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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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98-0376008
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Hi-Tech Park 2/5
Givat-Ram
P.O. Box 39098
Jerusalem, Israel
(Address of Principal Executive Offices)
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91390
(Zip Code)
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1
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2
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2
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14
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26
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26
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26
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27
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27
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28
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28
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38
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38
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38
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40
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41
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41
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45
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49
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53
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54
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55
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High
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Low
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|||||||
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Year Ended August 31, 2011
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||||||||
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Three Months Ended November 30, 2010
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$ | 0.42 | $ | 0.28 | ||||
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Three Months Ended February 28, 2011
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$ | 0.37 | $ | 0.27 | ||||
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Three Months Ended May 31, 2011
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$ | 0.35 | $ | 0.23 | ||||
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Three Months Ended August 31, 2011
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$ | 0.34 | $ | 0.20 | ||||
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Year Ended August 31, 2012
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||||||||
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Three Months Ended November 30, 2011
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$ | 0.44 | $ | 0.25 | ||||
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Three Months Ended February 29, 2012
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$ | 0.38 | $ | 0.27 | ||||
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Three Months Ended May 31, 2012
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$ | 0.36 | $ | 0.27 | ||||
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Three Months Ended August 31, 2012
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$ | 0.36 | $ | 0.23 | ||||
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Year ended
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||||||||
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Operating Data:
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August 31, 2012
|
August 31, 2011
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||||||
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Research and development expenses, net
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$ | 1,680,845 | $ | 1,159,309 | ||||
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General and administrative expenses
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1,203,164 | 1,275,960 | ||||||
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Gain on sale of investment
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- | (1,033,004 | ) | |||||
| Impairment of available for sale securities | 184,254 | 197,412 | ||||||
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Financial expenses (income), net
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185,997 | (14,452 | ) | |||||
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Loss before taxes on income
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(3,254,260 | ) | ( 1,585,225 | ) | ||||
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Taxes on income
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90,218 | (23,980 | ) | |||||
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Net loss for the period
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(3,344,478 | ) | (1,561,245 | ) | ||||
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Loss per common share – basic and diluted
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$ | (0.05 | ) | $ | (0.02 | ) | ||
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Weighted average common shares outstanding
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70,605,814 | 64,999,026 | ||||||
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Category
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Amount
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|||
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Research and development, net of OCS funds
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$ | 4,198,000 | ||
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General and administrative expenses
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1,038,000 | |||
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Financial income, net
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(10,000 | ) | ||
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Total
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$ | 5,246,000 | ||
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·
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pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;
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·
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provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
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·
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provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
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Name
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Age
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Position
|
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Nadav Kidron
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38
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President, Chief Executive Officer and Director
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Miriam Kidron
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72
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Chief Medical and Technology Officer and Director
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Leonard Sank
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47
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Director
|
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Harold Jacob
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59
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Director
|
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Michael Berelowitz
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68
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Director and Chairman of the Scientific Advisory Board
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Gerald Ostrov
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62
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Director
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Yifat Zommer
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38
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Chief Financial Officer, Treasurer and Secretary
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Position
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Year
(1)
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Salary
($)
(7)
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Option Awards
($)
(2)
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All Other
Compensation
($)
(3) (7)
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Total
($)
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|||||||
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Nadav Kidron
President and CEO and director (4)
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2012
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159,136 | 88,927 | 17,989 | 266,052 | |||||||
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2011
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171,167 | 163,304 | 28,213 | 362,684 | ||||||||
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Miriam Kidron
Chief Medical and Technology Officer and director (5)(6)
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2012
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159,136 | 88,927 | 13,200 | 261,263 | |||||||
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2011
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172,172 | 163,304 | 13,581 | 349,057 | ||||||||
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Yifat Zommer
CFO, Treasurer and Secretary
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2012
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58,686 | 32,915 | 29,719 | 121,320 | |||||||
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2011
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85,700 | 46,162 | 32,034 | 163,896 | ||||||||
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(1)
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The information is provided for each fiscal year, which begins on September 1 and ends on August 31.
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(2)
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The amounts reflect the grant date fair value, as calculated pursuant to
FASB ASC Topic 718, of these option awards. The assumptions used to determine the fair value of the option awards for fiscal years ended August 31, 2012 and 2011 are set forth in Note 10 to our audited consolidated financial statements included in this Annual Report on Form 10-K. Our Named Executive Officers will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold.
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(3)
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See “All Other Compensation Table” below.
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(4)
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Mr. Kidron receives compensation from Oramed Ltd. through KNRY, Ltd., an Israeli entity owned by Mr. Kidron, or KNRY. See “—Employment and Consulting Agreements” below.
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(5)
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Dr. Kidron receives compensation from Oramed Ltd. through KNRY. See “—Employment and Consulting Agreements” below.
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(6)
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See “Item 13. Certain Relationships and Related Transactions, and Director Independence” for a description of management fees received by Dr. Kidron from Hadasit.
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(7)
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Amounts paid for Salary and All Other Compensation were originally denominated in NIS and were translated into U.S. Dollars at the then current exchange rate for each payment.
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Name
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Year
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Automobile-
Related Expenses
($)
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Manager’s
Insurance*
($)
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Education
Fund*
($)
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Total
($)
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||||||||||||
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Nadav Kidron
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2012
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17,989 | -- | -- | 17,989 | ||||||||||||
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2011
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21,044 | -- | -- | 21,044 | |||||||||||||
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Miriam Kidron
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2012
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13,200 | -- | -- | 13,200 | ||||||||||||
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2011
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13,581 | -- | -- | 13,581 | |||||||||||||
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Yifat Zommer
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2012
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12,976 | 11,024 | 5,719 | 29,719 | ||||||||||||
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2011
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21,017 | 7,169 | 3,849 | 32,035 | |||||||||||||
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*
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Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance premiums. An education fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes.
