of any such breach shall not be construed as a
waiver of subsequent breaches or as a continuing waiver of such
breach.
|
5.10.
|
Severability. In
the event that any provision contained in his Agreement should, for any
reason, be held to be invalid or unenforceable in any respect under the
laws of any jurisdiction where enforcement is sought, such invalidity or
unenforceability shall not affect any other provision of this Agreement
and this Agreement shall be construed as if such invalid or unenforceable
provision had not been contained
herein.
|
5.11.
|
Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
|
5.12.
|
Indemnification:
Oramed shall indemnify, defend and hold harmless Hadasit, Hadassah Medical
Organization, their trustees, officers, directors, medical and
professional staff, employees, students and agents and their respective
successors, heirs and assigns (the "Indemnitees"), against any liability,
damage, loss or expense (including reasonable attorneys' fees and expenses
of litigation) incurred by or imposed upon the Indemnitees or any one of
them in connection with any claims, suits, actions, demands or judgments
arising out of the production, manufacture, sale, use in commerce or in
human clinical trials, lease, or promotion by OraMed or by a licensee,
affiliate or agent of OraMed of any product, process or service relating
to, or developed based on the Acquired Patents or the Additional Patents,
or arising out of the performance of any related Clinical Trials. Oramed's
indemnification obligation above will not apply to any liability, damage,
loss or expense to the extent that it is attributable to the negligence,
gross negligence, intentional misconduct or breach of any applicable laws
by any of the Indemnitees.
|
5.13.
|
Notwithstanding
anything to the contrary herein, OraMed shall not use the names of the
Hadasit, “Hadassah” or “HMO” without Hadasit’s prior written approval, not
to be unreasonably withheld, all except for (a) references to scientific
publications which are already in the public domain at the time of
publication and (b) applications for regulatory approvals to official
authorities, and (c) as requested by regulatory authorities as required by
law or applicable regulation. Notwithstanding the foregoing, OraMed shall
include appropriate acknowledgement and credit to Hadasit, HMO, and their
employees in any publication relating to the Clinical Trials and/or the
Patents, in whatever media, including application(s) to official
authorities or presentations to potential investors. Hadasit acknowledges
that OraMed is a reporting issuer in the United States and as such must
file a copy of this Agreement with the SEC, which will be open for
inspection by any party over the internet. Additionally, OraMed will be
required to make full disclosure in material change report and in its
periodic reports and other regulatory filing all aspects of this
transaction. Hadasit hereby consents to all such
filings.
|
HADASIT
|
ORAMED
INC.
|
|||
By:
|
/s/ Raphael Hofstein
|
By:
|
/s/ Nadav Kidron
|
|
Name:
|
Raphael Hofstein
|
Name:
|
Nadav Kidron
|
|
Title:
|
President & CEO
|
Title:
|
CEO
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
|
b)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such
evaluation;
|
c)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting;
|
Dated: January
13, 2009
|
By:
|
/s/ NADAV
KIDRON
|
|
Nadav
Kidron
President,
Chief Executive Officer and
Director
|
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
|
b)
|
evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such
evaluation;
|
c)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
Dated: January
13, 2009
|
By:
|
/s/ CHAIME
ORLEV
|
|
Chaime
Orlev,
Chief
Financial Officer
|
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities and Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the
Company.
|
Dated: January
13, 2009
|
By:
|
/s/ NADAV
KIDRON
|
|
|
Nadav
Kidron
President,
Chief Executive Officer and
Director
|
|
(1)
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities and Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the
Company.
|
Dated: January
13, 2009
|
By:
|
/s/ CHAIME
ORLEV
|
|
|
Chaime
Orlev,
Chief
Financial Officer
|