x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Delaware
|
98-0376008
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Hi-Tech Park 2/4
Givat-Ram
P.O. Box 39098
Jerusalem, Israel
(Address of Principal Executive Offices)
|
91390
(Zip Code)
|
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company x |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS |
1
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PART I | 2 | |
2
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15
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26
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26
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26
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PART II |
27
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27
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29
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29
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||
39
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||
39
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39
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40
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||
PART III |
41
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41
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46
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51
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54
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55
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||
56
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·
|
subject to limited exceptions, the judgment is final and non-appealable;
|
·
|
the judgment was given by a court competent under the laws of the state in which the court is located and is otherwise enforceable in such state;
|
·
|
the judgment was rendered by a court competent under the rules of private international law applicable in Israel;
|
·
|
the laws of the state in which the judgment was given provides for the enforcement of judgments of Israeli courts;
|
·
|
adequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and evidence;
|
·
|
the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel;
|
·
|
the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and
|
·
|
an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court.
|
High
|
Low
|
|||||||
Year Ended August 31, 2012
|
||||||||
Three Months Ended November 30, 2011
|
$ | 5.28 | $ | 3.00 | ||||
Three Months Ended February 29, 2012
|
$ | 4.56 | $ | 3.24 | ||||
Three Months Ended May 31, 2012
|
$ | 4.32 | $ | 3.24 | ||||
Three Months Ended August 31, 2012
|
$ | 4.32 | $ | 2.76 | ||||
Year Ended August 31, 2013
|
||||||||
Three Months Ended November 30, 2012
|
$ | 3.96 | $ | 3.12 | ||||
Three Months Ended February 28, 2013
|
$ | 9.61 | $ | 3.60 | ||||
Three Months Ended May 31, 2013
|
$ | 10.68 | $ | 6.10 | ||||
Three Months Ended August 31, 2013
|
$ | 9.35 | $ | 5.00 |
Year ended
|
||||||||
Operating Data:
|
August 31, 2013
|
August 31, 2012
|
||||||
Research and development expenses, net
|
$ | 2, 2,271,794 | $ | 1,680,845 | ||||
General and administrative expenses
|
2,032,129 | 1,203,164 | ||||||
Impairment of available- for-sale securities
|
- | 184,254 | ||||||
Financial expenses, net
|
132,951 | 185,997 | ||||||
Loss before taxes on income
|
(4,436,874 | ) | (3,254,260 | ) | ||||
Taxes on income (Tax benefit)
|
(205,062 | ) | 90,218 | |||||
Net loss for the period
|
(4,231,812 | ) | (3,344,478 | ) | ||||
Loss per common share – basic and diluted
|
$ | (0.59 | ) | $ | (0.57 | ) | ||
Weighted average common shares outstanding
|
7,209,283 | 5,884,595 | ||||||
Category
|
Amount
|
|||
Research and development, net of OCS funds
|
$ | 4,203,000 | ||
General and administrative expenses
|
1,524,000 | |||
Financial expenses, net
|
10,000 | |||
Total
|
$ | 5,737,000 |
·
|
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 U.S. 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.
|
Name
|
Age
|
Position
|
||
Nadav Kidron
|
39
|
President, Chief Executive Officer and Director
|
||
Miriam Kidron
|
73
|
Chief Medical and Technology Officer and Director
|
||
Leonard Sank
|
48
|
Director
|
||
Harold Jacob
|
60
|
Director
|
||
Michael Berelowitz
|
69
|
Director and Chairman of the Scientific Advisory Board
|
||
Gerald Ostrov
|
63
|
Director
|
||
Yifat Zommer
|
39
|
Chief Financial Officer, Treasurer and Secretary
|
||
Joshua Hexter
|
43
|
Chief Operating Officer and VP Business Development
|
Name and Principal
Position
|
Year
(1)
|
Salary
($)
(2)
|
Bonus
($)
(2)(3)
|
Option Awards
($)
(4)
|
All Other
Compensation
($)
(2) (5)
|
Total
($)
|
||||||||||||||||
Nadav Kidron
President and CEO and director (6)
|
2013
|
199,670 | 60,000 | 104,253 | 11,992 | 375,915 | ||||||||||||||||
2012
|
159,136 | - | 88,927 | 17,989 | 266,052 | |||||||||||||||||
Miriam Kidron
Chief Medical and Technology Officer and director (7)
|
2013
|
168,410 | 20,000 | 104,253 | 12,076 | 304,739 | ||||||||||||||||
2012
|
159,136 | - | 88,927 | 13,200 | 261,263 | |||||||||||||||||
Yifat Zommer
CFO, Treasurer and Secretary
|
2013
|
83,387 | 15,000 | 93,355 | 29,086 | 220,828 | ||||||||||||||||
2012
|
58,686 | - | 32,915 | 29,719 | 121,320 | |||||||||||||||||
Joshua Hexter
COO and VP Business Development
|
2013
|
48,426 | - | 109,061 | 10,019 | 167,506 |
(1)
|
The information is provided for each fiscal year, which begins on September 1 and ends on August 31.
|
(2)
|
Amounts paid for Salary and All Other Compensation were originally denominated in NIS and were translated into U.S. Dollars at the then current exchange rate for each payment.
|
(3)
|
Bonuses were granted at the discretion of the Compensation Committee.
|
(4)
|
The amounts reflect the grant date fair value, as calculated pursuant to
FASB ASC Topic 718, of these option awards. The assumptions used to determine the fair value of the option awards for fiscal years ended August 31, 2013 and 2012 are set forth in Note 10 to our audited consolidated financial statements included in this Annual Report on Form 10-K. Our Named Executive Officers will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold.
|
(5)
|
See “All Other Compensation Table” below.
|
(6)
|
Mr. Kidron receives compensation from Oramed Ltd. through KNRY, Ltd., an Israeli entity owned by Mr. Kidron, or KNRY. See “—Employment and Consulting Agreements” below.
|
(7)
|
Dr. Kidron receives compensation from Oramed Ltd. through KNRY. See “—Employment and Consulting Agreements” below. See “Item 13. Certain Relationships and Related Transactions, and Director Independence” for a description of management fees received by Dr. Kidron from Hadasit.
|
Name
|
Year
|
Automobile-
Related Expenses
($)
|
Manager’s
Insurance*
($)
|
Education
Fund*
($)
|
Total
($)
|
|||||||||||||
Nadav Kidron
|
2013
|
11,992 | -- | -- | 11,992 | |||||||||||||
2012
|
17,989 | -- | -- | 17,989 | ||||||||||||||
Miriam Kidron
|
2013
|
12,076 | -- | -- | 12,076 | |||||||||||||
2012
|
13,200 | -- | -- | 13,200 | ||||||||||||||
Yifat Zommer
|
2013
|
10,507 | 12,416 | 6,163 | 29,086 | |||||||||||||
2012
|
12,976 | 11,024 | 5,719 | 29,719 | ||||||||||||||
Joshua Hexter
|
2013
|
3,536 | 3,998 | 2,485 | 10,019 |
*
|
Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance premiums. An education fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes.
|
Option Awards
|
|||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|||||||||
Nadav Kidron
|
72,000 | (1) | - | 6.48 |
05/07/18
|
||||||||
72,000 | (3) | - | 5.88 |
04/20/20
|
|||||||||
60,000 | (4) | 12,000 | (4) | 4.08 |
08/08/22
|
||||||||
Miriam Kidron
|
72,000 | (1) | - | 6.48 |
05/07/18
|
||||||||
72,000 | (3) | - | 5.88 |
04/20/20
|
|||||||||
60,000 | (4) | 12,000 | (4) | 4.08 |
08/08/22
|
||||||||
Yifat Zommer
|
33,334 | (2) | -- | 5.64 |
10/19/19
|
||||||||
22,750 | (5) | 28,000 | (5) | 4.08 |
08/08/22
|
||||||||
Joshua Hexter
|
12,600 | (6) | 88,200 | (6) | 7.88 |
03/14/23
|
(1)
|
On May 7, 2008, 72,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $6.48 per share; 12,000 of such options vested immediately on the date of grant and the remainder vested in twenty equal monthly installments, commencing on June 30, 2008. The options have an expiration date of May 7, 2018.
|
(2)
|
On June 3, 2009, 33,334 options were granted to Yifat Zommer under the 2008 Plan at an exercise price of $5.64 per share; the options vest in three equal annual installments, commencing October 19, 2010, and expire on October 19, 2019.
|
(3)
|
On April 21, 2010, 72,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $5.88 per share; 9,000 of such options vested immediately on the date of grant and the remainder vested in twenty-one equal monthly installments, commencing on May 31, 2010. The options have an expiration date of April 20, 2020.
|
(4)
|
On August 8, 2012, 72,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $4.08 per share; 21,000 of such options vested immediately on the date of grant and the remainder vests in seventeen equal monthly installments, commencing on August 31, 2012. The options have an expiration date of August 8, 2022.
