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
|
91390
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
x
|
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
|
(Do not check if a smaller reporting company)
|
2
|
|||
2
|
|||
12
|
|||
21 | |||
21
|
|||
21
|
|||
21
|
|||
22
|
|||
22
|
|||
22
|
|||
25
|
|||
33
|
|||
33
|
|||
34
|
|||
34
|
|||
34
|
|||
35
|
|||
35
|
|||
39
|
|||
48
|
|||
52
|
|||
52
|
|||
PART IV | 53 | ||
53
|
ORMD-0801
oral insulin
|
Type 2 diabetes
|
Q4 ’13: Phase IIa completed
Q1 ’15: Phase IIb multi-center study projected initiation
|
||||
Type 1 diabetes
|
Q3 ’14: Phase IIa completed
|
|||||
ORMD-0901
oral GLP-1
|
Type 2 diabetes
|
Q3, ’14: Preclinical/IND studies initiated
Q1, ’15: Phase Ia and Ib ex-US study projected initiation.
Q3, ’15: Phase II multi-center study projected initiation
|
|
•
|
Who must be recruited as qualified participants,
|
|
•
|
How often to administer the drug or product,
|
|
•
|
What tests to perform on the participants, and
|
|
•
|
What dosage of the drug or amount of the product to give to the participants.
|
|
•
|
Continued scientific progress in our research and development programs,
|
|
•
|
Costs and timing of conducting clinical trials and seeking regulatory approvals and patent prosecutions,
|
|
•
|
Competing technological and market developments,
|
|
•
|
Our ability to establish additional collaborative relationships, and
|
|
•
|
Effects of commercialization activities and facility expansions if and as required.
|
|
•
|
Clinical trial results and the timing of the release of such results,
|
|
•
|
The amount of cash resources and our ability to obtain additional funding,
|
|
•
|
Announcements of research activities, business developments, technological innovations or new products by us or our competitors,
|
|
•
|
Entering into or terminating strategic relationships,
|
|
•
|
Changes in government regulation,
|
|
•
|
Departure of key personnel,
|
|
•
|
Disputes concerning patents or proprietary rights,
|
|
•
|
Changes in expense level,
|
|
•
|
Future sales of our equity or equity-related securities,
|
|
•
|
Public concern regarding the safety, efficacy or other aspects of the products or methodologies being developed,
|
|
•
|
Activities of various interest groups or organizations,
|
|
•
|
Media coverage, and
|
|
•
|
Status of the investment markets.
|
|
•
|
Delaying, deferring or preventing a change in corporate control,
|
|
•
|
Impeding a merger, consolidation, takeover or other business combination involving us, or
|
|
•
|
Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
|
|
•
|
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, 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 August 31, 2014
|
||||||||
Three Months Ended November 30, 2013
|
$ | 11.49 | $ | 7.31 | ||||
Three Months Ended February 28, 2014
|
$ | 15.95 | $ | 6.72 | ||||
Three Months Ended May 31, 2014
|
$ | 31.73 | $ | 6.83 | ||||
Three Months Ended August 31, 2014
|
$ | 8.64 | $ | 6.12 |
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
in thousands of dollars except share and per share data
|
||||||||||||||||||||
Statements of Comprehensive Income (Loss):
|
||||||||||||||||||||
Research and development expenses, net
|
$
|
3,277
|
$
|
2,272
|
$
|
1,681
|
$
|
1,159
|
$
|
1,464
|
||||||||||
General and administrative expenses
|
2,629
|
2,032
|
1,203
|
1,276
|
1,508
|
|||||||||||||||
Impairment of available- for-sale securities
|
-
|
-
|
184
|
197
|
-
|
|||||||||||||||
Gain on sale of investment
|
-
|
-
|
-
|
(1,033
|
)
|
-
|
||||||||||||||
Financial expenses (income), net
|
(214
|
)
|
133
|
186
|
(14
|
)
|
(10
|
)
|
||||||||||||
Loss before taxes on income
|
5,692
|
4,437
|
3,254
|
1,585
|
2,962
|
|||||||||||||||
Taxes on income (Tax benefit)
|
4
|
(205
|
)
|
90
|
(24
|
)
|
15
|
|||||||||||||
Net loss for the period
|
$
|
5,696
|
$
|
4,232
|
$
|
3,344
|
$
|
1,561
|
$
|
2,977
|
||||||||||
Loss per common share – basic and diluted
|
$
|
0.62
|
$
|
0.59
|
$
|
0.57
|
$
|
0.29
|
$
|
0.62
|
||||||||||
Weighted average common shares outstanding
|
9,244,059
|
7,209,283
|
5,884,595
|
5,417,278
|
4,782,499
|
|||||||||||||||
As of August 31
|
||||||||||||||||||||
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||||||||
in thousands of dollars except share and per share data
|
||||||||||||||||||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash, cash equivalents, short-term deposits, restricted cash and marketable securities
|
$
|
21,306
|
$
|
8,491
|
$
|
5,101
|
$
|
3,716
|
$
|
1,317
|
||||||||||
Other current assets
|
472
|
153
|
175
|
568
|
81
|
|||||||||||||||
Long-term assets
|
24
|
16
|
19
|
42
|
53
|
|||||||||||||||
Total assets
|
21,802
|
8,660
|
5,295
|
4,326
|
1,451
|
|||||||||||||||
Current liabilities
|
973
|
498
|
644
|
441
|
459
|
|||||||||||||||
Long-term liabilities
|
36
|
31
|
873
|
161
|
162
|
|||||||||||||||
Stockholders’ equity
|
20,793
|
8,131
|
3,778
|
3,724
|
830
|
Year ended August 31,
|
||||||||||||
Operating Data:
|
2014
|
2013
|
2012
|
|||||||||
Research and development expenses, net
|
$ | 3,277 | $ | 2,272 | $ | 1,681 | ||||||
General and administrative expenses
|
2,629 | 2,032 | 1,203 | |||||||||
Impairment of available- for-sale securities
|
-
|
-
|
184 | |||||||||
Financial expenses (income), net
|
(214 | ) | 133 | 186 | ||||||||
Loss before taxes on income
|
5,692 | 4,437 | 3,254 | |||||||||
Taxes on income (Tax benefit)
|
4 | (205 | ) | 90 | ||||||||
Net loss for the period
|
5,696 | 4,232 | 3,344 | |||||||||
Loss per common share – basic and diluted
|
$ | 0.62 | $ | 0.59 | $ | 0.57 | ||||||
Weighted average common shares outstanding
|
9,244,059 | 7,209,283 | 5,884,595 |
Contractual Obligations
|
Total
|
Less than 1 year
|
1-3 years
|
3-5 years
|
Over 5 years
|
|||||||||||||||
Clinical research study obligations
|
$
|
3,588
|
$
|
2,694
|
$
|
894
|
$
|
-
|
$
|
-
|
||||||||||
Purchase obligations
|
962
|
918
|
44
|
-
|
-
|
|||||||||||||||
Operating lease obligations
|
84
|
43
|
41
|
-
|
-
|
|||||||||||||||
Accrued Severance Pay, net
|
9
|
-
|
-
|
-
|
9
|
|||||||||||||||
Total
|
$
|
4,643
|
$
|
3,655
|
$
|
979
|
$
|
-
|
$
|
9
|
Category
|
Amount
|
|||
Research and development, net of OCS funds
|
$
|
8,584
|
||
General and administrative expenses
|
2,712
|
|||
Total
|
$
|
11,296
|
Year Ended August 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Average rate for period
|
3.809
|
3.718
|
3.494
|
|||||||||
Rate at period-end
|
4.028
|
3.614
|
3.568
|
|
•
|
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 GAAP, 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
|
40
|
President, Chief Executive Officer and Director
|
||||
Miriam Kidron
|
74
|
Chief Medical and Technology Officer and Director
|
||||
Leonard Sank
|
49
|
Director
|
||||
Harold Jacob
|
61
|
Director
|
||||
Michael Berelowitz
|
70
|
Director and Chairman of the Scientific Advisory Board
|
||||
Gerald Ostrov
|
64
|
Director
|
||||
Yifat Zommer
|
40
|
Chief Financial Officer, Treasurer and Secretary
|
||||
Joshua Hexter
|
44
|
Chief Operating Officer and VP Business Development
|
Compensation Committee Members:
Leonard Sank
Michael Berelowitz
Gerald Ostrov
|
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)
|
2014
|
261,338
|
120,000
|
390,696
|
31,770
|
803,804
|
||||||||||||
2013
|
182,510
|
60,000
|
-
|
29,152
|
271,662
|
|||||||||||||
2012
|
159,136
|
-
|
186,783
|
17,989
|
363,908
|
|||||||||||||
Miriam Kidron
Chief Medical and Technology
Officer and director (7)
|
2014
|
206,315
|
65,000
|
390,696
|
12,076
|
676,739
|
||||||||||||
2013
|
168,410
|
20,000
|
-
|
14,728
|
200,486
|
|||||||||||||
2012
|
159,136
|
-
|
186,783
|
13,200
|
359,119
|
|||||||||||||
Yifat Zommer
CFO, Treasurer and Secretary
|
2014
|
143,769
|
50,000
|
-
|
39,806
|
233,575
|
||||||||||||
2013
|
83,387
|
15,000
|
-
|
29,086
|
127,473
|
|||||||||||||
2012
|
58,686
|
-
|
136,233
|
29,719
|
224,639
|
|||||||||||||
Joshua Hexter
COO and VP Business
Development(8)
|
2014
|
174,162
|
25,000
|
-
|
42,857
|
242,019
|
||||||||||||
2013
|
48,426
|
-
|
519,785
|
10,019
|
578,230
|
(1)
|
The information is provided for each fiscal year, which begins on September 1 and ends on August 31.
|
(2)
|
Amounts paid for Salary, Bonus 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, 2014, 2013 and 2012 are set forth in Note 9 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.
|
(8)
|
Mr. Hexter joined the Company in April 2013 and his base salary for fiscal 2013 was $128,000.
|
Name
|
Year
|
Automobile-
Related Expenses
($)
|
Manager’s
Insurance*
($)
|
Education
Fund*
($)
|
Business Travel**
($)
|
Total
($)
|
||||||||||
Nadav Kidron
|
2014
|
13,050
|
--
|
--
|
18,720
|
31,779
|
||||||||||
2013
|
11,992
|
--
|
--
|
17,160
|
29,152
|
|||||||||||
2012
|
17,989
|
--
|
--
|
--
|
17,989
|
|||||||||||
Miriam Kidron
|
2014
|
14,728
|
--
|
--
|
--
|
14,728
|
||||||||||
2013
|
12,076
|
--
|
--
|
--
|
12,076
|
|||||||||||
2012
|
13,200
|
--
|
--
|
--
|
13,200
|
|||||||||||
Yifat Zommer
|
2014
|
15,440
|
16,263
|
8,103
|
--
|
39,806
|
||||||||||
2013
|
10,507
|
12,416
|
6,163
|
--
|
29,086
|
|||||||||||
2012
|
12,976
|
11,024
|
5,719
|
--
|
29,719
|
|||||||||||
Joshua Hexter
|
2014
|
12,784
|
20,157
|
9,916
|
--
|
42,857
|
||||||||||
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.
|
**
|
Business travel represent the addition compensation of approximately $5,000 and $4,000 per month in fiscal 2014 and 2013, respectively, for the period during which Mr. Kidron was in the United States. This payment was in addition to per diem payments for that business travel. The Compensation Committee determined that this amount reflects the difference in the cost of living between Israel and the United States.
|
Name
|
Grant Date
|
All Other Option Awards: Number of Securities Underlying Options
(#)(1)
|
Exercise or
Base Price
of Option
Awards
($/Sh)
|
Grant Date Fair Value of Stock and Option Awards
($)
|
||||||||||
Nadav Kidron
|
4/9/14
|
47,134 | 12.45 | 390,695 | ||||||||||
Miriam Kidron
|
4/9/14
|
47,134 | 12.45 | 390,695 |
(1)
|
These options were granted under our 2008 Plan and vested with respect to 15,710 shares of common stock on April 30, 2014 and the remainder vests in eight equal monthly installments, commencing on May 31, 2014. These options have an expiration date of April 9, 2024.
|
Option Awards
|
|||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|||||||||
Nadav Kidron
|
72,000
|
(1)
|
-
|
6.48
|
5/7/18
|
||||||||
72,000
|
(2)
|
-
|
5.88
|
4/20/20
|
|||||||||
72,000
|
(3)
|
-
|
4.08
|
8/8/22
|
|||||||||
31,422
|
(4)
|
15,712
|
(7)
|
12.45
|
4/9/24
|
||||||||
Miriam Kidron
|
72,000
|
(1)
|
-
|
6.48
|
5/7/18
|
||||||||
72,000
|
(2)
|
-
|
5.88
|
4/20/20
|
|||||||||
72,000
|
(3)
|
-
|
4.08
|
8/8/22
|
|||||||||
31,422
|
(4)
|
15,712
|
(7)
|
12.45
|
4/9/24
|
||||||||
Yifat Zommer
|
33,334
|
(5)
|
--
|
5.64
|
10/19/19
|
||||||||
43,750
|
(6)
|
7,000
|
(5)
|
4.08
|
8/8/22
|
||||||||
Joshua Hexter
|
46,200
|
(7)
|
54,600
|
(6)
|
7.88
|
3/14/23
|
(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 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.
|
(3)
|
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 vested in seventeen equal monthly installments, commencing on August 31, 2012. The options have an expiration date of August 8, 2022.
|
(4)
|
On April 9, 2014, 47,134 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $12.45 per share; 15,710 of such options vested on April 30, 2014 and the remainder vests in eight equal monthly installments, commencing on May 31, 2014. The options have an expiration date of April 9, 2024.
|
(5)
|
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 vests in three equal annual installments, commencing October 19, 2010, and expire on October 19, 2019.
|
(6)
|
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 vested in twenty-nine equal monthly installments, commencing on August 31, 2012, and expire on August 8, 2022.
|
(7)
|
On April 14, 2013, 100,800 options were granted to Joshua Hexter under the 2008 Plan at an exercise price of $7.88 per share; the options vest in 35 consecutive equal installments during a 3-year period commencing on May 31, 2013, and two installments of 1,400 each, that will vest on April 30, 2013 and April 14, 2016, and expire on April 14, 2023.
|
Option Awards
|
||||||||
Name
|
Number of
Shares Acquired on Exercise
(#)
|
Value Realized on Exercise ($)
|
||||||
Miriam Kidron
(1)
|
280,114
|
2,799,757
|
|
(1)
|
On August 14, 2007, we granted Dr. Miriam Kidron a warrant to purchase up to 280,114 shares of our common stock at an exercise price of $.012 per share; the warrant vested immediately and had an expiration date of December 31, 2012. On August 8, 2012, our Board resolved to extend the term of Dr. Kidron’s warrant until August 6, 2014.