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Name
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Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
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Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
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Option
Exercise
Price
($)
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Option
Expiration
Date
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|||||||||
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Nadav Kidron
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864,000 | (1) | - | 0.54 |
05/07/18
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||||||||
| 864,000 | (3) | - | 0.49 |
04/20/20
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|||||||||
| 288,000 | (4) | 576,000 | (4) | 0.34 |
08/08/22
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||||||||
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Miriam Kidron
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864,000 | (1) | - | 0.54 |
05/07/18
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||||||||
| 864,000 | (3) | - | 0.49 |
04/20/20
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|||||||||
| 288,000 | (4) | 576,000 | (4) | 0.34 |
08/08/22
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||||||||
| Yifat Zommer |
266,666
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(2) |
133,334
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(2) | 0.47 | 10/19/19 | |||||||
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21,000
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(5) |
588,000
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(5) |
0.34
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08/08/22
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||||||||
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(1)
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On May 7, 2008, 864,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $0.54 per share; 144,000 of such options vested immediately on the date of grant and the remainder vested in twenty equal monthly installments, commencing on June 30, 2008. The options have an expiration date of May 7, 2018.
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(2)
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On June 3, 2009, 400,000 options were granted to Yifat Zommer under the 2008 Plan at an exercise price of $0.47 per share; the options vest in three equal annual installments, commencing October 19, 2010, and expire on October 19, 2019.
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(3)
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On April 21, 2010, 864,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $0.49 per share; 108,000 of such options vested immediately on the date of grant and the remainder vested in twenty-one equal monthly installments, commencing on May 31, 2010. The options have an expiration date of April 20, 2020.
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(4)
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On August 8, 2012, 864,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $0.34 per share; 252,000 of such options vested immediately on the date of grant and the remainder vests in seventeen equal monthly installments, commencing on August 31, 2012. The options have an expiration date of August 8, 2022.
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(5)
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On August 8, 2012, 609,000 options were granted to Yifat Zommer under the 2008 Plan at an exercise price of $0.34 per share; the options vest in twenty-nine equal monthly installments, commencing on August 31, 2012, and expire on August 8, 2022.
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Name of Director
|
Fees Earned or Paid in Cash
($)
|
Option Awards (6)
($)
|
All Other Compensation
($)
|
Total
($)
|
||||||||||||
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Nadav Kidron
(1)
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- | - | - | - | ||||||||||||
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Miriam Kidron
(1)
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- | - | - | - | ||||||||||||
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Leonard Sank
(2) (4)
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10,000 | 11,106 | - | 21,106 | ||||||||||||
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Harold Jacob
(2) (4)
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10,000 | 11,106 | - | 21,106 | ||||||||||||
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Michael Berelowitz
(3) (5)
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10,000 | 32,528 | 4,500 | 47,028 | ||||||||||||
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Gerald Ostrov
(7)
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- | - | - | - | ||||||||||||
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_______________
|
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(1)
|
Please refer to the summary compensation table for executive compensation with respect to the named individual.
|
|
(2)
|
On January 11, 2009, 300,000 options were granted to each of Leonard Sank and Harold Jacob under the 2008 Plan at an exercise price of $0.43 per share. The options vested in three equal annual installments, commencing January 1, 2010, and expire on January 10, 2019.
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(3)
|
On July 8, 2010, 300,000 options were granted to Michael Berelowitz under the 2008 Plan at an exercise price of $0.48 per share. The options vest in three equal annual installments, commencing July 8, 2011, and expire on July 7, 2020.
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(4)
|
On August 8, 2012, 240,000 options were granted to each of Leonard Sank and Harold Jacob under the 2008 Plan at an exercise price of $0.34 per share. The options vest in two equal annual installments, commencing January 1, 2013, and expire on August 8, 2022.
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(5)
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On August 8, 2012, 40,000 options were granted to Michael Berelowitz under the 2008 Plan at an exercise price of $0.34 per share. The options vest in two equal annual installments, commencing January 1, 2013, and expire on August 8, 2022.
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|
(6)
|
The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards. The assumptions used to determine the fair value of the option awards for the fiscal year ended August 31, 2012 are set forth in Note 10 to our audited consolidated financial statements included in this Annual Report on Form 10-K. Our directors will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold.
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|
(7)
|
Mr. Ostrov was appointed as a director on September 24, 2012.
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|
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
Weight-average exercise price of outstanding options, warrants and rights
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
|
Equity compensation plans approved by security holders
|
-- | -- | -- | |||||||||
|
Equity compensation plans not approved by security holders
|
12,923,560 | $ | 0.26 | 3,419,800 | ||||||||
|
Total
|
12,923,560 | $ | 0.26 | 3,419,800 | ||||||||
|
Name and Address of
Beneficial Owner
|
Number of Shares
|
Percentage of Shares
Beneficially Owned
|
|
Nadav Kidron †‡
12 Eliezer Hagadol St.
Jerusalem, Israel
|
12,567,735
(1)
|
14.2%
|
|
Miriam Kidron †‡
2 Elza St.
Jerusalem, Israel
|
5,557,360
(2)
|
6.0%
|
|
Leonard Sank †
3 Blair Rd Camps Bay
Cape Town, South Africa
|
6,318,050
(3)
|
7.2%
|
|
Harold Jacob †
Haadmur Mebuyon 26
Jerusalem, Israel
|
430,000
(4)
|
*
|
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Michael Berelowitz †
415 East 37th Street
New York, NY, USA
|
220,000
(5)
|
*
|
|
Yifat Zommer ‡
P.O. Box 39098,
Jerusalem, Israel
|
526,000
(6)
|
*
|
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Regals Fund LP
767 Fifth Ave.
New York, NY, USA
|
15,814,947
(7)