|
(5)
|
On August 8, 2012, 50,750 options were granted to Yifat Zommer under the 2008 Plan at an exercise price of $4.08 per share; the options vest in twenty-nine equal monthly installments, commencing on August 31, 2012, and expire on August 8, 2022.
|
(6)
|
On April 14, 2013, 100,800 options were granted to Joshua Hexter under the 2008 Plan at an exercise price of $7.88 per share; the options vest in 35 consecutive equal installments during a 3-year period commencing on May 31, 2013, and two installments of 1,400 each, that will vest on April 30, 2013 and April 14, 2016, and expire on April 14, 2023.
|
Name of Director
|
Fees Earned or Paid in Cash
($)
|
Option Awards (2)(3)
($)
|
All Other Compensation
($)
|
Total
($)
|
||||||||||||
Nadav Kidron
(1)
|
- | - | - | - | ||||||||||||
Miriam Kidron
(1)
|
- | - | - | - | ||||||||||||
Leonard Sank
(2)
|
10,000 | 41,203 | - | 51,203 | ||||||||||||
Harold Jacob
(2)
|
10,000 | 41,203 | - | 51,203 | ||||||||||||
Michael Berelowitz
(3)
|
10,000 | 16,484 | 1,375 | 27,859 | ||||||||||||
Gerald Ostrov
(6)
|
9,361 | 34,649 | - | 44,010 |
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
Weight-average exercise price of outstanding options, warrants and rights
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
|
-- | -- | -- | |||||||||
Equity compensation plans not approved by security holders
|
1,580,280 | $ | 4.43 | 151,176 | ||||||||
Total
|
1,580,280 | $ | 4.43 | 151,176 |
As used in the table below and elsewhere in this Annual Report on Form 10-K, the term “
beneficial ownership
” with respect to a security consists of sole or shared voting power, including the power to vote or direct the vote and/or sole or shared investment power, including the power to dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to acquire such power(s) during the next 60 days following November 25, 2013. Inclusion of shares in the table does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of common stock listed as owned by that person or entity.
|
Name and Address of
Beneficial Owner
|
Number of Shares
|
Percentage of Shares
Beneficially Owned
|
||||||
Nadav Kidron #+
12 Eliezer Hagadol St.
Jerusalem, Israel
|
1,080,312 | (1) | 13.2 | % | ||||
Miriam Kidron #+
2 Elza St.
Jerusalem, Israel
|
496,114 | (2) | 5.9 | % | ||||
Leonard Sank #
3 Blair Rd Camps Bay
Cape Town, South Africa
|
555,623 | (3) | 6.9 | % | ||||
Harold Jacob #
|
45,834 | (4) | * | |||||
Michael Berelowitz #
|
28,334 | (5) | * | |||||
Yifat Zommer +
|
63,084 | (6) | * | |||||
Regals Fund LP
767 Fifth Ave.
New York, NY, USA
|
1,325,094 | (7) | 15.6 | % | ||||
Gerald Ostrov #
|
20,000 | (8) | * | |||||
Joshua Hexter +
|
23,800 | (9) | * | |||||
All current executive officers and directors, as a group (eight persons)
|
2,313,101 | (10) | 25.9 | % |
_______________
|
*
|
Less than 1%
|
#
|
Indicates Director
|
+
|
Indicates Executive Officer
|
(1)
|
Includes 216,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
(2)
|
Includes 280,114 shares of common stock issuable upon the exercise of an outstanding warrant and 216,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
(3)
|
Includes: (i) 243,000 shares of common stock and warrants to purchase 23,265 shares of common stock held by Mr. Sank, (ii) 78,125 shares of common stock and a warrant to purchase 27,344 shares of common stock held by Mr. Sank’s wife, (iii) 45,000 shares of common stock issuable to Mr. Sank upon the exercise of outstanding stock options, and (iv) 138,889 shares of common stock owned by a company wholly owned by a trust of which Mr. Sank is a trustee. Mr. Sank disclaims beneficial ownership of the securities referenced in (ii) and (iv) above.
|
(4)
|
Includes 834
shares of common stock indirectly acquired through a corporation wholly-owned by Mr. Jacob, and 45,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
(5)
|
Includes 28,334 shares of common stock issuable upon the exercise of outstanding stock options.
|
(6)
|
Includes 63,084 shares of common stock issuable upon the exercise of outstanding stock options.
|
(7)
|
Include warrants to purchase 557,274 shares of common stock. Regals Capital Management LP is the investment manager of Regals Fund LP (“Regals”), the owner of record of these shares of common stock. Mr. David M. Slager is the managing member of the general partner of Regals Capital Management LP. All investment decisions are made by Mr. Slager, and thus the power to vote or direct the votes of these shares of common stock, as well as the power to dispose or direct the disposition of such shares of common stock is held by Mr. Slager through Regals Capital Management LP. The forgoing is based in part on a Schedule 13G/A filed February 12, 2013 and a Form 4 filed June 18, 2013 jointly by Regals, Regals Capital Management LP and Mr. Slager.
|
(8)
|
Includes 20,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
(9)
|
Includes 23,800 shares of common stock issuable upon the exercise of outstanding stock options.
|
(10)
|
Includes 987,941 shares of common stock issuable upon the exercise of warrants beneficially owned by the referenced persons and the exercise of outstanding stock options.
|
Summary:
|
2013
|
2012
|
||||||
Audit Fees
(1)
|
$ | 100,000 | $ | 102,240 | ||||
Audit-Related Fees
|
- | - | ||||||
Tax Fees
(2)
|
10,000 | 10,000 | ||||||
All Other Fees
|
- | - | ||||||
Total Fees
|
$ | 110,000 | $ | 112,240 |
(1)
|
Amount represents fees paid for professional services for the audit of our consolidated annual financial statements and review of our interim condensed consolidated financial statements included in quarterly reports and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
|
(2)
|
Amount represents fees paid for consulting services to assist us with our implementation of FASB ASC Topic 740-10 (formerly FIN 48), “Income Taxes,” relating to uncertain tax positions.
|
Page
|
||
F - 1 | ||
|
||
F - 2 | ||
|
||
CONSOLIDATED FINANCIAL STATEMENTS:
|
||
F - 3
|
||
F - 4
|
||
F - 5 -
F - 7
|
||
F - 8
|
||
F - 9 -
F - 38
|
Tel Aviv, Israel
|
/s/ Kesselman & Kesselman
|
November 26, 2013
|
Kesselman & Kesselman
|
Certified Public Accountants (Isr.)
|
|
A member firm of PricewaterhouseCoopers
|
|
International Limited
|
Period
|
||||||||||||
from April
|
||||||||||||
12, 2002 | ||||||||||||
(inception)
|
||||||||||||
Year ended
|
through
|
|||||||||||
August 31
|
August 31,
|
|||||||||||
2013
|
2012
|
2013 | ||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
(note 12)
|
$ | 2,271,794 | $ | 1,680,845 | $ | 11,804,488 | ||||||
IMPAIRMENT OF INVESTMENT
|
- | - | 434,876 | |||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
(note 13)
|
2,032,129 | 1,203,164 | 10,193,676 | |||||||||
OPERATING LOSS
|
4,303,923 | 2,884,009 | 22,433,040 | |||||||||
FINANCIAL INCOME
(note 14a)
|
(180,495 | ) | (13,126 | ) | (387,653 | ) | ||||||
GAIN ON SALE OF INVESTMENT
|
- | - | (1,033,004 | ) | ||||||||
IMPAIRMENT OF AVAILABLE- FOR-SALE SECURITIES
|
- | 184,254 | 381,666 | |||||||||
FINANCIAL EXPENSES
(note 14b)
|
313,446 | 199,123 | 693,826 | |||||||||
LOSS BEFORE TAXES ON INCOME
|
4,436,874 | 3,254,260 | 22,087,875 | |||||||||
INCOME TAX EXPENSES (BENEFIT)
(note 15)
|
(205,062 | ) | 90,218 | 35,714 | ||||||||
NET LOSS FOR THE PERIOD
|
$ | 4,231,812 | $ | 3,344,478 | $ | 22,123,589 | ||||||
SUBSEQUENT INCREASE IN THE FAIR VALUE OF AVAILABLE FOR SALE SECURITIES PREVIOUSLY WRITTEN DOWN AS IMPAIRED
|
(130,845 | ) | - | (130,845 | ) | |||||||
RECLASSIFICATION ADJUSTMENT FOR GAINS INCLUDED IN NET LOSS
|
90,370 | - | 90,370 | |||||||||
UNREALIZED GAIN ON AVAILABLE FOR SALE SECURITIES
|
(262,928 | ) | - | (262,928 | ) | |||||||
TOTAL OTHER COMPREHENSIVE INCOME
|
(303,403 | ) | - | (303,403 | ) | |||||||
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD
|
$ | 3,928,409 | $ | 3,344,478 | $ | 21,820,186 | ||||||
BASIC AND DILUTED LOSS PER COMMON SHARE
|
$ | 0.59 | $ | 0.57 | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON
|
||||||||||||
SHARES USED IN COMPUTING BASIC AND
|
||||||||||||
DILUTED LOSS PER COMMON STOCK*
|
7,209,283 | 5,884,595 |
* See note 1a(3).
