Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Nov. 30, 2020 | Jan. 14, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | ORAMED PHARMACEUTICALS INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --08-31 | |
Entity Common Stock, Shares Outstanding | 26,661,004 | |
Amendment Flag | false | |
Entity Central Index Key | 0001176309 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Nov. 30, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-50298 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 14,931 | $ 19,296 |
Short-term deposits | 10,592 | 11,060 |
Marketable securities | 8,825 | 9,544 |
Prepaid expenses and other current assets | 1,676 | 611 |
Total current assets | 36,024 | 40,511 |
LONG-TERM ASSETS: | ||
Long-term deposits | 2 | 2 |
Marketable securities | 3,878 | 3,928 |
Amounts funded in respect of employee rights upon retirement | 18 | 18 |
Property and equipment, net | 409 | 99 |
Operating lease right-of-use assets | 640 | 75 |
Total long-term assets | 4,947 | 4,122 |
Total assets | 40,971 | 44,633 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 2,808 | 1,699 |
Deferred revenues | 2,703 | 2,703 |
Payable to related parties | 93 | 90 |
Operating lease liabilities | 138 | 44 |
Total current liabilities | 5,742 | 4,536 |
LONG-TERM LIABILITIES: | ||
Deferred revenues | 6,273 | 6,947 |
Employee rights upon retirement | 19 | 18 |
Provision for uncertain tax position | 11 | 11 |
Operating lease liabilities | 502 | 31 |
Other liabilities | 212 | 211 |
Total long-term liabilities | 7,017 | 7,218 |
COMMITMENTS (note 2) | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, $0.012 par value (60,000,000 authorized shares; 23,810,530 and 23,675,530 shares issued and outstanding as of November 30, 2020 and August 31, 2020, respectively) | 286 | 284 |
Additional paid-in capital | 126,110 | 125,209 |
Accumulated deficit | (98,184) | (92,614) |
Total stockholders’ equity | 28,212 | 32,879 |
Total liabilities and stockholders’ equity | $ 40,971 | $ 44,633 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Nov. 30, 2020 | Aug. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.012 | $ 0.012 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 23,810,530 | 23,675,530 |
Common stock, shares outstanding | 23,810,530 | 23,675,530 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
REVENUES | $ 674 | $ 674 |
COST OF REVENUES | ||
RESEARCH AND DEVELOPMENT EXPENSES | 5,774 | 2,022 |
GENERAL AND ADMINISTRATIVE EXPENSES | 727 | 1,081 |
OPERATING LOSS | 5,827 | 2,429 |
FINANCIAL INCOME (EXPENSES), NET | 257 | (114) |
NET LOSS FOR THE PERIOD | $ 5,570 | $ 2,543 |
LOSS PER SHARE OF COMMON STOCK: | ||
BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK (in Dollars per share) | $ 0.23 | $ 0.15 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK (in Shares) | 23,745,980 | 17,472,315 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Accumulated deficit | Total | |
BALANCE at Aug. 31, 2019 | $ 208 | $ 100,288 | $ (81,103) | $ 19,393 | |
BALANCE (in Shares) at Aug. 31, 2019 | 17,383 | ||||
SHARES ISSUED FOR SERVICES | [1] | 17 | 17 | ||
SHARES ISSUED FOR SERVICES (in Shares) | 5 | ||||
EXERCISE OF WARRANTS AND OPTIONS | $ 1 | 12 | 13 | ||
EXERCISE OF WARRANTS AND OPTIONS (in Shares) | 12 | ||||
STOCK-BASED COMPENSATION | [1] | 280 | 280 | ||
NET LOSS | (2,543) | (2,543) | |||
BALANCE at Nov. 30, 2019 | $ 209 | 100,597 | (83,646) | 17,160 | |
BALANCE (in Shares) at Nov. 30, 2019 | 17,400 | ||||
BALANCE at Aug. 31, 2020 | $ 284 | 125,209 | (92,614) | 32,879 | |
BALANCE (in Shares) at Aug. 31, 2020 | 23,675 | ||||
ISSUANCE OF COMMON STOCK, NET | $ 2 | 584 | 586 | ||
ISSUANCE OF COMMON STOCK, NET (in Shares) | 135 | ||||
STOCK-BASED COMPENSATION | [1] | 317 | 317 | ||
NET LOSS | (5,570) | (5,570) | |||
BALANCE at Nov. 30, 2020 | $ 286 | $ 126,110 | $ (98,184) | $ 28,212 | |
BALANCE (in Shares) at Nov. 30, 2020 | 23,810 | ||||
[1] | Represents an amount of less than $1. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,570) | $ (2,543) |
Adjustments required to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2 | |
Exchange differences and interest on deposits and held to maturity bonds | (114) | (92) |
Changes in fair value of investments | (162) | 303 |
Stock-based compensation | 317 | 280 |
Shares issued for services | 17 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,104) | 433 |
Accounts payable, accrued expenses and related parties | 1,153 | (714) |
Deferred revenue | (675) | (675) |
Liability for employee rights upon retirement | 1 | (5) |
Total net cash used in operating activities | (6,152) | (2,996) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of short-term deposits | (7,460) | (3,000) |
Purchase of held to maturity securities | (658) | |
Purchase of corporate bonds designated as fair value | (1,004) | |
Proceeds from sale of short-term deposits | 7,960 | 4,600 |
Proceeds from maturity of held to maturity securities | 1,900 | 1,225 |
Proceeds from sale of mutual funds | 775 | |
Funds in respect of employee rights upon retirement | (1) | 3 |
Purchase of property and equipment | (313) | (3) |
Total net cash provided by investing activities | 1,199 | 2,825 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock, net of issuance costs | 586 | 1 |
Proceeds from exercise of options | 12 | |
Total net cash provided by financing activities | 586 | 13 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 2 | 0 |
DECREASE IN CASH AND CASH EQUIVALENTS | (4,365) | (158) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 19,296 | 3,329 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 14,931 | 3,171 |
(A) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS - | ||
Interest received | 92 | 112 |
(B) SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||
