UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 20222023

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 001-35813

 

ORAMED PHARMACEUTICALS INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware 98-0376008
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification No.)
   
1185 Avenue of the Americas, Third Floor, New York, NY 10036
(Address of Principal Executive Offices) (Zip Code)

 

844-967-2633

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading symbol Name of each exchange on which registered
Common Stock, par value $0.012 ORMP The Nasdaq Capital Market,
Tel Aviv Stock Exchange

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes ☒    No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Yes ☒    No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐    No ☒

 

As of August 10, 2022,2023, there were 38,827,08140,275,688 shares of the issuer’s common stock, $0.012 par value per share, outstanding.

 

 

 

 

 

 

ORAMED PHARMACEUTICALS INC.

FORM 10-Q

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION1
  
ITEM 1 - FINANCIAL STATEMENTS1
  
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS18
  
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK24
  
ITEM 4 - CONTROLS AND PROCEDURES24
  
PART II - OTHER INFORMATION25
  
ITEM 1A. – RISK FACTORS25
ITEM 6 - EXHIBITS2526

On February 28, 2022, the Board of Directors approved a change of the Company’s fiscal year from the period beginning on September 1 and ending on August 31 to the period beginning on January 1 and ending on December 31. As a result, the Company filed a transition report on Form 10-Q with the Securities and Exchange Commission on March 30, 2022 that included financial information for the transition period from September 1, 2021 through December 31, 2021. Subsequent to that report, the Company’s fiscal year now begins on January 1 and ends on December 31. This Quarterly Report on Form 10-Q is the Company’s second quarterly report in its new fiscal year, and reports financial results for the three and six month periods ended June 30, 2022.

 

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our” and the “Company” mean Oramed Pharmaceuticals Inc. and our wholly-owned subsidiaries, unless otherwise indicated. All dollar amounts refer to U.S. Dollars unless otherwise indicated.

 

On June 30, 2022,2023, the exchange rate between the New Israeli Shekel, or NIS, and the dollar, as quoted by the Bank of Israel, was NIS 3.53.70 to $1.00. Unless indicated otherwise by the context, statements in this Quarterly Report on Form 10-Q that provide the dollar equivalent of NIS amounts or provide the NIS equivalent of dollar amounts are based on such exchange rate.

 

i

 

 

Cautionary Statement Regarding Forward-Looking Statements

 

The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws.laws and the Israeli securities law. Words such as “expects,” “anticipates,” “intends,” “plans,” “planned expenditures,” “believes,” “seeks,” “estimates,” “considers” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Quarterly Report on Form 10-Q. Additionally, statements concerning future matters are forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements, or industry results, expressed or implied by such forward-looking statements. Such forward-looking statements include, among other statements, statements regarding the following:

 

our comprehensive analysis of data from our ORA-D-013-1 Phase 3 trial to understand if there is a path forward for our oral insulin candidate;

our plan to evaluate potential strategic opportunities;

our ability to close the Stock Purchase Agreement (as defined herein) with Sorrento Therapeutics, Inc., or Sorrento, in a timely manner or at all;

our and Sorrento’s ability to satisfy the conditions to completion of the Transaction (as defined herein), including receipt of required regulatory and other approvals or any other reason;

the possibility that Sorrento may receive higher or otherwise better offers from competing bidders at an auction in a supervised process in the Bankruptcy Court (as defined herein);

the occurrence of any event, change or other circumstances that could give rise to the termination of the Stock Purchase Agreement by either the Company or Sorrento;

the outcome and timing of Sorrento’s Chapter 11 process and approval of the Transaction by the Bankruptcy Court;

the possibility that the anticipated benefits of the Transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the Company’s purchase of the Purchased Securities (as defined herein);

the possibility that the Transaction may be more expensive to complete than anticipated;

our ability to recover the proceeds and/or collateral under the DIP Loan Agreement (as defined herein);

our exposure to potential litigation;

our ability to enhance value for our stockholders;

the expected development and potential benefits from our products in treating diabetes;products;

 

the prospects of entering into additional license agreements, or other partnerships or forms of cooperation with other companies or medical institutions;

 

the ability of Oramed and Hefei Tianhui Incubator of Technologies Co. Ltd. to reach agreement on a definitive joint venture agreement and the transactions contemplated by the term sheet;

future milestones, conditions and royalties under theour license agreement with Hefei Tianhui Incubator of Technologies Co., Ltd., or HTIT, as well as our disagreements with HTIT;agreements;

 

expected timing of a clinical trialstudy for the potential Oravax Medical Inc., or Oravax, vaccine and its potential to protect against COVID-19;the coronavirus, or COVID-19, pandemic;

 

our consideration of ways in which our shareholders could benefit more directly from Oravax, including the potential issuance of some of our shares in Oravax to our shareholders as a dividend;

our research and development plans, including pre-clinical and clinical trials plans and the timing of enrollment, obtaining results and conclusion of trials, and our expectation to file a Biologics License Application, or BLA thereafter;trials;

 

ii 

our belief that our technology has the potential to deliver medications and vaccines orally that today can only be delivered via injection;

 

the competitive ability of our technology based on product efficacy, safety, patient convenience, reliability, value and patent position;

 

the potential market demand for our products;

 

our ability to obtain patent protection for our intellectual property;

our expectation that in upcoming years our research and development expenses net, will continue to be our major expenditure;

 

our expectations regarding our short- and long-term capital requirements;

 

our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; and

 

information with respect to any other plans and strategies for our business; and

our expectations regarding the impact of COVID-19, including on our clinical trials and operations.business.

 

Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended AugustDecember 31, 2021,2022, or our Annual Report, as filed with the Securities and Exchange Commission, or the SEC, on November 24, 2021,March 6, 2023, as well as those discussed elsewhere in our Annual Report and expressed from time to time in our other filings with the SEC. In addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would not suggest different conclusions. Also, historic results referred to in this Quarterly Report on Form 10-Q could be interpreted differently in light of additional research, clinical and preclinical trials results. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report on Form 10-Q which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

iiiii 

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1 - FINANCIAL STATEMENTS

 

ORAMED PHARMACEUTICALS INC.

 

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

AS OF JUNE 30, 20222023

 

TABLE OF CONTENTS

 

 Page
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: 
Balance sheets2
Statements of comprehensive loss3
Statements of changes in stockholders’ equity4-54
Statements of cash flows6
Notes to financial statements7-17

 


 

 

ORAMED PHARMACEUTICALS INC.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

 June 30, December 31,  June 30, December 31, 
 2022  2021  2023  2022 
Assets          
CURRENT ASSETS:          
Cash and cash equivalents $29,892  $27,456  $6,767  $40,464 
Short-term deposits  97,395   111,077   142,491   111,513 
Marketable securities  6,625   7,747   943   3,743 
Prepaid expenses and other current assets  958   1,657   769   1,389 
Total current assets  134,870   147,937   150,970   157,109 
                
LONG-TERM ASSETS:                
Long-term deposits  25,209   25,094   7   7 
Marketable securities  684   3,875 
Non-marketable equity securities  3,524   2,700 
Amounts funded in respect of employee rights upon retirement  23   26   26   24 
Property and equipment, net  429   388   945   815 
Operating lease right-of-use assets  1,076   500   842   987 
Total long-term assets  27,421   29,883   5,344   4,533 
Total assets $162,291  $177,820  $156,314  $161,642 
                
Liabilities and stockholders’ equity                
                
CURRENT LIABILITIES:                
Accounts payable, accrued expenses and other liabilities $3,481  $4,535 
Accounts payable and accrued expenses $828  $4,158 
Deferred revenues  2,703   2,703   -   1,340 
Payable to related parties  1   -   3   1 
Operating lease liabilities  233   130   236   247 
Total current liabilities  6,418   7,368   1,067   5,746 
                
LONG-TERM LIABILITIES:                
Long-term deferred revenues  2,000   3,340   4,000   4,000 
Employee rights upon retirement  21   22   27   21 
Provision for uncertain tax position  11   11   11   11 
Operating lease liabilities  744   370   488   647 
Other liabilities  60   99   66   61 
Total long-term liabilities  2,836   3,842   4,592   4,740 
                
COMMITMENTS (note 2)        
COMMITMENTS (note 3)        
                
Equity                
EQUITY ATTRIBUTABLE TO COMPANY’S STOCKHOLDERS:                
Common stock, $0.012 par value (60,000,000 authorized shares; 38,564,016 and 38,158,792 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively)  463   459 
Common stock, $0.012 par value (60,000,000 authorized shares; 40,219,396 and 39,563,888 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)  484   476 
Additional paid-in capital  300,712   292,514   318,732   314,417 
Accumulated deficit  (147,478)  (126,520)  (167,670)  (163,081)
Total stockholders’ equity  153,697   166,453   151,546   151,812 
Non-controlling interests  (660)  157   (891)  (656)
Total equity  153,037   166,610   150,655   151,156 
Total liabilities and equity $162,291  $177,820  $156,314  $161,642 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 


 

 

ORAMED PHARMACEUTICALS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

 Six months ended  Three months ended  Six months ended  Three months ended 
 June 30, June 30, June 30, June 30,  June 30, June 30, June 30, June 30, 
 2022  2021  2022  2021  2023  2022  2023  2022 
REVENUES $1,340   1,340  $674   674  $1,340   1,340  $674   674 
RESEARCH AND DEVELOPMENT EXPENSES  15,015   9,366   9,179   3,198   6,248   15,015   1,821   9,179 
SALES AND MARKETING EXPENSES  970   -   380   -   376   970   192   380 
GENERAL AND ADMINISTRATIVE EXPENSES  8,024   3,028   2,532   1,926   3,715   8,024   2,452   2,532 
OPERATING LOSS  22,669   11,054   11,417   4,450   8,999   22,669   3,791   11,417 
                                
FINANCIAL INCOME, NET  894   1,082   350   541   4,075   894   2,478   350 
NET LOSS FOR THE PERIOD $21,775   9,972  $11,067   3,909 
NET LOSS $4,924   21,775  $1,313   11,067 
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS  817   485   534   92   335   817   119   534 
NET LOSS ATTRIBUTABLE TO STOCKHOLDERS  20,958   9,487   10,533   3,817   4,589   20,958   1,194   10,533 
LOSS PER SHARE                
                
BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK $0.54  $0.32  $0.27  $0.12  $0.11  $0.54  $0.03  $0.27 
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK  38,732,636   29,347,635   38,795,318   30,716,982   40,144,725   38,732,636   40,225,594   38,795,318 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 


 

 

ORAMED PHARMACEUTICALS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

U.S. Dollars in thousands

(UNAUDITED)

 

  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF DECEMBER 31, 2021  38,158  $459  $292,514  $(126,520) $166,453  $157  $166,610 
CHANGES DURING THE SIX MONTH PERIOD ENDED JUNE 30, 2022:                            
ISSUANCE OF COMMON STOCK, NET  277   3   2,965   -   2,968   -   2,968 
EXERCISE OF WARRANTS AND OPTIONS  4   (*)  -   -   (*)  -   (*)
STOCK-BASED COMPENSATION  125   1   5,910   -   5,911   -   5,911 
TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS  -   -   (677)  -   (677)  -   (677)
NET LOSS  -   -   -   (20,958)  (20,958)  (817)  (21,775)
BALANCE AS OF JUNE 30, 2022  38,564  $463  $300,712  $(147,478) $153,697  $(660) $153,037 
  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF DECEMBER 31, 2022  39,564  $476  $314,417  $(163,081) $151,812  $(656) $151,156 
CHANGES DURING THE SIX MONTH PERIOD ENDED JUNE 30, 2023:                            
ISSUANCE OF COMMON STOCK, NET  193   2   2,428   -   2,430   -   2,430 
STOCK-BASED COMPENSATION  462   6   1,887   -   1,893   -   1,893 
STOCK-BASED COMPENSATION OF ORAVAX  -   -   -   -   -   100   100 
NET LOSS  -   -   -   (4,589)  (4,589)  (335)  (4,924)
BALANCE AS OF JUNE 30, 2023  40,219  $484  $318,732  $(167,670) $151,546  $(891) $150,655 

  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF DECEMBER 31, 2021  38,158  $459  $292,514  $(126,520) $166,453  $157  $166,610 
CHANGES DURING THE SIX MONTH PERIOD ENDED JUNE 30, 2022:                            
ISSUANCE OF COMMON STOCK, NET  277   3   2,965   -   2,968   -   2,968 
EXERCISE OF WARRANTS AND OPTIONS  4   (*)  -   -   (*)  -   (*)
STOCK-BASED COMPENSATION  125   1   5,910   -   5,911   -   5,911 
TAX WITHHOLDINGS RELATED TO STOCK-BASED COMPENSATION SETTLEMENTS  -   -   (677)  -   (677)  -   (677)
NET LOSS  -   -   -   (20,958)  (20,958)  (817)  (21,775)
BALANCE AS OF JUNE 30, 2022  38,564  $463  $300,712  $(147,478) $153,697  $(660) $153,037 

 

(*)LessRepresents an amount of less than $1$1.