|
Additional
capital
paid-in
|
Accumulated
Other
|
Deficit
accumulated
|
Total
stockholders'
|
|||||||||||||||||||||
Common Stock
|
||||||||||||||||||||||||
Shares*
|
$ | |||||||||||||||||||||||
BALANCE AS OF APRIL 12, 2002
(inception)
|
2,902,589 | $ | 34,828 | $ | 18,872 | - | - | $ | 53,700 | |||||||||||||||
CHANGES DURING THE PERIOD FROM APRIL 12, 2002 THROUGH
AUGUST 31, 2007:
|
||||||||||||||||||||||||
SHARES CANCELLED
|
(1,650,000 | ) | (19,800 | ) | 19,800 | - | - | - | ||||||||||||||||
SHARES ISSUED FOR INVESTMENT IN ISTI-NJ
|
95,368 | 1,144 | 433,732 | - | - | 434,876 | ||||||||||||||||||
SHARES ISSUED FOR OFFERING COSTS
|
146,079 | 1,753 | (1,753 | ) | - | - | - | |||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH– NET OF ISSUANCE EXPENSES
|
2,265,514 | 27,181 | 2,095,800 | - | - | 2,122,981 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES
|
10,417 | 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 | ||||||||||||||||||
OTHER COMPREHENSIVE LOSS
|
- | - | - | (16 | ) | (16 | ) | |||||||||||||||||
IMPUTED INTEREST
|
- | - | 8,437 | - | - | 8,437 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (4,478,917 | ) | (4,478,917 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2007
|
3,769,967 | 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
|
45,844 | 550 | 274,450 | - | - | 275,000 | ||||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH - NET OF ISSUANCE EXPENSES
|
848,288 | 10,178 | 5,774,622 | - | - | 5,784,800 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES
|
24,419 | 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
|
4,688,518 | $ | 56,252 | $ | 11,785,012 | - | $ | (7,248,204 | ) | $ | 4,593,060 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
accumulated
|
|||||||||||||||||||||||
Additional
|
Other
|
during the
|
Total
|
|||||||||||||||||||||
Common Stock
|
paid-in
|
Comprehensive
|
development
|
stockholders'
|
||||||||||||||||||||
Shares*
|
$ |
capital
|
Income
|
stage
|
equity
|
|||||||||||||||||||
BALANCE AS OF AUGUST 31, 2008
|
4,688,518 | $ | 56,252 | $ | 11,785,012 | $ | - | $ | (7,248,204 | ) | $ | 4,593,060 | ||||||||||||
SHARES ISSUED FOR SERVICES
|
17,012 | 204 | 152,724 | - | - | 152,928 | ||||||||||||||||||
SHARES TO BE ISSUED FOR SERVICES
|
- | - | 203,699 | - | - | 203,699 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 436,025 | - | - | 436,025 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 117,174 | - | - | 117,174 | ||||||||||||||||||
IMPUTED INTEREST
|
- | - | 3,780 | - | - | 3,780 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (2,760,474 | ) | (2,760,474 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2009
|
4,705,530 | $ | 56,456 | $ | 12,698,414 | - | $ | (10,008,678 | ) | $ | 2,746,192 | |||||||||||||
SHARES ISSUED FOR SERVICES
|
92,416 | 1,109 | 248,741 | - | - | 249,850 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 690,882 | - | - | 690,882 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 116,944 | - | - | 116,944 | ||||||||||||||||||
IMPUTED INTEREST
|
- | - | 3,780 | - | - | 3,780 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (2, 977, 376 | ) | (2,977,376 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2010
|
4,797,946 | $ | 57,565 | $ | 13,758,761 | - | $ | (12,986,054 | ) | $ | 830,272 | |||||||||||||
SHARES ISSUED FOR SERVICES
|
60,887 | 731 | 226,838 | - | - | 227,569 | ||||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH**
|
984,209 | 11,808 | 3,682,404 | - | - | 3,694,212 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 502,593 | - | - | 502,593 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 26,733 | - | - | 26,733 | ||||||||||||||||||
IMPUTED INTEREST
|
- | - | 3,782 | - | - | 3,782 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (1,561,245 | ) | (1,561,245 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2011
|
5,843,042 | 70,104 | 18,201,111 | - | (14,547,299 | ) | 3,723,916 | |||||||||||||||||
SHARES ISSUED FOR SERVICES
|
29,084 | 349 | 107,511 | - | - | 107,860 | ||||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH, INCLUDING RECLASSIFICATION OF WARRANTS
|
801,942 | 9,622 | 2,984,842 | - | - | 2,944,464 | ||||||||||||||||||
SHARES AND WARRANTS TO BE ISSUED FOR CASH
|
- | - | 25,093 | - | - | 25,093 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 200,866 | - | - | 200,866 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 70,292 | - | - | 70,292 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (3,344,478 | ) | (3,344,478 | ) | ||||||||||||||||
BALANCE AS OF
AUGUST
31, 2012
|
6,674,068 | $ | 80,075 | $ | 21,589,715 | - | $ | (17,891,777) | $ | 3,778,013 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
accumulated
|
|||||||||||||||||||||||
Additional
|
other
|
during the
|
Total
|
|||||||||||||||||||||
Common Stock
|
paid-in
|
Comprehensive
|
development
|
stockholders'
|
||||||||||||||||||||
Shares*
|
$ |
capital
|
Income
|
stage
|
equity
|
|||||||||||||||||||
BALANCE AS OF AUGUST 31, 2012
|
6,674,068 | $ | 80,075 | $ | 21,589,715 | - | $ | (17,891,777) | $ | 3,778,013 | ||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH, NET**
|
349,396 | 4,192 | 1,418,400 | - | - | 1,422,592 | ||||||||||||||||||
SHARES ISSUED FOR CASH, NET***
|
658,144 | 7,897 | 4,230,992 | - | - | 4,238,889 | ||||||||||||||||||
SHARES ISSUED FOR MARKETABLE SECURITIES
|
199,172 | 2,390 | 626,240 | - | - | 628,630 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES****
|
33,709 | 404 | 244,053 | - | - | 244,457 | ||||||||||||||||||
EXCHANGE OF WARRANTS (see note 6)
|
- | - | 917,809 | - | - | 917,809 | ||||||||||||||||||
EXERCISE OF WARRANTS AND OPTIONS
|
23,383 | 280 | 109,295 | - | - | 109,575 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 562,966 | - | - | 562,966 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 156,253 | - | - | 156,253 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (4, 231,812 | ) | (4,231,812 | ) | ||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
- | - | - | 303,403 | - | 303,403 | ||||||||||||||||||
BALANCE AS OF
AUGUST 31
, 2013
|
7,937,872 | $ | 95,238 | $ | 29,855,723 | $ | 303,403 | $ | (22,123,589) | $ | 8,130,775 |
Period from April 12, 2002 (inception date) through
|
||||||||||||
Year ended August 31
|
August 31,
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (4,231,812 | ) | $ | (3,344,478 | ) | $ | (22,123,589 | ) | |||
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation and amortization
|
5,379 | 14,737 | 126,223 | |||||||||
Amortization of debt discount
|
- | - | 108,000 | |||||||||
Exchange differences
|
19,179 | 62,494 | 50,216 | |||||||||
Stock based compensation
|
719,219 | 271,158 | 5,690,506 | |||||||||
Common stock issued for services
|
244,457 | 107,860 | 1,400,413 | |||||||||
Gain on sale of investment
|
(50,703 | ) | - | (1,083,707 | ) | |||||||
Impairment of investments
|
- | - | 434,876 | |||||||||
Impairment of available for sale securities
|
- | 184,254 | 381,666 | |||||||||
Imputed interest
|
- | - | 23,559 | |||||||||
Exchange of warrants
|
296,982 | - | 296,982 | |||||||||
Changes in fair value of warrant liabilities
|
(44,699 | ) | 142,704 | 98,005 | ||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
(3,094 | ) | (31,199 | ) | (163,253 | ) | ||||||
Restricted cash
|
- | - | (16,000 | ) | ||||||||
Accounts payable and accrued expenses
|
(146,232 | ) | 203,133 | 450,941 | ||||||||
Liability for employee rights upon retirement
|
1,045 | (2,489 | ) | 21,231 | ||||||||
Provision for uncertain tax position
|
(205,062 | ) | 90,218 | 23,210 | ||||||||
Total net cash used in operating activities
|
(3,395,341 | ) | (2,301,608 | ) | (14,280,721 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase of property and equipment
|
(6,379 | ) | (2,129 | ) | (131,991 | ) | ||||||
Purchase of short term deposits
|
(5,846,628 | ) | (475,353 | ) | (11,750,363 | ) | ||||||
Proceeds from sale of short term deposits
|
1,054,011 | 1,800,000 | 6,482,011 | |||||||||
Proceeds from sale of investment and marketable securities
|
226,671 | 450,000 | 676,671 | |||||||||
Funds in respect of employee rights upon retirement
|
(2,090 | ) | (3,620 | ) | (8,985 | ) | ||||||
Other
|
4,894 | - | (2,615 | ) | ||||||||
Total net cash provided by (used in) investing activities
|
(4,569,521 | ) | 1,768,898 | (4,735,272 | ) | |||||||
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
||||||||||||
Proceeds from sales of common stocks and
warrants - net of issuance expenses
|
5,714,918 | 3,488,942 | 20,859,553 | |||||||||
Proceeds from exercise of warrants and options
|
109,575 | - | 109,575 | |||||||||
Receipts on account of shares issuances
|
- | - | 6,061 | |||||||||
Proceeds from convertible notes
|
- | - | 275,000 | |||||||||
Proceeds from short term note payable
|
- | - | 120,000 | |||||||||
Payments of short term note payable
|
- | - | (120,000 | ) | ||||||||
Stockholder advances
|
- | - | 66,243 | |||||||||
Total net cash provided by financing activities
|
5,824,493 | 3,488,942 | 21,316,432 | |||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(18,143 | ) | (38,857 | ) | (28,211 | ) | ||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(2,158,512 | ) | 2,917,375 | 2,272,228 | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
4,430,740 | 1,513,365 | - | |||||||||
CASH AND CASH EQUIVALENTS AT END OF
|
||||||||||||
PERIOD
|
$ | 2,272,228 | $ | 4,430,740 | $ | 2,272,228 | ||||||
Material non cash investing and financing activities:
|
||||||||||||
Discount on convertible note related to beneficial
conversion feature
|
- | - | $ | 108,000 | ||||||||
Shares and warrants issued as offering costs
|
- | - | $ | 77,779 | ||||||||
Contribution to paid in capital
|
- | - | $ | 18,991 | ||||||||
Exchange of warrants
|
$ | 917,809 | - | $ | 917,809 | |||||||
Shares issued for marketable securities
|
$ | 628,630 | - | $ | 628,630 | |||||||
Shares and warrants to be issued for cash
|
- | $ | 25,093 | - |
|
a.