Right of use assets and lease liabilities recognition | $ 582 |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES: | NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: a. General: 1) Incorporation and operations Oramed Pharmaceuticals Inc. (collectively with its subsidiary, the “Company”, unless the context indicates otherwise) was incorporated on April 12, 2002, under the laws of the State of Nevada. From incorporation until March 3, 2006, the Company was an exploration stage company engaged in the acquisition and exploration of mineral properties. On February 17, 2006, the Company entered into an agreement with Hadasit Medical Services and Development Ltd. 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 March 11, 2011, the Company was reincorporated from the State of Nevada to the State of Delaware. On July 30, 2019, the Subsidiary incorporated a wholly-owned subsidiary in Hong Kong, Oramed HK Limited (the “Hong Kong Subsidiary”). As of November 30, 2020, the Hong Kong Subsidiary has no operations. 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 “License Agreement”). According to the 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 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 License Agreement shall remain in effect until the expiration of the Royalty Term. The 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 November 30, 2020, 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 revenues in each of the consolidated balance sheets for the three months ended November 30, 2020 and for the fiscal years ended August 31, 2020, and 2019. 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 a Stock Purchase Agreement with HTIT (the “SPA”). According to the SPA, the Company issued 1,155,367 shares of common stock to HTIT for $12,000. The transaction closed on December 28, 2015. 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 License Agreement. For revenue recognition policy see note 1c. 2) 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 cannot predict the outcome of these activities. b. Loss per common share Basic and diluted net loss per common share are computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding for each period. Outstanding stock options, warrants and restricted stock units (“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 5,278,347 and 4,366,806 for the three month periods ended November 30, 2020 and 2019, respectively. c. Revenue recognition The License Agreement and the SPA were considered a single arrangement with multiple deliverables. The Company allocated the total consideration of $49,500 between the 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 License Agreement. Under Accounting Standards Codification (“ASC”) 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018) given the Company’s continuing involvement through the expected product submission in June 2023, amounts received relating to the License Agreement were recognized over the period from which the Company was entitled to the respective payment, and the expected product submission date using a time-based model approach over the periods that the fees were earned. On September 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”), using the modified retrospective method of adoption. Under this method, the Company applied ASC 606 to the License Agreement at the adoption date and was required to make an adjustment to the September 1, 2018 opening accumulated deficit balance and all prior periods continue to be presented under ASC 605. The most significant impact from adopting ASC 606 was the impact of the timing of recognition of revenue associated with the milestone payment. Under ASC 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018) given the Company’s continuing involvement through the expected product submission in June 2023, amounts received relating to the License Agreement were recognized over the period from which the Company was entitled to the respective payment, and the expected product submission date using a time-based model approach over the periods that the fees were earned. However, under ASC 606, the Company is required to recognize the total transaction price (which includes consideration related to milestones once the criteria for recognition have been satisfied) using the input method over the period the performance obligation is fulfilled. Accordingly, once the consideration associated with a milestone is included in the transaction price, incremental revenue is recognized immediately based on the period of time that has elapsed towards complete satisfaction of the performance obligation. This method results in the recognition of revenue earlier than under ASC 605 and the resulting impact was recorded as a reduction of the opening balance of accumulated deficit at September 1, 2018 as further described below. Under 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. 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 the adoption date, the Company adjusted its accumulated deficit by $1,773 against deferred revenue due to the effect of variable consideration. Amounts that were allocated to the License Agreement as of November 30, 2020 aggregated $22,382, all of which were received through the balance sheet date. Through November 30, 2020, the Company has recognized revenue associated with this agreement in the aggregate amount of $13,406, of which $674 was recognized in the quarter ended November 30, 2020, and deferred the remaining amount of $8,976 which is presented as deferred revenues on the condensed consolidated balance sheet. d. Marketable securities 1. Equity securities In January 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which updates certain aspects of recognition, measurement, presentation and disclosure of financial assets and financial liabilities (“ASU 2016-01”). The guidance requires entities to recognize changes in fair value in net income rather than in accumulated other comprehensive income. The Company adopted the provisions of this update in the first quarter of fiscal year 2019. Following the adoption, as of September 1, 2018, the Company classified the available for sale securities to financial assets measured in fair value through profit or loss. The impact of this adoption on the Company’s accumulated losses as of the adoption date was $702. 