  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF DECEMBER 31, 2020  26,660  $320  $138,587  $(99,938) $38,969  $-  $38,969 
CHANGES DURING THE SIX MONTH PERIOD ENDED JUNE 30, 2021:                            
ISSUANCE OF COMMON STOCK, NET  4,287   51   47,089   -   47,140   -   47,140 
EXERCISE OF WARRANTS AND OPTIONS  1,566   19   10,393   -   10,412   -   10,412 
STOCK-BASED COMPENSATION  -   -   1,616   -   1,616   -   1,616 
ASSET ACQUISITION  -   -   1,045   -   1,045   1,495   2,540 
NET LOSS  -   -   -   (9,487)  (9,487)  (485)  (9,972)
BALANCE AS OF JUNE 30, 2021  32,513  $390  $198,730  $(109,425) $89,695  $1,010  $90,705 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 


 

 

ORAMED PHARMACEUTICALS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

U.S. Dollars in thousands

(UNAUDITED)

 

  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF MARCH 31, 2022  38,564  $463  $298,831  $(136,945) $162,349  $(126) $162,223 
CHANGES DURING THE THREE MONTH PERIOD ENDED JUNE 30, 2022:                            
ISSUANCE OF COMMON STOCK, NET  -   -   (1)  -   (1)  -   (1)
STOCK-BASED COMPENSATION  -   -   1,882   -   1,882   -   1,882 
NET LOSS  -   -   -   (10,533)  (10,533)  (534)  (11,067)
BALANCE AS OF JUNE 30, 2022  38,564  $463  $300,712  $(147,478) $153,697  $(660) $153,037 
  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF MARCH 31, 2023  39,970  $481  $316,965  $(166,476) $150,970  $(822) $150,148 
CHANGES DURING THE THREE MONTH PERIOD ENDED JUNE 30, 2023:                            
STOCK-BASED COMPENSATION  249   3   1,767   -   1,770   -   1,770 
STOCK-BASED COMPENSATION OF ORAVAX  -   -   -   -   -   50   50 
NET LOSS  -   -   -   (1,194)  (1,194)  (119)  (1,313)
BALANCE AS OF JUNE 30, 2023  40,219  $484  $318,732  $(167,670) $151,546  $(891) $150,655 

 

  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF MARCH 31, 2021  29,947  $359  $169,272  $(105,608) $64,023  $1,102  $65,125 
CHANGES DURING THE THREE MONTH PERIOD ENDED JUNE 30, 2021:                            
ISSUANCE OF COMMON STOCK, NET  2,022   24   24,809   -   24,833   -   24,833 
EXERCISE OF WARRANTS AND OPTIONS  544   7   3,680   -   3,687   -   3,687 
STOCK-BASED COMPENSATION          969   -   969   -   969 
NET LOSS  -   -   -   (3,817)  (3,817)  (92)  (3,909)
BALANCE AS OF JUNE 30, 2021  32,513  $390  $198,730  $(109,425) $89,695  $1,010  $90,705 
  Common Stock  Additional
paid-in
  Accumulated  Total
stockholders’
  Non-
controlling
  Total 
  Shares  $  capital  deficit  equity  interests  equity 
  In thousands                   
BALANCE AS OF MARCH 31, 2022  38,564  $463  $298,831  $(136,945) $162,349  $(126) $162,223 
CHANGES DURING THE THREE MONTH PERIOD ENDED JUNE 30, 2022:                            
ISSUANCE OF COMMON STOCK, NET  -   -   (1)  -   (1)  -   (1)
STOCK-BASED COMPENSATION  -   -   1,882   -   1,882   -   1,882 
NET LOSS  -   -   -   (10,533)  (10,533)  (534)  (11,067)
BALANCE AS OF JUNE 30, 2022  38,564  $463  $300,712  $(147,478) $153,697  $(660) $153,037 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.


 

 

ORAMED PHARMACEUTICALS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

(UNAUDITED)

 

 Six months ended  Six months ended 
 June 30,  June 30, 
 2022  2021  2023  2022 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss $(21,775) $(9,972) $(4,924) $(21,775)
Adjustments required to reconcile net loss to net cash used in operating activities:                
Depreciation  26   54   89   26 
Non-cash expense for acquired in-process research and development  -   1,040 
Exchange differences and interest on deposits and held to maturity bonds  (319)  (120)  (457)  (319)
Changes in fair value of investments  375   (914)  (820)  375 
Stock-based compensation  5,911   1,616   1,993   5,911 
Gain on amounts funded in respect of employee rights upon retirement  (2)  - 
Changes in operating assets and liabilities:                
Prepaid expenses and other current assets  699   393   620   699 
Accounts payable, accrued expenses and related parties  (1,054)  930   (3,328)  (1,054)
Net changes in operating lease  (99)  -   (25)  (99)
Deferred revenues  (1,340)  (1,340)  (1,340)  (1,340)
Liability for employee rights upon retirement  (1)  -   6   (1)
Other liabilities  (38)  (37)  5   (38)
Total net cash used in operating activities  (17,615)  (8,350)  (8,183)  (17,615)
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of held to maturity securities  -   (8,593)
Purchase of short-term deposits  (107,000)  -   (89,919)  (107,000)
Proceeds from sale of short-term deposits  121,000   9,500 
Proceeds from short-term deposits  59,500   121,000 
Proceeds from maturity of held to maturity securities  3,786   4,895   2,725   3,786 
Proceeds from sale of mutual funds  -   3,029 
Funds in respect of employee rights upon retirement  3   -   -   3 
Purchase of property and equipment  (67)  (37)  (219)  (67)
Total net cash provided by investing activities  17,722   8,794 
Total net cash provided by (used in) investing activities  (27,913)  17,722 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of common stock, net of issuance costs  2,968   47,140   2,430   2,968 
Proceeds from exercise of warrants and options  -   10,412 
Tax withholdings related to stock-based compensation settlements  (677)  -   -   (677)
Total net cash provided by financing activities  2,291   57,552   2,430   2,291 
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS  38   (4)  (31)  38 
                
INCREASE IN CASH AND CASH EQUIVALENTS  2,436   57,992 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS  (33,697)  2,436 
                
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD  27,456   21,630   40,464   27,456 
CASH AND CASH EQUIVALENTS AT END OF PERIOD $29,892  $79,622  $6,767  $29,892 
                
(A) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS -                
Interest received $739  $362  $2,866  $739 
(B) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS -                
Recognition of operating lease right of use assets and liabilities $678  $- 
(C) ASSET ACQUISITION TRANSACTION (see note 8) -        
In-process research and development  -   1,040 
Note receivable from Akers  -   1,500 
Additional paid in capital  -   (1,045)
Non-controlling interests $-  $(1,495)
Recognition of operating lease right-of-use assets and liabilities $-  $678 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:GENERAL:

 

 a.General:

1)Incorporation and Operations

 

Oramed Pharmaceuticals Inc. (collectively with its subsidiaries, the “Company”, unless the context indicates otherwise), a Delaware corporation, was incorporated on April 12, 2002.

 

On February 17, 2006, the Company entered into an agreement with Hadasit Medical Services and Development Ltd. to acquire the provisional patent related to an orally ingestible insulin capsule to be used for the treatment of individuals with diabetes.

On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd. (the “Subsidiary”), which is engaged in research and development.

On July 30, 2019, the Subsidiary incorporated a wholly-owned subsidiary in Hong Kong, Oramed HK Limited (the “Hong Kong Subsidiary”). As of June 30, 2022, the Hong Kong Subsidiary has no operations. 

On March 18, 2021, the Company entered into a license agreement (the “Oravax License Agreement”) with Oravax Medical Inc. (“Oravax”) and into a stockholders agreement (the “Stockholders Agreement”) with Akers Biosciences Inc. (“Akers”), Premas Biotech Pvt. Ltd. (“Premas”), Cutter Mill Capital LLC (“Cutter Mill”) and Run Ridge LLC (“Run Ridge”). According to the Stockholders Agreement, Oravax issued 1,890,000 shares of its capital stock to the Company, representing 63% of the issued and outstanding share capital of Oravax on a fully diluted basis, as of the date of issuance. Consequently, Oramed consolidates Oravax in its consolidated financial statements since that time.

 

On November 23, 2021, Oravax incorporated a wholly-owned subsidiary in Israel, Oravax Medical Ltd., which is engaged in research and development. Effective January 1, 2022, Oravax transferred its rights and obligations under the Oravax License Agreement to Oravax Medical Ltd.

 

2)Change in Fiscal Year

On February 28, 2022,January 11, 2023, the Board of Directors approved a change ofCompany announced that the Company’s fiscal year from the period beginning on September 1ORA-D-013-1 Phase 3 trial did not meet its primary and ending on August 31 to the period beginning on January 1 and ending on December 31.secondary endpoints. As a result, the Company filedterminated this trial and a transition reportparallel Phase 3, ORA-D-013-2 clinical trial. As these results are considered a triggering event, the Company evaluated all of its long lived assets which include fixed assets and operating lease right-of-use assets in the first quarter of 2023 and concluded that no impairment was required. The Company recently completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters, such as body mass index (BMI), baseline HbA1c, age, gender and body weight, responded well to oral insulin. These subsets exhibited an over 1% placebo adjusted, statistically significant, reduction in HbA1c. The Company is currently considering if there is a path forward for its oral insulin candidate, based on Form 10-Qthis analysis. Concurrently, the Company is examining its existing pipeline and has commenced an evaluation process of potential strategic opportunities, with the Securities and Exchange Commission on March 30, 2022 that included financial informationgoal of enhancing value for the transition period from September 1, 2021 through December 31, 2021. Subsequent to that report, the Company’s fiscal year now begins on January 1 and ends on December 31.stockholders.

 

 3)b.Development and Liquidity Risks

 

The Company is engaged in research and development in the biotechnology field for innovative pharmaceutical solutions, including an orally ingestible insulin capsule to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules for delivery of other polypeptides, and has not generated significant revenues from its operations. Based on the Company’s current cash resources and commitments, the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that the Company will not need additional funds prior to such time. If there are unexpected increases in its operating expenses, the Company may need to seek additional financing during the next 12 months. Successful completion of the Company’s development programs and its transition to normal operations is dependent upon obtaining necessary regulatory approvals from the U.S. Food and Drug Administration prior to selling its products within the United States, obtaining foreign regulatory approvals to sell its products internationally, or entering into licensing agreements with third parties. There can be no assurance that the Company will receive regulatory approval of any of its product candidates, and a substantial amount of time may pass before the Company achieves a level of revenues adequate to support its operations, if at all. The Company also expects to incur substantial expenditures in connection with the regulatory approval process for each of its product candidates during their respective developmental periods. Obtaining marketing approval will be directly dependent on the Company’s ability to implement the necessary regulatory steps required to obtain marketing approval in the United States and in other countries. The Company may also need additional funds to realize the decisions made as part of its strategic review process. The Company cannot predict the outcome of these activities.

 

In additionOn August 9, 2023, the Company entered into the DIP Loan Agreement (as defined herein) with the Debtors (as defined herein) in the principal amount of $100,000. This amount will be used by the Company as a credit bid for the consideration for the Purchased Securities (as defined herein), with an additional $5,000 in cash to be paid by the foregoing, based onCompany at closing. This transaction will significantly reduce the Company’s current assessment, the Company does not expect any material impact on its development timeline and its liquidity due to the worldwide spread of COVID-19.cash position. However, the Company has experienced approximately six months of delays in clinical trials duebelieves it will be able to slow-downs of recruitment for trials generally. The Company may experience further delays if the pandemic worsens and continues for an extended period of time and it is continuing to assess the effect onmaintain its operations by monitoring the spread of COVID-19current planned development activities and the actions implemented by governmentscorresponding level of expenditures for at least the next 12 months, although no assurance can be given that the Company will not need additional funds prior to combatsuch time. See note 9 for additional information regarding the virus throughout the world.DIP Loan Agreement.

 

On August 8, 2023, the Company borrowed an aggregate of $99,550 pursuant to loan agreements from the Israel Discount Bank, LTD (the “Short-Term Borrowings”). The Short-Term Borrowings mature on dates ranging from August 11, 2023 to May 24, 2024, bear interest ranging from 6.66% to 7.38%, are secured by certificates of deposits issued by the Israel Discount Bank, LTD having an aggregate face amount of $99,550. The net proceeds of the Short-Term Borrowings were used to fund the DIP Loan Agreement.


 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

NOTE 12 - SIGNIFICANT ACCOUNTING POLICIES (continued):POLICIES:

 b.Loss per common share

Basic and diluted net loss per share of common stock are computed by dividing the net loss attributable to stockholders for the period by the weighted average number of shares of common stock outstanding for each period, including vested restricted stock units (“RSUs”). Outstanding stock options, warrants and unvested RSUs have been excluded from the calculation of the diluted loss per share because all such securities are anti-dilutive for all periods presented. The weighted average number of common stock options, warrants and RSUs excluded from the calculation of diluted net loss was 3,470,361 and 5,292,034 for the six month periods ended June 30, 2022 and June 30, 2021, respectively, and 3,477,121 and 5,102,392 for the three month periods ended June 30, 2022 and June 30, 2021, respectively.

c.Revenue recognition

On November 30, 2015, the Company entered into a Technology License Agreement (the “TLA”), with Hefei Tianhui Incubator of Technologies Co. Ltd. (“HTIT”) and on December 21, 2015, the parties entered into an Amended and Restated Technology License Agreement that was further amended by the parties on June 3, 2016 and July 24, 2016 (the “HTIT License Agreement”). The HTIT License Agreement and a stock purchase agreement, dated November 30, 2015, between the Company and HTIT (the “SPA”) were considered a single arrangement with multiple deliverables. The Company allocated the total consideration of $49,500 between the HTIT License Agreement and the SPA according to their fair value, as follows: $10,617 was allocated to the issuance of common stock (less issuance expenses of $23), based on the quoted price of the Company’s shares on the closing date of the SPA on December 28, 2015, and $38,883 was allocated to the HTIT License Agreement.