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17.0%
|
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Zeev Bronfeld
6 Uri St.
Tel-Aviv, Israel
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8,366,212
(8)
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9.6%
|
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All current executive officers and directors, as a group (seven persons)
|
25,619,145
(9)
|
26.6%
|
|
_______________
|
|
|
|
*
|
Less than 1%
|
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†
|
Indicates Director
|
|
‡
|
Indicates Executive Officer
|
|
(1)
|
Includes 2,196,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
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(2)
|
Includes 3,361,360 shares of common stock issuable upon the exercise of an outstanding warrant and 2,196,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
|
(3)
|
Includes: (i) 2,763,055 shares of common stock and warrants to purchase 202,703 shares of common stock held by Mr. Sank, (ii) 937,500 shares of common stock and a warrant to purchase 328,125 shares of common stock held by Mr. Sank’s wife, (iii) 420,000 shares of common stock issuable upon the exercise of outstanding stock options, and (iv) 1,666,667 shares of common stock owned by a company wholly owned by a trust of which Mr. Sank is a trustee. Mr. Sank disclaims beneficial ownership of the securities referenced in (ii) and (iv) above. The foregoing is based on Form 4’s filed by Mr. Sank on January 13, 2009, October 6, 2011, August 9, 2012 and November 6, 2012, and information available to the Company.
|
|
(4)
|
Includes 10,000
shares of common stock indirectly acquired through a corporation wholly-owned by Mr. Jacob, and 420,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
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(5)
|
Includes 220,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
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(6)
|
Includes 526,000 shares of common stock issuable upon the exercise of outstanding stock options.
|
|
(7)
|
Include warrants to purchase 6,687,277 shares of common stock. Regals Capital Management LP is the investment manager of Regals Fund LP, the owner of record of these shares of common stock. Mr. David M. Slager is the managing member of the general partner of Regals Capital Management LP. All investment decisions are made by Mr. Slager, and thus the power to vote or direct the votes of these shares of common stock, as well as the power to dispose or direct the disposition of such shares of common stock is held by Mr. Slager through Regals Capital Management LP. The forgoing is based on a Schedule 13G/A and Form 3 filed September 6, 2012, and on a Form 4 filed November 6, 2012, each of which was filed jointly by Regals Fund LP, Regals Capital Management LP and Mr. Slager, and on subsequent information available to the Company.
|
|
(8)
|
Includes 2,390,057
shares of common stock and warrants to purchase 273,438 shares of common stock held by D.N.A. Mr. Bronfeld and Mr. Meni Mor are parties to a voting agreement relating to their joint holdings in D.N.A, which as of December 31, 2011, represented approximately 41.2% of D.N.A’s outstanding share capital on an actual basis, as reported by D.N.A to the Israel Securities Authority. As a result, Mr. Bronfeld may be deemed a beneficial owner of, and to share the power to vote and dispose of our securities held by D.N.A. Mr. Bronfeld has disclaimed beneficial ownership of any of our securities held by D.N.A. The foregoing is based on a Schedule 13G/A filed by Mr. Bronfeld on January 19, 2012 and on subsequent information available to the Company.
|
|
(9)
|
Includes 9,870,188 shares of common stock issuable upon the exercise of warrants beneficially owned by the referenced persons and the exercise of outstanding stock options.
|
|
Summary:
|
2012
|
2011
|
||||||
|
Audit Fees
(1)
|
$ | 102,240 | $ | 100,390 | ||||
|
Audit-Related Fees
|
- | - | ||||||
|
Tax Fees
(2)
|
7,500 | - | ||||||
|
All Other Fees
|
- | - | ||||||
|
Total Fees
|
$ | 109,740 | $ | 100,390 | ||||
|
|
(1)
|
Amount represents fees paid for professional services for the audit of our consolidated annual financial statements and review of our interim condensed consolidated financial statements included in quarterly reports and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
|
|
|
(2)
|
Amount represents fees paid for consulting services to assist us with our implementation of FASB ASC Topic 740-10 (formerly FIN 48), “Income Taxes,” relating to uncertain tax positions.
|
|
Page
|
||
|
F - 2
|
||
|
F - 3
|
||
|
CONSOLIDATED FINANCIAL STATEMENTS:
|
||
|
F - 4
|
||
|
F - 5
|
||
|
F - 6 - F - 7
|
||
|
F - 8
|
||
|
F - 9 - F - 39
|
|
Tel Aviv, Israel
|
/s/ Kesselman & Kesselman
|
|
December 11, 2012
|
Kesselman & Kesselman
|
|
Certified Public Accountant (Isr.)