2. Debt securities During the three months ended November 30, 2020, a small portion of the debt securities, which were purchased by the Company were classified as corporate bonds designated as fair value due to the nature of such securities. As such, these securities are presented by their fair market value and not by their amortized cost as the rest of the debt securities are presented. For more information, please see note 4(e) below. e. 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 August 31, 2020 (the “2020 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 2020 Form 10-K. The results for interim periods are not necessarily indicative of a full fiscal year’s results. f. Recently adopted standards 3. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840). The new standard requires a lessee to record assets and liabilities on its balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the lessee’s income statement. The Company adopted this standard as of September 1, 2019 on a modified retrospective basis and will not restate comparative periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows the Company to carry forward the historical lease classification. The Company made an accounting policy election to keep leases with an initial term of 12 months or less off of its balance sheet. The Company recognized those lease payments in its statements of operations on a straight-line basis over the lease period. As of the adoption date, the Company recognized an operating lease asset and liability of $168 and $168, respectively, as of September 1, 2019 on its balance sheet. 4. On September 1, 2019, the Company adopted ASU No. 2018-07, “Compensation-Stock Compensation (Topic 718) Improvements to Nonemployee Share-based Payments”. This ASU was issued to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions are being measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The adoption of this standard had no material impact on the Company’s consolidated financial statements. g. Standards issued but not yet adopted In June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current 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 will be effective for the fiscal year beginning after December 15, 2022, including interim periods within that year. The adoption of this guidance will not have a significant impact on the Company’s consolidated financial statements. |
Commitments
Commitments | 3 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 2 - COMMITMENTS: a. 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). As part of this agreement, the Subsidiary entered into a patent transfer agreement (the “Patent Transfer Agreement”) according to which the Subsidiary assigned to Entera all of its right, title and interest in and to a certain patent application related to the oral administration of proteins that it has licensed to Entera since August 2010. Under this agreement, the Subsidiary is entitled to receive from Entera royalties of 3% of Entera’s net revenues (as defined in the agreement) and a license back of that patent application for use in respect of diabetes and influenza. As of November 30, 2020, Entera had not paid any royalties to the Subsidiary. On December 11, 2018, Entera announced that it had entered into a research collaboration and license agreement (the “Amgen License”) with Amgen related to the research of inflammatory disease and other serious illnesses. As reported by Entera, under the terms of the Amgen License, Entera will receive a modest initial technology access fee from Amgen and will be responsible for preclinical development at Amgen’s expense. Entera will be eligible to receive up to $270,000 in aggregate payments, as well as tiered royalties up to mid-single digits, upon achievement of various clinical and commercial milestones if Amgen decides to move all of these programs forward. Amgen is responsible for clinical development, manufacturing and commercialization of any of the resulting programs. To the extent the Amgen License results in net revenues as defined in the Patent Transfer Agreement, the Subsidiary will be entitled to the aforementioned royalties. In addition, 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% of the net royalties received in respect of the patent that was sold to Entera in March 2011. b. On December 18, 2017, the Subsidiary entered into an agreement with a vendor for the process development and production of one of its oral capsule ingredients in the amount of $2,905 that will be paid over the term of the engagement and based on the achievement of certain development milestones, of which $1,542 was recognized in research and development expenses through November 30, 2020. c. On August 2, 2020, the Subsidiary entered into a new lease agreement for its facilities in Israel. The new lease agreement is for 263 square meters and is for a period of 60 months commencing September 1, 2020. The Company has the option to extend the period by another 60 months. The annual lease payment, including management fee, is NIS 435,000 ($131). As security for its obligation under this lease agreement, the Company provided a bank guarantee in an amount equal to three monthly lease payments. 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. As consideration for its services, the Subsidiary will pay the CRO a total amount of $21,589 during the term of the engagement and based on achievement of certain milestones, of which $2,381 was recognized in research and development expenses through November 30, 2020. 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. As consideration for its services, the Subsidiary will pay the CRO a total amount of $12,343 during the term of the engagement and based on achievement of certain milestones, of which $1,294 was recognized in research and development expenses through November 30, 2020. f. 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 that was received through November 30, 2020 was $2,207 ($2,486 including interest). The royalty expenses which are related to the funded project were recognized in cost of revenues in the quarter ended November 30, 2020 and in prior periods. g. Grants from the European Commission (“EC”) During fiscal year 2020, the Company received an aggregate payment of €50 from the EC under The European Innovation Council Accelerator (previously known as SME Instrument) of the European Innovation Programme Horizon 2020. As part of the grant terms, the Company is required to use the proceeds from the grant in Europe. The Company intends on using the grant to explore the possibility of running clinical trials in Europe. |