|
Name of Director
|
Fees
Earned or
Paid in
Cash
($)
|
Option
Awards (2)
(3)
($)
|
All Other Compensation
($)
|
Total
($)
|
|||||||
Nadav Kidron
(1)
|
-
|
-
|
-
|
-
|
|||||||
Miriam Kidron
(1)
|
-
|
-
|
-
|
-
|
|||||||
Leonard Sank
|
10,000
|
90,028
|
-
|
100,028
|
|||||||
Harold Jacob
|
10,000
|
90,028
|
-
|
100,028
|
|||||||
Michael Berelowitz
|
10,000
|
84,719
|
26,664
(4)
|
121,383
|
|||||||
Gerald Ostrov
|
10,000
|
90,411
|
-
|
100,411
|
|
(1)
|
Please refer to the Summary Compensation Table for executive compensation with respect to the named individual.
|
|
(2)
|
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 2014 are set forth in Note 9 to our audited consolidated financial statements included in this Annual Report on Form 10-K. Our directors will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold.
|
|
(3)
|
At August 31, 2014, our non-employee directors held options to purchase shares of our common stock as follows:
|
Name of Director
|
Aggregate Number
of Shares
Underlying
Stock
Options
|
|||
Leonard Sank
|
58,094
|
|||
Harold Jacob
|
58,094
|
|||
Michael Berelowitz
|
31,994
|
|||
Gerald Ostrov
|
33,094
|
|
(4)
|
Michael Berelowitz serves as the Chairman of our Scientific Advisory Board. In this role, Dr. Berelowitz is actively involved in our scientific decisions, clinical strategy, and partnership negotiations. Dr. Berelowitz was paid a fee of $3,333 per month from December 1, 2013 to August 31, 2014, and prior to that he was compensated at an hourly rate of $300, up to $1,500 per day, as compensation for serving in this position.
|
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
|
1,036,289
|
$
|
6.72
|
393,642
|
||||
Equity compensation plans not approved by security holders
|
--
|
--
|
--
|
|||||
Total
|
1,036,289
|
$
|
6.72
|
393,642
|
Name and Address of Beneficial Owner
|
Number of
Shares
|
Percentage
of Shares
Beneficially
Owned
|
||||
Regals Fund LP
|
||||||
767 Fifth Ave.
|
||||||
New York, NY 10153
|
1,453,637
|
(1)
|
13.6
|
%
|
||
Special Situations Fund
|
||||||
527 Madison Ave., Suite 2600
|
||||||
New York, NY 10022
|
790,000
|
(2)
|
7.8
|
%
|
||
Guangxi Wuzhou Pharmaceutical (Group) Co., Ltd.
|
||||||
1# Industrial Road, Wuzhou Industrial Park
|
||||||
Wuzhou City, Guangxi Province, 543000
|
696,378
|
(3)
|
6.4
|
%
|
||
Nadav Kidron #+
|
1,119,590
|
(4)
|
10.8
|
%
|
||
Miriam Kidron #+
|
358,092
|
(5)
|
3.5
|
%
|
||
Leonard Sank #
|
568,717
|
(6)
|
5.6
|
%
|
||
Harold Jacob #
|
58,794
|
(7)
|
*
|
|||
Michael Berelowitz #
|
31,994
|
(8)
|
*
|
|||
Gerald Ostrov #
|
33,094
|
(9)
|
*
|
|||
Yifat Zommer +
|
80,584
|
(10)
|
*
|
|||
Joshua Hexter +
|
51,800
|
(11)
|
*
|
|||
All current executive officers and directors, as a group (eight persons)
|
2,302,665
|
(12)
|
21.0
|
%
|
#
|
Director
|
+
|
Named Executive Officer
|
(1)
|
Includes warrants to purchase 557,274 shares of common stock. Regals Capital Management LP is the investment manager of 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 foregoing is based on information known to us.
|
(2)
|
Consists of 440,000 shares of common stock owned by Special Situations Fund III QP, L.P., 150,000 shares of common stock owned by Special Situations Cayman Fund, L.P and 200,000 shares of common stock owned by Special Situations Life Sciences Fund, L.P. Austin W. Marxe, or Marxe, David M. Greenhouse, or Greenhouse, and Adam C. Stettner, or Stettner, are members of SSCayman LLC, the general partner of Special Situations Cayman Fund, L.P. Marxe, Greenhouse and Stettner are controlling principals of AWM Investment Company, Inc., the general partner of MGP Advisers Limited Partnership, the general partner of Special Situations Fund III QP, L.P. Marxe, Greenhouse and Stettner are also members of LS Advisers L.L.C., the general partner of Special Situations Life Sciences Fund, L.P. The foregoing is based on a Schedule 13G filed jointly by Marxe, Greenhouse and Stettner on February 12, 2014.
|
(3)
|
Consists of 696,378 shares of common stock issuable pursuant to a Stock Purchase Agreement entered into by the Company and between Guangxi Wuzhou Pharmaceutical (Group) Co., Ltd.
|
(4)
|
Includes 255,278 shares of common stock issuable upon the exercise of outstanding stock options.
|
(5)
|
Includes 255,278 shares of common stock issuable upon the exercise of outstanding stock options.
|
(6)
|
Includes: (a) 243,000 shares of common stock and warrants to purchase 23,265 shares of common stock held by Mr. Sank, (b) 78,125 shares of common stock and a warrant to purchase 27,344 shares of common stock held by Mr. Sank’s wife, (c) 58,094 shares of common stock issuable to Mr. Sank upon the exercise of outstanding stock options, and (d) 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 (b) and (d) above.
|
(7)
|
Includes 700 shares of common stock indirectly acquired through a corporation wholly-owned by Mr. Jacob, and 58,094 shares of common stock issuable upon the exercise of outstanding stock options.
|
(8)
|
Consists of common stock issuable upon the exercise of outstanding stock options.
|
(9)
|
Consists of common stock issuable upon the exercise of outstanding stock options.
|
(10)
|
Consists of common stock issuable upon the exercise of outstanding stock options.
|
(11)
|
Consists of common stock issuable upon the exercise of outstanding stock options.
|
(12)
|
Includes 848,637 shares of common stock issuable upon the exercise of options beneficially owned by the referenced persons.
|
Summary:
|
2014
|
2013
|
||||||
Audit Fees
(1)
|
$ | 91,000 | $ | 100,000 | ||||
Tax Fees
(2)
|
5,000 | 10,000 | ||||||
Total Fees
|
$ | 96,000 | $ | 110,000 |
(1)
|
Amount represents fees paid for professional services for the audit of our consolidated annual financial statements, review of our interim condensed consolidated financial statements included in quarterly reports, audit of our internal control over financial reporting, assistance with review of our response to SEC comments on our Annual Report on Form 10-K for the fiscal year ended August 31, 2013 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.
|
(a)
|
Index to Financial Statements
|
Page
|
||
F - 1
|
||
CONSOLIDATED FINANCIAL STATEMENTS:
|
||
F - 2
|
||
F - 3
|
||
F - 4
|
||
F - 5
|
||
F - 6 - F - 30
|
Tel Aviv, Israel
|
/s/ Kesselman & Kesselman
|
|
November 13, 2014
|
Kesselman & Kesselman
|
|
Certified Public Accountants (Isr.)
|
||
A member firm of PricewaterhouseCoopers
|
||
International Limited
|
Year ended
August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
RESEARCH AND DEVELOPMENT EXPENSES, NET
|
$ | 3,277 | $ | 2,272 | $ | 1,681 | ||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
2,629 | 2,032 | 1,203 | |||||||||
OPERATING LOSS
|
5,906 | 4,304 | 2,884 | |||||||||
FINANCIAL INCOME
(note 10a)
|
(225 | ) | (180 | ) | (13 | ) | ||||||
IMPAIRMENT OF AVAILABLE- FOR-SALE SECURITIES
|
- | - | 184 | |||||||||
FINANCIAL EXPENSES
(note 10b)
|
11 | 313 | 199 | |||||||||
LOSS BEFORE TAXES ON INCOME
|
5,692 | 4,437 | 3,254 | |||||||||
INCOME TAX EXPENSES (BENEFIT)
(note 11)
|
4 | (205 | ) | 90 | ||||||||
NET LOSS FOR THE YEAR
|
$ | 5,696 | $ | 4,232 | $ | 3,344 | ||||||
SUBSEQUENT INCREASE IN THE FAIR VALUE OF AVAILABLE FOR SALE SECURITIES PREVIOUSLY WRITTEN DOWN AS
IMPAIRED
|
(34 | ) | (131 | ) | - | |||||||
RECLASSIFICATION ADJUSTMENT FOR GAINS INCLUDED IN NET LOSS
|
80 | 90 | - | |||||||||
UNREALIZED GAIN ON AVAILABLE FOR SALE SECURITIES
|
(194 | ) | (263 | ) | - | |||||||
TOTAL OTHER COMPREHENSIVE INCOME
|
(148 | ) | (304 | ) | - | |||||||
TOTAL COMPREHENSIVE LOSS FOR THE
PERIOD
|
$ | 5,548 | $ | 3,928 | $ | 3,344 | ||||||
BASIC AND DILUTED LOSS PER COMMON SHARE
|
$ | 0.62 | $ | 0.59 | $ | 0.57 | ||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN COMPUTING BASIC AND DILUTED LOSS PER COMMON STOCK
|
9,244,059 | 7,209,283 | 5,884,595 |
Accumulated
|
||||||||||||||||||||||||
Additional
|
other
|
Total
|
||||||||||||||||||||||
Common Stock
|
paid-in
|
comprehensive
|
Accumulated
|
stockholders’
|
||||||||||||||||||||
Shares
|
$
|
capital
|
income
|
loss
|
equity
|
|||||||||||||||||||
In thousands
|
||||||||||||||||||||||||
BALANCE AS OF AUGUST 31, 2011
|
5,844 | $ | 70 | $ | 18,201 | $ | - | $ | (14,548 | ) | $ | 3,723 | ||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH, NET(see note 8b)
|
802 | 10 | 2,985 | - | - | 2,995 | ||||||||||||||||||
SHARES AND WARRANTS TO BE ISSUED FOR CASH
(see note 8b)
|
- | - | 25 | - | - | 25 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES
|
29 | * | 108 | - | - | 108 | ||||||||||||||||||
STOCK BASED COMPENSATION EXPENSE
|
- | - | 271 | - | - | 271 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (3, 344 | ) | (3,344 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2012
|
6,675 | 80 | 21,590 | - | (17,892 | ) | 3,778 | |||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH, NET(see note 8c)
|
349 | 4 | 1,418 | - | - | 1,422 | ||||||||||||||||||
SHARES ISSUED FOR CASH, NET (see note 8d)
|
658 | 8 | 4,231 | - | - | 4,239 | ||||||||||||||||||
SHARES ISSUED FOR MARKETABLE SECURITIES
(see note 8b)
|
199 | 2 | 626 | - | - | 628 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES
|
34 | * | 244 | - | - | 245 | ||||||||||||||||||
EXCHANGE OF WARRANTS (see note 5)
|
- | - | 918 | - | - | 918 | ||||||||||||||||||
EXERCISE OF WARRANTS AND OPTIONS
|
23 | * | 110 | - | - | 110 | ||||||||||||||||||
STOCK BASED COMPENSATION EXPENSE
|
- | - | 719 | - | - | 719 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (4, 232 | ) | (4,232 | ) | ||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
- | - | - | 304 | - | 304 | ||||||||||||||||||
BALANCE AS OF AUGUST 31, 2013
|
7,938 | $ | 95 | $ | 29,856 | $ | 304 | $ | (22,124 | ) | $ | 8,131 | ||||||||||||
SHARES ISSUED FOR CASH, NET (see note 8g)
|
1,580 | 19 | 14,868 | - | - | 14,887 | ||||||||||||||||||
SHARES ISSUED (see notes 7f)
|
16 | * | 102 | - | - | 102 | ||||||||||||||||||
EXERCISE OF WARRANTS AND OPTIONS
|
569 | 7 | 1,746 | - | - | 1,753 | ||||||||||||||||||
STOCK BASED COMPENSATION EXPENSE
|
- | - | 1,468 | - | - | 1,468 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (5,696 | ) | (5,696 | ) | ||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
- | - | - | 148 | 148 | |||||||||||||||||||
BALANCE AS OF AUGUST 31, 2014
|
10,103 | $ | 121 | $ | 48,040 | $ | 452 | $ | (27,820 | ) | $ | 20,793 |
*
|
Represents an amount of less than $1.
|
Year ended August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (5,696 | ) | $ | (4,232 | ) | $ | (3,344 | ) | |||
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation and amortization
|
6 | 5 | 15 | |||||||||
Exchange differences and interest on deposits
|
(29 | ) | 19 | 62 | ||||||||
Stock based compensation
|
1,468 | 719 | 271 | |||||||||
Common stock issued for services
|
102 | 244 | 108 | |||||||||
Gain on sale of investment
|
(80 | ) | (50 | ) | - | |||||||
Impairment of available for sale securities
|
- | - | 184 | |||||||||
Exchange of warrants
|
- | 297 | - | |||||||||
Changes in fair value of warrant liabilities
|
- | (45 | ) | 143 | ||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
(319 | ) | (3 | ) | (31 | ) | ||||||
Accounts payable and accrued expenses
|
475 | (146 | ) | 203 | ||||||||
Liability for employee rights upon retirement
|
1 | 1 | (2 | ) | ||||||||
Provision for uncertain tax position
|
4 | (205 | ) | 90 | ||||||||
Total net cash used in operating activities
|
(4,068 | ) | (3,396 | ) | (2,301 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase of property and equipment
|
(14 | ) | (6 | ) | (2 | ) | ||||||
Purchase of short term deposits
|
(55,750 | ) | (5,847 | ) | (475 | ) | ||||||
Proceeds from sale of short term deposits
|
42,539 | 1,054 | 1,800 | |||||||||
Proceeds from sale of marketable securities
|
137 | 227 | 450 | |||||||||
Funds in respect of employee rights upon retirement
|
(2 | ) | (2 | ) | (4 | ) | ||||||
Other
|
2 | 5 | - | |||||||||
Total net cash used in investing activities
|
(13,088 | ) | (4,569 | ) | 1,769 | |||||||
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
||||||||||||
Proceeds from issuance of common stock and warrants - net of issuance expenses*
|
14,887 | 5,715 | 3,489 | |||||||||
Proceeds from exercise of warrants and options
|
1,753 | 109 | - | |||||||||
Total net cash provided by financing activities
|
16,640 | 5,824 | 3,489 | |||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
6 | (18 | ) | (39 | ) | |||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(510 | ) | (2,159 | ) | 2,918 | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
2,272 | 4,431 | 1,513 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 1,762 | $ | 2,272 | $ | 4,431 | ||||||
Material non cash investing and financing activities:
|
||||||||||||
Exchange of warrants
|
- | 918 | - | |||||||||
Shares issued for marketable securities
|
- | 628 | - | |||||||||
Shares and warrants to be issued for cash
|
- | - | 25 |
|
a.