|
|
|
A member firm of PricewaterhouseCoopers
|
|
|
International Limited
|
|
August 31
|
||||||||
|
2012
|
2011
|
|||||||
|
Assets
|
||||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash and cash equivalents
|
$ | 4,430,740 | $ | 1,513,365 | ||||
|
Short term deposits (note 2)
|
454,381 | 1,801,400 | ||||||
|
Marketable securities (note 3)
|
200,311 | 384,565 | ||||||
|
Restricted cash (note 1o)
|
16,000 | 16,000 | ||||||
|
Accounts receivable - other (note 4)
|
87,691 | 542,891 | ||||||
|
Prepaid expenses
|
2,307 | 1,670 | ||||||
|
Related parties (note 16)
|
404 | - | ||||||
|
Grants receivable from the chief scientist
|
84,642 | 24,191 | ||||||
|
T o t a l current assets
|
5,276,476 | 4,284,082 | ||||||
|
LONG TERM DEPOSITS AND INVESTMENT
(note 9b)
|
8,867 | 10,186 | ||||||
|
AMOUNTS FUNDED IN RESPECT OF EMPLOYEE RIGHTS UPON RETIREMENT
(note 8)
|
4,740 | 14,293 | ||||||
|
PROPERTY AND EQUIPMENT, NET
(note 6)
|
4,768 | 17,376 | ||||||
|
T o t a l assets
|
$ | 5,294,851 | $ | 4,325,937 | ||||
|
Liabilities and stockholders' equity
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Accounts payable and accrued expenses (note 12)
|
$ | 597,173 | $ | 375,538 | ||||
|
Related parties (note 16)
|
- | 18,502 | ||||||
|
Account payable with former shareholder
|
47,252 | 47,252 | ||||||
|
T o t a l current liabilities
|
644,425
|
441,292 | ||||||
|
LONG TERM LIABILITIES:
|
||||||||
|
Warrants (note 7)
|
637,182 | - | ||||||
|
Employee rights upon retirement
(note 8)
|
6,959 | 22,675 | ||||||
|
Provision for uncertain tax position
(note 15e)
|
228,272
|
138,054 | ||||||
|
872,413
|
160,729 | |||||||
|
COMMITMENTS
(note 9)
|
||||||||
|
STOCKHOLDERS’ EQUITY:
|
||||||||
|
Common stock, $ 0.001 par value (200,000,000 authorized shares; 80,075,725
and 70,104,583 shares issued and outstanding as of August 31, 2012 and
2011, respectively)
|
80,075 | 70,104 | ||||||
|
Additional paid-in capital
|
21,589,715 | 18,201,111 | ||||||
|
Deficit accumulated during the development stage
|
(17,891,777 | ) | (14,547,299 | ) | ||||
|
T o t a l stockholders' equity
|
3,778,013 | 3,723,916 | ||||||
|
T o t a l liabilities and stockholders’ equity
|
$ | 5,294,851 | $ | 4,325,937 | ||||
|
Period
|
||||||||||||
|
from April
|
||||||||||||
| 12, 2002 | ||||||||||||
|
(inception)
|
||||||||||||
|
Year ended
|
through
|
|||||||||||
|
August 31
|
August 31,
|
|||||||||||
|
2012
|
2011
|
2012 | ||||||||||
|
RESEARCH AND DEVELOPMENT EXPENSES, NET
(note 13)
|
$ | 1,680,845 | $ | 1,159,309 | $ | 9,532,694 | ||||||
|
IMPAIRMENT OF INVESTMENT
|
- | - | 434,876 | |||||||||
|
GENERAL AND ADMINISTRATIVE EXPENSES
(note 14)
|
1,203,164 | 1,275,960 | 8,161,547 | |||||||||
|
OPERATING LOSS
|
2,884,009 | 2,435,269 | 18,129,117 | |||||||||
|
FINANCIAL INCOME
|
(13,126 | ) | (33,232 | ) | (207,158 | ) | ||||||
|
GAIN ON SALE OF INVESTMENT
|
- | (1,033,004 | ) | (1,033,004 | ) | |||||||
|
IMPAIRMENT OF AVAILABLE- FOR-SALE SECURITIES
|
184,254 | 197,412 | 381,666 | |||||||||
|
FINANCIAL EXPENSES
|
199,123 | 18,780 | 380,380 | |||||||||
|
LOSS BEFORE TAXES ON INCOME
|
3,254,260 | 1,585,225 | 17,651,001 | |||||||||
|
TAXES ON INCOME
(note 15)
|
90,218 | (23,980 | ) | 240,776 | ||||||||
|
NET LOSS FOR THE PERIOD
|
$ | 3,344,478 | $ | 1,561,245 | $ | 17,891,777 | ||||||
|
BASIC AND DILUTED LOSS PER
|
||||||||||||
|
COMMON SHARE
|
$ | (0.05 | ) | $ | (0.02 | ) | ||||||
|
WEIGHTED AVERAGE NUMBER OF COMMON
|
||||||||||||
|
SHARES USED IN COMPUTING BASIC AND
|
||||||||||||
|
DILUTED LOSS PER COMMON STOCK
|
70,605,814 | 64,999,026 | ||||||||||
|
Deficit
|
||||||||||||||||||||
|
accumulated
|
||||||||||||||||||||
|
Common Stock
|
Additional
|
during the
|
Total
|
|||||||||||||||||
|
paid-in
|
development
|
stockholders'
|
||||||||||||||||||
|
Shares
|
$ |
capital
|
stage
|
equity
|
||||||||||||||||
|
BALANCE AS OF APRIL 12, 2002
(inception)
|
34,828,200 | $ | 34,828 | $ | 18,872 | - | $ | 53,700 | ||||||||||||
|
CHANGES DURING THE PERIOD FROM APRIL
12, 2002 THROUGH
AUGUST 31, 2007 :
|
||||||||||||||||||||
|
SHARES CANCELLED
|
(19,800,000 | ) | (19,800 | ) | 19,800 | - | - | |||||||||||||
|
SHARES ISSUED FOR INVESTMENT IN ISTI-NJ
|
1,144,410 | 1,144 | 433,732 | - | 434,876 | |||||||||||||||
|
SHARES ISSUED FOR OFFERING COSTS
|
1,752,941 | 1,753 | (1,753 | ) | - | - | ||||||||||||||
|
SHARES AND WARRANTS ISSUED FOR CASH–
NET OF ISSUANCE EXPENSES
|
27,181,228 | 27,181 | 2,095,800 | - | 2,122,981 | |||||||||||||||
|
SHARES ISSUED FOR SERVICES
|
125,000 | 125 | 98,625 | - | 98,750 | |||||||||||||||
|
CONTRIBUTIONS TO PAID IN CAPITAL
|
- | - | 18,991 | - | 18,991 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO
OPTIONS GRANTED TO EMPLOYEES AND
DIRECTORS
|