|
General
|
|
1)
|
Incorporation and operations
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 (“Hadasit”) to acquire the provisional patent related to orally ingestible insulin pill to be used for the treatment of individuals with diabetes. In subsequent periods, the Company entered into additional development agreements with Hadasit, the most recent of which was signed on September 11, 2011, see also note 8a.
On March 11, 2011, the Company was reincorporated from the State of Nevada to the State of Delaware.
On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd., which is engaged in research and development. Unless the context indicates otherwise, the term “Group” refers to Oramed Pharmaceuticals Inc. and its Israeli subsidiary, Oramed Ltd. (the “Subsidiary”), (together with the Company, "the Group").
In March 2011, the Subsidiary sold shares of its investee company, Entera Bio Ltd ("Entera") to D.N.A Biomedical Solutions Ltd ("D.N.A"), remaining a 3% interest, which is accounted for as a cost method investment (amounting $1,027). In consideration for the shares sold to D.N.A, the Company received a promissory note issued by D.N.A in the principal amount of $450,000, with an annual interest rate of 0.45%, that was paid in full in November 2011, and 8,404,667 ordinary shares of D.N.A, see also note 3.
As part of this agreement, the Subsidiary entered into a patent transfer agreement according to which, the Subsidiary assigned to Entera all of its right, title and interest in and to the patent application that it has licensed to Entera since August 2010. Under this agreement, the Subsidiary is entitled to receive from Entera royalties of 3% of Entera's net revenues (as defined in the agreement) and a license back of that patent application for use in respect of diabetes and influenza. As of August 31, 2013, Entera had not yet realized any revenues and had not paid any royalties to the Subsidiary.
|
|
2)
|
Development and liquidity risks
The Company has been in the development stage since its formation and has not yet generated any revenues from its operations.
The Group is engaged in research and development in the biotechnology field and is considered a development stage company in accordance with the ASC Topic 915 "Development Stage Entities" due to the fact that it has not generated any revenues from its operations.
|
|
3)
|
Reverse stock split
|
|
b.
|
Accounting principles
|
|
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
|
|
c.
|
Use of estimates in the preparation of financial statements
|
|
d.
|
Functional currency
|
|
e.
|
Principles of consolidation
|
|
f.
|
Property and equipment
|
%
|
||||
Computers and peripheral equipment
|
33 | |||
Office furniture and equipment
|
15-33 |
|
g.
|
Income taxes
|
|
h.
|
Research and development, net
|
|
i.
|
Cash equivalents
|
|
j.
|
Loss per common share
|
|
k.
|
Impairment in value of long-lived assets
|
|
l.
|
Stock based compensation
|
|
m.
|
Warrants issued as part of capital raisings that are classified as a liability
|
|
n.
|
Fair value measurement:
|
|
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 other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
|
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.
|
|
o.
|
Concentration of credit risks
|
|
p.
|
Newly issued and recently adopted accounting pronouncements:
|
|
1.
|
In June 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (ASU) 2011-05, an update to ASC No. 220, “Presentation of Comprehensive Income,” which eliminates the option to present other comprehensive income and its components in the statement of shareholders’ equity. The Company can elect to present the items of net income and other comprehensive income in a single continuous statement of comprehensive income or in two separate, but consecutive, statements. Under either method the statement would need to be presented with equal prominence as the other primary financial statements. The amended guidance, which must be applied retroactively, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with earlier adoption permitted. In December 2011, the FASB issued another update on the topic, which deferred the effective date pertaining only to the presentation of reclassification adjustments on the face of the financial statements. The Company adopted the pronouncement in the first quarter of fiscal year 2013.
|
|
2.
|
In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, ASU 2013-02 requires presentation, either on the face of the income statement or in the notes, of significant amounts reclassified out of accumulated other comprehensive income by respective line items of net income, but only if the amounts reclassified are required to be reclassified in their entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about these amounts. The amendments in ASU 2013-02 will be effective prospectively for annual reporting periods beginning after December 15, 2012, and interim periods within those annual periods. The accounting update will be applicable to the Company beginning in the first quarter of fiscal year 2014. The Company does not expect the adoption of ASU 2013-02 to have a material effect on the consolidated financial statement presentation.
|
|
3.
|
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). This update requires an entity to present in the financial statements an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments in ASU 2013-11 will be effective prospectively for annual reporting periods beginning after December 15, 2013, and interim periods within those annual periods. The accounting update will be applicable to the Company beginning in the first quarter of fiscal year 2015. The Company does not expect the adoption of ASU 2013-11 to have a material effect on the consolidated financial statement presentation.
|
August 31
|
||||||||||||||||
2013
|
2012
|
|||||||||||||||
Annual interest rate
|
Amount
|
Annual
interest rate
|
Amount
|
|||||||||||||
Dollar deposits
|
0.6-1.06% | $ | 5,111,914 | 0.85% | $ | 260,371 | ||||||||||
NIS deposits
|
1.93% | 134,713 | 1.93-1.97% | 194,010 | ||||||||||||
$ | 5,246,627 | $ | 454,381 |
Level 1
|
||||
Marketable securities:
|
||||
August 31, 2013
|
$ | 956,376 | ||
August 31, 2012
|
$ | 200,311 |
August 31
|
||||||||
2013
|
2012
|
|||||||
Carrying value at the beginning of the period
|
$ | - | $ | 384,565 | ||||
Additions
|
628,630 | - | ||||||
Reclassification to level 1
|
(628,630 | ) | (384,565 | ) | ||||
Carrying value at the end of the period
|
$ | - | $ | - |
August 31
|
||||||||
2013
|
2012
|
|||||||
Tax Authorities
|
$ | 59,898 | $ | 53,341 | ||||
Prepaid expenses and other receivables
|
30,205 | 36,657 | ||||||
$ | 90,103 | $ | 89,998 |
|
a.
|
Composition of property and equipment, grouped by major classifications, is as follows:
|
August 31
|
||||||||
2013
|
2012
|
|||||||
Cost:
|
||||||||
Leasehold improvements
|
$ | 76,029 | $ | 76,029 | ||||
Office furniture and equipment
|
19,941 | 19,941 | ||||||
Computers and peripheral equipment
|
34,301 | 29,642 | ||||||
130,271 | 125,612 | |||||||
Less - accumulated depreciation and amortization
|
124,503 | 120,844 | ||||||
$ | 5,768 | $ | 4,768 |
|
b.
|
Depreciation expenses totaled $5,379 and $14,737 in the years ended August 31, 2013 and 2012, respectively.
|
Fair value measurements at reporting
date using
|
||||||||
Level 3
|
Total
|
|||||||
Warrants -
|
||||||||
August 31, 2013
|
$ | - | $ | - | ||||
August 31, 2012
|
$ | 637,182 | $ | 637,182 |
Year ended August 31,
|
Year ended August 31,
|
|||||||
2013
|
2012
|
|||||||
Carrying value at the beginning of the period
|
$ | 637,182 | $ | - | ||||
Additional warrant liabilities granted
|
28,344 | 494,478 | ||||||
Changes in fair value
|
(44,699 | ) | 142,704 | |||||
Exchange of warrants
|
(620,827 | ) | - | |||||
Carrying value at the end of the period
|
$ | - | $ | 637,182 |
|
a.
|
On
September 11, 2011, the Subsidiary entered into an agreement with Hadasit, Dr. Miriam Kidron and Dr. Daniel Schurr (the “Agreement”), to retain consulting and clinical trial services. According to the Agreement, Hadasit will be entitled to a consideration of $200,000 to be paid by the Company in accordance with the actual progress of the study, $50,000 of which were paid and recognized through August 31, 2013
.