|
General
|
|
1)
|
Incorporation and operations
|
|
2)
|
Development and liquidity risks
|
|
3)
|
Reverse stock split
|
|
b.
|
Accounting principles
|
|
c.
|
Use of estimates in the preparation of financial statements
|
|
d.
|
Functional currency
|
|
e.
|
Principles of consolidation
|
|
f.
|
Income taxes
|
|
g.
|
Research and development, net
|
|
h.
|
Cash equivalents
|
|
i.
|
Loss per common share
|
|
j.
|
Stock based compensation
|
|
k.
|
Warrants issued as part of capital raisings that are classified as a liability
|
|
l.
|
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.
|
|
m.
|
Concentration of credit risks
|
n.
|
Property and equipment
|
%
|
||
Computers and peripheral equipment
|
33
|
|
Office furniture and equipment
|
15-33
|
|
o.
|
Newly issued and recently adopted accounting pronouncements:
|
1.
|
In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Currently, there is no guidance under U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in ASU 2014-15 provide that guidance. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. This new standard requires management to assess the entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU 2014-15 will be effective prospectively for annual reporting periods ending after the first annual period ending after December 15, 2016 and interim periods therein. Early application of the standard is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. The Company has elected to early adopt the provisions of ASU 2014-15 in fiscal year 2014.
|
|
2.
|
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation (“ASU 2014-10”). This update removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, ASU 2014-10 eliminates the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments in ASU 2014-10 will be effective retrospectively except for the clarification to Topic 275, which shall be applied prospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued. The Company has elected to adopt the provisions of ASU 2014-10 in the third quarter of fiscal year 2014, and therefore removed the inception to date information and all reference to development. As a result, the adoption of ASU 2014-10 only impacted the consolidated financial statement presentation.
|
|
3.
|
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 Company adopted ASU 2013-02 in the first quarter of fiscal year 2014. The adoption of ASU 2013-02 did not have any material effect on the consolidated financial statement presentation.
|
August 31
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Annual interest rate
|
Amount
|
Annual
interest
rate
|
Amount
|
|||||||||||||
Dollar deposits
|
0.12-0.6 | % | $ | 18,481 | 0.6-1.06 | % | $ | 5,112 | ||||||||
NIS deposits
|
- | 1.93 | % | 135 | ||||||||||||
$ | 18,481 | $ | 5,247 |
|
a.
|
Composition of property and equipment, grouped by major classifications, is as follows:
|
August 31
|
||||||||
2014
|
2013
|
|||||||
Cost:
|
||||||||
Leasehold improvements
|
$ | 78 | $ | 76 | ||||
Office furniture and equipment
|
28 | 20 | ||||||
Computers and peripheral equipment
|
38 | 34 | ||||||
144 | 130 | |||||||
Less - accumulated depreciation and amortization
|
130 | 124 | ||||||
$ | 14 | $ | 6 |
|
b.
|
Depreciation expenses totaled $6, $5 and $15 in the years ended August 31, 2014, 2013 and 2012, respectively.
|
Year
ended August 31,
|
||||||||
2013
|
2012
|
|||||||
Carrying value at the beginning of the period
|
$ | 637 | $ | - | ||||
Additions
|
28 | 494 | ||||||
Changes in fair value
|
(44 | ) | 143 | |||||
Exchange of warrants
|
(621 | ) | - | |||||
Carrying value at the end of the period
|
$ | - | $ | 637 |
|
a.
|
In March 2011, the Subsidiary sold shares of its investee company, Entera Bio Ltd (“Entera”) to D.N.A (see also note 3), retaining a 3% interest, which is accounted for as a cost method investment (amounting $1). 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, with an annual interest rate of 0.45% that was fully paid in November 2011, and 8,404,667 ordinary shares of D.N.A.
|
|
b.
|
On September 11, 2011, the Subsidiary entered into an agreement with Hadasit, the Company's Medical and Chief Technology Officer (the “CTO”) and Dr. Daniel Schurr (the “Hadasit Agreement”) to retain consulting and clinical trial services. According to the Hadasit Agreement, Hadasit will be entitled to a consideration of $200 to be paid by the Company in accordance with the actual progress of the studies, $95 of which were recognized through August 31, 2014. See also note 1a(1).
|
|
c.
|
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, 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 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, 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, 2014 was $111, using the following assumptions: dividend yield of 0% and expected term of 6.46 years; expected volatility of 81.31%; and risk-free interest rate of 2.05%. The fair value of the unvested options is remeasured at each balance sheet reporting date and is recognized over the related service period using the straight-line method.
|
|
d.
|
On March 18, 2012, the Subsidiary entered into a lease agreement for its facilities in Israel. The lease agreement was for a period of 57 months commencing January 1, 2012.
|
|
e.
|
The Subsidiary has entered into operating lease agreements for vehicles used by its employees for a period of 3 years.
|
|
As security for its obligation under the lease agreements the Subsidiary deposited $2, which are classified as long term deposits.
|
|
f.
|
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
common stock 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 $25, $27 and $25, respectively.
|
|
g.
|
On April 29, 2013, the Subsidiary entered into a Clinical Research Organization Service Agreement with a third party, to retain it as a Clinical Research Organization (“CRO”), for its Phase IIa clinical trial for an oral insulin capsule for type 2 diabetes patients. As consideration for its services, the Subsidiary will pay the CRO a total amount of approximately
$333 that will be paid during the term of the engagement and based on achievement of certain milestones, all of which were recognized through August 31, 2014.
|
|
h.
|
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, all of which was recognized through August 31, 2014.
On March 3, 2014, the Subsidiary entered into an additional agreement with the same vendor, for the process development and production of one of its oral capsule ingredients in a different technology in the amount of $311, $40 of which was recognized through August 31, 2014, and bonus payments of up to $600 that will be paid upon achieving certain milestones, as described in the agreement, none of which was recognized through August 31, 2014.
On May 15, 2014, the Subsidiary entered into an additional agreement with the same vendor, for the process development and production of the same capsule ingredients in the amount of $217, $103 of which was recognized through August 31, 2014
|
|
i.
|
On May 26, 2014, the Subsidiary entered into a supply agreement with a vendor, according to which, the vendor will manufacture insulin capsules for total consideration of $214, $47 of which were recognized through August 31, 2014.
|
|
j.
|
Grants from Bio-Jerusalem
|
|
k.
|
Grants from the Chief Scientist Office (“OCS”)
|
|
a.
|
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. 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 5.
|
|
b.
|
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. 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. In addition,
the Leading Investor, who purchased
33,784
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 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 certain Warrants, and
the removal of the full ratchet anti-dilution protection
see note 5.
|
|
c.
|
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 $629 at the day of the transaction. The Company exercised the option in February 2013. See also note 3.
|
|
d.
|
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 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 $4,239, after deducting Placement Agents’ commissions of $255 and other offering expenses of the Company.
|
|
e.
|
On December 24, 2013, the Company entered into a Placement Agency Agreement with the Placement Agent, pursuant to which the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of up to 1,580,000 shares of the Company’s common stock. In connection therewith, on December 24, 2013, the Company entered into a Securities Purchase Agreement, pursuant to which the Company agreed to sell an aggregate of 1,580,000 shares of common stock, at a price of $10.00 per share, to two institutional investors in a registered direct offering (the "Offering"). The net proceeds to the Company from the Offering were approximately $14,887, after deducting Placement Agent's commissions of $816 and other offering expenses of the Company.
|
|
f.
|
On July 23, 2014, the Company’s shareholders approved an amendment to the Company’s Certificate of Incorporation to increase the Company’s authorized common stock from 16,666,667 shares to 30,000,000 shares.
|
|
g.
|
As of August 31, 2014, the Company had outstanding warrants exercisable for 953,369 shares of common stock at exercise prices ranging from $3.7656 to $7.20 expiring at various dates between November 11, 2015 and February 2, 2018.
|
2014
|
2013
|
2012
|
||||||||||||||||||||||
Warrants
|
Weighted-Average Exercise Price
|
Warrants
|
Weighted-Average Exercise Price*
|
Warrants
|
Weighted-Average Exercise Price*
|
|||||||||||||||||||
Warrants outstanding as of September 1
|
1,215,034 | $ | 5.33 | 883,191 | $ | 5.56 | 352,883 | $ | 6.00 | |||||||||||||||
Issued
|
- | - | 353,285 | $ | 4.79 | 530,308 | $ | 5. 28 | ||||||||||||||||
Exercised
|
(261,665 | ) | $ | 6.00 | (21,442 | ) | $ | 6.00 | - | - | ||||||||||||||
Warrants outstanding as of August 31
|
953,369 | $ | 5.15 | 1,215,034 | $ | 5.33 | 883,191 | $ | 5.56 | |||||||||||||||
Warrants exercisable as of August 31
|
952,258 | $ | 5 | 1,213,478 | $ | 5.33 | 852,024 | $ | 5.55 |
*
|
See note 5 with regards to the amendment of price of certain warrants during the years ended August 31, 2012 and 2013.
|
a.
|
On August 8, 2012, options to purchase an aggregate of 144,000 shares of the Company were granted to the CEO and to the CTO, 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 $374, 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 $115, 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, 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 the CTO by approximately two years from such approval, expiring on August 6, 2014. The incremental fair value of the warrant extension was negligible.
|
d.
|
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 vested 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, 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.
|
e.
|
On April 9, 2014, options to purchase an aggregate of 94,268 shares of the Company were granted to the CEO and to the CTO, both related parties, at an exercise price of $12.45 per share (equivalent to the traded market price on the date of grant). The options vested with respect to 31,420 shares of common stock on April 30, 2014, and the remaining shares of common stock vest in eight equal monthly installments of 7,586 each. These options expire on April 9, 2024. The fair value of these options on the date of grant was $781, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 82.06%; risk-free interest rates of 1.65%; and expected term of 5.21 years.
|
f.
|
On April 9, 2014, options to purchase an aggregate of 52,376 shares of the Company were granted to four Board of Directors members at an exercise price of $12.45 per share (equivalent to the traded market price on the date of grant). The options vest in two equal installments, on July 1, 2014 and January 1, 2015, and expire on April 9, 2024. The fair value of these options on the date of grant was $435, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 82.06%; risk-free interest rates of 1.65%; and expected term of 5.25 years.
|
For options granted in
the year ended August
31
|
||||||||||
2014
|
2013
|
2012
|
||||||||
Expected option life (years)
|
5.21-5.25
|
5.75-6
|
5.5-5.75
|
|||||||
Expected stock price volatility (%)
|
82.06
|
64.35-75.46
|
76.03
|
|||||||
Risk free interest rate (%)
|
1.65
|
0.92-1.01
|
0.83-1.0375
|
|||||||
Expected dividend yield (%)
|
0.0
|
0.0
|
0.0
|
Year ended August 31,
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Number
of
options
|
Weighted
average
exercise
price
|
Number
of
options
|
Weighted
average
exercise
price
|
Number
of
options
|
Weighted
average
exercise
price
|
|||||||||||||||||||
$
|
$
|
$
|
||||||||||||||||||||||
Options outstanding at beginning of year
|
1,049,249 | 4.13 | 932,116 | 3.72 | 834,116 | 3.84 | ||||||||||||||||||
Changes during the year:
|
||||||||||||||||||||||||
Granted - at market price
|
149,200 | 12.45 | 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
|
(289,548 | ) | 0.18 | (8,334 | ) | 5.04 | - | |||||||||||||||||
Options outstanding at end of year
|
908,901 | 6.75 | 1,049,249 | 4.13 | 932,116 | 3.72 | ||||||||||||||||||
Options exercisable at end of year
|
786,328 | 870,883 | 717,088 | |||||||||||||||||||||
Weighted average fair value of options granted during the year
|
$ | 8.31 | $ | 4.55 | $ | 2.65 |
Range of
exercise
prices
|
Number
outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
average
exercise
price
|
Aggregate
intrinsic value
|
||||||||||||
$ |
Years
|
$
|
||||||||||||||
4.08 to 6.00
|
514,901 | 6.70 | 4.95 | 2,672 | ||||||||||||
6.48 to 7.88
|
244,800 | 5.72 | 7.06 | 755 | ||||||||||||
12.45
|
149,200 | 9.61 | 12.45 | - | ||||||||||||
908,901 | 6.91 | 6.75 | 3,427 |
Range of
exercise
prices
|
Number
exercisable
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
average
exercise
price
|
Aggregate
intrinsic value
|
||||||||||||
$
|
Years
|
$
|
||||||||||||||
4.08 to 6.00
|
505,818 | 6.67 | 4.97 | 2,617 | ||||||||||||
6.48 to 7.88
|
190,200 | 4.88 | 6.82 | 631 | ||||||||||||
12.45
|
90,310 | 9.61 | 12.45 | - | ||||||||||||
786,328 | 6.58 | 6.27 | 3,248 |
Year ended August 31
|
||||||||||||||||||||||||
2014
|
2013
|
2012
|
||||||||||||||||||||||
Number
of
options
|
Weighted
average
exercise
price
|
Number
of
options
|
Weighted
average
exercise
price
|
Number
of
options
|
Weighted
average
exercise
price
|
|||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||
Options outstanding at beginning of year
|
79,689 | 7.21 | 79,689 | 7.21 | 79,689 | 7.21 | ||||||||||||||||||
Changes during the year:
|
||||||||||||||||||||||||
Exercised
|
(17,468 | ) | 7.49 | - | - | - | ||||||||||||||||||
Options outstanding at end of year
|
62,221 | 7.13 | 79,689 | 7.21 | 79,689 | 7.21 | ||||||||||||||||||
Options exercisable at end of year
|
53,888 | 47,469 | 54,683 |
Range of
exercise
prices
|
Number
outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
intrinsic value
|
||||||||||||
$
|
Years
|
$
|
||||||||||||||
4.08 to 6.00
|
37,219 | 3.94 | 5.79 | 162 | ||||||||||||
9.12
|
25,002 | 2.99 | 9.12 | 25 | ||||||||||||
62,221 | 3.56 | 7.13 | 187 |
Range of
exercise
prices
|
Number
exercisable
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
average
exercise
price
|
Aggregate
intrinsic value
|
||||||||||||
$
|
Years
|
$
|
||||||||||||||
4.08 to 6.00
|
28,886 | 3.21 | 5.73 | 128 | ||||||||||||
9.12
|
25,002 | 2.99 | 9.12 | 25 | ||||||||||||
53,888 | 3.11 | 7.30 | 153 |
|
a.