Under Accounting Standard Codification, (“ASC”) 606, the Company identified a single performance obligation in the agreement and determined that the license and services are not distinct as the license and services are highly dependent on each other. In other words, HTIT cannot benefit from the license without the related services, and vice versa.

Since the customer benefits from the services as the entity performs, revenue is recognized over time through the expected product submission date in June 2023, using the input method. The Company used the input method to measure the process for the purpose of recognizing revenue, which approximates the straight line attribution. The Company used significant judgment when it determined the product submission date.

Under ASC 606, the consideration that the Company would be entitled to upon the achievement of contractual milestones, which are contingent upon the occurrence of future events, are a form of variable consideration. When assessing the portion, if any, of such milestones-related consideration to be included in the transaction price, the Company first assesses the most likely outcome for each milestone and excludes the consideration related to milestones of which the occurrence is not considered the most likely outcome.


ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

The Company then evaluates if any of the variable consideration determined in the first step is constrained by including in the transaction price variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company used significant judgment when it determined the first step of variable consideration.

The potential future royalty consideration is also considered a form of variable consideration under ASC 606 as it is based on a percentage of potential future sales of the Company’s products. However, the Company applies the sales-based royalty exception and accordingly will recognize the sales-based royalty amounts when the related sale has occurred. To date, the Company has not recognized any royalty-related revenue.

As of June 30, 2022, an aggregate amount of $22,382 was allocated to the HTIT License Agreement, all of which were received through the balance sheet date. Through June 30, 2022, the Company has recognized revenue associated with this agreement in the aggregate amount of $17,679, of which $674 was recognized in the quarter ended June 30, 2022, and deferred the remaining amount of $4,703, which is presented as deferred revenues on the condensed consolidated balance sheet.

d.a.Condensed consolidated financial statements preparation

The condensed consolidated financial statements included herein have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and, on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended AugustDecember 31, 20212022 (the “2021“2022 Form 10-K”). These condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results of the periods presented. Certain information and disclosures normally included in annual consolidated financial statements have been omitted in this interim period report pursuant to the rules and regulations of the Securities and Exchange Commission. Because the condensed consolidated interim financial statements do not include all of the information and disclosures required by U.S. GAAP for annual financial statements, they should be read in conjunction with the audited consolidated financial statements and notes included in the 20212022 Form 10-K. The results for interim periods are not necessarily indicative of a full fiscal year’s results.

 e.b.Recently issued accounting pronouncements, not yet adoptedLoss per common share

In June 2016,Basic and diluted net loss per share of common stock are computed by dividing the Financial Accounting Standards Board issued Accounting Standards Update 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurrednet loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable informationattributable to inform credit loss estimates. The guidance will be effectivestockholders for the fiscal year beginning after December 15,period by the weighted average number of shares of common stock outstanding for each period, including vested restricted stock units (“RSUs”). Outstanding stock options, warrants and unvested RSUs have been excluded from the calculation of the diluted loss per share because all such securities are anti-dilutive for all periods presented. The weighted average number of common stock options, warrants and RSUs excluded from the calculation of diluted net loss was 3,694,057 and 3,470,361 for the six month periods ended June 30, 2023 and June 30, 2022, including interimrespectively, and 4,026,508 and 3,477,121 for the three month periods within that year. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.

NOTE 2 - COMMITMENTS:ended June 30, 2023 and June 30, 2022, respectively.

 a.c.In March 2011, the Subsidiary sold shares of its investee company, Entera Bio Ltd. (“Entera”) to D.N.A Biomedical Solutions Ltd. (“D.N.A”), retaining 117,000 ordinary shares (after giving effect to a stock split by Entera in July 2018). In consideration for the shares sold to D.N.A, the Company received, among other payments, ordinary shares of D.N.A (see also note 4).Revenue recognition

As part of this agreement,HTIT

On November 30, 2015, the SubsidiaryCompany entered into a patent transfer agreementTechnology License Agreement (the “Patent Transfer“TLA”), with Hefei Tianhui Incubator of Technologies Co. Ltd. (“HTIT”) and on December 21, 2015, the parties entered into an Amended and Restated Technology License Agreement that was further amended by the parties on June 3, 2016 and July 24, 2016 (the “HTIT License Agreement”), according to which the Subsidiary assigned to Entera all of its rights to a patent application related to the oral administration of proteins that it has licensed to Entera since August 2010, in return for royalties of 3% of Entera’s net revenues and a license back of that patent application for use in respect of diabetes and influenza. .

As of June 30, 2022, Entera had not paid any royalties2023, an aggregate amount of $22,382 was allocated to the Subsidiary. HTIT License Agreement, all of which were received through the balance sheet date. Through June 30, 2023, the Company recognized revenue associated with this agreement in the aggregate amount of $20,382, of which $1,340 was recognized in the six month period ended June 30, 2023, and deferred the remaining amount of $2,000, which is presented as long-term deferred revenues on the condensed consolidated balance sheet.

Medicox

On December 11, 2018, Entera announced that it hadNovember 13, 2022, the Company entered into a research collaboration anddistribution license agreement (“Medicox License Agreement”) with Amgen, Inc.Medicox Co., Ltd. (“Amgen”Medicox”). ToThe Medicox License Agreement grants Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the extentRepublic of Korea. For further details, see note 3a.

Under ASC 606, the Company identified Medicox as a customer and the Medicox License Agreement as a contract with a customer.

The Company identified a performance obligation in the Medicox License Agreement to stand-ready and provide Medicox with support in its commercialization efforts in the Republic of Korea. This performance obligation includes a non-distinct distribution license for ORMD-0801, which the Company views a predominant item in the combined performance obligation. The Company concluded that the license grantedis not distinct, as no party other than the Company is capable of providing related services to Amgen resultsMedicox, and both the license and related services are necessary for the customer to obtain a regulatory approval in netthe Republic of Korea. In addition, the agreement covers the terms of future manufacturing services, that are contingent on the completion and success of the commercialization efforts.

The Medicox License Agreement contains a fixed consideration of $2,000, which was received by the Company in fiscal year 2022 and is presented under long-term deferred revenues as definedof June 30, 2023. It also contains variable consideration of contractual milestone payments and sales-based royalties.

The Company’s obligation to stand-ready and support Medicox will be recognized on a straight-line basis over the period the Company expects to provide support to Medicox. As of June 30, 2023, this support has not commenced, and no revenue was recognized from the Medicox License Agreement.

If Medicox proceeds with the regulatory approval process in the Patent Transfer Agreement,Republic of Korea, the Subsidiary will be entitled to the aforementioned royalties. As part of a consulting agreement with a third party dated February 15, 2011, the Subsidiary is obliged to pay this third party royalties of 8%Company expects most of the net royalties received in respectrevenue to be recognized at a later stage. The Company notes that its Phase 3 trial did not meet its primary and secondary endpoints. If Medicox chooses to terminate the agreement as a result of the patent that was soldoutcome of the applicable Phase 3 trials, the Company expects to Entera in March 2011.accelerate revenue recognition and recognize it at such time.


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 2 - COMMITMENTSSIGNIFICANT ACCOUNTING POLICIES (continued):

 

 b.d.

According to the HTIT License Agreement, the Company granted HTIT an exclusive commercialization license in the territory of the People’s Republic of China, Macau and Hong Kong (the “Territory”), related to the Company’s oral insulin capsule, ORMD-0801 (the “Product”). Pursuant to the HTIT License Agreement, HTIT will conduct, at its own expense, certain pre-commercialization and regulatory activities with respect to the Subsidiary’s technology and ORMD-0801 capsule, and will pay to the Subsidiary (i) royalties of 10% on net sales of the related commercialized products to be sold by HTIT in the Territory (“Royalties”), and (ii) an aggregate of $37,500, of which $3,000 was payable immediately, $8,000 will be paid subject to the Company entering into certain agreements with certain third parties, and $26,500 will be paid upon achievement of certain milestones and conditions. In the event that the Company does not meet certain conditions, the Royalties rate may be reduced to a minimum of 8%. Following the final expiration of the Company’s patents covering the technology in the Territory in 2033, the Royalties rate may be reduced, under certain circumstances, to 5%.

The royalty payment obligation shall apply during the period of time beginning upon the first commercial sale of the Product in the Territory, and ending upon the later of (i) the expiration of the last-to-expire licensed patents in the Territory; and (ii) 15 years after the first commercial sale of the Product in the Territory (the “Royalty Term”).

The HTIT License Agreement shall remain in effect until the expiration of the Royalty Term. The HTIT License Agreement contains customary termination provisions.

Among others, the Company’s involvement through the product submission date will include consultancy for the pre-commercialization activities in the Territory, as well as advisory services to HTIT on an ongoing basis.

As of June 30, 2022, the Company has received milestone payments in an aggregate amount of $20,500 as follows: the initial payment of $3,000 was received in January 2016. Following the achievement of certain milestones, the second and third payments of $6,500 and $4,000, respectively, were received in July 2016, the fourth milestone payment of $4,000 was received in October 2016 and the fifth milestone payment of $3,000 was received in January 2019.

On August 21, 2020, the Company received a letter from HTIT, disputing certain pending payment obligations of HTIT under the TLA. The payment obligation being disputed is $6,000, out of which only an amount of $2,000 has been received and has been included in deferred revenue in each of the consolidated balance sheets as of June 30, 2022 and December 31, 2021. The Company wholly disputes the claims made by HTIT and has been engaged in discussions and exchanges with HTIT in an attempt to clarify and resolve disagreements between the parties regarding milestone payments and work plan implementation.

In addition, on November 30, 2015, the Company entered into the SPA with HTIT, according to which, the Company issued 1,155,367 shares of common stock to HTIT for $12,000. The transaction closed on December 28, 2015.

The HTIT License Agreement and the SPA were considered a single arrangement with multiple deliverables. The Company allocated the total consideration of $49,500 between the HTIT License Agreement and the SPA according to their fair value, as follows: $10,617 was allocated to the issuance of common stock (less issuance expenses of $23), based on the quoted price of the Company’s shares on the closing date of the SPA on December 28, 2015, and $38,883 was allocated to the HTIT License Agreement. The Company determined that revenues are recognized over time through the expected product submission date in June 2023.

In July 2015, according to the letter of intent signed between the parties or their affiliates, HTIT’s affiliate paid the Subsidiary a non-refundable amount of $500 as a no-shop fee. The no-shop fee was deferred and the related revenue is recognized over the estimated term of the HTIT License Agreement.

For the Company’s revenue recognition policy see note 1c.

Recently adopted accounting pronouncements

 

Financial instruments – credit losses

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance became effective for the fiscal year beginning after December 15, 2022, including interim periods within that year. The Company adopted the provisions of this update as of January 1, 2023, with no material impact on its consolidated financial statements.

e.Fair value

The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

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.

As of June 30, 2023, the fair value of marketable equity securities as presented in note 4 was based on a Level 1 measurement. The fair value of held to maturity bonds as presented in note 4 was based on a Level 2 measurement. The fair value of the investment in non-marketable equity securities as presented in note 5 was based on a Level 3 measurement.

As of June 30, 2023, the carrying amounts of cash equivalents, short-term deposits and accounts payable approximate their fair values due to the short-term maturities of these instruments.

The amounts funded in respect of employee rights are stated at cash surrender value which approximates its fair value.


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 23 - COMMITMENTS(continued):

 

 c.a.

On December 18, 2017,November 13, 2022, the SubsidiaryCompany entered intothe Medicox License Agreement with Medicox.

The Medicox License Agreement grants Medicox an agreement with a vendorexclusive license to apply for the process developmentregulatory approval and production of one of its oral capsule ingredientsdistribute ORMD-0801 in the amountRepublic of $2,905 thatKorea. The Medicox License Agreement is for ten years, but the parties have the right to terminate it upon 180 days’ notice.

Medicox will comply with agreed distribution targets and will purchase ORMD-0801 at an agreed upon transfer price per capsule. In addition, Medicox will pay the Company up to $15,000 in developmental milestones, $2,000 of which have already been received by the Company, and up to 15% royalties on gross sales. Medicox will also be paid overresponsible for obtaining a regulatory approval in the termRepublic of Korea.

The Company is currently evaluating with Medicox a path forward to continue its collaboration, following the results of the engagement and based onORA-D-013-1 Phase 3 trial.

For the achievement of certain development milestones, of which $1,592 was recognized in research and development expenses through June 30, 2022.Company’s revenue recognition policy, see note 2c.