Fair Value
Fair Value | 3 Months Ended |
Nov. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | 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 November 30, 2020, the assets measured at fair value are comprised of equity securities (Level 1) and debt securities which are classified as corporate bonds designated as fair value (Level 2). The fair value of held to maturity bonds as presented in note 4 was based on a Level 2 measurement. As of November 30, 2020, 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 November 30, 2020, 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. There were no Level 3 items for the three month periods ended November 30, 2020 and 2019. |
Marketable Securities
Marketable Securities | 3 Months Ended |
Nov. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | NOTE 4 - MARKETABLE SECURITIES: The Company’s marketable securities include investments in equity securities of D.N.A and Entera, held to maturity bonds, corporate bonds designated as fair value, preferred equity and mutual funds. a. Composition: November 30, 2020 August 31, Short-term: D.N.A (see b below) $ 414 $ 246 Entera (see c below) 144 150 Held to maturity bonds (see d below) 4,169 5,369 Corporate bonds designated as fair value (see e below) 1,082 - Preferred equity - 481 Mutual funds* 3,016 3,298 $ 8,825 $ 9,544 Long-term: Held to maturity bonds (see d below) $ 3,878 $ 3,928 12,703 $ 13,472 * Mutual funds include equity funds only b. D.N.A The D.N.A 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. As of November 30, 2020, the Company owns approximately 5.5% of D.N.A’s outstanding ordinary shares. The cost of the securities as of November 30, 2020 and August 31, 2020 is $595. 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 November 30, 2020, are as follows: November 30, 2020 Amortized Gross Estimated Average Short-term: Commercial bonds $ 4,089 $ (15 ) $ 4,074 2.37 % Accrued interest 80 - 80 Long-term 3,878 6 3,884 2.34 % $ 8,047 $ (9 ) $ 8,038 The amortized cost and estimated fair value of held-to-maturity securities as of August 31, 2020, are as follows: August 31, 2020 Amortized Gross Estimated Average Short-term: Commercial bonds $ 5,295 $ (29 ) $ 5,266 2.26 % Accrued interest 74 - 74 Long-term 3,928 56 3,984 2.20 % $ 9,297 $ 27 $ 9,324 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. e. Corporate bonds designated as fair value The cost and estimated fair value of corporate bonds designated as fair value securities as of November 30, 2020, are as follows: November 30, Amortized cost $ 1,086 Accrued Interest 12 Revaluation (16 ) Estimated fair value $ 1,082 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Nov. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 - STOCKHOLDERS’ EQUITY: 1. On September 5, 2019, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”), pursuant to which the Company could, from time to time and at the Company’s option, issue and sell shares of Company common stock having an aggregate offering price of up to $15,000, through a sales agent, subject to certain terms and conditions. Any shares sold would be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus and prospectus supplement, each dated February 10, 2020 (which superseded a prior registration statement, prospectus and prospectus supplement that related to shares sold under the Sales Agreement). 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 Sales Agreement. As of November 30, 2020, 974,357 shares were issued under the Sales Agreement for aggregate net proceeds of $4,508. As of January 14, 2021, 3,212,621 shares were issued under the Sales Agreement for aggregate net proceeds of $14,397. 2. On February 27, 2020, the Company entered into an underwriting agreement (“Agreement”) with National Securities Corporation (“Underwriter”), in connection with a public offering (“Offering”) of 5,250,000 shares of the Company’s common stock, at an offering price of $4.00 per share. Under the terms of the Agreement, the Company granted the Underwriter a 45-day option to purchase from the Company up to an additional 787,500 shares of common stock at the public offering price (“Over-Allotment Option”). In connection with the Offering, the Company also agreed to issue to the Underwriter, or its designees, warrants (“Underwriter’s Warrants”), to purchase up to an aggregate of 7% of the shares of common stock sold in the Offering (including any additional shares sold during the 45-day option period), at an exercise price of $4.80 per share. The Underwriter’s Warrants issued in the Offering will be exercisable at any time and from time to time, in whole or in part, commencing six months from issuance for a period of three years from the date of issuance. The closing of the sale of the Offering occurred on March 2, 2020. On April 9, 2020, the Company issued 180,561 shares of Common Stock and 12,640 Underwriter’s Warrants pursuant to a partial exercise by the Underwriter of the Over-Allotment Option (“Partial Over-Allotment Option Exercise”). The net proceeds to the Company from the Offering, including from the Partial Over-Allotment Option Exercise, after deducting the underwriting discount and the Company’s estimated Offering expenses were $19,894. 3. On December 1, 2020, the Company entered into a new equity distribution agreement (the “New Sales Agreement”), pursuant to which the Company may, from time to time and at the Company’s option, issue and sell shares of Company common stock having an aggregate offering price of up to $40,000, through a sales agent, subject to certain terms and conditions. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus dated February 10, 2020 and prospectus supplement dated December 1, 2020. The Company will pay 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 New Sales Agreement. As of January 14, 2021, 612,210 shares were issued under the New Sales Agreement for aggregate net proceeds of $2,557. |