|
Financial income
|
Year ended August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Gain on sale of marketable securities (note 3)
|
$ | 80 | $ | 90 | $ | - | ||||||
Changes in fair value of warrants
|
- | 44 | - | |||||||||
Income from interest on deposits
|
138 | 19 | 13 | |||||||||
Exchange rate differences
|
7 | - | - | |||||||||
Other
|
- | 27 | - | |||||||||
$ | 225 | $ | 180 | $ | 13 |
|
b.
|
Financial expenses
|
Year ended August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Exchange of warrants
|
$ | - | $ | 297 | $ | - | ||||||
Changes in fair value of warrants
|
- | - | 143 | |||||||||
Exchange rate differences
|
- | 3 | 35 | |||||||||
Bank commissions
|
11 | 13 | 15 | |||||||||
Other
|
- | - | 6 | |||||||||
$ | 11 | $ | 313 | $ | 199 |
|
a.
|
Corporate taxation in the U.S.
|
|
b.
|
Corporate taxation in Israel:
|
August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
In respect of:
|
||||||||||||
Net operating loss carryforward
|
4,890 | 3,993 | 3,190 | |||||||||
Research and development expenses
|
688 | 339 | 18 | |||||||||
Less - valuation allowance
|
(5,578 | ) | (4,332 | ) | (3,208 | ) | ||||||
Net deferred tax assets
|
- | - | - |
|
c.
|
Loss before taxes on income and income taxes included in the income statements of operations:
|
Year ended
August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Loss before taxes on income:
|
||||||||||||
U.S.
|
893 | 1,186 | 599 | |||||||||
Outside U.S.
|
4,799 | 3,251 | 2,655 | |||||||||
$ | 5,692 | $ | 4,437 | $ | 3,254 | |||||||
Income tax expenses (benefit):
|
||||||||||||
Current:
|
||||||||||||
U.S.
|
- | (13 | ) | (8 | ) | |||||||
Outside U.S.
|
4 | (192 | ) | 98 | ||||||||
$ | 4 | $ | (205 | ) | $ | 90 |
|
d.
|
Reconciliation of the statutory tax benefit to effective tax expense
|
Year ended
August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Loss before income taxes as reported in the consolidated statement of comprehensive income (loss)
|
$ | (5,692 | ) | $ | (4,437 | ) | $ | (3,254 | ) | |||
Statutory tax benefit
|
(1,992 | ) | (1,552 | ) | (1,139 | ) | ||||||
Increase (decrease) in income taxes resulting from:
|
||||||||||||
Change in the balance of the valuation allowance for deferred tax
|
1,104 | 902 | 517 | |||||||||
Disallowable deductions
|
480 | 374 | 120 | |||||||||
Increase in taxes resulting from different tax rates applicable to the Subsidiary
|
408 | 276 | 502 | |||||||||
Uncertain tax position
|
4 | (205 | ) | 90 | ||||||||
Taxes on income for the reported year
|
$ | 4 | $ | (205 | ) | $ | 90 |
|
e.
|
Uncertainty in Income Taxes
|
Year ended August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Balance at Beginning of Year
|
$ | 23 | $ | 228 | 138 | |||||||
Increase (decrease) in uncertain tax positions for the current year
|
4 | (205 | ) | 90 | ||||||||
Balance at End of Year
|
$ | 27 | $ | 23 | $ | 228 |
f.
|
Valuation Allowance Rollforward
|
Year ended
August 31
|
||||||||||||
Balance at beginning of period
|
Additions
|
Balance at end of period
|
||||||||||
Allowance in respect of carryforward tax losses:
|
||||||||||||
Year ended August 31, 2014
|
$ | 4,332 | $ | 1,246 | $ | 5,578 | ||||||
Year ended August 31, 2013
|
$ | 3,208 | $ | 1,124 | $ | 4,332 | ||||||
Year ended August 31, 2012
|
$ | 1,813 | $ | 1,395 | $ | 3,208 |
|
a.
|
During each of the fiscal years of 2014, 2013 and 2012 the Company paid to directors $40, $39 and $30, respectively, as directors fee.
|
|
b.
|
On July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY Ltd. (“KNRY”), an Israeli company owned by the CEO, whereby the CEO, through KNRY, will provide services as President and Chief Executive Officer of both the Company and the Subsidiary (the “CEO's Consulting Agreement”). Additionally, on July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY whereby the CTO, through KNRY, will provide services as Chief Medical and Technology Officer of both the Company and the Subsidiary (the “CTO's Consulting Agreement” and together with the CEOs Consulting Agreement, the “Consulting Agreements”). 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, a gross amount of NIS 50,400 per month ($14) and (ii) will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreements.
|
|
c.
|
Balances with related parties:
|
August 31
|
||||||||
2014
|
2013
|
|||||||
Receivable
|
$ | 330 | $ | 5 | ||||
Accounts payable and accrued expenses - KNRY
|
$ | 47 | $ | 64 |
|
d.
|
Expenses to related parties:
|
Year ended August 31
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
KNRY
|
$ | 671 | $ | 448 | $ | 318 |
(b) | Exhibits |
3.1*
|
Composite Copy of Certificate of Incorporation, as amended as of January 22, 2013, corrected February 8, 2013 and further amended July 25, 2014.
|
3.2*
|
Composite Copy of Certificate of Incorporation, as amended as of January 22, 2013, corrected February 8, 2013 and further amended July 25, 2014 (marked copy).
|
3.3
|
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).
|
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+*
|
Amendment, dated July 13, 2013, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Nadav Kidron.
|
10.3+*
|
Amendment, dated November 13, 2014, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Nadav Kidron and Miriam Kidron.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
+
|
Management contract or compensation plan.
|
ORAMED PHARMACEUTICALS INC.
|
||
/s/ NADAV KIDRON
|
||
Nadav Kidron,
|
||
President and Chief Executive Officer
|
||
Date: November 13, 2014
|
/s/ NADAV KIDRON
|
November 13, 2014
|
||
Nadav Kidron,
|
|||
President and Chief Executive Officer and Director
|
|||
(principal executive officer)
|
|||
/s/ YIFAT ZOMMER
|
November 13, 2014
|
||
Yifat Zommer,
|
|||
Chief Financial Officer
|
|||
(principal financial and accounting officer)
|
|||
/s/ MIRIAM KIDRON
|
November 13, 2014
|
||
Miriam Kidron,
|
|||
Chief Medical and Technology Officer and Director
|
|||
/s/ LEONARD SANK
|
November 13, 2014
|
||
Leonard Sank,
|
|||
Director
|
|||
/s/ HAROLD JACOB
|
November 13, 2014
|
||
Harold Jacob,
|
|||
Director
|
|||
/s/ MICHAEL BERELOWITZ
|
November 13, 2014
|
||
Michael Berelowitz,
|
|||
Director
|
|||
/s/ GERALD OSTROV
|
November 13, 2014
|
||
Gerald Ostrov,
|
|||
Director
|
Name
|
Address
|
Nadav Kidron
|
Hi-Tech Park 2/5
|
Givat-Ram
|
|
PO Box 39098
|
|
Jerusalem 91390 Israel
|
Name
|
Address
|
Nadav Kidron
|
Hi-Tech Park 2/5
|
Givat-Ram
|
|
PO Box 39098
|
|
Jerusalem 91390 Israel
|
1.
|
Amendment to Section 6
. Section 6 of the Original Agreement is hereby amended and restated in its entirety to read as follows:
|
|
“2.1
|
Compensation
. Effective from July 2013 (inclusive), the Company shall pay to the Consultant in consideration for the performance of the Consulting Services, a gross monthly amount of 75,000 + VAT (approximately $20,833) (the “
Consideration
”), subject to the receipt by the Company of an invoice from the Consultant. Each of the Consultant and Nadav hereby declares that neither of them has, nor shall have in the future, any claims or demands in respect of amounts paid prior to May 2008.”
|
2.
|
Ratification
. As amended hereby, the Original Agreement is ratified and confirmed and all other terms and conditions remain in full force and effect.
|
ORAMED
LTD
.
|
KNRY LTD . |
Per:
/s/ Yifat Zommer
Name:
Yifat Zommer
|
s/ Nadav Kidron
KNRY LTD
.
|
Title:
Chief Financial Officer and Secretary
|
Name: Nadav Kidron |
|
1.
|
Consultant confirms that both Nadav Kidron and Miriam Kidron (the “
Service Providers
”) are KNRY’s employees and, as such, Consultant pays them a monthly salary and all other benefits required by law, reports them as its employees to the tax authorities including the National Insurance Institute, and maintains all legaly required records as an employer.
|
|
2.
|
Consultant confirms that it is the sole and only employer of the Service Providers.
|
|
3.
|
Section 14 to each of the Original Agreements is hereby deleted in its entirety and replaced with the following:
|
|
a.
|
Without derogating from any of the above, should it be held by any competent judicial authority or any governmental authority, that the relationship between any of the Service Providers and the Company is one of employer and employee; and/or in the event that the Company shall be demanded and/or obligated, to pay any of the Service Providers and/or the Consultant any amount, or give them any right, deriving from the existence of an employer-employee relationship between the Service Providers and the Company or usually paid to employees; all of the following provisions shall apply:
|
|
i.
|
Retroactively, from the first date of Consultant’s engagement with the Company (the “Effective Date”) and in lieu of any remuneration paid to Consultant (including bonuses, benefits and expenses), Consultant will be deemed to have been entitled only to a gross monthly salary (including for all over-time hours, if relevant) in an amount equal to: (A) 150% (one hundred and fifty percents) of the gross monthly salary of the company's COO, or in the absence of a COO, of the highest gross monthly salary paid to an employee of the Company, in case of Nadav Kidron, and (B) 125% (one hundred and twenty five percents) of the gross monthly salary of the Company's COO, or in the absence of a COO, of the highest gross monthly salary paid to an employee of the Company, in case of Miriam Kidron. Consultant will immediately return to the Company any amount paid to it beyond the above gross salaries for each Service Provider. Any entitlements as an employee (if at all) for each Service Provider, will be calculated on the base of the above salary; and
|
|
ii.
|
The Company shall be entitled to set off from the amounts due to any of the Service Providers in accordance with any source, the amounts which the Consultant will be liable to refund to the Company pursuant to Sections (i) above or in accordance with any other source; and
|
|
iii.
|
Consultant shall indemnify the Company for any and all costs, liabilities and expenses it may have in connection with such demand and/or obligation, including the economic value of such right and legal expenses.
|
|
b.
|
Without derogating from any of the above, should it be held by the tax authorities including the National Insurance Institute, that the Company is demanded and/or obligated, to pay any amount or bare any cost, deriving from the existence of an employer-employee relationship between the Service Providers and the Company or usually paid to employees; all of the following provisions shall apply:
|
|
i.
|
Consultant shall indemnify the Company for any and all costs, liabilities and expenses it may have in connection with such demand and/or obligation, including the economic value of such right and legal expenses.
|
|
ii.
|
The Company shall be entitled to set off from the amounts due to the Consultant or to any of the Service Providers in accordance with any source, the amounts which the Consultant will be liable to refund to the Company pursuant to Section (i) above or in accordance with any other source.
|
|
4.
|
Section 5 to each of the Original Agreements is hereby amended in way that the number "60" is changed to "140", so that the Prior Written Notice will be 140 days.
|
|
5.
|
All Consultant’s confirmations and undertakings in this Amendment are made to the benefit of the Company and are meant to add to any previous confirmations and undertakings of Consultant, and should be read as such, and in case of contradiction between the foregoing, this Amendment shall control.
|
Oramed Ltd.
Signature:
/s/ Leonard Sank
Name:
Leonard Sank
Title:
Director
Date:
November 13, 2014
|
KNRY Ltd.
Signature:
/s/ Nadav Kidron
Name:
Nadav Kidron
Title: ___________________
Date:
November 13, 2014
|
I the undersigned, Nadav Kidron, Israel ID# 027424282, hereby confirm the following:
I.
I agree to the set-off arrangement set out in Section
3.a.ii above.
II.
I am personally responsible for the undertakings of KNRY Ltd. in this Amendment, and I guarantee its payments.
Nadav Kidron
027424282
November 13, 2014
/s/ Nadav Kidron
Name
ID# Date Signature
|
I the undersigned, Miriam Kidron, Israel ID# 09665993, hereby confirm the following:
III. I agree to the set-off arrangement set out in Section
3.a.ii above.
IV.
I am personally responsible to the undertakings of KNRY Ltd. in this Amendment, and I guarantee its payments.