 

 d.On September 2, 2020 (effective as of January 15, 2020), the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a clinical research organization (“CRO”) for the Subsidiary’s phase 3 clinical trial for its oral insulin. The CRO Services Agreement was amended effective May 26, 2022 and as consideration for its services, the Subsidiary will pay the CRO a total amended amount of $22,684 during the term of the engagement and based on achievement of certain milestones, of which $14,536 was recognized in research and development expenses through June 30, 2022.

e.On September 16, 2020 (effective as of January 15, 2020), the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a CRO for the Subsidiary’s phase 3 clinical trial for its oral insulin. The CRO Services Agreement was amended effective May 26, 2022 and as consideration for its services, the Subsidiary will pay the CRO a total amended amount of $15,796 during the term of the engagement and based on achievement of certain milestones, of which $6,639 was recognized in research and development expenses through June 30, 2022.

f.On December 2, 2021, the Subsidiary entered into an addendum (the “Addendum”) to the current lease agreement for its facilities in Israel. The Addendum refers to the lease of an additional space of 264 square meters for a period of 60 months commencing February 1, 2022. The Subsidiary has the option to extend the period for another 60 months. The annual lease payment, including management fees, is approximately NIS 435 (approximately $124). As security for its obligation under the Addendum, the Company provided a bank guarantee in an amount equal to three monthly lease payments. For accounting purposes, the lease commenced on February 1, 2022 as the Subsidiary did not have access to the space until that date.

g.b.Grants from the Israel Innovation Authority (“IIA”)

 

Under the terms of the Company’s funding from the IIA, royalties of 3% are payable on sales of products developed from a project so funded, up to a maximum amount equaling 100%-150% of the grants received (dollar linked) with the addition of interest at an annual rate based on LIBOR.

 

At the time the grants were received, successful development of the related projects was not assured. The total amount received through June 30, 20222023 was $2,207$2,208 ($2,5242,548 including interest).

 

As of June 30, 2022,2023, the liability to the IIA was $169.$96.

 

The royalty expenses which are related to the funded project were recognized in cost of revenues in the relevant periods.

h.Legal expenses

Following the Company’s 2019 annual meeting of stockholders, a complaint was filed in the Court of Chancery of the State of Delaware against the Company and the members of the Board of Directors. On April 27, 2022, the Court of Chancery of the State of Delaware approved the terms of a settlement between the Company and the plaintiff in the complaint, awarding the plaintiff an amount of $850 in attorneys’ fees, which was paid on April 28, 2022 and included in general and administrative expenses in the first quarter of 2022. All other details of the settlement were previously agreed by the parties and acted upon at the Company’s 2021 annual meeting of stockholders.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 3 - FAIR VALUE:

The Company measures fair value and discloses fair value measurements for financial assets. Fair value is based on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:

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.

As of June 30, 2022, the assets measured at fair value are comprised of equity securities (Level 1). The fair value of held to maturity bonds as presented in note 4 was based on a Level 2 measurement.

As of June 30, 2022, the carrying amounts of cash equivalents, short-term deposits and accounts payable approximate their fair values due to the short-term maturities of these instruments.

As of June 30, 2022, the carrying amounts of long-term deposits approximate their fair values due to the stated interest rates which approximate market rates.

The amounts funded in respect of employee rights are stated at cash surrender value which approximates its fair value.

NOTE 4 - MARKETABLE SECURITIES:

 

The Company’s marketable securities include investments in equity securities of DNA GROUP (T.R.) Ltd. (formerly D.N.A andBiomedical Solutions Ltd.) (“DNA”), Entera Bio Ltd. (“Entera”) and in held to maturity bonds.securities.

 

 a.Composition:

 

  June 30,
2022
  December 31,
2021
 
Short-term:      
D.N.A (see b below) $669  $863 
Entera (see c below)  156   337 
Held to maturity bonds (see d below)  5,800   6,547 
  $6,625  $7,747 
Long-term:        
Held to maturity bonds (see d below) $684  $3,875 
  $7,309  $11,622 
  June 30,
2023
  December 31,
2022
 
Short-term:      
DNA (see b below) $334  $352 
Entera (see c below)  99   85 
Held to maturity securities (see d below)  510   3,306 
  $943  $3,743 

 

 b.D.N.ADNA

 

The D.N.ADNA ordinary shares are traded on the Tel Aviv Stock Exchange. The fair value of those securities is measured at the quoted prices of the securities on the measurement date.

 

During the six month period ended June 30, 2023, the Company did not sell any of DNA’s ordinary shares. As of June 30, 2022,2023, the Company owns approximately 1.4% of D.N.A’sDNA’s outstanding ordinary shares.

 

The cost of the securities as of both June 30, 20222023 and December 31, 20212022 was $595.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 4 - MARKETABLE SECURITIES (continued):

 

 c.Entera

 

Entera ordinary shares have been traded on The Nasdaq Capital Market since June 28, 2018. The Company measures the investment at fair value from such date, since it has a readily determinable fair value (prior to such date the investment was accounted for as a cost method investment (amounting to $1)).

 

 d.Held to maturity securities

 

The amortized cost and estimated fair value of held to maturity securities as of June 30, 2022,2023, were as follows:

 

 June 30, 2022  June 30, 2023 
 Amortized
cost
  Gross
unrealized
gains (losses)
  Estimated
fair value
  Average
yield to
maturity
rate
  Amortized
cost
  Gross
unrealized
gains (losses)
  Estimated
fair value
  Average
yield to
maturity
rate
 
Short-term:                  
Commercial bonds $5,747  $(130) $5,617   1.03% $501  $(10) $491   0.8%
Accrued interest  53   -   53       9   -   9     
                 $510  $(10) $500     
Long-term  672   (38)  634   0.75%
Accrued interest  12   -   12     
 $6,484  $(168) $6,316     

 

The amortized cost and estimated fair value of held to maturity securities as of December 31, 2021,2022, were as follows:

 

 December 31, 2021  December 31, 2022 
 Amortized
cost
  Gross
unrealized
gains (losses)
  Estimated
fair value
  

Average

yield  to
maturity
rate

  Amortized
cost
  Gross
unrealized
gains (losses)
  Estimated
fair value
  

Average

yield to
maturity
rate

 
Short-term:                  
Commercial bonds $6,432  $(115) $6,317   1.37% $3,258  $(82) $3,176   1.07%
Accrued interest  115   -   115       48   -   48     
                 $3,306  $(82) $3,224     
Long-term  3,875   (29)  3,846   1.20%
 $10,422  $(144) $10,278     

 

Held to maturity securities which will mature during the 12 months from the balance sheet date are included in short-term marketable securities. Held to maturity securities with maturity dates of more than one year are considered long-term marketable securities.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 5 – NON-MARKETABLE EQUITY SECURITIES:

On August 26, 2022, the Company entered into a stock purchase agreement with Diasome Pharmaceuticals, Inc. (“Diasome”), a privately-held company, pursuant to which the Company purchased shares of Series B preferred stock of Diasome for an aggregate purchase price of approximately $2,700. Following the purchase, the Company holds less than 5% of the issued and outstanding stock of Diasome. The stock purchase agreement provides the Company with the option to purchase additional preferred shares of stock on a pro rata basis at similar terms to the terms and conditions of the current round contingent upon Diasome achieving certain milestones.

The Company accounts for the investment under the measurement alternative in ASC 321 “Investments – Equity Securities,” whereby the equity investment is recorded at cost, less impairment. The carrying amount is subsequently remeasured to its fair value in accordance with the provisions of ASC 820 “Fair Value Measurement” when observable price changes occur as of the date the transaction occurred, or it is impaired. Any adjustments to the carrying amount are recorded in net income.

The Company’s non-marketable equity securities are an investment in a company without a readily determinable fair value. As of June 30, 2023, the Company recorded an $824 increase in value due to the closing in June 2023 of a Series C investment round in Diasome. The change was recorded using the transaction price of similar securities issued by Diasome, adjusted for contractual rights and obligations of the securities held by the Company.

NOTE 6 - STOCKHOLDERS’ EQUITY:

 

1.On September 1, 2021, the Company entered into a controlled equity offering agreement (the “Cantor Equity Distribution Agreement”) with Cantor Fitzgerald & Co., as agent, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $100,000, through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to ourthe Company’s effective shelf registration statement on Form S-3 including a prospectus dated July 26, 2021 and prospectus supplement dated September 1, 2021. The Company paid the sales agent a cash commission of 3.0% of the gross proceeds of the sale of any shares sold through the sales agent under the Cantor Equity Distribution Agreement. As of June 30, 2022, 841,6382023 and August 10, 2023, 1,971,447 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $15,275. As of August 10, 2022, 1,061,363 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $17,233.$26,253.

 

2.On November 3, 2021, the Company entered into a securities purchase agreement with several institutional and accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell, in a registered direct offering (the “Offering”), an aggregate of 2,000,000 shares of the Company’s common stock to the Purchasers for an offering price of $25.00 per share. The closing of the sale of the shares occurred on November 5, 2021. The net proceeds to the Company from the Offering, after deducting the placement agent’s fees and expenses and the Company’s Offering expenses, were approximately $46,375.

3.The following are the significant stock options transactions with employees and board members made during the six months ended June 30, 2022:

a.On January 3, 2022,April 17, 2023, the Company granted an aggregate of 150,000 shares of the Company’s common stock to its President and Chief Executive Officer. The total fair value of these shares on the date of grant was $2,084, using the quoted closing market share price of $13.89 on the Nasdaq Capital Market on the date of grant.

b.On January 3, 2022, the Company granted an aggregate of 207,500868,500 RSUs representing a right to receive shares of the Company’s common stock to the Company’s employeesexecutive officers and board members of the Board of Directors as follows: 63,000 to the President and Chief Executive Officer; 42,000 to the Chief Scientific Officer; 21,000 to the Chief Operating and Business Officer, 19,000 to the Chief Financial Officer and Treasurer, 19,000 to the Chief Commercial Officer, 18,000 to the Chief Legal Officer and Secretary (effective as of the time his employment with the Company commenced on January 9, 2022), an aggregate of 24,000 to four board members and 1,500 to an employee.Company. The RSUs will vest in fourtwelve equal annual instalments on each of Januaryquarterly installments starting May 1, 2023, 2024, 2025 and 2026.2023. The total fair value of these RSUs on the date of grant was $2,849,$1,980, using the quoted closing market share price of $13.89$2.28 on the Nasdaq Capital Market on the date of grant and $12.03 for the Chief Legal Officer’s grant (equivalent to the closing price of the Company’s common stock on January 10, 2022 which represents the first trading date after his employment with the Company commenced).grant.

 

c.3.On January 3, 2022,April 17, 2023, the Company granted options to purchase an aggregate of 321,500245,500 performance based RSUs (“PSUs”) representing a right to receive shares of the Company’s common stock to executive officers of the Company’s employees and board members at an exercise price of $13.89 per share (equivalent to the closing price ofCompany. The PSUs vested on May 26, 2023, upon the Company’s common stock on the date of grant) as follows: 107,000 to the Presidentachieving and Chief Executive Officer; 72,000 to the Chief Scientific Officer; 36,000 to the Chief Operating and Business Officer, 32,000 to the Chief Financial Officer and Treasurer and 32,000 to the Chief Commercial Officer, an aggregate of 40,000 to four board members and 2,500 to an employee.maintaining a specified price per share. The options will vest in four equal annual instalments on each of January 1, 2023, 2024, 2025 and 2026. These options expire on January 3, 2032. Thetotal fair value of all these optionsPSUs on the date of grant was $2,630,$550, using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $13.89; dividend yield of 0% for all years; expected volatility of 63.05%; risk-free interest rates of 1.46%; and expected term of 6.25 years.Monte-Carlo model.

 

d.4.On January 3, 2022,May 1, 2023, the Company granted options to purchase an aggregate of 30,00020,000 RSUs representing a right to receive shares of the Company’s common stock to the Company’s Chief Legal Officer and Secretary (effective as of the time his employment with the Company commenced on January 9, 2022), at an exercise price of $12.03 per share (equivalent to the closing price of the Company’s common stock on January 10, 2022 which represents the first trading date after his employment with the Company commenced).a board member. The optionsRSUs will vest in four equal annual instalments on each of Januarytwelve quarterly installments starting May 1, 2023, 2024, 2025 and 2026. These options expire on January 3, 2032.2023. The total fair value of all these optionsRSUs on the date of grant was $214,$49, using the Black Scholes option-pricing model and was basedquoted closing market share price of $2.45 on the following assumptions: stock priceNasdaq Capital Market on the date of $12.03; dividend yield of 0% for all years; expected volatility of 63.22%; risk-free interest rates of 1.60%; and expected term of 6.25 years.grant.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 57 - STOCKHOLDERS’ EQUITY (continued):

e.On May 2, 2022, the Company granted 4,500 RSUs representing a right to receive shares of the Company’s common stock to Mr. Yadin Rozov, a member of the Company’s board of directors. The RSUs will vest in four equal annual instalments on each of May 2, 2023, 2024, 2025 and 2026. The total fair value of these RSUs on the date of grant was $23, using the quoted closing market share price of $5.14 on the Nasdaq Capital Market on the last trading day before the date of grant.

f.On May 2, 2022, the Company granted options to purchase an aggregate of 7,500 shares of the Company’s common stock to Mr. Yadin Rozov, a member of the Company’s board of directors, at an exercise price of $5.14 per share (equivalent to the closing price of the Company’s common stock on the last trading day before the date of grant). The options will vest in four equal annual instalments on each of May 2, 2023, 2024, 2025 and 2026. These options expire on May 2, 2032. The fair value of all these options on the date of grant was $24, using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $5.14; dividend yield of 0% for all years; expected volatility of 65.26%; risk-free interest rates of 3.03% and expected term of 6.26 years.

NOTE 6 - LEASESLEASES:

 

The right-of-use asset and lease liability are initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company’s incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located.