See also note 1a(1).
|
|
b.
|
The Subsidiary has entered into operating lease agreements for vehicles used by its employees for a period of 3 years.
|
|
c.
|
On July 5, 2010, the Subsidiary of the Company entered into a Manufacturing Supply Agreement (“MSA”) with Sanofi-Aventis Deutschland GMBH (“Sanofi”). According to the MSA, Sanofi will supply the subsidiary with specified quantities of recombinant human insulin to be used for clinical trials in the United States.
|
|
d.
|
On February 15, 2011, the Subsidiary entered into a consulting agreement with a third party (the "Consultant”) for a period of five years, pursuant to which the Consultant will provide consultation on scientific and clinical matters. The Consultant is entitled to a fixed monthly fee of $8,000, royalties of 8% of the net royalties actually received by the Subsidiary in respect of the patent that was sold to Entera on March 31, 2011 (see note 1a(1)) and an option to purchase up to 20,834 shares of the Company at an exercise price of $6.00 per share. The option vests in five annual installments commencing February 16, 2012 and expires on February 16, 2021. The initial fair value of the option on the date of grant was $62,185, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 78.65%; risk-free interest rates of 3.62%; and the remaining expected term of 10 years. The fair value of the option as of August 31, 2013 was $108,675, using the following assumptions: dividend yield of 0% and expected term of 7.46 years; expected volatility of 76.87%; and risk-free interest rate of 2.33%.
The fair value of the option granted is remeasured at each balance sheet reporting date and is recognized over the related service period using the straight-line method.
|
|
e.
|
On July 25, 2011, the Company issued warrants to purchase
32,000
shares of the Company at an exercise price of $6.00 per share to a third party as remuneration for services to be rendered during the 12 month period commencing May 13, 2011. The warrants vest in twelve equal installments over the five years period form October 13, 2011 to May 13, 2016, and will expire on July 25, 2016. The fair value of these warrants on the date of grant was $5,057, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 77.39%; risk-free interest rate of 1.55%; and the remaining expected term of 5 years. The fair value of the option as of August 31, 2013, was $9,169, using the following assumptions: dividend yield of 0% and expected term of 2.9 years; expected volatility of 76.41%; and risk-free interest rate of 0.79%. The fair value of the option granted is remeasured at each balance sheet reporting date and is recognized over the related service period using the straight-line method.
|
|
f.
|
On February 15, 2012, the Company entered into an advisory agreement with a third party for a period of one year, pursuant to which such third party will provide investors relations services and will be entitled to a share based compensation as follows: 25,000 shares of the Company will be issued in six installments over the engagement period, commencing February 15, 2012, and a warrant to purchase 62,500 shares of the Company at an exercise price of $6.00 per share. The warrant vested in 12 monthly installments commencing February 15, 2012 and expires on February 15, 2017. The initial fair value of the warrant on the date of grant was $121,304, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.82%; risk-free interest rates of 0.81%; and the remaining expected term of 5 years.
|
|
g.
|
On March 18, 2012, the Subsidiary entered into a lease agreement for its facilities in Israel. The lease agreement is for a period of 57 months commencing January 1, 2012.
|
|
h.
|
On April 15, 2013, the Company entered into a consulting agreement with a third party advisor for a period of twelve months, pursuant to which such advisor provided investor relations services and received a monthly cash fee and 15,000 shares of the Company to be issued in three equal installments, on
each of May 1, 2013, August 1, 2013 and November 15, 2013. On July 11, 2013 the Company issued to such advisor 5,000 shares. The fair value of the shares at this date was $34,900. The Company issued the remaining 10,000 shares on November 4, 2013, see also note 9f.
|
|
i.
|
On April 29, 2013, the Subsidiary entered into a Clinical Research Organization Service Agreement with a third party, to retain it as a CRO, for its Phase 2a clinical trial for an oral insulin capsule
.
As consideration for its services, the subsidiary will pay the CRO a total amount of approximately $332,702 that will be paid during the term of the engagement and based on achievement of certain milestones, $89,830 of which were paid and recognized through August 31, 2013.
|
|
j.
|
On July 23, 2013, the Subsidiary entered into a Master Service Agreement with a vendor for the process development and production of one of its oral capsule ingredients in the amount of $102,280, of which $30,684 were paid and recognized through August 31, 2013.
|
|
k.
|
Grants from Bio-Jerusalem
|
|
l.
|
Grants from the Chief Scientist Office ("OCS")
|
|
a.
|
On August 15, 2011, the Company entered into a consulting agreement with a third party advisor for a period of nine months, pursuant to which such advisor provided investor relations services and received a monthly cash fee and shares of the Company's that were issued in three equal installments as follows: on
each of December 12, 2011, March 14, 2012 and May 15, 2012, the Company issued 6,917 shares at a fair value of $24,900, $26,560 and $24,900, respectively.
|
|
b.
|
Under the terms of the advisory agreement, as described in note 8f, on
each of March 14, 2012 and July 5, 2012, the Company issued 4,167 shares to such advisor as remuneration for services provided. The fair value of the shares at the dates of grant was $15,500 and $16,000, respectively. The Company issued the remaining 16,667 shares on July 30, 2013 at a fair value of $123,336.
|
|
c.
|
In August 2012, the Company entered into Securities Purchase Agreements with a number of investors for the sale of 801,942 units at a purchase price of $4.44 per unit for total consideration of $3,560,192. Each unit consisted of one share of the Company and one common stock purchase warrant. Each warrant entitles the holder to purchase half a share exercisable for five years at an exercise price of $6.00 per share.
The investors were granted customary registration rights with respect to resales of shares, including the shares underlying the warrants. In addition, one of the investors who was
previously
defined
as a leading investor (the "Leading Investor"), who purchased 225,226 of the units, was granted the right to maintain its percentage of the shares of the Company’s common stock outstanding by purchasing more shares whenever the Company proposes to issue certain additional shares to other investors. Such right only exists so long as such investor holds at least 5% of the Company's outstanding common stock. In addition, such investor’s warrants contained anti-dilution protection (the "full ratchet anti-dilution protection") and cashless exercise provisions not contained in the other investors’ warrants. The other terms of the Leading Investor's Securities Purchase Agreement were substantially the same as those granted to him in 2011 for his first investment.
As to the amendment to the 2011 Warrants, see note 6.
In addition, in August 2012, the Company entered into a Securities Purchase Agreement with an investor for the sale of 5,652 units at same terms as describe above. As the payment from said investor was received during September 2012, following which, the Company issued him 5,652 shares of its common stock and a warrant to purchase 2,826 shares of its common stock, the proceeds from that investment, of $25,093 were presented as shares and warrants to be issued for cash.
The Company paid cash consideration of $71,250 as finders' fees in connection with the Securities Purchase Agreements.
|
|
d.
|
Between September and November 2012, the Company entered into Securities Purchase Agreements with a number of investors for the sale of 329,872 units at a purchase price of $4.44 per unit for total consideration of $1,464,425. Each unit consisted of one share of the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.50 a share of common stock exercisable for five years at an exercise price of $6.00 per share. The investors were granted customary registration rights with respect to resales of shares, including the shares underlying the warrants. The Leading Investor purchased 33,784 of the units and was granted the same rights as described in note 9c above. See also note 6 regarding the removal of the full ratchet anti-dilution protection.
|
|
e.
|
On October 30, 2012, the Company entered into a Securities Purchase Agreement with D.N.A, according to which, the Company issued on that day to D.N.A 199,172 shares of its common stock, in consideration for the option to purchase up to 21,637,611 ordinary shares of D.N.A, valued at approximately $628,630 at the day of the transaction. The Company exercised the option in February 2013. See also note 3.
|
|
f.
|
As described in note 8h, on
July 11, 2013, the Company issued 5,000 shares of its common stock to an advisor as remuneration for services rendered.
|
|
g.