Miriam Kidron
09665993
November 13, 2014
/s/ Miriam Kidron
Name ID# Date Signature
|
1.
|
Amendment to Section 6
. Section 6 of the Original Agreement is hereby amended and restated in its entirety to read as follows:
|
|
“2.1
|
Compensation
. Effective from July 2013 (inclusive), the Company shall pay to the Consultant in consideration for the performance of the Consulting Services, a gross monthly amount of 60,000 + VAT (approximately $16,667) (the “
Consideration
”), subject to the receipt by the Company of an invoice from the Consultant. Each of the Consultant and Miriam hereby declares that neither of them has, nor shall have in the future, any claims or demands in respect of amounts paid prior to May 2008.”
|
2.
|
Ratification
. As amended hereby, the Original Agreement is ratified and confirmed and all other terms and conditions remain in full force and effect.
|
ORAMED
LTD
.
|
KNRY
LTD
.
|
Per:
/s/ Yifat Zommer
Name:
Yifat Zommer
|
/s/ Nadav Kidron, /s/ Miriam Kidron
KNRY LTD
.
|
Title:
Chief Financial Officer and Secretary
|
Name: Nadav Kidron, Miriam Kidron |
Percentage of Total Restricted Stock Units Vested
|
||
Vesting Date
2
|
Incremental Amount
|
Cumulative Amount
|
1.
|
Amendment to Section 1.2
. Section 1.2 of the Original Agreement is hereby amended and restated in its entirety to read as follows:
|
|
“2.1
|
Term
. Unless terminated earlier in accordance with the provisions hereof, the term of engagement under this Agreement shall commence on December 31, 2013 (the “Effective Date”) and shall continue for a period of twelve months (the “Term”).”
|
2.
|
Ratification
. As amended hereby, the Original Agreement is ratified and confirmed and all other terms and conditions remain in full force and effect.
|
ORAMED
PHARMACEUTICALS INC.
|
|
Per:
/s/ Nadav Kidron
Name:
Nadav Kidron
Title:
Chief Executive Officer
|
/s/ Michael Berelowitz
MICHAEL BERELOWITZ
M.D.
|
Integrium, LLC. | Confidential |
Name:
|
Jessica Coutu
|
Title:
|
Sr. Dir., Contract Administration
|
Address:
|
100 East Hanover Avenue, Suite 401
Cedar Knolls, NJ 07927
|
Name:
|
Dr. Miriam Kidron
|
Title:
|
Chief Medical and Technology Officer |
Address:
|
Hi-Tech Park 2/4 Givat-Ram,
P.O. Box 39098
Jerusalem, 91390, Israel
|
Integrium, LLC. | Confidential |
1.
|
Term
|
|
2.
|
Scope of Work
|
|
3.
|
Conditions of Work/Sponsor Responsibilities
|
|
4.
|
Compensation
|
|
5.
|
Representations of CRO
|
|
6.
|
Confidentiality
|
|
7.
|
Conflicts of Interest
|
|
8.
|
Independent Contractor
|
|
9.
|
Tax Reporting and Payment
|
|
10.
|
Ownership, Disclosure and Transfer of Developments and Study Data
|
|
11.
|
Relationship with Investigators
|
|
12.
|
Indemnification
|
|
13.
|
Limitation of Liability
|
|
14.
|
Insurance
|
|
15.
|
Termination
|
|
16.
|
Personnel Recruitment
|
|
17.
|
Equal Opportunity / Affirmative Action
|
|
18.
|
Miscellaneous Provision
|
Integrium, LLC. | Confidential |
|
1.1
|
The term of this Agreement shall be for the period beginning as of July 22, 2014 and ending upon the satisfactory performance of all the Services (as hereinafter defined) unless terminated sooner as provided for herein.
|
|
2.1
|
Sponsor is conducting a Study pursuant to Protocol No. ORA-D-007, (“
Protocol
”) entitled “Randomized, Double-Blind, Placebo-Controlled Study to Assess the Safety and Pharmacodynamics of Multiple Oral Bedtime Doses of ORMD-0801 (Insulin Capsules) in Adult Patients with Type 2 Diabetes Mellitus who are Inadequately Controlled with Diet and Metformin” (the “
Study
”). Sponsor anticipates that the Protocol will be submitted by Sponsor to the FDA by September 30, 2014, such Protocol being set out in
Exhibit 1
attached hereto.
|
|
2.2
|
Integrium shall perform services (“
Services
”) as required for the execution of the Protocol according to the Study Specifications (Study Assumptions, Timeline and Task Ownership Matrix),
Exhibit 2
, attached hereto and made fully a part hereof. The designation of personnel to perform the Services, shall be within Integrium’s discretion, but Sponsor reserves the right, at its sole discretion, to reject any personnel so designated by Integrium, and require replacement of such personnel. Prior to performing the Services under this Agreement, Integrium will inform Sponsor of the identity of the personnel designated and Integrium shall make reasonable efforts to assure that the personnel designated to perform the Services shall not be changed until the Services are completed;
provided, however
, that where any such personnel ceases to be employed by Integrium, Integrium shall promptly notify Sponsor of such cessation and use its best efforts to locate replacement personnel acceptable to Sponsor.
|
|
3.1
|
In order for Integrium to perform the Services properly and timely, unless otherwise agreed in writing, Sponsor shall provide Integrium with those materials and take those actions as described in the Study Specifications, set out in
Exhibit 2
attached hereto and made a part hereof. In addition, Sponsor shall cause all Sponsor contracted designees to (i) reasonably cooperate with Integrium, and (ii) perform their services and supply to Integrium their study materials and deliverables in a timely manner. Any failure under this Section 3.1 shall not constitute a breach of this Agreement by Sponsor, but may require changes in the budget/compensation and/or timelines for the Services in accordance with Section 4.3.
|
|
3.2
|
Sponsor and/or its representatives may, during the Term, visit Integrium’s facilities (and those of Integrium’s approved contractors) at reasonable times and with reasonable frequency during normal business hours to (i) observe the progress of the Study at Integrium’s facilities and all Study sites (it being clarified that Integrium shall ensure that Sponsor has such rights viz-a-viz each Study site), (ii) monitor the accuracy and completeness of the Services, including, but not limited to, quality control and assurance, and/or (iii) review the responsibilities and/or performance obligations of Integrium personnel. Integrium will assist Sponsor in scheduling such visits and will make records and any other relevant information available to Sponsor and/or its representatives.
|
Integrium, LLC. | Confidential |
|
3.3
|
Both Sponsor and Integrium enter into the Agreement for the express purpose of transferring from Sponsor to Integrium the responsibilities and obligations of a Sponsor to conduct, coordinate, manage, and/or develop the Study in accordance with United States Food and Drug Administration (“
FDA
”) regulations set forth in 21 CFR Section 312, Subpart D, as such may be amended from time to time. Accordingly, if Sponsor is transferring to Integrium the responsibility for various regulatory responsibilities under the U.S. laws and regulations as set forth in
Exhibit 5
(sample form), a Transfer of Regulatory Obligations Form will be completed. Any regulatory responsibilities not specifically stated as transferred to Integrium shall remain the regulatory responsibility of Sponsor. Sponsor shall file the Transfer of Regulatory Obligations with the FDA or as otherwise required by law or regulation. If an amendment to this Agreement affects the scope of regulatory obligations that have been transferred to Integrium, Integrium and Sponsor shall execute a corresponding amendment. Such amendment shall be filed by Sponsor with the appropriate government bodies.
|
|
4.1
|
In consideration for Integrium’s satisfactory performance of any and all of the Services, Sponsor shall pay Integrium a fee in the amount and on the terms specified in
Exhibit 3
(the “
Study Budget and Payment Schedule
”) attached hereto and made fully a part hereof. All fees will be invoiced by Integrium and Sponsor shall pay each invoice within thirty (30) days of receipt. If any portion of an invoice is disputed, then Sponsor shall pay the undisputed amounts as provided above and the parties will use good faith efforts to reconcile the disputed amount as soon as practicable. If any undisputed invoice is not paid within forty five (45) days Sponsor will be considered in material breach. If the breach is not cured within ten (10) days of written notice thereof provided by Integrium, Integrium will suspend all activity until the breach is cured. If any breach extends beyond forty five (45) days Integrium will terminate this Agreement. Any 3
rd
Party Vendor late fee charges resulting from Sponsor delays in providing payment to Integrium will be passed on to Sponsor.
|
|
4.2
|
Any statement or invoice for services or expenses shall be stated with sufficient specificity for Sponsor to be able to determine the services performed, the work done, the related charges, and summary of pass through expenses.
|
|
4.3
|
Any material change in the Services, or the Assumptions set out in
Exhibit 2
(including, but not limited to, changes in an agreed starting date or suspension of the Study by the Sponsor) may require changes in the budget/compensation and/or timelines and shall require a written amendment to this Agreement. Each amendment shall detail the changes to the Services, Conditions, Compensation, Timeline or other matter. Sponsor agrees that it will not unreasonably withhold approval of an amendment even if it involves a fixed price contract if the proposed changes in compensation or timelines result from, among other appropriate reasons, changes in the assumptions upon which current compensation or timelines were based. Integrium shall not implement any change in the Project scope without Sponsor’s prior written approval. Integrium reserves the right to postpone effecting material changes in the Project’s scope until such time as the parties agree to and execute the corresponding Change Order.
|
Integrium, LLC. | Confidential |
|
5.1
|
Integrium represents that it has the requisite facilities, equipment, and personnel with the requisite expertise, experience and skill, to render the desired Services, and it shall render the Services, in a timely, competent and efficient manner. Integrium further represents that the Services to be provided pursuant to this Agreement will represent Integrium’s best efforts and will be of the highest professional standards and quality. Integrium further represents that it shall abide by all laws, rules and regulations including, but not limited to, GCP Guidelines issued by the FDA that apply to the performance of the Services at the time they are provided, including applicable requirements regarding equal employment opportunity and, when on Sponsor’s premises, Integrium’s employees shall comply with Sponsor’s policies with respect to conduct of visitors.
|
|
5.2
|
Integrium certifies that neither Integrium nor any person employed by Integrium has been debarred under Section 335a of Title 22 of the United States Code, and that no debarred person will in future be employed or utilized to perform any Services. Integrium certifies that, to the best of its knowledge, no person performing any Services, including any investigator, has a conviction which could lead to debarment under Section 335a. Furthermore, Integrium agrees to notify Sponsor immediately of any action toward conviction or debarment of any person performing any Services. Integrium understands that Sponsor shall have the right to terminate this Agreement immediately upon receipt of notice that any employee or agent of Integrium has been debarred or is subject to any action toward conviction or debarment.
|
|
5.3
|
Integrium shall maintain accurate and complete records specifically relating to the Services provided hereunder in accordance with generally accepted accounting principles and practices, consistently applied. To the extent that such records may be relevant in Sponsor’s reasonable opinion in determining whether Integrium is complying with its obligations pursuant to this Agreement, Sponsor, or Sponsor’s authorized representative, may audit such records during Integrium’s normal working hours and at Sponsor’s expense, upon providing five (5) working days’ written notice to Integrium. Integrium shall retain such records for a period of three (3) years from the date of final payment by Sponsor pursuant to the Agreement.
|
|
5.4
|
Integrium represents and warrants that in any and all contracts between Integrium and a third party with respect to the performance by such third party of clinical trials or tests and services associated with any such clinical trials or tests (a “Third Party Contractor”), and in which Integrium acts as an agent or general contractor for Sponsor and to which such contract Sponsor is not a party, Integrium will include a third party beneficiary provision naming Sponsor as the third party beneficiary under such agreement. Notwithstanding anything to the contrary in this Agreement, prior to entering into any contract or arrangement with any Third Party Contractor or with any subcontractor with respect to the performance by such subcontractor of any of Integrium’s obligations under this Agreement, Integrium shall notify Sponsor thereof and be required to obtain the written consent of Sponsor to any such contract or arrangement (such consent not to be unreasonably withheld, delayed or conditioned).
|
Integrium, LLC. | Confidential |
|
6.1
|
It is understood by the parties hereto that during the performance of the Services, Integrium may receive from Sponsor, or otherwise acquire, certain Confidential, Proprietary, and/or Trade Secret Information which is the property of Sponsor (“
Confidential Information
”). Confidential Information shall include without limitation the Investigator’s brochure, the Protocol, the data recorded during the Study and data, formulae and information on the Study drug. For purposes of this Agreement, Confidential Information shall be understood to include all written or electronically transferred information received from Sponsor by Integrium, and unless expressly described in this section 6.1 such written material shall be marked “Confidential.” Confidential Information which is disclosed orally shall be deemed confidential if it is confirmed to be confidential by a writing provided to Integrium by Sponsor within a reasonable amount of time following oral disclosure or if such information is known or reasonably should be known by Integrium to be deemed to be Confidential Information (even without such written confirmation). Integrium hereby warrants and affirms that it shall neither use nor disclose Confidential Information for any purpose other than as is specifically allowed by this Agreement.
|
|
6.2
|
Integrium shall disclose Confidential Information only to such of its employees or third parties (approved by Sponsor in writing) as may reasonably be required to assist Integrium in the performance of this Agreement and who have agreed to be bound by confidentiality and non-use terms and conditions similar to those in this Agreement. In the event of such disclosure, Integrium shall advise its employees, of the confidential nature of the information and shall instruct them to take all necessary and reasonable precautions to prevent the unauthorized use or disclosure thereof at least consistent with those precautions undertaken by Integrium hereunder.
|
|
6.3
|
Upon the expiration or termination of this Agreement, Integrium shall either destroy or return to Sponsor all tangible and electronic forms of Confidential Information, including any and all copies and/or derivatives of Confidential Information made by Integrium (or Integrium’s employees or agents), as well as any writings, drawings, specifications, manuals or other printed material made by Integrium (or Integrium’s employees or agents) and based on, or derived from, Confidential Information;
provided, however
, that Integrium shall retain all information it is required by law to retain. Such information shall be retained for the amount of time required by law using the same amount of care and diligence to protect Sponsor’s information as it uses to protect its own confidential information but in any case not less than reasonable care and diligence.
|
|
6.4
|
The foregoing obligations shall
not
apply to Confidential Information to the extent that it: (a) is or becomes generally available to the public other than as a result of a disclosure by the receiving party; (b) becomes available to the receiving party on a non-confidential basis from a source which is not prohibited from disclosing such information; (c) was developed independently of any disclosure by the disclosing party or was known to the receiving party prior to its receipt from the disclosing party, as shown by contemporaneous written evidence; or (d) is required by law or regulation to be disclosed (in which case notice of such disclosure shall be given promptly to Sponsor and Integrium shall reasonably cooperate with Sponsor in seeking to obtain assurances that any such information will be treated confidentially).
|
Integrium, LLC. | Confidential |
|
6.5
|
Integrium shall not disclose, or otherwise make public, the terms of this Agreement, except as may be necessary to secure enforcement of the terms of this Agreement or in response to a lawful subpoena or to comply with applicable regulations.
|
|
6.6
|
All of Integrium’s obligations set forth in this Article 6, including the obligations of confidentiality and non-use, shall continue through the term of this Agreement and shall survive for a period of ten (10) years following the expiration or termination of this Agreement.
|
|
7.1
|
Integrium hereby warrants and represents that it has advised Sponsor, prior to the date of signing of this Agreement, of any relationship with any third parties, including competitors of Sponsor, which would prevent Integrium from performing the Services contemplated by this Agreement in accordance with the legal and ethical standards set out herein or as otherwise mandated by applicable law.
|
|
7.2
|
Integrium undertakes to advise Sponsor of any such relationships that might arise during the Term of this Agreement. In the event such a relationship arises, the parties will discuss in good faith options to minimize or eliminate possible effects of such conflicts of interest.
|
|
8.1
|
The parties hereto agree that Integrium is being retained and shall perform as an “Independent Contractor”. Neither Integrium nor any of its employees performing Service’s, shall be employees of Sponsor, it being understood and agreed that Integrium is an independent contractor for all purposes and at all times. All matters of compensation and benefits and terms of employment for Integrium’s employees shall be solely a matter between Integrium and its employees. Nothing contained herein shall be deemed or construed to create between the parties hereto a partnership or joint venture or employment relationship. No party shall have the authority to act on behalf of any other party, or to commit any other party in any manner or cause whatsoever or to use any other party’s name in any way not expressly authorized by this Agreement. No party shall be liable for any act, omission, representation, obligation or debt of any other party, even if informed of such act, omission, representation, obligation or debt.