Leases
Leases | 3 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 6 - LEASES 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 date of adoption 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 2025. Below is a summary of our operating right-of-use assets and operating lease liabilities as of November 30, 2020: November 30, Operating right-of-use assets $ 640 Operating lease liabilities, current 138 Operating lease liabilities long-term 502 Total operating lease liabilities $ 640 For more information about our office lease terms, please see note 2(c). Minimum lease payments for the Company’s right-of-use assets over the remaining lease periods as of November 30, 2020 are as follows: November 30, 2021 $ 125 2022 163 2023 134 2024 132 2025 132 Total undiscounted lease payments 685 Less: Interest* 45 Present value of lease liabilities $ 640 * Future lease payments were discounted by 3% interest rate. |
Related Parties - Transactions
Related Parties - Transactions | 3 Months Ended |
Nov. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES - TRANSACTIONS | NOTE 7 - RELATED PARTIES - TRANSACTIONS: On July 1, 2008, the Subsidiary entered into two consulting agreements with KNRY Ltd. (“KNRY”), an Israeli company owned by the Chief Scientific Officer (the “CSO”), whereby the Chief Executive Officer (the “CEO”) and the CSO, 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 CEO and the CSO is NIS 127,570 ($39) and NIS 92,522 ($28), respectively. In addition to the Consulting Agreements, based on a relocation cost analysis prepared by consulting company ORI - Organizational Resources International Ltd., the Company pays for certain direct costs, related taxes and expenses incurred in connection with the relocation of the CEO to New York. During the three months ended November 30, 2020, such relocation expenses totaled $74, compared to $86 for the three months ended November 30, 2019. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
General | a. General: 1) Incorporation and operations Oramed Pharmaceuticals Inc. (collectively with its subsidiary, the “Company”, unless the context indicates otherwise) was incorporated on April 12, 2002, under the laws of the State of Nevada. From incorporation until March 3, 2006, the Company was an exploration stage company engaged in the acquisition and exploration of mineral properties. On February 17, 2006, the Company entered into an agreement with Hadasit Medical Services and Development Ltd. 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 March 11, 2011, the Company was reincorporated from the State of Nevada to the State of Delaware. On July 30, 2019, the Subsidiary incorporated a wholly-owned subsidiary in Hong Kong, Oramed HK Limited (the “Hong Kong Subsidiary”). As of November 30, 2020, the Hong Kong Subsidiary has no operations. 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 “License Agreement”). According to the 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 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 License Agreement shall remain in effect until the expiration of the Royalty Term. The 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 November 30, 2020, 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 revenues in each of the consolidated balance sheets for the three months ended November 30, 2020 and for the fiscal years ended August 31, 2020, and 2019. 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 a Stock Purchase Agreement with HTIT (the “SPA”). According to the SPA, the Company issued 1,155,367 shares of common stock to HTIT for $12,000. The transaction closed on December 28, 2015. 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 License Agreement. For revenue recognition policy see note 1c. 2) 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 cannot predict the outcome of these activities. |
Loss per common share | b. Loss per common share Basic and diluted net loss per common share are computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding for each period. Outstanding stock options, warrants and restricted stock units (“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 5,278,347 and 4,366,806 for the three month periods ended November 30, 2020 and 2019, respectively. |
Revenue recognition | c. Revenue recognition The License Agreement and the SPA were considered a single arrangement with multiple deliverables. The Company allocated the total consideration of $49,500 between the 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 License Agreement. Under Accounting Standards Codification (“ASC”) 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018) given the Company’s continuing involvement through the expected product submission in June 2023, amounts received relating to the License Agreement were recognized over the period from which the Company was entitled to the respective payment, and the expected product submission date using a time-based model approach over the periods that the fees were earned. On September 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”), using the modified retrospective method of adoption. Under this method, the Company applied ASC 606 to the License Agreement at the adoption date and was required to make an adjustment to the September 1, 2018 opening accumulated deficit balance and all prior periods continue to be presented under ASC 605. The most significant impact from adopting ASC 606 was the impact of the timing of recognition of revenue associated with the milestone payment. Under ASC 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018) given the Company’s continuing involvement through the expected product submission in June 2023, amounts received relating to the License Agreement were recognized