- | - | 1,968,547 | - | 1,968,547 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 177,782 | - | 177,782 | |||||||||||||||
|
DISCOUNT ON CONVERTIBLE NOTE RELATED TO BENEFICIAL CONVERSION FEATURE
|
- | - | 108,000 | - | 108,000 | |||||||||||||||
|
OTHER COMPREHENSIVE LOSS
|
- | - | (16 | ) | (16 | ) | ||||||||||||||
|
IMPUTED INTEREST
|
- | - | 8,437 | - | 8,437 | |||||||||||||||
|
NET LOSS
|
- | - | - | (4,478,917 | ) | (4,478,917 | ) | |||||||||||||
|
BALANCE AS OF AUGUST 31, 2007
|
45,231,779 | 45,231 | 4,946,833 | (4,478,933 | ) | 513,131 | ||||||||||||||
|
RECEIPTS ON ACCOUNT OF SHARES
AND WARRANTS
|
- | - | 6,061 | - | 6,061 | |||||||||||||||
|
SHARES ISSUED FOR CONVERSION OF
CONVERTIBLE NOTE
|
550,000 | 550 | 274,450 | - | 275,000 | |||||||||||||||
|
SHARES AND WARRANTS ISSUED FOR CASH – NET OF ISSUANCE EXPENSES
|
10,178,002 | 10,178 | 5,774,622 | - | 5,784,800 | |||||||||||||||
|
SHARES ISSUED FOR SERVICES
|
293,025 | 293 | 115,817 | - | 116,110 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO
OPTIONS GRANTED TO EMPLOYEES
AND DIRECTORS
|
- | - | 459,467 | - | 459,467 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO
OPTIONS GRANTED TO CONSULTANTS
|
- | - | 203,982 | - | 203,982 | |||||||||||||||
|
IMPUTED INTEREST
|
- | - | 3,780 | - | 3,780 | |||||||||||||||
|
NET LOSS
|
- | - | - | (2,769,271 | ) | (2,769,271 | ) | |||||||||||||
|
BALANCE AS OF AUGUST 31, 2008
|
56,252,806 | 56,252 | 11,785,012 | (7,248,204 | ) | 4,593,060 | ||||||||||||||
|
Deficit
|
||||||||||||||||||||
|
accumulated
|
||||||||||||||||||||
|
Additional
|
during the
|
Total
|
||||||||||||||||||
|
Common Stock
|
paid-in
|
development
|
stockholders'
|
|||||||||||||||||
|
Shares
|
$ |
capital
|
stage
|
equity
|
||||||||||||||||
|
BALANCE AS OF AUGUST 31, 2008
|
56,252,806 | 56,252 | 11,785,012 | (7,248,204 | ) | 4,593,060 | ||||||||||||||
|
SHARES ISSUED FOR SERVICES RENDERED
|
203,904 | 204 | 152,724 | - | 152,928 | |||||||||||||||
|
SHARES TO BE ISSUED FOR SERVICES RENDERED
|
- | - | 203,699 | - | 203,699 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 436,025 | - | 436,025 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 117,174 | - | 117,174 | |||||||||||||||
|
IMPUTED INTEREST
|
- | - | 3,780 | - | 3,780 | |||||||||||||||
|
NET LOSS
|
- | - | - | (2,760,474 | ) | (2,760,474 | ) | |||||||||||||
|
BALANCE AS OF AUGUST 31, 2009
|
56,456,710 | $ | 56,456 | $ | 12,698,414 | $ | (10,008,678 | ) | $ | 2,746,192 | ||||||||||
|
SHARES ISSUED FOR SERVICES RENDERED
|
1,108,611 | 1,109 | 248,741 | - | 249,850 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 690,882 | - | 690,882 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 116,944 | - | 116,944 | |||||||||||||||
|
IMPUTED INTEREST
|
- | - | 3,780 | - | 3,780 | |||||||||||||||
|
NET LOSS
|
- | - | - | (2, 977, 376 | ) | (2,977,376 | ) | |||||||||||||
|
BALANCE AS OF AUGUST 31, 2010
|
57,565,321 | $ | 57,565 | $ | 13,758,761 | $ | (12,986,054 | ) | $ | 830,272 | ||||||||||
|
SHARES ISSUED FOR SERVICES RENDERED
|
730,636 | 731 | 226,838 | - | 227,569 | |||||||||||||||
|
SHARES AND WARRANTS ISSUED FOR CASH*
|
11,808,626 | 11,808 | 3,682,404 | - | 3,694,212 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 502,593 | - | 502,593 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 26,733 | - | 26,733 | |||||||||||||||
|
IMPUTED INTEREST
|
- | - | 3,782 | - | 3,782 | |||||||||||||||
|
NET LOSS
|
- | - | - | (1,561,245 | ) | (1,561,245 | ) | |||||||||||||
|
BALANCE AS OF AUGUST 31, 2011
|
70,104,583 | 70,104 | 18,201,111 | (14,547,299 | ) | 3,723,916 | ||||||||||||||
|
SHARES ISSUED FOR SERVICES
|
349,000 | 349 | 107,511 | - | 107,860 | |||||||||||||||
|
SHARES AND WARRANTS ISSUED FOR CASH, INCLUDING RECLASSIFICATION OF WARRANTS
|
9,622,142 | 9,622 | 2,984,842 | - | 2,944,464 | |||||||||||||||
|
SHARES AND WARRANTS TO BE ISSUED FOR CASH
|
- | - | 25,093 | - | 25,093 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 200,866 | - | 200,866 | |||||||||||||||
|
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 70,292 | - | 70,292 | |||||||||||||||
|
NET LOSS
|
- | - | - | (3,344,478 | ) | (3,344,478 | ) | |||||||||||||
|
BALANCE AS OF
AUGUST
31, 2012
|
80,075,725 | $ | 80,075 | $ | 21,589,715 | $ | (17,891,777 | ) | $ | 3,778,013 | ||||||||||
|
Period from April 12, 2002 (inception date) through
|
||||||||||||
|
Year ended August 31
|
August 31,
|
|||||||||||
|
2012
|
2011
|
2012
|
||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net loss
|
$ | (3,344,478 | ) | $ | (1,561,245 | ) | $ | (17,891,777 | ) | |||
|
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||||||
|
Depreciation and amortization
|
14,737 | 28,303 | 120,844 | |||||||||
|