|
On
July 10, 2013, the Company entered into a Placement Agency Agreement with Aegis Capital Corp. as representative of the several placement agents (the "Placement Agents"), pursuant to which the Placement Agents agreed to use their reasonable best efforts to arrange for the sale of up to 658,144 shares of the Company’s common stock. In connection therewith, on July 10, 2013, the Company also entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell an aggregate of 658,144 shares at a price of $7.00 per share, to various investors in a registered direct offering (the "Offering"). The Company had received all funds and issued all shares in connection with the Offering as of July 17, 2013. The net proceeds to the Company from the offering are approximately $4,238,889, after deducting Placement Agents' commissions of $255,246 and other offering expenses of the Company.
|
|
h.
|
On July 8,2013, the Company issued 12,042 shares to four service providers as remuneration for investors relations services provided during the year ended August 31, 2013. The total fair value of the shares at the date of grant was $86,221.
|
|
i.
|
As to shares issued as part of stock based compensation plan see note 10.
|
|
a.
|
On August 8, 2012, options to purchase an aggregate of 144,000 shares of the Company were granted to Nadav Kidron, the Company’s President, Chief Executive Officer and director, and Miriam Kidron, the Company’s Chief Medical and Technology Officer and director, both related parties, at an exercise price of $4.08 per share (equivalent to the traded market price on the date of grant), the options vested with respect to 42,000 shares of common stock immediately on the date of grant and the remaining shares of common stock will vest in seventeen equal monthly installments of 6,000 each. These options expire on August 7, 2022. The fair value of these options on the date of grant was $373,565, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 0.83%; and expected term of 5.5 years.
|
|
b.
|
On August 8, 2012, options to purchase an aggregate of 43,334 shares of the Company were granted to three Board of Directors members at an exercise price of $4.08 per share (equivalent to the traded market price on the date of grant). The options vest in two equal annual installments, commencing January 1, 2013, and expire on August 7, 2022. The fair value of these options on the date of grant was $114,694, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 1.0375%; and expected term of 5.75 years.
|
|
c.
|
On August 8, 2012, options to purchase 50,750 shares of the Company were granted to an employee of the Subsidiary, at an exercise price of $4.08 per share (equivalent to the traded market price on the date of grant). The options vest in 29 equal monthly installments, commencing August 31, 2012, and expire on August 8, 2022. The fair value of these options on the date of grant was $134,324, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 1.0375%; and expected term of 5.75 years.
|
|
d.
|
On August 8, 2012, options to purchase 6,250 shares of the Company c granted to an employee of the Subsidiary, at an exercise price of $4.08 per share (equivalent to the traded market price on the date of grant). The options vest in three equal annual installments, commencing January 1, 2013, and expire on August 7, 2022. The fair value of these options on the date of grant was $16,780, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 0.935%; and expected term of 6 years.
|
|
e.
|
August 8, 2012, the Company's Board of Directors approved an extension of the term of the warrants to purchase 280,114 shares of the Company held by Dr. Miriam Kidron by approximately two years from such approval, expiring on August 6, 2014. The incremental fair value of the warrant extension was negligible.
|
|
f.
|
On December 20, 2012, options to purchase 20,000 shares of the Company were granted to a director at an exercise price of $6.00 per share (higher than the traded market price on the date of grant). The options vest in two equal annual installments, commencing January 1, 2013, and expire on December 19, 2022. The fair value of these options on the date of grant was $41,402, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 64.35%; risk-free interest rates of 1.01%; and expected term of 5.75 years.
|
|
g.
|
On December 20, 2012, options to purchase 4,667 shares of the Companywere granted to an employee of the Subsidiary at an exercise price of $6.00 per share (higher than the traded market price on the date of grant). The options vest in two equal annual installments, commencing June 1, 2013, and expire on December 19, 2022. The fair value of these options on the date of grant was $9,660, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 64.35%; risk-free interest rates of 1.01%; and expected term of 5.75 years.
|
|
h.
|
On April 14, 2013, options to purchase 100,800 shares of the Company’s common stock were granted to an employee of the Subsidiary at an exercise price of $7.88 per share (equal to the traded market price on the date of grant). The options vest in 35 consecutive equal installments during a 3-year period commencing on May 31, 2013, and two installments of 1,400 shares of common stock each, that will vest on April 30, 2013 and April 14, 2016, and expire on April 14, 2023. The fair value of these options on the date of grant was $519,785, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 75.46%; risk-free interest rates of 0.92%; and expected term of 6 years .
|
|
i.
|
As to options granted to third parties, see notes 8d, 8e and 8f.
|
For options granted in
|
||||||||
the year ended August 31
|
||||||||
2013
|
2012
|
|||||||
Expected option life (years)
|
5.75-6 | 5.5-5.75 | ||||||
Expected stock price volatility (%)
|
64.35-75.46 | 76.03 | ||||||
Risk free interest rate (%)
|
0.92-1.01 | 0.83-1.0375 | ||||||
Expected dividend yield (%)
|
0.0 | 0.0 |
Year ended August 31,
|
||||||||||||||||
2013
|
2012
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
average
|
Number
|
average
|
|||||||||||||
of
|
exercise
|
of
|
exercise
|
|||||||||||||
options
|
price
|
options
|
price
|
|||||||||||||
$ | $ | |||||||||||||||
Options outstanding at
|
||||||||||||||||
beginning of year
|
932,116 | 3.72 | 834,117 | 3.84 | ||||||||||||
Changes during the year:
|
||||||||||||||||
Granted - at market price
|
100,800 | 7.88 | 244,334 | 4.08 | ||||||||||||
Granted - above market price
|
24,667 | 6.00 | - | |||||||||||||
Expired
|
- | (141,667 | ) | 5.40 | ||||||||||||
Forfeited
|
- | (4,667 | ) | 5.64 | ||||||||||||
Exercised
|
8,334 | 5.04 | - | |||||||||||||
Options outstanding at end
|
||||||||||||||||
of year
|
1,049,249 | 4.13 | 932,116 | 3.72 | ||||||||||||
Options exercisable at end
|
||||||||||||||||
of year
|
870,883 | 717,088 | ||||||||||||||
Weighted average fair
|
||||||||||||||||
value of options granted
|
||||||||||||||||
during the year
|
$ | 4.55 | $ | 2.65 |
Weighted
|
||||||||||||||||||
Average
|
Weighted
|
|||||||||||||||||
Range of
|
Remaining
|
average
|
||||||||||||||||
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
||||||||||||||
prices
|
outstanding
|
Life
|
price
|
intrinsic value
|
||||||||||||||
$ |
Years
|
$ | $ | |||||||||||||||
0.012 | 280,114 | 0.93 | 0.012 | 2,038,670 | ||||||||||||||
4.08 to 6.48
|
668,335 | 7.05 | 5.28 | 1,340,874 | ||||||||||||||
7.88 | 100,800 | 9.62 | 7.88 | - | ||||||||||||||
1,049,249 | 5.66 | 4.13 | 3,379,544 |
Weighted
|
||||||||||||||||||
Average
|
Weighted
|
|||||||||||||||||
Range of
|
Remaining
|
average
|
||||||||||||||||
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
||||||||||||||
prices
|
exercisable
|
Life
|
price
|
intrinsic value
|
||||||||||||||
$ |
Years
|
$ | $ | |||||||||||||||
0.012 | 280,114 | 0.93 | 0.012 | 2,038,670 | ||||||||||||||
4.08 to 6.48
|
578,169 | 6.74 | 5.43 | 1,075,120 | ||||||||||||||
7.88 | 12,600 | 9.62 | 7.88 | - | ||||||||||||||
870,883 | 4.92 | 3.72 | 3,113,790 |
Year ended August 31
|
||||||||||||||||
2013
|
2012
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
average
|
Number
|
average
|
|||||||||||||
of
|
exercise
|
of
|
exercise
|
|||||||||||||
options
|
price
|