|
|
8.2
|
It is further understood that all Integrium services will be performed in accordance with Integrium’s SOPs;
provided, however
, that in the event that the performance of such services according to such SOPs conflict with the terms of this Agreement, performance of such services shall follow the terms of this Agreement.
|
|
8.3
|
Integrium acknowledges and agrees that its employees are not eligible to participate in any benefits programs offered by Sponsor to its employees, or in any pension plans, profit sharing plans, insurance plans (including but not limited to, worker’s compensation insurance), or any other employee benefit or perquisite plans offered from time to time by Sponsor to its employees or to receive Sponsor stock directly from Sponsor or its officers, directors, or employees.
|
|
8.4
|
Nothing contained in this Agreement shall be construed as making the parties joint venturers or as granting to either party the authority to bind or contract any obligations in the name of or on the account of the other party or to make any representations, guarantees or warranties on behalf of the other party except to the extent such authority is expressly provided in writing and agreed by the parties.
|
Integrium, LLC. | Confidential |
|
9.1
|
Integrium acknowledges and agrees that it shall be solely responsible for paying the appropriate amount of all federal, state and local taxes with respect to all compensation paid to Integrium pursuant to this Agreement, and that Sponsor shall have no responsibility whatsoever for withholding or paying any such taxes for or on behalf of Integrium.
|
|
9.2
|
Integrium further agrees to indemnify and hold Sponsor harmless from and against any and all damages, losses, expenses, or penalties arising from or in connection with any claim brought by any federal, state or local taxing authority with regard to Integrium’s failure to pay required taxes or failure to file required forms with regard to compensation paid to Integrium by Sponsor pursuant to this Agreement.
|
|
10.1
|
Sponsor acknowledges that Integrium possesses certain computer technical expertise, software and methodologies for administration of clinical trials, data collection, data management and statistical analyses methods which have been independently developed by Integrium without the benefit of any information provided by Sponsor. Sponsor and Integrium agree that any computer software programs, methodologies or other formulae or analyses or methodologies developed by Integrium in the administration and the conduct of clinical trials used by Integrium under or during the term of this Agreement are the product of Integrium’s technical expertise possessed and developed by Integrium prior to the date of this Agreement and remain the sole property of Integrium and Sponsor agrees that such technology is commercially valuable to Integrium and Sponsor agrees not to disclose such technology to any other party without Integrium’s prior written consent.
|
|
10.2
|
All written materials and other works which may be subject to copyright and all patentable and un-patentable inventions, discoveries, data, and ideas (including but not limited to any computer software) which are made, conceived or reduced to practice or written by Integrium or Integrium’s employees or third party contractors authorized by Integrium pursuant to the terms hereof
and
which are based upon or arise from the Services performed by Integrium specifically for Sponsor (“
Developments
”) shall become Sponsor’s exclusive property, and may be used by Sponsor as Sponsor deems appropriate in its sole discretion without any obligation of any nature (including financial, reporting, accounting or otherwise) to Integrium. Integrium, by signing this Agreement, expressly agrees to Sponsor’s ownership of all Developments, and represents and warrants that it has appropriate provisions in its agreements with third party contractors approved to provide services hereunder that would enable Integrium to meet the obligations set out in this Article 10.
|
|
10.3
|
Integrium agrees to hold all Developments in strict confidence in accordance with Article 6 of this Agreement.
|
Integrium, LLC. | Confidential |
|
10.4
|
Integrium shall disclose promptly to Sponsor each Development and, upon Sponsor’s request and at Sponsor’s expense, Integrium shall assist Sponsor, or its designees, in filing patent or copyright applications in any country in the world. Each copyrightable work, to the extent permitted by law, shall be considered a work made for hire and the authorship and copyright of the work shall be in Sponsor’s name and, if not so considered, Integrium hereby assigns to Sponsor all of Integrium’s rights, title, and interests in such works, and agrees to the waiver of all moral rights therein - to the extent that same may exist. Integrium shall execute or cause to be executed by the inventor(s) or a duly authorized agent of Integrium, as the case may be, all papers and do all things which may be necessary or advisable, in the opinion of Sponsor, to prosecute such applications and to vest in Sponsor, or its designee, all the right, title and interest in and to the Developments.
|
|
10.5
|
To avoid doubt, Integrium acknowledges and agrees that Sponsor and its licensors retain all right, title and interest in and to the Confidential Information
,
the Investigator’s brochure, the Protocol, and all rights and information underlying and related to the Study drug, and that no license (whether express or implied) to any of the foregoing is granted to Integrium under this Agreement.
|
|
10.6
|
Upon the expiration or termination of this Agreement, Integrium shall transfer to Sponsor all Developments including any and all copies and/or derivatives hereof, made by Integrium (or Integrium employees) as well as any writings, drawings, specifications, manuals or other printed material made by Integrium (or Integrium employees or contractors), to the extent such Development is not already transferred prior to expiration or termination. Notwithstanding the reason for expiration or termination of this Agreement, Integrium shall under no circumstances be entitled to retain Confidential Information.
|
|
10.7
|
All data developed relating to the Study shall be the sole and exclusive property of Sponsor, and Sponsor may use all data relating to the Study for any lawful purpose, including but not limited to submission to the FDA or other regulatory agencies. All agreements with Investigators and/or Trial Sites shall provide for the foregoing rights of Sponsor.
|
|
10.8
|
Sponsor’s authorised representative(s) and, to the extent permitted by law, regulatory authorities may, during regular business hours, arrange in advance with Integrium and/or the respective Principal Investigator(s) and/or Trial Site(s) to inspect all data and work products relating to the respective Study and to examine Integrium’s facilities required for performance of this Agreement.
|
|
11.1
|
If this Agreement requires Integrium to contract with investigators or investigative sites (collectively, “
Investigators
”), then any such contract shall be in a form mutually acceptable to Integrium and Sponsor. If an Investigator requests any material changes to such form effecting Sponsor’s rights, Integrium shall submit the proposed change to Sponsor, and Sponsor shall promptly review, comment on and/or approve such proposed change(s). The parties acknowledge and agree that Investigators shall not be considered the employees, agents, or subcontractors of Integrium or Sponsor, and that Investigators shall exercise their own independent medical judgement. Integrium’s responsibilities with respect to Investigators shall be limited to those responsibilities specifically set forth in this Agreement and any amendments hereto.
|
Integrium, LLC. | Confidential |
|
11.2
|
It is hereby agreed that
Exhibit 3
(the “
Study Budget and Payment Schedule
”) represents the entire consideration that will be paid by Sponsor to Integrium on behalf of the Study, and that the Sponsor will not pay directly or indirectly to any third party, including Investigators, and/or any other third party vendors (IRBs, labs, meeting planners, subcontracting CROs, IVRS, etc.), any amount that is not included in
Exhibit 3
. Sponsor acknowledges that Integrium shall not be responsible for any Study timeline delays as a result of site enrollment delays due to lack of payment or late payment from Sponsor. Integrium warrants that all up-front and advance payment or any monies made by Sponsor to Integrium will be allocated only to the Sponsor study specified on the invoice and will not be used for any other purposes. Integrium will provide Sponsor with a monthly pass-through reconciliation report indicating the status of these funds. Notwithstanding anything contained herein to the contrary, Sponsor agrees to indemnify and hold Integrium harmless for any and all claims from any sites and 3
rd
Party Vendors for unpaid invoices submitted to Sponsor.
|
|
11.3
|
Sponsor agrees that, although Integrium will assume responsibility for disbursing fees and/or expenses to Investigators, and Third Party Contractors, Integrium is not liable for payment to Investigators and Third Party Contractors until Sponsor has pre-paid Integrium in advance for these fees and expenses. Upon contract execution of this Agreement, Sponsor agrees to provide the start-up and vendor advance requirements in accordance with
Exhibit 4
, Payment Schedule.
|
|
11.4
|
Reserved
|
|
11.5
|
Sponsor acknowledges and agrees that Integrium will not be responsible for delays in a Study or Project to the extent that such delays are caused by Sponsor’s failure to make adequate pre-payment for Investigators’ services. Sponsor further acknowledges and agrees that payments for Investigator’s/vendors’ services are pass-through payments at actual costs to Third Party Contractors and are separate from payments for Integrium’s Services. Sponsor agrees that it will not withhold Investigator payments except to the extent that it has reasonable questions about the services performed by a particular Investigator.
|
|
12.1
|
Sponsor hereby agrees to indemnify, defend, and hold Integrium, and its respective agents, servants, employees, officers, and directors (“
Integrium Indemnities
”) harmless from and against any and all losses, costs, damages, expenses, claims, actions, liability, and/or suits (including court costs and reasonable attorney fees) (“
Liabilities
”) suffered or incurred by Integrium or any of the foregoing as a result of personal injury to or death of a participant in any Study, and such personal injury or death arises from or is, by unappealable judgment or binding settlement between the parties, attributed to: (a) a claim of product liability or claim arising from the design, production, manufacture, or instructions for use of any Study Product; (b) a claim of strict liability in tort; (c) the design of the Study; and (d) Sponsor’s negligence with respect to performance of its obligations under this Agreement;
provided, however
, that if a claim with respect to the matters set forth in this Section 12.1 hereof arises in whole or in part from Integrium’s negligence or intentional misconduct or fraud, then the amount of Claim that Sponsor shall indemnify Integrium pursuant to this Section 12.1 shall be reduced by an amount in proportion to the percentage of Integrium’s responsibilities for such Claim as determined by a court of competent jurisdiction in a final and non-appealable decision or in a binding settlement between the parties. Under no circumstances shall Integrium be liable for any Third Party Contractor’s (i) adherence to the Study Protocol, (ii) adherence to project specifications or the Study timeline, (iii) breach of contract, (iv) the negligence or willful misconduct, or (v) any infringement, misappropriation or violation by Third Party Contractors of any right of any other party.
|
Integrium, LLC. | Confidential |
|
12.2
|
Integrium hereby agrees to indemnify, defend, and hold Sponsor and its respective affiliates, employees, directors, agents, approved subcontractors and consultants (“
Sponsor Indemnitees
”) harmless from and against any and all Liabilities suffered or incurred by and Sponsor Indemnitee arising out of (a) any Integrium Indemnitee’s error, omission, gross negligence or willful misconduct, or (b) any breach of any covenant or warranty, or the inaccuracy of any representation of Integrium in this Agreement, or (c) Integrium’s failure to comply with the terms of this Agreement.
|
|
12.3
|
Integrium Indemnitees agree: (a) to promptly notify Sponsor of any such Liability or Liabilities; (b) to cooperate fully in the handling of such Liability or Liabilities and, in the event of litigation, to attend hearings and trials and assist in securing and giving evidence, and obtaining the attendance of necessary and proper witnesses, and (c) to Sponsor’s control of the defense and settlement, with Integrium’s consent which shall not be unreasonably withheld, of all Liability or Liabilities by Sponsor. Sponsor will reimburse Integrium for all reasonable expenses incurred at Sponsor’s request in connection with this Section 12.2 (b) except to the extent and in the proportion that Integrium is responsible under 12.1 Sponsor shall carry out the management and defense of such claims or suits at their own expense.
|
|
12.4
|
In the event that a patient participating in a Study suffers an illness or injury that the Investigator(s) and Sponsor determine to be directly associated with Study participation, and for which Sponsor would be obligated to indemnify Integrium under section 12.1, then – provided such illness or injury is not excluded by Sponsor’s insurance policy -Sponsor shall pay all medical and hospital expenses directly associated with the medical treatment of such adverse reaction which are in excess of that portion covered by the patient’s own insurance. In the event diagnostic procedures are required to determine the etiology of the patient’s symptoms, Sponsor shall pay the reasonable expense of such diagnostic workup without regard to the final diagnosis, but up to the amount covered by the Sponsor’s insurance policy and in accordance with its terms.
|
13.
|
Limitation of Liability; Damages
|
|
13.1
|
Except in the case of gross negligence, willful misconduct, fraud or non-adherence to the Protocol, neither Integrium, nor its affiliates, nor any of its or their respective directors, officers, employees or agents shall have any liability of any type (including, but not limited, to contract, negligence, and tort liability), for any special, incidental, indirect or consequential damages, including, but not limited to the loss of opportunity, loss of use, or loss of revenue or profit, in connection with or arising out of this Agreement, or any service order, even if such damages may have been foreseeable to Integrium. In addition, except in the case of gross negligence, willful misconduct, fraud or non-adherence to the Protocol, in no event shall the collective, aggregate liability (including, but not limited to, contract, negligence and tort liability) of Integrium and its affiliates and its and their respective directors, officers, employees and agents under this Agreement or any service order hereunder exceed the
CRO Service Fees Grand Total
amount set out in the Study Budget.
|
Integrium, LLC. | Confidential |
|
13.2
|
For Failure to Perform.