Amortization of debt discount
|
- | - | 108,000 | |||||||||
|
Exchange differences
|
62,494 | (30,791 | ) | 31,037 | ||||||||
|
Stock based compensation
|
271,158 | 529,326 | 4,971,287 | |||||||||
|
Common stock issued for services
|
107,860 | 227,569 | 1,155,956 | |||||||||
|
Gain on sale of investment
|
- | (1,033,004 | ) | (1,033,004 | ) | |||||||
|
Impairment of investments
|
- | - | 434,876 | |||||||||
|
Impairment of available for sale securities
|
184,254 | 197,412 | 381,666 | |||||||||
|
Imputed interest
|
- | 3,782 | 23,559 | |||||||||
|
Changes in fair value of warrant liabilities
|
142,704 | - | 142,704 | |||||||||
|
Changes in operating assets and liabilities:
|
||||||||||||
|
Prepaid expenses and other current assets
|
(31,199 | ) | (36,105 | ) | (160,159 | ) | ||||||
|
Restricted cash
|
- | 8 | (16,000 | ) | ||||||||
|
Accounts payable and accrued expenses
|
203,133 | (17,290 | ) | 597,173 | ||||||||
|
Liability for employee rights upon retirement
|
(2,489 | ) | 22,675 | 20,186 | ||||||||
|
Provision for uncertain tax position
|
90,218 | (36,484 | ) | 228,272 | ||||||||
|
Total net cash used in operating activities
|
(2,301,608 | ) | (1,705,844 | ) | (10,885,380 | ) | ||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Purchase of property and equipment
|
(2,129 | ) | (2,180 | ) | (125,612 | ) | ||||||
|
Purchase of short term deposits
|
(475,353 | ) | (1,700,382 | ) | (5,903,735 | ) | ||||||
|
Proceeds from sale of short term deposits
|
1,800,000 | - | 5,428,000 | |||||||||
|
Proceeds from sale of investment
|
450,000 | - | 450,000 | |||||||||
|
Funds in respect of employee rights upon retirement
|
(3,620 | ) | (3,275 | ) | (6,895 | ) | ||||||
|
Lease deposits
|
- | 2,407 | (7,509 | ) | ||||||||
|
Total net cash provided by (used in) investing activities
|
1,768,898 | (1,703,430 | ) | (165,751 | ) | |||||||
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
||||||||||||
|
Proceeds from sales of common stocks and
warrants - net of issuance expenses
|
3,488,942 | 3,694,212 | 15,144,635 | |||||||||
|
Receipts on account of shares issuances
|
- | - | 6,061 | |||||||||
|
Proceeds from convertible notes
|
- | - | 275,000 | |||||||||
|
Proceeds from short term note payable
|
- | - | 120,000 | |||||||||
|
Payments of short term note payable
|
- | - | (120,000 | ) | ||||||||
|
Shareholder advances
|
- | - | 66,243 | |||||||||
|
Net cash provided by financing activities
|
3,488,942 | 3,694,212 | 15,491,939 | |||||||||
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(38,857 | ) | 28,789 | (10,068 | ) | |||||||
|
INCREASE IN CASH AND CASH EQUIVALENTS
|
2,917,375 | 313,727 | 4,430,740 | |||||||||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD
|
1,513,365 | 1,199,638 | - | |||||||||
|
CASH AND CASH EQUIVALENTS AT END OF
|
||||||||||||
|
PERIOD
|
$ | 4,430,740 | $ | 1,513,365 | $ | 4,430,740 | ||||||
|
Material non cash investing and financing activities:
|
||||||||||||
|
Discount on convertible note related to beneficial
conversion feature
|
$ | 108,000 | ||||||||||
|
Shares and warrants issued as offering costs
|
$ | 76,026 | $ | 77,779 | ||||||||
|
Contribution to paid in capital
|
$ | 18,991 | ||||||||||
|
Shares and warrants to be issued for cash
|
$ | 25,093 | - | $ | 25,093 | |||||||
|
Changes to amounts funded in respect of employee rights upon
retirement and long term liability to Employee rights upon retirement
|
$ | 13,227 | - | $ | 13,227 | |||||||
|
|
a.
|
General
|
|
|
b.
|
Accounting principles
|
|
|
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
|
|
|
c.
|
Use of estimates in the preparation of financial statements
|
|
|
d.
|
Functional currency
|
|
|
e.
|
Principles of consolidation
|
|
|
f.
|
Property and equipment
|
|
%
|
|||
|
Computers and peripheral equipment
|
33 | ||
|
Office furniture and equipment
|
15-33 |
|
|
g.
|
Income taxes
|
|
1.
|
Deferred taxes
|
|
2.
|
Uncertainty in income tax
|
|
|
h.
|
Research and development, net
|
|
|
i.
|
Cash equivalents
|
|
|
j.
|
Comprehensive loss
|
|
|
The Company has no other comprehensive loss components other than net loss for the fiscal years of 2012 and 2011.
|
|
|
k.
|
Loss per common share
|
|
|
l.
|
Impairment in value of long-lived assets
|
|
|
m.
|
Stock based compensation
|
|
|
n.
|
Warrants issued as part of capital raisings that are classified as a liability
|
|
|
o.
|
Fair value measurement:
|
|
Level 1:
|
Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
|
|
Level 2:
|
Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
|
|
Level 3:
|
Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
|
|
|
p.
|
Concentration of credit risks
|
|
|
q.
|
Newly issued and recently adopted accounting pronouncements:
|
|
1.