over the period from which the Company was entitled to the respective payment, and the expected product submission date using a time-based model approach over the periods that the fees were earned. However, under ASC 606, the Company is required to recognize the total transaction price (which includes consideration related to milestones once the criteria for recognition have been satisfied) using the input method over the period the performance obligation is fulfilled. Accordingly, once the consideration associated with a milestone is included in the transaction price, incremental revenue is recognized immediately based on the period of time that has elapsed towards complete satisfaction of the performance obligation. This method results in the recognition of revenue earlier than under ASC 605 and the resulting impact was recorded as a reduction of the opening balance of accumulated deficit at September 1, 2018 as further described below. Under 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. 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 the adoption date, the Company adjusted its accumulated deficit by $1,773 against deferred revenue due to the effect of variable consideration. Amounts that were allocated to the License Agreement as of November 30, 2020 aggregated $22,382, all of which were received through the balance sheet date. Through November 30, 2020, the Company has recognized revenue associated with this agreement in the aggregate amount of $13,406, of which $674 was recognized in the quarter ended November 30, 2020, and deferred the remaining amount of $8,976 which is presented as deferred revenues on the condensed consolidated balance sheet. |
Marketable securities | d. Marketable securities 1. Equity securities In January 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which updates certain aspects of recognition, measurement, presentation and disclosure of financial assets and financial liabilities (“ASU 2016-01”). The guidance requires entities to recognize changes in fair value in net income rather than in accumulated other comprehensive income. The Company adopted the provisions of this update in the first quarter of fiscal year 2019. Following the adoption, as of September 1, 2018, the Company classified the available for sale securities to financial assets measured in fair value through profit or loss. The impact of this adoption on the Company’s accumulated losses as of the adoption date was $702. 2. Debt securities During the three months ended November 30, 2020, a small portion of the debt securities, which were purchased by the Company were classified as corporate bonds designated as fair value due to the nature of such securities. As such, these securities are presented by their fair market value and not by their amortized cost as the rest of the debt securities are presented. For more information, please see note 4(e) below. |
Condensed Consolidated Financial Statements Preparation | e. 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 August 31, 2020 (the “2020 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 2020 Form 10-K. The results for interim periods are not necessarily indicative of a full fiscal year’s results. |
Recently adopted standards | f. Recently adopted standards 3. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840). The new standard requires a lessee to record assets and liabilities on its balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the lessee’s income statement. The Company adopted this standard as of September 1, 2019 on a modified retrospective basis and will not restate comparative periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard which, among other things, allows the Company to carry forward the historical lease classification. The Company made an accounting policy election to keep leases with an initial term of 12 months or less off of its balance sheet. The Company recognized those lease payments in its statements of operations on a straight-line basis over the lease period. As of the adoption date, the Company recognized an operating lease asset and liability of $168 and $168, respectively, as of September 1, 2019 on its balance sheet. 4. On September 1, 2019, the Company adopted ASU No. 2018-07, “Compensation-Stock Compensation (Topic 718) Improvements to Nonemployee Share-based Payments”. This ASU was issued to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions are being measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The adoption of this standard had no material impact on the Company’s consolidated financial statements. |
Standards issued but not yet adopted | g. Standards issued but not yet adopted In June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current 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 will be effective for the fiscal year beginning after December 15, 2022, including interim periods within that year. The adoption of this guidance will not have a significant impact on the Company’s consolidated financial statements. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable securities include investments in equity securities | November 30, 2020 August 31, Short-term: D.N.A (see b below) $ 414 $ 246 Entera (see c below) 144 150 Held to maturity bonds (see d below) 4,169 5,369 Corporate bonds designated as fair value (see e below) 1,082 - Preferred equity - 481 Mutual funds* 3,016 3,298 $ 8,825 $ 9,544 Long-term: Held to maturity bonds (see d below) $ 3,878 $ 3,928 12,703 $ 13,472 * Mutual funds include equity funds only |
Schedule of amortized cost and estimated fair value of held-to-maturity securities | November 30, 2020 Amortized Gross Estimated Average Short-term: Commercial bonds $ 4,089 $ (15 ) $ 4,074 2.37 % Accrued interest 80 - 80 Long-term 3,878 6 3,884 2.34 % $ 8,047 $ (9 ) $ 8,038 August 31, 2020 Amortized Gross Estimated Average Short-term: Commercial bonds $ 5,295 $ (29 ) $ 5,266 2.26 % Accrued interest 74 - 74 Long-term 3,928 56 3,984 2.20 % $ 9,297 $ 27 $ 9,324 |