The Company has various operating leases for office space and vehicles that expire through 2027. Below is a summary of ourthe Company’s operating right-of-use assets and operating lease liabilities as of June 30, 20222023 and December 31, 2021:2022:

 

 June 30,
2022
  December 31,
2021
  

June 30,

2023

  December 31,
2022
 
Operating right-of-use assets $1,076  $500  $842  $987 
                
Operating lease liabilities, current  233   130   236   247 
Operating lease liabilities long-term  744   370   488   647 
Total operating lease liabilities $977  $500  $724  $894 

 

Lease payments for the Company’s right-of-use assets over the remaining lease periods as of June 30, 20222023 and December 31, 20212022 are as follows:

 

 June 30,
2022
  December 31,
2021
  

June 30,

2023

  December 31,
2022
 
2022 $141  $155 
2023  274   140   138   291 
2024  274   140   276   291 
2025  213   93   217   228 
2026  124   -   118   124 
2027  10   -   10   10 
Total undiscounted lease payments  1,036   528   759   944 
Less: Interest*  (59)  (28)  (35)  (50)
Present value of lease liabilities $977  $500  $724  $894 

 

*Future lease payments were discounted by 3%-5.75% interest rate.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 78 - RELATED PARTY TRANSACTIONS:

 

On July 1, 2008, the SubsidiaryCompany’s wholly-owned subsidiary, Oramed Ltd. (the “Subsidiary”), entered into two consulting agreements with KNRY Ltd. (“KNRY”), an Israeli company owned by the Chief Scientific Officer, whereby the President and Chief Executive Officer and the Chief Scientific Officer, through KNRY, provide services to the Company (the “Consulting Agreements”). The Consulting Agreements are both terminable by either party upon 140 days prior written notice. The Consulting Agreements, as amended, provide that KNRY will be reimbursed for reasonable expenses incurred in connection with the performance of the Consulting Agreements and that the monthly consulting fee paid to the President and Chief Executive Officer and the Chief Scientific Officer is NIS 146,705 ($42)40) and NIS 106,400 ($30)29), respectively.

 

In addition to the Consulting Agreements, based on a relocation cost analysis, the Company payspaid for certain direct costs, related taxes and expenses incurred in connection with the relocation of the President and Chief Executive Officer to the U.S. During the six months ended June 30, 2022,2023, there were no such relocation expenses, were $190, compared to $186$190 for the six months ended June 30, 2021.

NOTE 8 - ASSET ACQUISITION TRANSACTION2022.

 

On March 18, 2021,Following the Company entered into the Oravax License Agreement and into the Stockholders Agreement with Oravax. On that date, Oravax’s assets were (1) in process research and development of COVID-19 vaccine technology; and (2) $1,500 to be received in cash. According to the Stockholders Agreement, Oravax issued 1,890,000 shares of its capital stock to the Company, representing 63%relocation of the issued and outstanding share capital of Oravax, on a fully diluted basis, as of the date of issuance, for which we paid $1,500. Consequently, the Company consolidates Oravax in its consolidated financial statements since that time. In addition, under the terms of the Oravax License Agreement, the Company has licensed out to Oravax certain patent rights, know-how and information related to the Company’s oral drug delivery technology with respect to the combination with the COVID-19 vaccine technology.

In consideration for the grant of the License, the Oravax License Agreement provides that the Company will receive (i) royalties equal to 7.5% on net sales, as defined in the Oravax License Agreement, of each product commercialized by Oravax, its affiliates and permitted sublicensees related to the License during the term specified in the Oravax License Agreement, (ii) sublicensing fees equal to 15% of any non-sales-based consideration received by Oravax from a permitted sublicensee and (iii) other payments ranging between $25,000 to $100,000, based on certain sales milestones being achieved by Oravax. The parties further agreed to establish a development and steering committee, which will consist of three members, of which two members will be appointed by the Company, that will oversee the ongoing research, development, clinical and regulatory activity with respect to the Oravax product. Akers contributed $1,500 in cash to Oravax and a license agreement to the Oravax product which includes a maximum of 2.5% royalties of all net sales. Effective January 1, 2022, Oravax transferred its rights and obligations under the Oravax License Agreement to its wholly-owned subsidiary, Oravax Medical Ltd.

Concurrently with the execution and delivery of the Oravax License Agreement, the Company entered into the Stockholders Agreement with Akers, Premas, Cutter Mill, and Run Ridge, entities controlled by Michael Vasinikovich and Craig Schwabe, former members of Cystron Biotech LLC (“Cystron,” and collectively with Akers, Premas, Cutter Mill and Run Ridge, the “Stockholders Parties”). Pursuant to the Stockholders Agreement, among other things, the Company has the right to appoint two out of the three members to the board of directors of Oravax (the “Oravax Board”), one of which is the Company’s Chief Executive Officer who will serve as the chairman of the Oravax Board, conditioned upon the Company maintaining certain ownership thresholds. Akers has the right, until the third anniversary of the Stockholders Agreement effective date, to appoint one member to the Oravax Board. Oravax’s common stock held by the Stockholders Parties is subject to certain transfer restrictions. In addition, the Stockholders Parties have certain rights of participation in future financings as well as rights of first refusal and co-sale related to future potential transactions. Nadav Kidron, the Company’s President and Chief Executive Officer was oneto the State of Israel, the Company entered into two agreements with the President and Chief Executive Officer, replacing his above-mentioned consulting agreement through KNRY, substantially on the same terms, in order to allocate his time and services between the Company and the Subsidiary.

Effective November 1, 2022, the Company entered into a consulting agreement with Shnida Ltd., whereby the President and Chief Executive Officer, through Shnida Ltd., provides services as President and Chief Executive Officer of the former membersCompany. The agreement is terminable by either party upon 140 days prior written notice. The agreement provides that Shnida Ltd. will be reimbursed for reasonable expenses incurred in connection with performance of Cystron.the agreement and that the President and Chief Executive Officer will receive a monthly consulting fee of NIS 88,023 ($24), plus value added tax. Pursuant to the agreement, Shnida Ltd. and the President and Chief Executive Officer each agree that during the term of the agreement and for a 12-month period thereafter, none of them will compete with the Company nor solicit employees of the Company.

In addition, the Company, through the Subsidiary, has entered into an employment agreement with the President and Chief Executive Officer, effective as of November 1, 2022, pursuant to which the President and Chief Executive Officer receives gross monthly salary of NIS 46,901 ($13) in consideration for his services as President and Chief Executive Officer of the Subsidiary. In addition, the President and Chief Executive Officer is provided with a cellular phone and a company car pursuant to the terms of his agreement.

 


 

 

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 9 - SUBSEQUENT EVENTSEVENTS:

Stock Purchase Agreement

On August 7, 2023, the Company entered into a Stock Purchase Agreement, as amended by a First Amendment to Stock Purchase Agreement, dated as of August 9, 2023 (together, the “Stock Purchase Agreement”), with Sorrento Therapeutics, Inc. (“Sorrento”), to acquire certain securities of Scilex Holding Company (“Scilex”) owned by Sorrento, including (A) 59,726,737 shares of common stock of Scilex; provided, that the Company will have an option to purchase up to 2,259,058 additional shares of common stock of Scilex, which Sorrento is holding in abeyance on behalf of certain warrant holders of Sorrento (the “Option Shares”), at an exercise price of $1.13 per Option Share; (B) 29,057,096 shares of Series A preferred stock of Scilex; and (C) public warrants exercisable for 1,386,617 shares of common stock of Scilex, and private placement warrants exercisable for 3,104,000 shares of common stock of Scilex, (collectively, the “Purchased Securities”) (such acquisition of the Purchased Securities, the “Transaction”) for a total purchase price of $105,000. The consideration for the Transaction consists of a credit bid by the Company on a dollar-for-dollar basis of the full amount of outstanding obligations as of the closing date under the DIP Facility (as defined below), with the remaining balance of the purchase price to be paid in cash at closing. Sorrento and its wholly-owned subsidiary (collectively, the “Debtors”) are debtors in Chapter 11 bankruptcy proceedings pending before the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) which commenced on February 13, 2023. The Transaction is being conducted through a Bankruptcy Court-supervised process and is subject to the receipt of higher or otherwise better offers from competing bidders at an auction and approval of the sale by the Bankruptcy Court. Scilex is a company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain.

Completion of the Transaction is subject to the satisfaction or waiver of customary and certain other closing conditions, including governmental and bankruptcy court approvals, the approval of an amendment to Scilex’s governance documents, the grant of an irrevocable proxy and call option (with an exercise price of $1 (not in thousands)) with respect to the remaining share of Scilex Series A preferred stock retained by Sorrento, no trigger event in Scilex’s governance documents having occurred and the Purchased Securities shall represent at least a majority in voting power of Scilex, entry by the Company and Scilex into a new registration rights agreement, and no event of default under the DIP Facility. Sorrento has also agreed to provide certain transition services for a period of 90 days following the closing. The Company may also terminate the Stock Purchase Agreement (a) if the auction has not commenced on or before August 14, 2023 or if the sale order has not been entered by the Bankruptcy Court by August 21, 2023, (b) if Sorrento’s bankruptcy case is converted to chapter 7, or (c) if Sorrento materially breaches the DIP Facility or the Company is unable to credit bid in payment of the DIP Facility.

The Stock Purchase Agreement provides for certain termination rights including, but not limited to, by mutual written consent of the parties, and by either party in the event that the Transaction is not consummated by September 30, 2023, or pursuant to any legal prohibition or injunction. The Stock Purchase Agreement provides for payment to the Company by Sorrento of a termination fee of $3,413 and expense reimbursement of up to $1,000 for outside counsel upon termination of the Stock Purchase Agreement under certain circumstances, including if Sorrento enters into a transaction involving the disposition of any portion of the Purchased Securities to a person other than the Company.

 

1.On July 28, 2022, the Company granted an aggregate of 404,100 RSUs representing a right to receive shares of the Company’s common stock to the Company’s executive officers, employees and board members. The RSUs granted to certain employees, executive officers and board members will vest in three equal annual instalments on each of January 1, 2024, 2025 and 2026 and the RSUs granted to certain employees will vest in three equal annual instalments on each of January 1, 2023, 2024 and 2025. The total fair value of these RSUs on the date of grant was $3,423, using the quoted closing market share price of $8.47 on the Nasdaq Capital Market on the date of grant.


 

2.On July 28, 2022, the Company granted 34,000 shares of the Company’s common stock to each of the Company’s President and Chief Executive Officer and Chief Scientific Officer. These shares vested in full on August 1, 2022. The total fair value of these shares on the date of grant was $576, using the quoted closing market share price of $8.47 on the Nasdaq Capital Market on the date of grant.

ORAMED PHARMACEUTICALS INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands (except share and per share data)

(UNAUDITED)

 

NOTE 9 - SUBSEQUENT EVENTS (continued):

DIP Loan Agreement

On August 9, 2023, the Company entered into a Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement by and among the Debtors, the Company and the guarantors from time to time party thereto (the “DIP Loan Agreement”), pursuant to which the Company will provide to the Debtors a non-amortizing super-priority senior secured debtor-in-possession term loan financing facility in an aggregate principal amount of $100,000 (the “DIP Facility”). The DIP Facility proceeds will be used (i) to refinance and pay in full the approximately $82,000 of obligations outstanding under the Debtors’ current DIP facility (the “Existing DIP Facility”), (ii) for working capital and other general corporate purposes of the Debtors (subject to an agreed budget), and (iii) the payment of certain statutory fees and bankruptcy-related expenses and fees.

The DIP Facility is provided on substantially the same terms and conditions as those of the Existing DIP Facility, subject to, among other things, (a) mutually agreed-upon permitted asset sales of collateral, the proceeds of such asset sales are included in the DIP Facility collateral package; (b) agreed-upon “stalking horse” bidder protections; (c) agreed-upon milestones and other deadlines for, among other things, the auction, the sale hearing and the outside date for consummation of the Transaction; (d) an agreed budget, or the DIP budget; and (e) the Bankruptcy Court order. On August 7, 2023, the Bankruptcy Court entered an order, approving the Debtors’ entry into the DIP Loan Agreement and the “stalking horse” bidder protections, among other things.

The DIP Facility bears interest at a per annum rate equal to 15%, payable in cash (and a default interest rate that shall accrue at an additional per annum rate of 3% plus the non-default interest) and other fees and charges. The DIP Facility is secured by first-priority liens on substantially all of the Debtors’ assets, subject to certain enumerated exceptions.

The DIP Facility matures on the earliest of: (i) October 15, 2023; (ii) the effective date of a plan of reorganization in the Debtors’ Chapter 11 case; (iii) the sale or other disposition of all or substantially all of the collateral; (iv) the date of the acceleration of the obligations in accordance with the DIP Loan Agreement; (v) the dismissal of the Chapter 11 cases or conversion into Chapter 7 cases; (vi) the date of termination of the Stock Purchase Agreement or other related definitive documentation as a result of a material breach by the Debtors; and (vii) the date on which a trigger event in Scilex’s governance documents has occurred.