options
|
price
|
|||||||||||||
$ | $ | |||||||||||||||
Options outstanding at
|
||||||||||||||||
beginning of year
|
144,856 | 6.66 | 82,356 | 7.20 | ||||||||||||
Changes during the year:
|
||||||||||||||||
Granted above market
|
||||||||||||||||
price
|
- | 62,500 | 6.00 | |||||||||||||
Options outstanding at end
|
||||||||||||||||
of year
|
144,856 | 6.66 | 144,856 | 6.66 | ||||||||||||
Options exercisable at end
|
||||||||||||||||
of year
|
109,969 | 88,689 |
Weighted
|
||||||||||||||||||
Average
|
Weighted
|
|||||||||||||||||
Range of
|
Remaining
|
Average
|
||||||||||||||||
exercise
|
Number
|
Contractual
|
Exercise
|
Aggregate
|
||||||||||||||
prices
|
outstanding
|
Life
|
Price
|
intrinsic value
|
||||||||||||||
$ |
Years
|
$ | $ | |||||||||||||||
4.08 to 6.00
|
111,520 | 3.79 | 5.93 | 151,785 | ||||||||||||||
9.12 | 33,336 | 4.33 | 9.12 | - | ||||||||||||||
144,856 | 3.92 | 6.66 | 151,785 |
Weighted
|
||||||||||||||||||
Average
|
Weighted
|
|||||||||||||||||
Range of
|
Remaining
|
average
|
||||||||||||||||
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
||||||||||||||
prices
|
exercisable
|
Life
|
price
|
intrinsic value
|
||||||||||||||
$ |
Years
|
$ | $ | |||||||||||||||
4.08 to 6.00
|
93,301 | 3.42 | 5.92 | 128,283 | ||||||||||||||
9.12 | 16,668 | 4.33 | 9.12 | - | ||||||||||||||
109,969 | 3.55 | 6.40 | 128,283 |
Year ended
|
||||||||
August 31,
|
||||||||
2013
|
2012
|
|||||||
Service providers
|
$ | 392,289 | $ | 580,714 | ||||
Payroll and related expenses
|
58,652 | 16,459 | ||||||
$ | 450,941 | $ | 597,173 |
Period from April
|
||||||||||||
12, 2002 | ||||||||||||
(inception)
|
||||||||||||
Year ended
|
through
|
|||||||||||
August 31,
|
August 31,
|
|||||||||||
2013
|
2012
|
2013 | ||||||||||
Clinical trials
|
$ | 1,341,471 | $ | 1,298,310 | $ | 6,504,824 | ||||||
Payroll and consulting fees
|
447,195 | 385,646 | 2,368,728 | |||||||||
Costs for registration of patents
|
106,687 | 110,811 | 558,297 | |||||||||
Compensation costs in respect of options
granted to employees, directors and
consultants
|
346,961 | 98,688 | 3,268,842 | |||||||||
Other
|
338,635 | 160,350 | 886,242 | |||||||||
Less - grants from the OCS and Bio Jerusalem Fund
|
(309,155 | ) | (372,959 | ) | (1,782,445 | ) | ||||||
$ | 2,271,794 | $ | 1,680,845 | $ | 11,804,488 |
Period from April
|
||||||||||||
12, 2002 | ||||||||||||
(inception)
|
||||||||||||
Year ended
|
through
|
|||||||||||
August 31
|
August 31,
|
|||||||||||
2013
|
2012
|
2013 | ||||||||||
Compensation costs in respect of options
granted to employees, directors and
consultants
|
$ | 372,258 | $ | 172,470 | $ | 2,421,664 | ||||||
Professional services
|
439,175 | 221,218 | 2,338,919 | |||||||||
Consulting fees
|
259,670 | 159,136 | 1,230,570 | |||||||||
Travel costs
|
127,196 | 71,529 | 673,126 | |||||||||
Write off of debt
|
- | - | 275,000 | |||||||||
Business development
|
308,183 | 284,899 | 1,124,128 | |||||||||
Payroll and related expenses
|
230,191 | 144,101 | 983,399 | |||||||||
Insurance
|
43,399 | 22,375 | 162,320 | |||||||||
Other
|
252,057 | 127,436 | 984,550 | |||||||||
$ | 2,032,129 | $ | 1,203,164 | $ | 10,193,676 |
|
a.
|
Financial income
|
Year ended August 31
|
||||||||
2013
|
2012
|
|||||||
Gain on sale of marketable securities (note 3)
|
$ | 90,370 | $ | - | ||||
Changes in fair value of warrants
|
44,699 | - | ||||||
Income from interest
|
18,728 | 13,126 | ||||||
Other
|
26,698 | - | ||||||
$ | 180,495 | $ | 13,126 |
|
b.
|
Financial expenses
|
Year ended August 31
|
||||||||
2013
|
2012
|
|||||||
Exchange of warrants
|
$ | 296,982 | $ | - | ||||
Changes in fair value of warrants
|
- | 142,704 | ||||||
Exchange rate differences
|
2,804 | 35,067 | ||||||
Bank commissions
|
13,660 | 14,952 | ||||||
Other
|
- | 6,400 | ||||||
$ | 313,446 | $ | 199,123 |
|
a.
|
Corporate taxation in the U.S.
|
|
b.
|
Corporate taxation in Israel:
|
August 31
|
||||||||
2013
|
2012
|
|||||||
In respect of:
|
||||||||
Net operating loss carryforward
|
3,992,737 | 3,190,152 | ||||||
Research and development expenses
|
338,908 | 18,008 | ||||||
Less - Valuation allowance
|
(4,331,645 | ) | (3,208,160 | ) | ||||
Net deferred tax assets
|
-,- | -,- |
|
c.
|
Loss before taxes on income and income taxes included in the income statements of operations:
|
Period from April
|
||||||||||||
12, 2002 | ||||||||||||
(inception)
|
||||||||||||
Year ended
|
through
|
|||||||||||
August 31
|
August 31,
|
|||||||||||
2013
|
2012
|
2013 | ||||||||||
Loss before taxes on income:
|
||||||||||||
U.S.
|
1,185,831 | 599,067 | 9,626,374 | |||||||||
Outside U.S.
|
3,251,044 | 2,655,193 | 12,461,502 | |||||||||
$ | 4,436,874 | $ | 3,254,260 | $ | 22,087,875 | |||||||
Income tax expenses (benefit):
|
||||||||||||
Current:
|
||||||||||||
U.S.
|
(12,960 | ) | (7,569 | ) | 67,392 | |||||||
Outside U.S.
|
(192,102 | ) | 97,787 | 108,440 | ||||||||
$ | (205,062 | ) | $ | 90,218 | $ | 175,832 |
|
d.
|
Reconciliation of the statutory tax benefit to effective tax expense
|
Period from April
|
||||||||||||
12, 2002 | ||||||||||||
(inception)
|
||||||||||||
Year ended
|
through
|
|||||||||||
August 31
|
August 31,
|
|||||||||||
2013
|
2012
|
2013 | ||||||||||
Loss before income taxes as reported in
|
||||||||||||
the consolidated statement of operations
|
$ | (4,436,874 | ) | $ | (3,254,260 | ) | $ | (22,087,875 | ) | |||
Statutory tax benefit
|
(1,522,906 | ) | (1,138,991 | ) | (7,700,757 | ) | ||||||
Increase (decrease) in income taxes
|
||||||||||||
resulting from:
|
||||||||||||
Change in the balance of the valuation
|
||||||||||||
allowance for deferred tax
|
902,509
|
516,749 | 3,573,334 | |||||||||
Disallowable deductions
|
374,059
|
120,156 | 2,617,605 | |||||||||
Increase in taxes resulting from
|
||||||||||||
different tax rates applicable to the
|
||||||||||||
Subsidiary
|
276,338
|
502,086 | 1,588,322 | |||||||||
Uncertain tax position
|
(205,062 | ) | 90,218 | 23,210 | ||||||||
Taxes on income for the reported year
|
$ | (205,062 | ) | $ | 90,218 | $ | 35,714 |
|
e.
|
Uncertainty in Income Taxes
|
Year ended August 31
|
||||||||
2013
|
2012
|
|||||||
Balance at Beginning of Year
|
$ | 228,272 | $ | 138,054 | ||||
Increase (decrease) in uncertain tax positions for the current year
|
(205,062 | ) | 90,218 | |||||
Balance at End of Year
|
$ | 23,210 | $ | 228,272 |
|
a.
|
During each of the fiscal years of 2013 and 2012 the Company paid to directors $39,361 and $30,000, respectively, for managerial services.
|
|
b.
|
As to the agreements with Hadasit, see note 8a.
|
|
c.
|
On July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY Ltd. (“KNRY”), an Israeli company owned by Nadav Kidron, whereby Mr. Nadav Kidron, through KNRY, will provide services as President and Chief Executive Officer of both Oramed and the Subsidiary (the “Nadav Kidron Consulting Agreement”). Additionally, on July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY whereby Dr. Miriam Kidron, through KNRY, will provide services as Chief Medical and Technology Officer of both Oramed and the Subsidiary (the “Miriam Kidron Consulting Agreement” and together with the Nadav Kidron Consulting Agreement, the “Consulting Agreements”). The Consulting Agreements replaced the employment agreements entered into between the Company and KNRY, dated as of August 1, 2007, pursuant to which Nadav Kidron and Miriam Kidron, respectively, provided services to the Company and the Subsidiary. The Consulting Agreements are both terminable by either party upon 60 days prior written notice. The Consulting Agreements provide that KNRY (i) will be paid, under each of the Consulting Agreements, in NIS a gross amount of NIS 50,400 per month (as of August 31, 2012 the monthly payment in the Company's functional currency was $12,512) and (ii) will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreements.
|
|
d.
|
As to options granted to related parties, see notes 10a and 10f.
|
|
e.
|
Balances with related parties:
|
August 31
|
||||||||
2013
|
2012
|
|||||||
Accounts Receivable - KNRY
|
$ | 1,377 | $ | 404 | ||||
Accounts Receivable – Nadav Kidron*
|
$ | 3,153 | - | |||||
Accounts payable and accrued expenses - KNRY
|
$ | 64,355 | - |
|
* Down payment for travel expenses.
|
|
f.