Schedule of cost and estimated fair value of fair value through profit or loss securities | November 30, Amortized cost $ 1,086 Accrued Interest 12 Revaluation (16 ) Estimated fair value $ 1,082 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Leases [Abstract] | |
Schedule of operating right-of-use assets and operating lease liabilities | November 30, Operating right-of-use assets $ 640 Operating lease liabilities, current 138 Operating lease liabilities long-term 502 Total operating lease liabilities $ 640 |
Schedule of minimum lease payments for the company’s right-of-use assets | November 30, 2021 $ 125 2022 163 2023 134 2024 132 2025 132 Total undiscounted lease payments 685 Less: Interest* 45 Present value of lease liabilities $ 640 * Future lease payments were discounted by 3% interest rate. |
Significant Accounting Polici_2
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||
Aug. 21, 2020 | Dec. 28, 2015 | Nov. 30, 2015 | Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | Sep. 01, 2019 | Jul. 31, 2015 | |
Significant Accounting Policies (Details) [Line Items] | ||||||||
Royalty term | 15 years | |||||||
Milestone payment received | $ 20,500 | |||||||
Milestone payment, description | 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. | |||||||
Non-refundable amount | $ 500 | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) (in Shares) | 5,278,347 | 4,366,806 | ||||||
Adjusted accumulated deficit against contract liabilities | $ 1,773 | |||||||
Revenue recognition, description | the aggregate amount of $13,406, of which $674 was recognized in the quarter ended November 30, 2020, and deferred the remaining amount of $8,976 which is presented as deferred revenues on the condensed consolidated balance sheet. | |||||||
Accumulated losses | $ 702 | |||||||
Operating lease asset | 640 | $ 75 | $ 168 | |||||
Operating lease liability | $ 168 | |||||||
Stock Purchase Agreement [Member] | ||||||||
Significant Accounting Policies (Details) [Line Items] | ||||||||
Number of common stock issued | $ 10,617 | |||||||
Total consideration | 49,500 | |||||||
issuance expenses | 23 | |||||||
License Agreement [Member] | ||||||||
Significant Accounting Policies (Details) [Line Items] | ||||||||
Number of common stock issued | 38,883 | $ 22,382 | ||||||
Total consideration | 49,500 | |||||||
issuance expenses | $ 23 | |||||||
HTIT [Member] | ||||||||
Significant Accounting Policies (Details) [Line Items] | ||||||||
Percentages of royalties on net sales | 10.00% | |||||||
Aggregate license cost | $ 37,500 | |||||||
License costs payable | 3,000 | |||||||
Amount paid subject to the Company entering into certain agreements | 8,000 | |||||||
Payable upon achievement of certain milestones and conditions | $ 26,500 | |||||||
Royalty commitment description | 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%. | |||||||
Milestone payment, description | 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 revenues in each of the consolidated balance sheets for the three months ended November 30, 2020 and for the fiscal years ended August 31, 2020, and 2019. 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. | |||||||
HTIT [Member] | Stock Purchase Agreement [Member] | ||||||||
Significant Accounting Policies (Details) [Line Items] | ||||||||
Number of common stock issued (in Shares) (in Shares) | 1,155,367 | |||||||
Number of common stock issued | $ 12,000 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | Sep. 16, 2020 | Sep. 02, 2020 | Aug. 02, 2020 | Dec. 11, 2018 | Mar. 31, 2011 | Dec. 18, 2017 | Nov. 30, 2020 | Feb. 15, 2011 |
Commitments (Details) [Line Items] | ||||||||
Aggregate payments receive | $ 270,000 | |||||||
Total amount received | $ 2,207 | |||||||
Total amount received including interest | $ 2,486 | |||||||
Grants from the European Commission, description | During fiscal year 2020, the Company received an aggregate payment of €50 from the EC under The European Innovation Council Accelerator (previously known as SME Instrument) of the European Innovation Programme Horizon 2020. | |||||||
Vendor Two [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Expense which was recognized | $ 2,381 | |||||||
Commitments for consulting services | $ 21,589 | |||||||
Vendor Three [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Expense which was recognized | 1,294 | |||||||
Commitments for consulting services | $ 12,343 | |||||||
Vendor One [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Commitments for consulting services | $ 2,905 | |||||||
Expense which was recognized | $ 1,542 | |||||||
Office Facilities [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Lessee, description | The new lease agreement is for 263 square meters and is for a period of 60 months commencing September 1, 2020. The Company has the option to extend the period by another 60 months. The annual lease payment, including management fee, is NIS 435,000 ($131). | |||||||
Entera Bio Ltd. [Member] | D.N.A [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Ordinary shares after stock split (in Shares) | 117,000 | |||||||
Ownership percentage retained | 3.00% | |||||||
Royalty percentage | 8.00% | |||||||
Israel Innovation Authority [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Royalty percentage | 3.00% | |||||||
Israel Innovation Authority [Member] | Minimum [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Royalty percentage | 100.00% | |||||||
Israel Innovation Authority [Member] | Maximum [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Royalty percentage | 150.00% |
Marketable Securities (Details)
Marketable Securities (Details) | 3 Months Ended |
Nov. 30, 2020USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Percentage of ownership interest | 5.50% |
Cost of securities | $ 595 |
Cost method investment | $ 1 |
Marketable securities maturity, term | 12 months |
Marketable Securities (Detail_2
Marketable Securities (Details) - Schedule of marketable securities include investments in equity securities - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 | |
Schedule of marketable securities include investments in equity securities [Abstract] | |||