|
In May 2011, the Financial Accounting Standard Board ("FASB") issued an accounting update that amends ASC No. 820, "Fair Value Measurement" regarding fair value measurements and disclosure requirements. The amendments are effective during interim and annual periods beginning after December 15, 2011 and are to be applied prospectively. The Company adopted the accounting update beginning in the third quarter of fiscal year 2012. As applicable to the Company, the adoption of the new guidance did not have any material impact on the consolidated financial statements.
|
|
2.
|
In June 2011, the FASB issued an update to ASC No. 220, “Presentation of Comprehensive Income,” which eliminates the option to present other comprehensive income and its components in the statement of shareholders’ equity. The Company can elect to present the items of net income and other comprehensive income in a single continuous statement of comprehensive income or in two separate, but consecutive, statements. Under either method the statement would need to be presented with equal prominence as the other primary financial statements. The amended guidance, which must be applied retroactively, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with earlier adoption permitted. In December 2011, the FASB issued another update on the topic, which deferred the effective date pertaining only to the presentation of reclassification adjustments on the face of the financial statements. The accounting update will be applicable to the Company beginning in the first quarter of fiscal year 2013. The adoption of the new guidance is not expected to have a material impact on the consolidated financial statements.
|
|
|
r.
|
Reclassifications
|
|
August 31
|
||||||||||||||
|
2012
|
2011
|
|||||||||||||
|
Annual
interest rate
|
Amount
|
Annual
interest rate
|
Amount
|
|||||||||||
|
Dollars deposits
|
0.85% | $ | 260,371 | 0.7-0.86% | $ | 1,801,400 | ||||||||
|
NIS deposits
|
1.93-1.97% | 194,010 | - | |||||||||||
| $ | 454,381 | $ | 1,801,400 | |||||||||||
|
Level 1
|
Level 3
|
Total
|
||||||||||
|
Marketable securities:
|
||||||||||||
|
August 31, 2012
|
$ | 200,311 | - | $ | 200,311 | |||||||
|
August 31, 2011
|
- | $ | 384,565 | $ | 384,565 | |||||||
|
August 31
|
||||||||
|
2012
|
2011
|
|||||||
|
Carrying value at the beginning of the period
|
$ | 384,565 | $ | - | ||||
|
Additions - see note 5
|
- | 581,977 | ||||||
|
Reclassification to level 1
|
(384,565 | ) | - | |||||
|
Impairment of available-for-sale securities - financial expenses
|
- | (197,412 | ) | |||||
|
Carrying value at the end of the period
|
$ | - | $ | 384,565 | ||||
|
August 31
|
||||||||
|
2012
|
2011
|
|||||||
|
Receivables from D.N.A (see note 5)
|
$ | - | $ | 450,844 | ||||
|
Tax Authorities
|
53,341 | 32,406 | ||||||
|
Other receivables
|
34,350 | 59,641 | ||||||
| $ | 87,691 | $ | 542,891 | |||||
|
|
a.
|
In June 2010, the Subsidiary entered into an agreement with D.N.A, for the establishment of a new company, Entera. According to the JV Agreement, D.N.A invested $600,000, in two stages, in Entera, and Entera was owned in equal parts by the Subsidiary and D.N.A. In consideration for 50% of Entera's shares, the Subsidiary entered into a Patent License Agreement with Entera, according to which, the Subsidiary out-licensed to Entera a technology for the development of oral delivery drugs for certain actions.
|
|
|
b.
|
On February 22, 2011, the Subsidiary entered into a share purchase agreement with D.N.A for the sale of 47% of Entera's outstanding share capital on an undiluted basis. The closing of that transaction took place on March 31, 2011. As consideration for the Entera shares, the Subsidiary received a promissory note issued by D.N.A in the principal amount of $450,000, with an annual interest rate of 0.45%, which was paid on November 14, 2011, and 8,404,667 ordinary shares of D.N.A (the "D.N.A Shares"), having a fair value of $581,977 as of the closing date of the transaction. The D.N.A Shares are listed on the Tel Aviv Stock Exchange ("TASE") and their tradability was restricted for a period of 6 months from the closing date of the transaction according to TASE policy with regards to private placements.
|
|
Fair value of D.N.A Shares
|
$ | 581,977 | ||
|
Receivables from D.N.A
|
450,000 | |||
|
Re-classification of currency translation adjustments
|
7,930 | |||
| $ | 1,039,907 | |||
|
Less - net cost of the investment realized
|
(6,903 | ) | ||
| $ | 1,033,004 |
|
|
a.
|
Composition of property and equipment, grouped by major classifications, is as follows:
|
|
August 31
|
||||||||
|
2012
|
2011
|
|||||||
|
Cost:
|
||||||||
|
Leasehold improvements
|
$ | 76,029 | $ | 76,029 | ||||
|
Office furniture and equipment
|
19,941 | 19,941 | ||||||
|
Computers and peripheral equipment
|
29,642 | 27,513 | ||||||
| 125,612 | 123,483 | |||||||
|
Less - accumulated depreciation and amortization
|
120,844 | 106,107 | ||||||
| $ | 4,768 | $ | 17,376 | |||||
|
|
b.
|
Depreciation expenses totaled $14,737 and $28,303 in the years ended August 31, 2012 and 2011, respectively.
|
|
Fair value measurements at reporting
date using
|
||||||||
|
Level 3
|
Total
|
|||||||
|
Warrants -
|
||||||||
|
August 31, 2012
|
$ | 637,182 | $ | 637,182 | ||||
|
August 31
|
||||
|
2012
|
||||
|
Carrying value at the beginning of the period
|
- | |||
|
Additions
|
$ | 494,478 | ||
|
Changes in fair value of warrant liabilities
|
142,704 | |||
|
Carrying value at the end of the period
|
$ | 637,182 | ||
|
|
a.