The DIP Loan Agreement includes the following milestones:

By no later than:Event
August 14, 2023 3.On July 28, 2022,The auction for the Company granted an aggregate of 175,500 performance based RSUs (“PSUs”) representing a right to receive sharessale of the Company’s common stockPurchased Securities shall have commenced.
August 18, 2023The Bankruptcy Court shall commence a hearing to consider approval of the sale of the Purchased Securities.
August 21, 2023The Bankruptcy Court shall have entered an order approving the sale of the Purchased Securities in form and substance acceptable to the Company’s executive officers. Company.
September 30, 2023The PSUs will vest in two instalments upon achievementclosing of the following milestones: (i) two thirds shall vest upon receipt of positive topline data in the first oral insulin Phase 3 clinical trial (675 patients in the U.S. under protocol ORA-D-013-1); and (ii) one third shall vest upon completion of enrollmentsale of the second oral insulin Phase 3 clinical trial (450 patients in the U.S., E.U. and Israel under protocol ORA-D-013-2) by June 30, 2023. The total fair value of these PSUs on the date of grant was $1,486, using the quoted closing market share price of $8.47 on the Nasdaq Capital Market on the date of grant.Purchased Securities shall have occurred.

 


 

 

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the related notes included elsewhere herein and in our consolidated financial statements, accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report and our Transition Report on Form 10-Q for the transition period from September 1, 2021 to December 31, 2021.Report.

 

Overview of Operations

 

We are a pharmaceutical company currently engaged in the research and development of innovative pharmaceutical solutions with a technology platform that delivers protein orally instead of by injection. Our first drug candidate is an oral insulin capsule to be usedallows for the treatmentoral delivery of type 2 diabetes. We utilize clinical research organizations, or CROs, to conduct our clinical trials.therapeutic proteins.

 

Through our research and development efforts, weWe have successfully developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active biological insulin or other proteins, such as Glucagon-like peptide-1, or GLP-1, leptin, and others.proteins. The excipients in the formulation are not intended to modify the proteins chemically or biologically, and the dosage form is designed to be safe to ingest. We plan to continue to conduct clinical trials to show the effectiveness of our technology.

 

On January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial did not meet its primary or secondary endpoints. As a result, we terminated this trial and a parallel Phase 3, ORA-D-013-2 clinical trial. We recently completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters, such as body mass index (BMI), baseline HbA1c, age, gender and body weight, responded well to oral insulin. We are currently considering if there is a path forward for our oral insulin candidate, based on this analysis. We are additionally examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders.

Stock Purchase Agreement

On August 7, 2023, the Company entered into a Stock Purchase Agreement, as amended by a First Amendment to Stock Purchase Agreement, dated as of August 9, 2023 (together, the Stock Purchase Agreement), with Sorrento, to acquire certain securities, or the Transaction, of Scilex Holding Company, or Scilex owned by Sorrento, including (A) 59,726,737 shares of common stock of Scilex; including an option to purchase up to 2,259,058 additional shares; (B) 29,057,096 shares of Series A preferred stock of Scilex; and (C) public warrants exercisable for 1,386,617 shares of common stock of Scilex, and private placement warrants exercisable for 3,104,000 shares of common stock of Scilex, or collectively, the Purchased Securities, for a total purchase price of $105,000,000. The consideration for the Transaction consists of a credit bid by the Company on a dollar-for-dollar basis of the full amount of outstanding obligations as of the closing date under the DIP Facility (as defined below), with the remaining balance of the purchase price to be paid in cash at closing. Sorrento and its wholly-owned subsidiary or collectively, the Debtors, are debtors in Chapter 11 bankruptcy proceedings pending before the United States Bankruptcy Court for the Southern District of Texas or the Bankruptcy Court, which commenced on February 13, 2023. Scilex is a company focused on acquiring, developing and commercializing non-opioid pain management products for the treatment of acute and chronic pain.

The Transaction is being conducted through a Bankruptcy Court-supervised process and is subject to the receipt of higher or otherwise better offers from competing bidders at an auction, approval of the sale by the Bankruptcy Court, and the satisfaction of certain closing conditions. Accordingly, the Company can give no assurances of the outcome of the Transaction and whether the Company will be successful in acquiring the Purchased Securities. See note 9 – Subsequent Events for additional information regarding the Transaction.

DIP Loan Agreement

On August 9, 2023, the Company entered into the Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement by and among the Debtors, the Company and the guarantors from time to time party thereto, or the DIP Loan Agreement, pursuant to which the Company will provide to the Debtors a non-amortizing super-priority senior secured debtor-in-possession term loan financing facility in an aggregate principal amount of $100,000,000, the DIP Facility. The DIP Facility proceeds will be used (i) to refinance and pay in full the approximately $82,000,000 of obligations outstanding under the Debtors’ current DIP facility, the Existing DIP Facility, (ii) for working capital and other general corporate purposes of the Debtors (subject to an agreed budget), and (iii) the payment of certain statutory fees and bankruptcy-related expenses and fees.

The DIP Facility bears interest at a per annum rate equal to 15%, payable in cash (and a default interest rate that shall accrue at an additional per annum rate of 3% plus the non-default interest) and other fees and charges. The DIP Facility is secured by first-priority liens on substantially all of the Debtors’ assets, subject to certain enumerated exceptions.


The DIP Facility matures on the earliest of: (i) October 15, 2023; (ii) the effective date of a plan of reorganization in the Debtors Chapter 11 case; (iii) the sale or other disposition of all or substantially all of the collateral; (iv) the date of the acceleration of the obligations in accordance with the DIP Loan Agreement; (v) the dismissal of the Chapter 11 cases or conversion into Chapter 7 cases; (vi) the date of termination of the Stock Purchase Agreement or other related definitive documentation as a result of a material breach by the Debtors; and (vii) the date on which a trigger event in Scilex’s governance documents has occurred. See Note 9 – Subsequent Events for additional information regarding the DIP Loan Agreement.

Oral Insulin

 

Our proprietary flagship product, an orally ingestible insulin capsule, or ORMD-0801, allows insulin to travel from the gastrointestinal tract via the portal vein to the liver, revolutionizing the manner in which insulin is delivered. This novel mode of delivery closely mimics the human body’s delivery of endogenous insulin.

FDA Guidance: In August 2017, the U.S. Food and Drug Administration, or FDA, provided guidance that the regulatory pathway for the submission of candidates like ORMD-0801 would be a BLA. If approved, the BLA pathway would grant us 12 years of marketing exclusivity for ORMD-0801, from the approval date, and an additional six months of exclusivity may be granted to us if the product also receives approval for use in pediatric patients.

Phase 2b Trial: In February 2020, we announced positive topline data from the second and final cohort of our Phase 2b trial. Treatment with ORMD-0801 at all doses demonstrated an excellent safety profile, with no serious drug-related adverse events and with no increased frequency of hypoglycemic episodes or weight gain compared to placebo.

Phase 3 TrialType 2 Diabetes: We are currently conducting twoconducted the ORA-D-013-1 Phase 3 trials concurrently intrial on patients with type 2 diabetes, or T2D. These trials involve about 1,125 patients to provide evidence of ORMD-0801’s safety and efficacy in T2D, patients over a treatment period of 6 to 12 months. A geographically diverse patient population is being recruited from multiple sites throughout the United States, Europe, United Kingdom and Israel. Our Phase 3 trial is composed of two protocols:

ORA-D-013-1: This trial is currently being conducted on T2D patients with inadequate glycaemic control who are currentlywere on two or three oral glucose-lowering agents. This U.S. trial was designed to recruit 675 patients from over 90 clinical sites located throughout the U.S. Patients were randomized 1:1:1 in this double-dummy trial into cohorts of: 8 mg ORMD-0801 once-daily at night and placebo 45 minutes before breakfast; 8 mg ORMD-0801 twice-daily, at night and 45 minutes before breakfast; and placebo twice-daily, at night and 45 minutes before breakfast. The primary endpoint of the trial iswas to evaluate the efficacy of our oral insulin capsule, ORMD-0801, compared to placebo in improving glycaemic control as assessed by HbA1c, with a secondary efficacy endpoint of assessing the change from baseline in fasting plasma glucose at 26 weeks. We initiated thisOn January 11, 2023, we announced that the ORA-D-013-1 Phase 3 trial in December 2020. In May 2022did not meet its primary and secondary endpoints. Following the results of the ORA-D-013-1 Phase 3 trial, we completed enrollment, with 710 patients enrolled.


also terminated the ORA-D-013-2: This Phase 3 trial, includesa second Phase 3 trial that included T2D patients with inadequate glycaemic control who arewere attempting to manage their condition with either diet alone or with diet and metformin. A total of 450 patients are being recruited through 36 sites in the United States and 25 sites in Western Europe and Israel. Patients are being randomized 1:1 into two cohorts dosed with: 8 mg ORMD-0801 at night; and placebo at night. The primary endpoint is to evaluate the efficacy of ORMD-0801 compared to placebo in improving glycaemic control as assessed by HbA1c over a 26-week treatment period, with a secondary efficacy endpoint of assessing the change from baseline in fasting plasma glucose at 26 weeks. We initiated this trial in the United States in March 2021. As of July 2022, 50%recently completed an analysis of the 450data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients plannedwith pooled specific parameters, such as body mass index (BMI), baseline HbA1c, age, gender and body weight, responded well to oral insulin. These subsets exhibited an over 1% placebo adjusted, statistically significant, reduction in HbA1c. We are currently considering if there is a path forward for our oral insulin candidate, based on this trial were enrolled and randomized.analysis.

 

We expectOn August 2, 2023, Oramed signed a non-binding term sheet with HTIT to receiveestablish a joint venture, or the efficacy data fromJV, based on Oramed’s oral drug delivery technology. The proposed JV would focus on the trials after patients have completed the first 6 monthsdevelopment and worldwide commercialization of treatment. Safety will be further monitored as patients will be exposedinnovative products based on Oramed’s oral insulin and POD™ (Protein Oral Delivery) pipeline and HTIT’s manufacturing capabilities and technologies. The JV is subject to the execution of a binding definitive agreement.

The JV would be responsible for developing, marketing and commercializing drug over an additional 6 months (total 12 months). Topline efficacy dataproducts globally, focusing on Oramed’s oral insulin and POD™ technology, as well as other assets in the Oramed pipeline. The parties intend for the ORA-D-013-1JV to initiate a Phase 3 oral insulin trial is expected in January 2023 and we anticipate filing a BLA with the FDA in 2024. A BLA would grant us at least 12 years of marketing exclusivity from the date of approval in the United States.

 

HTIT License. On November 30, 2015, we, the SubsidiaryOramed and HTIT entered into a Technology License Agreement, orwould initially hold equal shares in the TLA, and on December 21, 2015, these parties entered into an Amended and Restated Technology License Agreement that was further amended byJV, with each owning 50% of the parties on June 3, 2016 and July 24, 2016.

On August 21, 2020, we received a letterequity. The Board of Directors would initially consist of equal representation from HTIT disputing certain pending payment obligationsand Oramed, ensuring that both parties have an equal say in decision-making. As part of the JV, HTIT under the TLA. We wholly dispute said claims and we are in discussions with HTIT inwill make an attempt to reach a mutually agreeable solution. For further information, see note 2.b. to our interim condensed consolidated financial statements.initial investment of $60 million, while Oramed will invest $10 million.

 

NASH trial: In September 2020, we initiated an open label clinical trial of our oral insulin capsule, ORMD-0801, for the treatment of non-alcoholic steatohepatitis, or NASH, in type 2 diabetes. This six patient multi-center trial is comprised of three clinical sites in Belgium. The trial will measure change and percent change in MRI-PDFF from baseline to week 12. Data from this trial is expected in the second half of 2022.

NASH trial: : In December 2020, we initiated a double blind, placebo controlled clinical trial of our oral insulin capsule, ORMD-0801 for the treatment of non-alcoholic steatohepatitis, or NASH, in type 2 diabetes. This 30 patient multi-center trial is comprised of five clinical sites: three in the United States and two in Israel. The trial will measure change and percent change in MRI-PDFF from baseline to week 12. In MarchT2D. On September 13, 2022, we completed patient enrollment. Datareported positive top line results from this trial, is expecteddemonstrating that ORMD-0801 was safe and well tolerated at 8 mg twice daily dosing, meeting the primary endpoint of no difference in adverse events for ORMD-0801 compared to placebo. The trial also evaluated the third quartereffectiveness of 2022.

Oral Glucagon-Like Peptide-1

Oral GLP-1, is an incretin hormone, which stimulatesORMD-0801 in reducing liver fat content over the secretion12-week treatment period by observing several independent measures. All the measurements showed a consistent clinically meaningful trend in favor of insulin from the pancreas. In addition toORMD-0801. We are currently evaluating our flagship product, thepath forward for ORMD-0801 insulin capsule, we use our technology for an orally ingestible GLP-1 capsule, or ORMD-0901.

In June 2021, we initiated a trial in T2D patients in the United States under an Investigational New Drug application filed with the FDA. Data from this trial is expected in the second half of 2022.NASH.

 

Oral Vaccine

 

On March 18, 2021, we entered intoformed Oravax, a license agreement, or the Oravax License Agreement, with Oravax, our 63% owned joint venture pursuant to which we granted to Oravax an exclusive, worldwide license of our rights in certain patents and related intellectual property relating to our proprietary oral delivery technology to further develop, manufacture and commercialize oral vaccines for COVID-19 and other novel coronaviruses based on Premas Biotech Pvt. Ltd.’s or Premas’s, proprietary vaccine technology involving a triple antigen virus like particle, or theparticle.