D.N.A (see b below) | $ 414 | $ 246 | |
Entera (see c below) | 144 | 150 | |
Held to maturity bonds (see d below) | 4,169 | 5,369 | |
Corporate bonds designated as fair value (see e below) | 1,082 | ||
Preferred equity | 481 | ||
Mutual funds | [1] | 3,016 | 3,298 |
Marketable securities | 8,825 | 9,544 | |
Long-term: | |||
Held to maturity bonds (see d below) | 3,878 | 3,928 | |
Total marketable securities, noncurrent | $ 12,703 | $ 13,472 | |
[1] | Mutual funds include equity funds only |
Marketable Securities (Detail_3
Marketable Securities (Details) - Schedule of amortized cost and estimated fair value of held-to-maturity securities - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Aug. 31, 2020 | |
Short-term: | ||
Amortized cost | $ 8,047 | $ 9,297 |
Gross unrealized gains (losses) | (9) | 27 |
Estimated fair value | 8,038 | 9,324 |
Short-term [Member] | Commercial bonds [Member] | ||
Short-term: | ||
Amortized cost | 4,089 | 5,295 |
Gross unrealized gains (losses) | (15) | (29) |
Estimated fair value | $ 4,074 | $ 5,266 |
Average yield to maturity rate | 2.37% | 2.26% |
Short-term [Member] | Accrued interest [Member] | ||
Short-term: | ||
Amortized cost | $ 80 | $ 74 |
Gross unrealized gains (losses) | ||
Estimated fair value | 80 | 74 |
Long-term [Member] | ||
Short-term: | ||
Amortized cost | 3,878 | 3,928 |
Gross unrealized gains (losses) | 6 | 56 |
Estimated fair value | $ 3,884 | $ 3,984 |
Average yield to maturity rate | 2.34% | 2.20% |
Marketable Securities (Detail_4
Marketable Securities (Details) - Schedule of cost and estimated fair value of fair value through profit or loss securities $ in Thousands | Nov. 30, 2020USD ($) |
Schedule of cost and estimated fair value of fair value through profit or loss securities [Abstract] | |
Amortized cost | $ 1,086 |
Accrued Interest | 12 |
Revaluation | (16) |
Estimated fair value | $ 1,082 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jan. 14, 2021 | Dec. 01, 2020 | Sep. 05, 2019 | Nov. 30, 2020 | Feb. 27, 2020 |
Stockholders' Equity (Details) [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Description and Terms | the Company entered into an underwriting agreement (“Agreement”) with National Securities Corporation (“Underwriter”), in connection with a public offering (“Offering”) of 5,250,000 shares of the Company’s common stock, at an offering price of $4.00 per share. Under the terms of the Agreement, the Company granted the Underwriter a 45-day option to purchase from the Company up to an additional 787,500 shares of common stock at the public offering price (“Over-Allotment Option”). In connection with the Offering, the Company also agreed to issue to the Underwriter, or its designees, warrants (“Underwriter’s Warrants”), to purchase up to an aggregate of 7% of the shares of common stock sold in the Offering (including any additional shares sold during the 45-day option period), at an exercise price of $4.80 per share. The Underwriter’s Warrants issued in the Offering will be exercisable at any time and from time to time, in whole or in part, commencing six months from issuance for a period of three years from the date of issuance. The closing of the sale of the Offering occurred on March 2, 2020. On April 9, 2020, the Company issued 180,561 shares of Common Stock and 12,640 Underwriter’s Warrants pursuant to a partial exercise by the Underwriter of the Over-Allotment Option (“Partial Over-Allotment Option Exercise”). The net proceeds to the Company from the Offering, including from the Partial Over-Allotment Option Exercise, after deducting the underwriting discount and the Company’s estimated Offering expenses were $19,894. | ||||
Sale agreement [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Aggregate offering price | $ 15,000 | ||||
Agent commission rate | 3.00% | ||||
Shares, Issued (in Shares) | 974,357 | ||||
Aggregate net proceeds | $ 4,508 | ||||
Sale agreement [Member] | Subsequent Event [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Shares, Issued (in Shares) | 3,212,621 | ||||
Aggregate net proceeds | $ 14,397 | ||||
New sales agreement [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Aggregate offering price | $ 40,000 | ||||
Agent commission rate | 3.00% | ||||
New sales agreement [Member] | Subsequent Event [Member] | |||||
Stockholders' Equity (Details) [Line Items] | |||||
Shares, Issued (in Shares) | 612,210 | ||||
Aggregate net proceeds | $ 2,557 |
Leases (Details)
Leases (Details) | 3 Months Ended |
Nov. 30, 2020 | |
Disclosure Text Block [Abstract] | |
Lease term, description | The Company has various operating leases for office space and vehicles that expire through 2025. |
Future lease payments , interest rate percentage | 3.00% |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating right-of-use assets and operating lease liabilities $ in Thousands | Nov. 30, 2020USD ($) |
Schedule of operating right-of-use assets and operating lease liabilities [Abstract] | |
Operating right-of-use assets | $ 640 |
Operating lease liabilities, current | 138 |
Operating lease liabilities long-term | 502 |
Total operating lease liabilities | $ 640 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of minimum lease payments for the company’s right-of-use assets $ in Thousands | Nov. 30, 2020USD ($) | |
Schedule of minimum lease payments for the company’s right-of-use assets [Abstract] | ||
2021 | $ 125 | |
2022 | 163 | |
2023 | 134 | |
2024 | 132 | |
2025 | 132 | |
Total undiscounted lease payments | 685 | |
Less: Interest | 45 | [1] |
Present value of lease liabilities | $ 640 | |
[1] | Future lease payments were discounted by 3% interest rate. |
Related Parties - Transactions
Related Parties - Transactions (Details) - Chief Executive Officer [Member] - USD ($) | 1 Months Ended | 3 Months Ended | |
Jul. 01, 2008 | Nov. 30, 2020 | Nov. 30, 2019 | |
Related Parties - Transactions (Details) [Line Items] | |||
Consulting agreements, description | 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 CEO and the CSO is NIS 127,570 ($39) and NIS 92,522 ($28), respectively. | ||
Relocation expenses | $ 74 | $ 86 |