In the event that the Services provided hereunder (or any portion thereof) do not meet the specifications or other performance criteria agreed to by Integrium and Sponsor in writing, then Integrium will, at Sponsor’s option, promptly (i) re-perform such Services at Integrium’s cost, or (ii) refund to Sponsor all amounts paid by Sponsor to Integrium in connection with such Services.
|
|
13.3
|
Except in the case of gross negligence, willful misconduct or fraud, neither Sponsor, nor its affiliates, nor any of its or their respective directors, officers, employees or agents shall have any liability of any type (including, but not limited, to contract, negligence, and tort liability), for any special, incidental, indirect or consequential damages, including, but not limited to the loss of opportunity, loss of use, or loss of revenue or profit, in connection with or arising out of this Agreement, or any service order, even if such damages may have been foreseeable to Sponsor.
|
14.
|
Insurance
|
|
14.1
|
Each party will maintain, for the duration of this Agreement, insurance in an amount reasonably adequate to cover its obligations under this Agreement and any and all Service Orders then in effect, and, upon request, each party will provide to the other party a certificate of insurance showing that such insurance is in place.
|
|
14.2
|
Sponsor will supply Integrium with the Clinical Trial Insurance Certificate for each Study covered under a Service Order prior to commencement of subject screening for each Service Order. Integrium will not be responsible for enrollment delays due to Sponsor’s delay in providing said Certificate.
|
15.
|
Termination
|
|
15.1
|
In the event that a party hereto shall commit a material breach of this Agreement, the other party hereto shall have the right to terminate this Agreement immediately unless the breaching party can cure its breach and provide full performance within thirty (30) days of notice to it that a material breach has been declared. Upon termination of this Agreement, the non-breaching party shall have no further obligation to the breaching party, other than for Sponsor to pay for Services performed by Integrium as of the date of such termination and any rights and duties which the parties expressly stated herein as surviving termination.
|
|
15.2
|
Sponsor may terminate this Agreement at any time by giving Integrium thirty (30) days written notice of such termination. If Sponsor should terminate pursuant to this Article 15.2, Sponsor will pay for all Service units performed up to the point of termination in accordance with the Budget, as well as costs reasonably incurred for the Services and which Integrium is unable to cancel (for the avoidance of doubt, Sponsor shall be responsible for any and all 3rd Party Vendor cancellation fees due upon Study cancellation), and all administrative costs incurred in the conduct of this Agreement up to the point of termination for those Services which are necessary to be performed for patient safety, government requirement compliance and/or expressly requested by Sponsor;
provided, however
, that no amounts shall be required to be paid which are in excess of the corresponding amounts set forth for such activities in this Agreement. Integrium shall use its best efforts to minimize the costs incurred following its receipt of notice of such termination.
|
Integrium, LLC. | Confidential |
|
15.3
|
Either party may terminate this Agreement upon receipt of written notice to the other party and regard the other party as in breach of this Agreement, if the other party becomes insolvent, makes a general assignment for the benefit of creditors, files a voluntary petition of bankruptcy, suffers or permits the appointment of a voluntary petition of bankruptcy, suffers or permits the appointment of a receiver for its business or assets, or becomes subject to any proceeding under any bankruptcy or insolvency law, whether domestic or foreign, or has wound up or liquidated, voluntary or otherwise. In the event that any of the above events occur, that party shall immediately notify the other, in writing, of its occurrence.
|
|
15.4
|
Upon receipt of notice of termination of this Agreement by either party: (i) Integrium will, as soon as reasonably practicable discontinue providing the applicable Services, except to the extent reasonably required to safely close out a Study or to transfer the remaining Services to another Service Provider selected by Sponsor, and (ii) Integrium will terminate or, if requested by Sponsor, assign existing 3rd Party obligations to the extent cancelable or assignable, as applicable. Any amounts paid by Sponsor which exceed the amounts owed to Integrium as of expiration or termination of this Agreement shall be refunded to Sponsor within thirty (30) days after expiration or termination. Any amounts owed by Sponsor, including 3
rd
Party Vendor cancellation fees, shall be paid to Integrium within thirty (30) days after expiration or termination.
|
16.
|
Personnel Recruitment
|
|
16.1
|
Neither Sponsor nor Integrium will solicit or make offers of employment to or enter into consultant relationships with employees or consultants of the other party if such person was involved, directly or indirectly, in the performance of this Agreement, at any time during the term of this Agreement;
provided, however
, that nothing contained herein will prevent a party from hiring any such employee or consultant who responds to a general hiring program conducted in the ordinary course of business or who approaches such party on a wholly unsolicited basis.
|
17.
|
Reserved
|
18.
|
Miscellaneous Provision
|
|
18.1
|
Assignment
. This Agreement may not be assigned by either party without the prior written consent of the other party, except that either of the parties may assign this Agreement to a successor in connection with the merger, consolidation or sale of all or substantially all of its assets. No assignment whether consensual or permissive shall relieve either party of its responsibility for performance of its obligations under this Agreement.
|
|
18.2
|
Complete Agreement
. This Agreement, together with its exhibits and Change Orders then in effect, supersedes all prior Agreements and understandings between the parties related to the subject matter of this Agreement.
|
|
18.3
|
Waiver.
No waiver by Sponsor with respect to any breach or default or of any right or remedy, and no course of dealing by Sponsor shall be deemed to constitute a continuing waiver of any other breach or default or of any other right or remedy, unless such waiver be expressed in writing, signed by Sponsor. No payment made by Sponsor shall be considered as acceptance of satisfactory performance of the Services, or as in any way relieving Integrium from its full responsibility pursuant to this Agreement.
|
Integrium, LLC. | Confidential |
|
18.4
|
Amendment
. This Agreement may not be altered, changed or amended except in writing signed by each of the parties hereto.
|
|
18.5
|
Survival
. The provisions of this Agreement dealing with confidentiality, independent contractor, ownership of developments, indemnification, limitations of liability, termination, governing law and survival shall survive the expiration and/or termination of this Agreement.
|
|
18.6
|
Severability
. In the event that any provision of this Agreement is held illegal or invalid for any reason, such provision shall not affect the remaining parts of this Agreement, but this Agreement shall be construed and enforced as if that illegal and invalid provision had never been inserted herein.
|
|
18.7
|
Extraordinary Relief
. In the event of the actual or threatened breach by Integrium of any of the terms of the Articles 6, 7, and 11 hereof, Sponsor shall have the right to specific performance and injunctive relief. The remedies in this paragraph are in addition to all other remedies and rights available at law or in equity.
|
|
18.8
|
Force Majeure
.
Performance of this Agreement by each party shall be pursued with due diligence in all requirements hereof; however, neither party shall be liable for any loss or damage for delay or nonperformance due to causes not reasonably within its control. In the event of any delay resulting from such causes, the time for performance and payment hereunder shall be extended for a period of time necessary to overcome the effect of such delays. In the event of any delay or nonperformance caused by such uncontrollable forces, the party affected shall promptly notify the other in writing of the nature, cause, date of commencement thereof, and the anticipated extent of such delay, and shall indicate whether it is anticipated that the completion date of the Agreement would be affected thereby.
|
|
18.9
|
Captions and Headings
. The captions, numbering and headings in this Agreement are for convenience and reference only, and they shall in no way be held to explain, modify, or construe the meaning of the terms of this Agreement.
|
|
18.10
|
Counterpart Originals
. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall constitute one and the same document.
|
|
18.11
|
Governing Law.
It is understood and agreed that this Agreement shall be governed by the laws of the State of Delaware in all respects of validity, construction and performance without regard to its conflict of laws rules.
|
|
18.12
|
Arbitration.
Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, may be submitted to binding arbitration under the auspices of, and in accordance with, the then existing rules of JAMS, in a forum selected by the party to whom a request for arbitration is directed. Notwithstanding the foregoing, either party may seek injunctive or equitable relief from any court of competent jurisdiction.
|
Integrium, LLC. | Confidential |
|
18.13
|
Notices
. Except as otherwise provided, all communications and notices concerning payments required under this Agreement shall be mailed by certified mail, return receipt requested postage prepaid, or sent by Federal Express or telecopy to the addresses set forth below, or to such other addresses as the parties from time to time specify in writing
|
(Remainder of Page Intentionally Left Blank)
|
Integrium, LLC. | Confidential |
For and on behalf of
Integrium, LLC
|
For and on behalf of
Oramed Ltd.
|
|
/s/ Jessica Coutu
By: Jessica Coutu
|
/s/ Nadav Kidron
By: Nadav Kidron
|
/s/ Michael Berelowitz
Michael Berelowitz
|
Title: Sr. Dir., Contract Administration
Date: July 22, 2014
|
Title: CEO
Date: July 22, 2014
|
Board Member
(Oramed Pharmaceuticals, Inc.)
|
Integrium, LLC. | Confidential |
|
Integrium/ Oramed
|
|
Exhibit 1
|
|
Protocol Number: ORA-D-007
|
|
Version: Original 1.0
|
|
Date: 5 June 2014 (Draft)
|
|
(Remainder of Page Intentionally Left Blank)
|
Integrium, LLC. | Confidential |
|
Integrium/Oramed
|
|
Exhibit 2
|
|
Study Specifications
|
|
(Remainder of Page Intentionally Left Blank)
|
Integrium, LLC. | Confidential |
Sponsor Company
|
Oramed Ltd.
|
|
Protocol Number
|
ORA-D-07
|
|
Protocol Title
|
Randomized, Double-Blind, Placebo-Controlled Study to Assess the Safety and Pharmacodynamics of Multiple Oral Bedtime Doses of ORMD-0801 (Insulin Capsules) in Adult Patients with Type 2 Diabetes Mellitus who are Inadequately Controlled with Diet and Metformin
|
|
Investigational Product(s)
|
ORMD-0801
|
|
Indication
|
Type 2 Diabetes
|
|
Therapeutic Area
|
Metabolic
|
|
Study Phase
|
II
|
|
Sponsor Country
|
Israel
|
|
Country Locations
|
US
|
|
Study Assumptions
|
||
Subjects
|
||
# Subjects Screened
|
308
|
|
% Screen Failure Rate
|
37%
|
|
# Screen Failures
|
114
|
|
# Subjects Entering Run-in
|
194
|
|
% Run-in Failure Rate
|
7%
|
|
# Run-in Failures
|
14
|
|
# Subjects Entering Treatment Phase
|
180
|
|
% Early Termination Rate
|
12%
|
|
# Early Terminations
|
21
|
|
# Subjects Complete
|
159
|
|
Sites
|
||
# Total Sites Identified
|
33
|
|
Total Sites
|
33
|
|
# Central IRB Sites
|
29
|
|
# Local IRB Sites
|
4
|
|
# Back-up Sites
|
0
|
|
Enrollment
|
||
# Screened/site
|
9.33
|
|
# Screened/site/week
|
.26
|
|
# Randomized/site
|
5.45
|
|
# Randomized Rate (per site per week)
|
.15
|
|
# Randomized Rate (per site per month
|
.65
|
|
Third Party Vendors
|
||
Meeting Planner
|
1
|
|
Central IRB
|
1 - Managed by Integrium
|
|
Central Lab
|
1 - Managed by Integrium
|
|
Continuous Glucose Monitors
|
1 – Provided by Oramed
|
|
IVRS/IWRS
|
Not Applicable
|
|
Product Packaging & Distribution
|
1 - Managed by Oramed
|
|
Project Meetings
|
# Meetings
|
Assumptions
|
Investigator/CRA Training Meeting
|
1
|
Assumed a 1 day Investigators’ meeting and a 0.5 day CRA training meeting at the same venue
|
Integrium, LLC. | Confidential |
Launch Meeting (Integrium NJ office)
|
1
|
Assumes 8-hour launch meeting
|
Face-to-Face Meeting
|
0
|
NA
|
Sponsor Team Teleconferences
|
40
|
Assumes every other week for duration of the study.
|
Internal Team Teleconferences
|
18
|
Assumes monthly for duration of the study.
|
CRA Teleconferences
|
12
|
Assumes monthly from FPFV to Database Lock.
|
Monitoring Assumptions
|
||
# CRAs
|
5
|
|
# Pre-study Qualification Visits
|
35
|
|
# Initiation Visits
|
6
|
|
# Interim Monitoring Visits
|
132
|
|
Monitoring Interval (Maximum - weeks)
|
Approximately every 10-12 weeks dependent upon enrollment
|
|
# Interim Monitoring Visits/site
|
8
|
|
# Additional days on-site/site
|
0.267
|
|
# 1-day Interim Monitoring Visits
|
132
|
|
# Additional Days
|
8
|
|
# Close-out Visits
|
33
|
|
Safety Assumptions
|
||
SAE Rate 9%)
|
13.89
|
|
Estimated # SAEs
|
25
|
|
Data Management
|
||
CRF pgs per randomized patient
|
48
|
|
Unique CRFs/Subject
|
22
|
|
Non-Unique CRFs/Subject
|
26
|
|
CRF pgs per early term
|
30
|
|
CRF pgs per screen failure
|
0
|
|
Total CRF Pages
|
8262
|
|
Complete subjects
|
7632
|
|
Early Terms
|
630
|
|
Screen Failures
|
0
|
|
Total DM Datasets
|
21
|
|
Total Edit Checks
|
305
|
|
Estimated # Total Queries
|
1652
|
|
Estimated # Queries/Patient (1/5 pages)
|
9.6
|
|
Manual Coding
|
||
# Medical History/Subject
|
2
|
|
# ConMeds/Subject
|
1
|
|
# AEs/Subject
|
1
|
|
Data Transfers
|
||
# Sponsor Transfers
|
6
|
|
Test, 4 Interim and Final
|
||
# Central Lab Transfers
|
8
|
|
Test, 6 Interim and Final
|
||
# CGM Transfers
|
410
|
Integrium, LLC. | Confidential |
2 per patient
|
|
Statistical Analysis
|
The following assumptions are estimates. The total number of TLGs will be defined upon the finalization of the Statistical Analysis Plan. An amendment to the budget will be issued at that time, if applicable.