In December 2021, Oravax product,commenced a Phase 1 clinical trial, which was previously owned by Cystron Biotech LLC, and later acquired by Akers Biosciences Inc., or Akers. Effective January 1,divided into two cohorts each comprised of 12 participants. In October 2022, Oravax transferred its rightsreported positive preliminary Phase 1 data for Cohort A of this trial, meeting primary and obligations undersecondary endpoints of safety and immunogenicity. These results included significant antibody response (2-6 fold over baseline) as measured by multiple markers of immune response to VLP vaccine antigens observed in the Oravax License Agreement to its wholly-owned subsidiary, Oravax Medical Ltd. For further details regardingmajority of the Oravax License Agreement, see note 8 to our interim condensed consolidated financial statements.patients dosed, and no safety issues were observed, including mild symptoms. Cohort B completed dosing on January 5, 2023. Cohort B measured Immunoglobulin G, or IGG against the spike (S) protein, showing positive IGG in approximately 55% of the patients dosed.

 


 

In October 2021, Oravax’s oral COVID-19 vaccine received clearance from the South African Health Products Regulatory Authority to initiate a Phase 1 trial and subsequently to commence patient enrollment in a first in human, Phase 1 clinical trial, for its oral COVID-19 vaccine and on December 14, 2021, Oravax screened and enrolled the first participant in a Phase 1 clinical trial of its oral virus-like particle (VLP) COVID-19 vaccine in Johannesburg, South Africa. The trial protocol calls for two cohorts each comprised of 12 participants. The South African Health Products Regulatory Authority (SAPHRA) requires a 42-day safety waiting period once the last patient in Cohort A completes enrollment and dosing, after which Cohort B may commence enrollment and dosing. Due to several factors, including the fact that many volunteers did not qualify during screening due to prior asymptomatic COVID-19 infection and other conditions, the rate of enrollment was slower than anticipated. We added an additional clinical site and we have since completed enrollment and dosing of Cohort A with no safety issues reported thus far and anticipate sharing top-line data in the third quarter of 2022. We expect Cohort B to complete dosing in the third quarter of 2022 as well, with data expected in the fourth quarter of 2022.

On December 29, 2021, Oravax signed a cooperation and purchase agreement for an initial pre-purchase of 10 million doses of oral COVID-19 vaccines with Tan Thanh Holdings to commercialize the vaccine in Southeast Asia.

COVID-19 Impact

We do not expect any material impact on our development timeline and our liquidity due to the worldwide spread of COVID-19. However, we have experienced approximately six months of delays in clinical trials due to slow-downs of recruitment for trials generally. We may experience further delays if the pandemic worsens and continues for an extended period of time and we are continuing to assess the effect on our operations by monitoring the spread of COVID-19 and the actions implemented by governments to combat the virus throughout the world.

 

Results of Operations

 

Comparison of six and three month periods ended June 30, 20222023 and June 30, 20212022

 

The following table summarizes certain statements of operations data of the Company for the six and three month periods ended June 30, 20222023 and June 30, 20212022 (in thousands of dollars except share and per share data):

 

 Six months ended  Three months ended  Six months ended Three months ended 
 June 30,
2022
  June 30,
2021
  June 30,
2022
  June 30,
2021
  June 30,
2023
 June 30,
2022
 June 30,
2023
 June 30,
2022
 
Revenues $1,340  $1,340  $674  $674  $1,340  $1,340  $674  $674 
Cost of revenues  -   -   -   -   -   -   -   - 
Research and development expenses  15,015   9,366   9,179   3,198   6,248   15,015   1,821   9,179 
Sales and marketing expenses  970   -   380   -   376   970   192   380 
General and administrative expenses  8,024   3,028   2,532   1,926   3,715   8,024   2,452   2,532 
Financial income, net  894   1,082   350   541   4,075   894   2,478   350 
Taxes on income  -   -   -   - 
Net loss for the period $21,775  $9,972  $11,067  $3,909  $4,924  $21,775  $1,313  $11,067 
Basic and diluted loss per share of common stock $0.54  $0.32  $0.27  $0.12  $0.11  $0.54  $0.03  $0.27 
Weighted average shares of common stock outstanding used in computing basic and diluted loss per share of common stock  38,732,636   29,347,635   38,795,318   30,716,982   40,144,725   38,732,636   40,225,594   38,795,318 

 

Revenues

 

Revenues consist of proceeds related to the HTIT License Agreement that are recognized on a cumulative basis when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, through the expected product submission date by HTIT of June 2023, using the input method.

 

Revenues were $1,340,000 for each of the six month periods ended June 30, 20222023 and June 30, 2021.2022.

 

Revenues were $674,000 for each of the three month periods ended June 30, 20222023 and June 30, 2021.2022.


 

Cost of Revenues

 

Cost of revenues consists of royalties related to the HTIT License Agreement that will be paid over the term of the HTIT License Agreement in accordance with revenue recognition accounting and the Israeli Law for the Encouragement of Industrial Research, Development and Technological Innovation, 1984, as amended, including any regulations or investment tracks promulgated thereunder.

 

There was no cost of revenues for the three and six month periods ended June 30, 20222023 and June 30, 2021.2022.


 

Research and Development Expenses

 

Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost of salaries, employee benefits, costs of materials, supplies, the cost of services provided by outside contractors, including services related to our clinical trials, clinical trial expenses, the full cost of manufacturing drugs for use in research and preclinical development. All costs associated with research and development are expensed as incurred.

 

Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. We outsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-party service providers to assist us with the execution of our clinical trials.

 

Clinical activities, which relate principally to clinical sites and other administrative functions to manage our clinical trials, are performed primarily by CROs. CROs typically perform most of the start-up activities for our trials, including document preparation, site identification, screening and preparation, pre-trial visits, training and program management.

 

Clinical trial and pre-clinical trial expenses include regulatory and scientific consultants’ compensation and fees, research expenses, purchase of materials, cost of capsule manufacturing of the oral insulin and exenatide capsules, payments for patient recruitment and treatment, as well as salaries and related expenses of research and development staff.

 

Research and development expenses for the six month period ended June 30, 2022 increased2023 decreased by 60%58% to $15,015,000,$6,248,000, compared to $9,366,000$15,015,000 for the six month period ended June 30, 2021.2022. The increasedecrease was mainly due to higherlower expenses related to ourthe Phase 3 clinical trials.trials that were terminated. Stock-based compensation expenses for the six month period ended June 30, 20222023 were $1,136,000,$415,000, compared to $674,000$1,136,000 during the six month period ended June 30, 2021.2022. This increasedecrease was mainly due to performance equity awards granted to employees inthat expired because they did not meet their performance conditions during the first quarter of 2022.period ended June 30, 2023.

 

Research and development expenses for the three month period ended June 30, 2022 increased2023 decreased by 187%80% to $9,179,000,$1,821,000, compared to $3,198,000$9,179,000 for the three month period ended June 30, 2021.2022. The increasedecrease was mainly due higherto lower expenses related to ourthe Phase 3 clinical trials.trials that were terminated. Stock-based compensation expenses for the three month period ended June 30, 20222023 were $574,000,$398,000, compared to $403,000$574,000 during the three month period ended June 30, 2021.2022. This increasedecrease was mainly due to equity awards granted to employeesthat vested in the first quartersecond half of 2022.

Following the results of the ORA-D-013-1 Phase 3 trial, which did not meet its primary and secondary endpoints, we terminated both ORA-D-013-1 and ORA-D-013-2 Phase 3 clinical trials. We recently completed an analysis of the data from the ORA-D-013-1 Phase 3 trial and found that subpopulations of patients with pooled specific parameters responded well to oral insulin. We are currently considering if there is a path forward for our oral insulin candidate, based on this analysis. We are also examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders.

 

Government grants

 

In the six month periods ended June 30, 20222023 and June 30, 2021,2022, we did not recognize any research and development grants. As of June 30, 2022,2023, we had incurred liabilities to pay royalties to the Israel Innovation Authority of the Israeli Ministry of Economy and Industry of $169,000.$96,000.

 

Sales and Marketing Expenses

 

Sales and marketing expenses include the salaries and related expenses of our commercial functions, consulting costsexpenses and other general costs. We anticipate that our commercial activities will increase in the future towards and following potential approval of our planned BLA submission for ORMD-0801.

Sales and marketing expenses for the six month period ended June 30, 2022 were $970,000, compared to no expenses for the six month period ended June 30, 2021. The increase was primarily due to stock-based compensation expenses, salary related expenses and consulting expenses, mainly resulting from hiring our Chief Commercial Officer. Stock-based compensation costs for the six month period ended June 30, 2022 were $584,000, compared to no stock-based compensation expenses during the six month period ended June 30, 2021. This increase was mainly due to equity awards granted to an employee during fiscal year 2021 and in the first quarter of 2022.expenses.

 


 

 

Sales and marketing expenses for the threesix month period ended June 30, 2022 were $380,000,2023 decreased by 61% to $376,000, compared to no$970,000 for the six month period ended June 30, 2022. The decrease was primarily due to lower stock-based compensation expenses and consulting expenses. Stock-based compensation expenses for the six month period ended June 30, 2023 were $223,000, compared to $584,000 for the six month period ended June 30, 2022. This decrease was mainly due to performance equity awards that expired because they did not meet their performance conditions during the period ended June 30, 2023.

Sales and marketing expenses for the three month period ended June 30, 2021. The increase was primarily due2023 decreased by 49% to stock-based compensation expenses, salary related expenses and consulting expenses, mainly resulting from hiring our Chief Commercial Officer. Stock-based compensation costs$192,000, compared to $380,000 for the three month period ended June 30, 2022 were $220,000, compared2022. The decrease was primarily due to nolower stock-based compensation expenses. Stock-based compensation expenses duringfor the three month period ended June 30, 2021.2023 were $136,000, compared to $220,000 for the three month period ended June 30, 2022. This increasedecrease was mainly due to performance equity awards granted to an employeethat expired because they did not meet their performance conditions during fiscal year 2021 and in the first quarter of 2022.period ended June 30, 2023.

 

General and Administrative Expenses

 

General and administrative expenses include the salaries and related expenses of our management, consulting costs,expenses, legal and professional fees, travel expenses, business development costs,expenses, insurance expenses and other general costs.expenses.

 

General and administrative expenses for the six month period ended June 30, 2022 increased2023 decreased by 165%54% to $8,024,000,$3,715,000 compared to $3,028,000$8,024,000 for the six month period ended June 30, 2021. The increase2022. This decrease was mainly due to increases inlower stock-based compensation expenses legal expenses and public relations and investor relationslegal expenses. Stock-based compensation costsexpenses for the six month period ended June 30, 20222023 were $4,190,000,$1,355,000, compared to $944,000$4,190,000 for the six month period ended June 30, 2021.2022. This increasedecrease was mainly due to equity awards that were granted to directors and officersvested in the first quarter of 2022.2022 and to performance equity awards that expired because they did not meet their performance conditions during the period ended June 30, 2023.

 

General and administrative expenses for the three month period ended June 30, 2022 increased2023 decreased by 31%3% to $2,532,000$2,452,000 compared to $1,926,000$2,532,000 for the three month period ended June 30, 2021. The increase2022. This decrease was mainly due to decreases in legal expenses, public relations and investor relations expenses and insurance expenses partially offset by increases in stock-based compensation expenses salaries and related expenses and public relations and investor relationsconsulting expenses. Stock-based compensation costsexpenses for the three month period ended June 30, 20222023 were $1,087,000,$1,285,000, compared to $568,000$1,087,000 for the three month period ended June 30, 2021.2022. This increase was mainly due to equity awards granted to directors and officers in the firstsecond quarter of 2022.2023.

 

Financial Income, Netnet

 

Net financial income wasincreased by 356% to $4,075,000 for the six month period ended June 30, 2023, compared to $894,000 for the six month period ended June 30, 2022, compared to $1,082,000 for the six month period ended June 30, 2021.2022. The decreaseincrease was mainly due to lossinterest from ashort-term bank deposits and revaluation of the shares we hold in Entera and D.N.A., partially offset by interest from short and long-term bank deposits.non-marketable equity securities.

 

Net financial income wasincreased by 608% to $2,478,000 for the three month period ended June 30, 2023, compared to $350,000 for the three month period ended June 30, 2022, compared to $541,000 for the three month period ended June 30, 2021.2022. The decreaseincrease was mainly due to lossinterest from ashort-term bank deposits and revaluation of the shares we hold in Entera and D.N.A., partially offset by interest from short and long-term bank deposits.non-marketable equity securities.

 

Basic and Diluted Loss Per Share of Common Stock

 

Basic and diluted loss per share of common stock for the six month period ended June 30, 2022 increased2023 decreased by 69%80% to $0.54,$0.11, compared to $0.32$0.54 for the six month period ended June 30, 2021.2022. The increasedecrease in loss per share was mainly due to the higherlower net loss together with a higher number of weighted average shares of common stockresulting from the changes set forth above in the six month period ended June 30, 20222023 compared to the six month period ended June 30, 2021.2022.

 

Basic and diluted loss per share of common stock for the three month period ended June 30, 2022 increased2023 decreased by 125%89% to $0.27,$0.03, compared to $0.12$0.27 for the three month period ended June 30, 2021.2022. The increasedecrease in loss per share was mainly due to the higherlower net loss together with a higher number of weighted average shares of common stockresulting from the changes set forth above in the three month period ended June 30, 20222023 compared to the three month period ended June 30, 2021.2022.