|
Expenses to related parties:
|
August 31
|
||||||||
2013
|
2012
|
|||||||
KNRY
|
$ | 448,080 | $ | 318,271 |
|
a.
|
During October and November 2013, the Subsidiary sold in aggregate of 1,025,991 of the D.N.A
shares
for a total of $43,208. As of November 25, 2013, the Group owns approximately 10.6% of D.N.A’s outstanding ordinary shares.
|
|
b.
|
In November 2013, the Company issued 10,000 shares to an advisor. See also note 8h.
|
3.1*
|
Composite Copy of Certificate of Incorporation, as amended as of January 22, 2013 and corrected February 8, 2013.
|
3.2
|
Amended and Restated By-laws (incorporated by reference from our current report on Form 8-K filed February 1, 2013).
|
4.1
|
Specimen Common Stock Certificate (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013).
|
4.2
|
Common Stock Purchase Warrant issued to Attara Fund, Ltd. on January 10, 2011, and transferred to Regals Fund LP on March 11, 2012 (incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2011).
|
4.3
|
Amendment No. 1, dated August 28, 2012, to Common Stock Purchase Warrant transferred to Regals Fund LP on March 11, 2012 (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).
|
4.4
|
Amendment No. 2, dated November 13, 2012, to Common Stock Purchase Warrant transferred to Regals Fund LP on March 11, 2012 (incorporated by reference from our quarterly report on Form 10-Q/A filed December 27, 2012).
|
4.5
|
Amendment No. 3, dated November 29, 2012, to Common Stock Purchase Warrant transferred to Regals Fund LP on March 11, 2012 (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013).
|
4.6
|
Form of Common Stock Purchase Warrant used in 2010-2011 private placement (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
4.7
|
Form of Common Stock Purchase Warrant used in 2012 private placements (incorporated by reference from our annual report on Form 10-K filed December 12, 2012).
|
4.8
|
Form of Common Stock Purchase Warrant issued to Regals Fund LP (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).
|
4.9
|
Amendment No. 1 to Form of Common Stock Purchase Warrant issued to Regals Fund LP (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013).
|
4.10
|
Common Stock Purchase Warrant issued to Regals Fund LP on November 29, 2012 (incorporated by reference from our quarterly report on Form 10-Q/A filed December 27, 2012)
|
4.11
|
Option of Oramed Pharmaceuticals Inc. issued to Dr. Miriam Kidron on August 14, 2007 (incorporated by reference from our registration statement on Form S-8 filed December 22, 2009).
|
4.12
|
Amendment No. 1, dated August 28, 2012, to Option of Oramed Pharmaceuticals Inc. issued to Dr. Miriam Kidron on August 14, 2007 (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013).
|
10.1+
|
Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Nadav Kidron (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
10.2+
|
Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Miriam Kidron (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
10.3+
|
Oramed Pharmaceuticals Inc. 2008 Stock Incentive Plan (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
10.4+
|
Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
10.5+
|
Employment Agreement dated as of April 19, 2009, by and between Oramed Ltd. and Yifat Zommer (incorporated by reference from our current report on Form 8-K filed on April 22, 2009).
|
10.6+
|
Clinical Trial Agreement dated September 11, 2011, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., Miriam Kidron and Daniel Schurr (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).
|
10.7+
|
Clinical Trial Agreement dated July 8, 2009, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., Miriam Kidron and Itamar Raz (incorporated by reference from our current report on Form 8-K filed July 9, 2009).
|
10.8
|
Agreement dated January 7, 2009, between Oramed Pharmaceuticals Inc. and Hadasit Medical Research Services and Development Ltd. (incorporated by reference from our current report on Form 8-K filed January 7, 2009).
|
10.9
|
Joint Venture Agreement dated June 1, 2010, between Oramed Ltd. and LASER Detect Systems Ltd (now known as D.N.A Biomedical Solutions Ltd.) (incorporated by reference from our quarterly report on Form 10-Q filed July 14, 2010).
|
10.10
|
Manufacturing and Supply Agreement dated July 5, 2010, between Oramed Ltd. and Sanofi-Aventis Deutschland GMBH (incorporated by reference from our current report on Form 8-K filed July 14, 2010).
|
10.11
|
Securities Purchase Agreement between Oramed Pharmaceuticals Inc. and Attara Fund, Ltd., dated as of December 21, 2010 (incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2011).
|
10.12
|
Share Purchase Agreement dated February 22, 2011, between Oramed Ltd. and D.N.A Biomedical Solutions Ltd. (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
10.13
|
Patent Transfer Agreement dated February 22, 2011, between Oramed Ltd. and Entera Bio Ltd. (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
10.14
|
Form of Securities Purchase Agreement used in 2010-2011 private placement (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
10.15+
|
Form of Indemnification Agreements dated March 11, 2011, between Oramed Pharmaceuticals Inc. and each of our directors and officers (incorporated by reference from our definitive proxy statement on Schedule 14A filed on January 31, 2011).
|
10.16+
|
Agreement dated June 21, 2011, with Dr. Michael Berelowitz (incorporated by reference from our current report on Form 8-K filed June 22, 2011).
|
10.17
|
Form of Securities Purchase Agreement used in 2012 private placements (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).
|
10.18
|
Form of Securities Purchase Agreement used in 2012 private placement with Regals Fund LP. (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).
|
10.19
|
Master Services Agreement dated September 27, 2012, between Oramed Ltd. and Medpace, Inc. (incorporated by reference from our annual report on Form 10-K filed December 12, 2012).
|
10.20
|
MEDPACE Task Order Number: 1 dated September 27, 2012, between Oramed Ltd. and Medpace, Inc. (portions of this exhibit have been omitted pursuant to an order granting confidential treatment provided by the SEC on January 8, 2013) (incorporated by reference from our annual report on Form 10-K filed December 12, 2012).
|
10.21
|
Securities Purchase Agreement dated October 30, 2012, between Oramed Pharmaceuticals Inc. and D.N.A Biomedical Solutions Ltd. (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).
|
10.22
|
Letter Agreement, dated as of November 29, 2012, between Oramed Pharmaceuticals Inc. and Regals Fund LP. (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013).
|
10.23+
|
Employment Agreement, dated April 14, 2013, between Oramed Ltd. and Joshua Hexter (incorporated by reference to Exhibit 10.1 of our current report on Form 8-K filed April 16, 2013).
|
10.24
|
Form of Securities Purchase Agreement used in 2013 registered direct offering (incorporated by reference from our current report on Form 8-K filed July 10, 2013).
|
21.1*
|
Subsidiary.
|
23.1*
|
Consent of Kesselman & Kesselman, Independent Registered Public Accounting Firm.
|
23.2*
|
Consent of MaloneBailey, LLP (formerly, Malone & Bailey, PC), Independent Registered Public Accounting Firm.
|
31.1*
|
Certification Statement of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
31.2*
|
Certification Statement of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
32.1**
|
Certification Statement of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
|
32.2**
|
Certification Statement of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
|
101.1**The following financial statements from the Company’s annual report on Form 10-K for the year ended August 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
+
|
Management contract or compensation plan.
|
ORAMED PHARMACEUTICALS INC.
/s/ NADAV KIDRON
Nadav Kidron,
President and Chief Executive Officer
Date: November 26, 2013
|
/s/ NADAV KIDRON
|
November 26, 2013
|
|||
Nadav Kidron,
|
||||
President and Chief Executive Officer and Director
|
||||
(principal executive officer)
|
||||
/s/ YIFAT ZOMMER
|
November 26, 2013
|
|||
Yifat Zommer,
|
||||
Chief Financial Officer
|
||||
(principal financial and accounting officer)
|
||||
/s/ MIRIAM KIDRON
|
November 26, 2013
|
|||
Miriam Kidron,
|
||||
Chief Medical and Technology Officer and Director
|
||||
/s/ LEONARD SANK
|
November 26, 2013
|
|||
Leonard Sank,
|
||||
Director
|
||||
Harold Jacob,
|
||||
Director
|
||||
/s/ MICHAEL BERELOWITZ
|
November 26, 2013
|
|||
Michael Berelowitz,
|
||||
Director
|
||||
/s/ GERALD OSTROV
|
November 26, 2013
|
|||
Gerald Ostrov,
|
||||
Director
|
Name
|
Address
|
Nadav Kidron
|
Hi-Tech Park 2/5
|
Givat-Ram
|
|
PO Box 39098
|
|
Jerusalem 91390 Israel
|
Date: November 26, 2013
|
By: /s/ Nadav Kidron | |
Nadav Kidron
|
||
President and Chief Executive Officer
|
Date: November 26, 2013 | By: /s/ Yifat Zommer | |
Yifat Zommer
|
||
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 results of operations of the Company.
|
Dated: November 26, 2013
|
/s/ Nadav Kidron
|
|
Nadav Kidron, President and Chief Executive 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 results of operations of the Company.
|
Dated: November 26, 2013
|
/s/ Yifat Zommer
|
|
Yifat Zommer, Chief Financial Officer
|
||