|
# SAS Datasets
|
14
|
Estimated Tables
|
|
# Unique
|
30
|
# Non-unique
|
16
|
# Exploratory
|
8
|
Estimated Listings
|
|
# Unique
|
21
|
# Non-unique
|
3
|
# Exploratory
|
8
|
Estimated Graphs
|
|
# Unique
|
8
|
# Non-unique
|
4
|
# Exploratory
|
8
|
Integrium, LLC. | Confidential |
Project Timeline
|
|||
Project Activity
|
Date
|
Month #
|
Week #
|
Synopsis Date
|
|||
CRO Start Date
|
July 22, 2014
|
0.0
|
0.0
|
Final Protocol Date
|
July 22, 2014
|
0.0
|
0.0
|
Delivery of Approved Capsules
|
September 17, 2014
|
1.9
|
8.1
|
Submission to FDA
|
September 30, 2014
|
2.3
|
10.0
|
30-day wait Period
|
October 30, 2014
|
3.3
|
14.3
|
Drug Available at Sites
|
October 26-27, 2014
|
2.6
|
11.4
|
Investigators’ Meeting (US)
|
November 1, 2014
|
3.4
|
14.6
|
1st Pt Screened
|
November 2, 2014
|
3.4
|
14.7
|
1st Patient Enters 2-week Run-in Period
|
November 16, 2014
|
3.8
|
16.7
|
1st Patient Randomized
|
November 30, 2014
|
4.3
|
18.7
|
1st Patient Last Visit
|
January 12, 2015
|
5.7
|
24.9
|
Last Patient Screened
|
July 15, 2015
|
11.8
|
51.1
|
Last Patient Enters 2-week Run-in Period
|
July 29, 2015
|
12.2
|
53.1
|
Last Patient Randomized
|
August 12, 2015
|
12.7
|
55.1
|
Last Patient Last Visit
|
September 24, 2015
|
14.1
|
61.3
|
Last IMV
|
October 5, 2015
|
14.5
|
62.9
|
Patient Listing Delivered to Oramed
|
October 15, 2015
|
14.8
|
64.3
|
Consolidated Comments from Oramed
|
October 17, 2015
|
14.9
|
64.6
|
Database Lock
|
October 31, 2015
|
15.3
|
66.6
|
Draft Final TLGs
|
November 7, 2015
|
15.6
|
67.6
|
Final TLGs
|
November 21, 2015
|
16.0
|
69.6
|
Draft CSR
|
December 19, 2015
|
16.9
|
73.6
|
Final CSR
|
January 16, 2016
|
17.9
|
77.6
|
CRO End Date
|
January 26, 2016
|
18.2
|
79.0
|
Total Project Duration (Months)
|
18.2
|
Months
|
Weeks
|
Phase
|
||||||||||
Start-up
|
3.4 | 14.7 | I | |||||||||
Enrollment
|
8.4 | 36.4 |
II
|
|||||||||
Treatment
|
2.3 | 10.1 |
III
|
|||||||||
LPLV-DBL
|
1.2 | 5.3 |
IV
|
|||||||||
DBL-CRO End
|
2.9 | 12.4 | V | |||||||||
18.2 | 79.0 |
Integrium, LLC. | Confidential |
Integrium/Oramed
|
(Remainder of Page Intentionally Left Blank)
|
Integrium, LLC. | Confidential |
STUDY START-UP
|
UNIT COST
|
UNITS
|
MEASURE OF UNIT
|
TOTAL
|
|
1
|
Project Management (Start Up)
|
[***]
|
5.0
|
Month
|
[***]
|
2
|
Develop/Finalize Project Management Plan
|
[***]
|
1
|
Plan
|
[***]
|
3
|
Project Launch Meeting/Training
|
[***]
|
1
|
Meeting
|
[***]
|
4
|
CRF Development
|
[***]
|
1
|
Total
|
[***]
|
5
|
Study Materials Management
|
[***]
|
33
|
Site
|
[***]
|
6
|
CRF Completion Instructions
|
[***]
|
1
|
Total
|
[***]
|
7
|
Source Documentation Development
|
[***]
|
1
|
Total
|
[***]
|
8
|
Develop/Finalize ICF
|
[***]
|
1
|
Total
|
[***]
|
9
|
Site Identification
|
[***]
|
35
|
Site
|
[***]
|
10
|
Pre-study Site Evaluation Visit
|
[***]
|
35
|
Visit
|
[***]
|
11
|
Develop/Finalize CRA Monitoring Plan
|
[***]
|
1
|
Plan
|
[***]
|
12
|
Study Reference Manual
|
[***]
|
1
|
Total
|
[***]
|
13
|
Regulatory Document Collection - Start Up
|
[***]
|
30
|
Site
|
[***]
|
14
|
Investigator Agreements
|
[***]
|
33
|
Site
|
[***]
|
15
|
Investigator Meeting and Preparation
|
[***]
|
1
|
Meeting
|
[***]
|
16
|
Clinical Database Development
|
[***]
|
1
|
Total
|
[***]
|
17
|
Clinical System Set-Up Configuration & Maintenance
|
[***]
|
30
|
Site
|
[***]
|
18
|
Data Management Plan ("DMP")
|
[***]
|
1
|
DM Plan
|
[***]
|
19
|
Edits Specifications
|
[***]
|
305
|
Edit Check
|
[***]
|
20
|
Generate Randomization Codes
|
[***]
|
1
|
Randomization
|
[***]
|
STUDY START-UP FEES TOTAL
|
[***]
|
||||
CLINICAL TRIAL MANAGEMENT
|
UNIT COST
|
UNITS
|
MEASURE OF UNIT
|
TOTAL
|
|
21
|
Project Management (enrollment phase)
|
[***]
|
8.4
|
Month
|
[***]
|
22
|
Project Management (treatment phase)
|
[***]
|
2.3
|
Month
|
[***]
|
23
|
Project Management Study (LPLV to DBL)
|
[***]
|
1.2
|
Month
|
[***]
|
24
|
Project Management Study (DBL to CRO end)
|
[***]
|
2.9
|
Month
|
[***]
|
25
|
Sponsor Team Teleconferences
|
[***]
|
40
|
Telecon
|
[***]
|
26
|
Internal Team Teleconferences
|
[***]
|
18
|
Telecon
|
[***]
|
27
|
CRA Teleconferences
|
[***]
|
12
|
Telecon
|
[***]
|
28
|
Trial Master File
|
[***]
|
33
|
Site
|
[***]
|
29
|
Regulatory Document Maintenance
|
[***]
|
427
|
Site*Month
|
[***]
|
30
|
Site Initiation Visits
|
[***]
|
6
|
Visit
|
[***]
|
31
|
Site Management
|
[***]
|
390
|
Site*Month
|
[***]
|
32
|
Interim Monitoring Visits - One Day
|
[***]
|
132
|
Visit
|
[***]
|
33
|
Interim Monitoring Visits - Additional Day On-site
|
[***]
|
8
|
Day
|
[***]
|
34
|
Close-out Visits
|
[***]
|
33
|
Visit
|
[***]
|
35
|
Site Grant Administration
|
[***]
|
13
|
Month
|
[***]
|
CLINICAL TRIAL MANAGEMENT SERVICES SUBTOTAL
|
[***]
|
||||
MEDICAL MANAGEMENT
|
UNIT COST
|
UNITS
|
MEASURE OF UNIT
|
TOTAL
|
|
36
|
Medical Management
|
[***]
|
11.7
|
Month
|
[***]
|
37
|
Create Safety Plan
|
[***]
|
1
|
Plan
|
[***]
|
38
|
Create Safety Database
|
[***]
|
1
|
Database
|
[***]
|
39
|
SAE Management
|
[***]
|
25
|
SAE
|
[***]
|
Integrium, LLC. | Confidential |
MEDICAL MANAGEMENT SERVICES SUBTOTAL
|
[***]
|
||||
DATA MANAGEMENT
|
UNIT COST
|
UNITS
|
MEASURE OF UNIT
|
TOTAL
|
|
40
|
Data Entry Activities
|
[***]
|
8,262
|
CRF Pg
|
[***]
|
41
|
Generate/Track/Resolve Queries
|
[***]
|
1,652
|
Query
|
[***]
|
42
|
Manual Listing Review
|
[***]
|
194
|
Patient
|
[***]
|
43
|
Import Other Data
|
[***]
|
416
|
Transfer
|
[***]
|
44
|
Export Data to Sponsor
|
[***]
|
6
|
Transfer
|
[***]
|
45
|
Manual Coding
|
[***]
|
776
|
Manual Code
|
[***]
|
46
|
Data Records Management
|
[***]
|
194
|
Subject
|
[***]
|
47
|
Data Base Lock Activities
|
[***]
|
1
|
DB Lock
|
[***]
|
DATA MANAGEMENT FEES SUBTOTAL
|
$108,234.89
|
||||
BIOSTATISTICAL ANALYSIS AND REPORT WRITING
|
UNIT COST
|
UNITS
|
MEASURE OF UNIT
|
TOTAL
|
|
48
|
Statistical Analysis Plan (SAP)
|
[***]
|
1
|
SAP
|
[***]
|
49
|
Analysis DataSets
|
[***]
|
14
|
Dataset
|
[***]
|
50
|
Statistical Programming Deliverables (TLGs)
|
[***]
|
82
|
T/L/G
|
[***]
|
51
|
Generate/QC TLFs
|
[***]
|
82
|
Appendix
|
[***]
|
52
|
Final CSR
|
[***]
|
1
|
CSR
|
[***]
|
BIOSTATISTICAL ANALYSIS AND REPORT WRITING SUBTOTAL
|
[***]
|
||||
CRO SERVICE FEES GRAND TOTAL
|
[***]
|
||||
PASS THROUGH COSTS
|
UNIT COST
|
UNITS
|
MEASURE OF UNIT
|
TOTAL
|
|
1
|
Pre-study Site Evaluation Visit
|
[***]
|
35
|
Visit
|
[***]
|
2
|
Site Initiation Visit
|
[***]
|
6
|
Visit
|
[***]
|
3a
|
Interim Monitoring Visits - One Day
|
[***]
|
132
|
Visit
|
[***]
|
3b
|
Interim Monitoring Visits - Additional Day On-site
|
[***]
|
8
|
Day
|
[***]
|
4
|
Close-out Visits
|
[***]
|
33
|
Visit
|
[***]
|
5
|
Launch Meeting Travel
|
[***]
|
2
|
Attendee
|
[***]
|
6
|
Investigators' Meeting Planner
|
[***]
|
1
|
Meeting
|
[***]
|
7
|
Investigator Grants
|
[***]
|
[***]
|
||
7a
|
# Subjects Complete
|
[***]
|
159
|
Patient
|
[***]
|
7b
|
# Early Terminations
|
[***]
|
21
|
Patient
|
[***]
|
7c
|
# Run-in Failures
|
[***]
|
14
|
Patient
|
[***]
|
7d
|
# Screen Failures
|
[***]
|
114
|
Patient
|
[***]
|
8
|
Advertising
|
[***]
|
33
|
Site
|
[***]
|
9
|
Start-up Costs
|
[***]
|
33
|
Site
|
[***]
|
10
|
Site Archiving Fees
|
[***]
|
33
|
Site
|
[***]
|
11a
|
Central IRB - Protocol & Advertising Submission
|
[***]
|
1
|
Protocol
|
[***]
|
11b
|
Central IRB - Site Submissions
|
[***]
|
29
|
Site
|
[***]
|
11c
|
Local IRBs
|
[***]
|
4
|
Site
|
[***]
|
12
|
Central Lab
|
[***]
|
1
|
Total
|
[***]
|
13
|
Launch Binders
|
[***]
|
18
|
Binder
|
[***]
|
14
|
Regulatory Binders
|
[***]
|
35
|
Binder
|
[***]
|
15
|
Study Reference Manuals
|
[***]
|
33
|
Binder
|
[***]
|
16
|
Copying/ Printing
|
[***]
|
1
|
Total
|
[***]
|
17
|
CRF Books
|
[***]
|
213
|
Books
|
[***]
|
18
|
Screening/extra pages packs
|
[***]
|
45
|
Books
|
[***]
|
19
|
Postal & Shipping Fees
|
[***]
|
1
|
Total
|
[***]
|
20
|
Other/Site Study Materials
|
[***]
|
30
|
Site
|
[***]
|
21
|
Sponsor/Internal - Teleconferences/Webcast
|
[***]
|
1
|
Total
|
[***]
|
22
|
Translations (Spanish)
|
[***]
|
1
|
Translation
|
[***]
|
23
|
Supplies
|
[***]
|
1
|
Total
|
[***]
|
PASS-THROUGH COSTS TOTAL
|
[***]
|
||||
PROJECT'S OVER-ALL TOTAL COST
|
$3,290,135.74
|
Integrium, LLC. | Confidential |
Contract
Execution
|
Aug-14
|
Sep-14
|
Oct-14
|
TBD
|
Study Total
|
|
Investigators' Meeting Planner:
40% invoiced start-up payment
40% payment 1 month prior to meeting
20% paid upon final reconciliation
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
Site Start-up Costs:
[***]
/site x 30 sites
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
Site Grant Advance Payments:
Usually equal to 1 Complete subject
[***]
/site X 30 sites
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
Central Lab Vendor:
Start-up payment
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
Pass-Through Advance Payment
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
Integrium, LLC. | Confidential |
Monthly Management Fees
|
Month
|
$ Amount
|
Verification of Milestone Completion/Deliverables
|
Project Management Fees
|
July 2014
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
August 2014
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
September 2014
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
October 2014
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
November 2014
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
December 2014
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
January 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
February 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
March 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
April 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
May 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
June 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
July 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
August 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
September 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
October 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
November 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
December 2015
|
[***]
|
Invoiced Monthly
|
Project Management Fees
|
January 2016
|
[***]
|
Invoiced Monthly
|
Total Monthly Management Fees:
|
[***]
|
[***]
|
Unit Based Payments:
Actual Units Invoiced Monthly
|
% Total Services Budget
|
# Units
|
Unit Cost
|
$ Amount
|
Verification of Milestone Completion/Deliverables
|
SAE Management
|
2.94%
|
25
|
[***]
|
[***]
|
Invoiced monthly as occurred
|
Total Unit Based Services:
|
[***]
|
||||
Total Services:
|
[***]
|
Integrium, LLC. | Confidential |
Pass-through expenses
|
$ Amount
|
Verification of Milestone Completion/Deliverables
|
|||
Monitoring Visit Travel Expenses
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Meeting Travel
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Investigator Grants
|
[***]
|
Invoiced and Paid in Advance of Payment to Sites
|
|||
Site Start-up Costs
|
[***]
|
Invoiced and Paid in Advance of Payment to Sites
|
|||
Site Advertising
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Site Archiving Fees
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Site Local IRB Fees
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Site Translations and Materials
|
[***]
|
Invoiced as Actuals Monthly
|
|||
IRB Fees
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Meeting Planner
|
[***]
|
Invoiced and Paid in Advance of Payment to Vendor
|
|||
Central Lab Vendor
|
[***]
|
Invoiced and Paid in Advance of Payment to Vendor
|
|||
Copying/Printing/Supplies
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Postal & Shipping Fees
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Sponsor/Internal - Teleconference System
|
[***]
|
Invoiced as Actuals Monthly
|
|||
Total Pass-through Budget:
|
[***]
|
||||
Grand Total Budget:
|
$3,290,135.74
|
Integrium, LLC. | Confidential |
TRANSFER OF US FDA REGULATORY OBLIGATIONS FOR INVESTIGATIONAL PHARMACEUTICAL AND BIOLOGIC PRODUCTS UNDER AN INVESTIGATIONAL NEW DRUG (IND) APPLICATION (21 CFR 312.52 and ICH E6)
|
Integrium, LLC. | Confidential |
Integrium, LLC. | Confidential |
Responsibility | Reference |
Integrium
|
Oramed
|
Third Party
Vendor
|
|
H.
|
Disposition of unused supply of investigational drug
1. Assure return of drug from site to sponsor
2. Conduct final disposition or destruction of drug
|
21 CFR 312.59; ICH
E6 5.14.4 (c)(d), 5.18.4
(c)(iv)(v)
|
x
o
|
o
o
|
x
x
|
I.
|
Application for FDA approval to export investigational drug
(a) Content
(b) Format
|
21 CFR 312.110; ICH E6 5.14.2
|
o
o
|
x
x
|
o
o
|
J.
|
Obtain investigator financial disclosure information
1. Initial collection prior to study participation
2. Responsibility for the one year follow-up financial disclosure collection
shall remain with the Sponsor (one year following the completion of the study)
|
21 CFR 312.53 (c)(4)
|
x
o
|
o
x
|
o
o
|
/s/ Miriam Kidron | Name: Miriam Kidron | July 22, 2014 |
Title: CSO | ||
Integrium LLC.
|
||
Name: | Date | |
Title: |
Date: November 13, 2014
|
By: /s/ Nadav Kidron
|
|
Nadav Kidron
|
||
President and Chief Executive Officer
|
Date: November 13, 2014
|
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 13, 2014
|
/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 13, 2014
|
/s/ Yifat Zommer
|
||
Yifat Zommer
Chief Financial Officer
|