 

Weighted Average Shares of Common Stock Outstanding

 

Weighted average shares of common stock outstanding for the six month period ended June 30, 20222023 were 38,732,636,40,144,725, compared to 29,347,63538,732,636 for the six month period ended June 30, 2021.2022. The increase was mainly due to shares issued in connection with our controlled equity offering and registered direct offering.

 

Weighted average shares of common stock outstanding for the three month period ended June 30, 20222023 were 38,795,318,40,225,594, compared to 30,716,98238,795,318 for the three month period ended June 30, 2021.2022. The increase was mainly due to shares issued in connection with our controlled equity offering and registered direct offering.

 


 

 

Liquidity and Capital Resources

 

From inception through June 30, 2022,2023, we have incurred losses in an aggregate amount of $147,478,000.$167,670,000. During that period and through June 30, 2022,2023, we have financed our operations through several private placements of our common stock, as well as public offerings of our common stock, raising a total of $244,393,000,$255,376,000, net of transaction costs. During that period, we also received cash consideration of $27,938,000$28,001,000 from the exercise of warrants and options. We expect to seek to obtain additional financing through similar sources in the future, as needed. As of June 30, 2022,2023, we had $29,892,000$6,767,000 of available cash, $122,604,000$142,491,000 of short-term and long-term bank deposits and $7,309,000$943,000 of marketable securities.

 

From inception through June 30, 2022,2023, we have not generated significant revenues from our operations. Management continues to evaluate various financing alternatives for funding new strategic activities, future research and development activities and general and administrative expenses through fundraising in the public or private equity markets. Although there is no assurance that we will be successful with those initiatives, management believes that it will be able to secure the necessary financing as a result of future third party investments. Based on our current cash resources and commitments, we believe we will be able to maintain our current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that we will not need additional funds prior to such time.

 

If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12 months. Successful completion of our development programs and our transition to normal operations is dependent upon obtaining necessary regulatory approvals from the FDA prior to selling our products within the United States, obtaining foreign regulatory approvals to sell our products internationally, or entering into licensing agreements with third parties. There can be no assurance that we will receive regulatory approval of any of our product candidates, and a substantial amount of time may pass before we achieve a level of revenues adequate to support our operations, if at all. We also expect to incur substantial expenditures in connection with the regulatory approval process for each of our product candidates during their respective developmental periods. Obtaining marketing approval will be directly dependent on our ability to implement the necessary regulatory steps required to obtain marketing approval in the United States and in other countries. We may also need additional funds to realize the decisions made as part of our strategic review process. We cannot predict the outcome of these activities.

 

On August 9, 2023, we entered into the DIP Loan Agreement with the Debtors in the principal amount of $100,000,000. This amount will be used by the Company as a credit bid for the consideration for the Purchased Securities, with an additional $5,000,000 in cash to be paid by the Company at closing. This transaction will significantly reduce our cash position. However, we believe we will be able to maintain our current planned development activities and the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that we will not need additional funds prior to such time. See Note 9 – Subsequent Events for additional information regarding the DIP Loan Agreement.

On August 8, 2023, we borrowed an aggregate of $99,550,000 pursuant to loan agreements from the Israel Discount Bank, LTD (the “Short-Term Borrowings”). The Short-Term Borrowings mature on dates ranging from August 11, 2023 to May 24, 2024, bear interest ranging from 6.66% to 7.38%, are secured by certificates of deposits issued by the Israel Discount Bank, LTD having an aggregate face amount of $99,550,000. The net proceeds of the Short-Term Borrowings were used to fund the DIP Loan Agreement.

As of June 30, 2023, our total current assets were $150,970,000 and our total current liabilities were $1,067,000. On June 30, 2023, we had a working capital surplus of $149,903,000 and an accumulated loss of $167,670,000. As of December 31, 2022, our total current assets were $134,870,000$157,109,000 and our total current liabilities were $6,418,000.$5,746,000. On June 30,December 31, 2022, we had a working capital surplus of $128,452,000$151,363,000 and an accumulated loss of $147,478,000. As of December 31, 2021, our total current assets were $147,937,000 and our total current liabilities were $7,368,000. On December 31, 2021, we had a working capital surplus of $140,569,000 and an accumulated loss of $126,520,000.$163,081,000. The decrease in working capital from December 31, 20212022 to June 30, 20222023 was mainly due to a decrease in short-term deposits.cash and cash equivalents, marketable securities, partially offset by an increase in short term deposits and accounts payable and accrued expenses.

 

During the six month period ended June 30, 2022,2023, cash and cash equivalents were $29,892,000, compareddecreased to $27,456,000$6,767,000, from $40,464,000 as of December 31, 2021.2022. The decrease was mainly due to the reasons described below.

 

Operating activities used cash of $17,615,000$8,183,000 in the six month period ended June 30, 2022,2023, compared to $8,350,000$17,615,000 used in the six month period ended June 30, 2021.2022. Cash used in operating activities primarily consisted of research and development, sales and marketing and general and administrative expenses and changes in accounts payablestock-based compensation expenses, interest on deposits, account payables and accrued expenses and stock-based compensation expenses.

 

Investing activities providedused cash of $17,722,000$27,913,000 in the six month period ended June 30, 2022,2023, compared to cash provided fromby investing activities of $8,794,000$17,222,000 in the six month period ended June 30, 2021.2022. Cash providedused by investing activities in the six month period ended June 30, 20222023 consisted primarily of the proceedspurchase of short-term deposits, and held to maturity securities, partially offset by the purchase of short-term deposits. Cash provided byproceeds from short term investing activities in the six month period ended June 30, 2021 consisted primarily of the proceeds of short-term deposits, held to maturity securities and mutual funds, partially offset by the purchase of bonds held to maturity.activities.

 


 

 

Financing activities provided cash of $2,291,000$2,430,000 in the six month period ended June 30, 2022,2023, compared to $57,552,000$2,291,000 provided in the six month period ended June 30, 2021.2023. Cash provided by financing activities consisted primarily of proceeds from the issuance of our common stock and from the exercise of warrants and options.stock.

 

On September 1, 2021, we entered into a controlled equity offering agreement, or the Cantor Equity Distribution Agreement, with Cantor Fitzgerald & Co., as agent, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $100,000,000, through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to our effective shelf registration statement on Form S-3 including a prospectus dated July 26, 2021 and prospectus supplement dated September 1, 2021. We paid the sales agent a cash commission of 3.0% of the gross proceeds of the sale of any shares sold through the sales agent under the Cantor Equity Sales Agreement. As of August 10, 2022, 1,061,363June 30, 2023, 1,971,447 shares were issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $17,233,000.

On November 3, 2021, we entered into a securities purchase agreement with several institutional and accredited investors, or the Purchasers, pursuant to which we agreed to sell, in a registered direct offering, or the Offering, an aggregate of 2,000,000 shares of our common stock to the Purchasers for an offering price of $25.00 per share. The closing of the sale of the shares occurred on November 5, 2021. The net proceeds to us from the Offering, after deducting the placement agent’s fees and expenses and the Company’s Offering expenses, were approximately $46,375,000. $26,253,000.

 

Critical accounting policies and estimates

 

Our critical accounting policies are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report.

 

Planned Expenditures

 

We invest heavily in research and development, and we expect that in the upcoming years our research and development expenses will continue to be our major operating expense.

 

Following the results of the Phase 3 trials for our oral insulin capsule candidate, ORMD-0801 and the current strategic review initiated by the Company, our obligations may change significantly.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

There has been no significant change in our exposure to market risk during the quarter ended June 30, 2022.2023. For a discussion of our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in our Annual Report.

 

ITEM 4 - CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022.2023. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 20222023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


 

 

PART II – OTHER INFORMATION

 

Item 1A. Risk Factors.

An investment in our securities involves a high degree of risk. You should consider carefully the following information about these risks, together with the other risks contained under the heading “Item 1A. Risk Factors” in our Annual Report before making an investment decision. Our business, prospects, financial condition and results of operations may be materially and adversely affected as a result of any of the following risks. The value of our securities could decline as a result of any of these risks. You could lose all or part of your investment in our securities. Some of the statements in “Item 1A. Risk Factors” are forward-looking statements. The following risk factors are not the only risk factors facing the Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business, prospects, financial condition and results of operations.

Risks Related to Our Business

If we fail to establish a joint venture with HTIT, if such joint venture is not successful or if we fail to realize the benefits we anticipate from such joint venture, we may not be able to capitalize on the full market potential of our drug products and technology.

On August 2, 2023, we signed a non-binding term sheet with HTIT to establish a joint venture, or the JV, based on Oramed’s oral drug delivery technology. The JV is subject to the execution of a binding definitive agreement and there can be no assurances, that we will enter into the binding and definitive agreements with HTIT in a particular time period, or at all, or on terms similar to those set forth in the non-binding term sheet, or that if such definitive agreements are entered into, that the JV will receive the necessary regulatory approvals for the Phase 3 oral insulin trial in the United States or that our drug products and our technology will be developed and commercialized successfully. In addition, the JV will subject us to a number of risks including risks relating to the lack of full control of the JV, potential disagreements with HTIT about how to manage the JV that may result in the delay or termination of the commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources, conflicting interests of the JV, and the JV and its business not being profitable.

While we believe that our board representation, voting rights and other contractual rights with respect to the JV will serve to mitigate some of these risks, we may have disagreements with the other directors and HTIT that could impair our ability to influence the JV to act in a manner that we believe is in the best interests of our Company.

We may not be able to close the Stock Purchase Agreement with Sorrento and complete the Transaction, realize the anticipated benefits of the Transaction, or recover the proceeds and/or collateral under the DIP Loan Agreement, which may impact our operations and financial condition.

On August 7, 2023, we entered into the Stock Purchase Agreement with Sorrento to acquire the Purchased Securities for a total purchase price of $105,000,000. In addition, on August 9, 2023, we entered into the DIP Loan Agreement, pursuant to which the Company will provide to Sorrento and its wholly-owned subsidiary a non-amortizing super-priority senior secured debtor-in-possession term loan financing facility in an aggregate principal amount of $100,000,000. Sorrento and its wholly-owned subsidiary are debtors in Chapter 11 bankruptcy proceedings pending before the Bankruptcy Court and the Transaction is being conducted through a Bankruptcy Court-supervised process and is subject to the receipt of higher or otherwise better offers from competing bidders at an auction and the approval of the sale by the Bankruptcy Court. The Stock Purchase Agreement includes certain other closing conditions, including the receipt of governmental approvals, the approval of an amendment to Scilex’s governance documents, the grant of an irrevocable proxy and call option with respect to the remaining share of Scilex Series A preferred stock retained by Sorrento, no occurrence of a trigger event in Scilex’s governance documents having occurred, entry by the Company and Scilex into a new registration rights agreement, and no occurrence of an event of default under the DIP Facility. The Stock Purchase Agreement also provides for certain termination rights including, but not limited to, by mutual written consent of the parties, and by either party in the event that the Transaction is not consummated by September 30, 2023, or pursuant to any legal prohibition or injunction.

There can be no assurances that Sorrento won’t receive higher or otherwise better offers from competing bidders, that the Bankruptcy Court will approve the Transaction, that the Company and Sorrento will be able to satisfy the other closing conditions in a timely matter or at all and acquire the Purchased Securities, or regarding the occurrence of any event, change or other circumstances that could give rise to the termination of the Stock Purchase Agreement by either the Company or Sorrento. There can be also no assurances, even if the Transaction is consummated, that we will be able to realize the anticipated benefits of the Transaction when expected or at all, and to recover the proceeds and/or collateral under the DIP Loan Agreement. The Transaction may also be more expensive to complete than anticipated by us and may subject us to potential litigation. This, in turn, may adversely affect our operations and financial condition.


ITEM 6 - EXHIBITS

 

Number Exhibit
2.1+Stock Purchase Agreement dated August 7, 2023, by and between Oramed Pharmaceuticals Inc. and Sorrento Therapeutics, Inc. (incorporated by reference from our current report on Form 8-K filed August 9, 2023).
   
2.2*First Amendment to Stock Purchase Agreement dated August 9, 2023, by and between Oramed Pharmaceuticals Inc. and Sorrento Therapeutics, Inc.
10.110.1* Amendment toRepresentative Form of Indemnification Agreements between Oramed Pharmaceuticals Inc. Amended and Restated 2019 Stock Incentive Planeach of our directors and officers.
10.2+Senior Secured, Super-Priority Debtor-In-Possession Loan and Security Agreement dated August 9, 2023, by and between Oramed Pharmaceuticals Inc., Sorrento Therapeutics, Inc. and Scintilla Pharmaceuticals, Inc. (incorporated by reference from our definitive proxy statementcurrent report on Schedule 14AForm 8-K filed June 2, 2022)August 9, 2023).
   
31.1* Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
   
31.2* Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
   
32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
   
32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
   
101.1* The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 20222023 formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Loss, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements.
   
104.1* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

*Filed herewith

 

**Furnished herewith

 

+Certain exhibits and similar attachments to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit or other attachment will be furnished supplementally to the SEC upon request.


 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 ORAMED PHARMACEUTICALS INC.
   
Date: August 10, 20222023By: /s/ Nadav Kidron
  Nadav Kidron
  President and Chief Executive Officer
   
Date: August 10, 20222023By:/s/ David Silberman
  David Silberman
  Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

 

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