|
Under the terms of the First Agreement with Hadasit (note 1a above), the Company retained Hadasit to provide consulting and clinical trial services. As remuneration for the services provided under the agreement, Hadasit is entitled to $200,000. The primary researcher for Hadasit is Dr. Miriam Kidron, a director and officer of the Company. The funds paid to Hadasit under the agreement are deposited by Hadasit into a research fund managed by Dr. Kidron. Pursuant to the general policy of Hadasit with respect to its research funds, Dr. Kidron receives from Hadasit a management fee in the rate of 10% of all the funds deposited into this research fund. The total amount paid to Dr. Kidron out of this fund was $10,214.
|
|
|
b.
|
The Subsidiary has entered into operating lease agreements for vehicles used by its employees for a period of 3 years.
|
|
|
c.
|
On March 18, 2012, the Subsidiary entered into a lease agreement for its office facilities in Israel. The lease agreement is for a period of 57 months commencing January 1, 2012. The monthly lease payment will be NIS 3,400 in 2012, NIS 4,225 in 2013 and NIS 5,610 from 2014 onwards, and will be linked to the increase in the Israeli consumer price index (as of August 31, 2012, the monthly payment in the Company's functional currency is $844, the future annual lease payments under the agreement will be $11,768 in 2013, $15,338 in 2013 and $16,713 from 2014 onwards).
|
|
d.
|
On April 21, 2009, the Subsidiary entered into a consulting service agreement withADRES Advanced Regulatory Services Ltd. (“ADRES”) (the "Original Agreement") pursuant to which ADRES will provide consulting services relating to quality assurance and regulatory processes and procedures in order to assist the Subsidiary in submission of a U.S. Investigational New Drug (“IND”) according to the U.S. Food and Drug Administration (the “FDA”) regulations. In consideration for the services provided under the agreement, ADRES will be entitled to total cash compensation of $211,000, of which the amount of $110,000 will be paid as a monthly fixed fee of $10,000 each month for 11 months commencing May 2009, and the remaining $101,000 will be paid based on achievement of certain milestones. $160,000 of the total amount was paid through November 30, 2011, $50,000 of which was paid for completing the first three milestones.
|
|
e.
|
On February 10, 2010, the Subsidiary entered into an agreement with Vetgenerics Research G. Ziv Ltd, a clinical research organization, to conduct a toxicology trial on its oral insulin capsules. The total cost estimated for the studies is €107,100 ($154,320) of which €89,923 ($129,570) was paid through August 31, 2012. The Company did not recognized any expense during 2012 with respect to said agreement.
|
|
f.
|
On February 15, 2011, the Subsidiary entered into a consulting agreement with a third party (the "Consultant”) for a period of five years, pursuant to which the Consultant will provide consultation on scientific and clinical matters. The Consultant is entitled to a fixed monthly fee of $8,000, royalties of 8% of the net royalties actually received by the Subsidiary in respect of the patent that was sold to Entera on February 22, 2011 and an option to purchase up to 250,000 shares of common stock of the Company at an exercise price of $0.50 per share. The option vests in five annual installments commencing February 16, 2012 and expires on February 16, 2021. The initial fair value of the option on the date of grant was $62,185, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 78.65%; risk-free interest rates of 3.62%; and the remaining expected term of 10 years. The fair value of the option as of August 31, 2012 was $54,345, using the following assumptions: dividend yield of 0% and expected term of 8.5 years; expected volatility of 75.41%; and risk-free interest rate of 1.29%.The fair value of the option granted is remeasured at each balance sheet reporting date and is recognized over the related service period using the straight-line method.
|
|
g.
|
On June 22, 2011, the Subsidiary issued a purchase order to SAFC Pharma for producing one of its oral capsule ingredients in the amount of $600,000. During the year ended August 31, 2012, only a quantity valued at approximately $444,000 was supplied to the Subsidiary, of which $170,000 was paid through August 31, 2012, and the remaining is presented under accounts payable and accrued expenses.
|
|
h.
|
On December 12, 2011, the Subsidiary entered into a Supply Agreement with Swiss Caps AG ("Swiss Caps"), according to which, Swiss Caps will manufacture insulin capsules for total consideration of CHF 395,000 (approximately $411,000) of which CHF 340,000 (approximately $375,000) was paid and recognized through August 31, 2012.
|
|
i.
|
On February 15, 2012, the Company entered into an advisory agreement with a third party for a period of one year, pursuant to which such third party will provide investors relations services and will be entitled to a share based compensation as follows: 300,000 shares of common stock of the Company will be issued in six installments over the engagement period, commencing February 15, 2012, and a warrant to purchase 750,000 shares of common stock of the Company at an exercise price of $0.50 per share. The warrant vests in 12 monthly installments commencing February 15, 2012 and expires on February 15, 2017. The initial fair value of the option on the date of grant was $121,304, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.82%; risk-free interest rates of 0.81%; and the remaining expected term of 5 years.
|
|
|
j.
|
Grants from Bio-Jerusalem
|
|
|
k.
|
Grants from the Chief Scientist Office ("OCS")
|
|
|
a.
|
Between
November 2010 and February 2011, the Company entered into Securities Purchase Agreements with a few accredited investors for the sale of 9,706,250 units at a purchase price of $0.32 per unit for total consideration of $3,106,000. Each unit consisted of one share of the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.35 a share of common stock exercisable for five years at an exercise price of $0.50 per share. For finder's fee with respect to these Securities Purchase Agreements, see note 11c..
|
|
b.
|
On March 31, 2011, the Company consummated a transaction with D.N.A for the sale of 781,250 shares of common stock and warrants to purchase up to 273,438 shares of common stock, for a total purchase price of $250,000 in cash. The shares and warrants were sold in units at a price per unit of $0.32, each unit consisting of one share of common stock and a warrant to purchase 0.35 of a share of common stock. The warrants have an exercise price of $0.50 per share, and a term of five years commencing from the closing of the transaction. See also note 5.
|
|
|
c.
|
In April 2011, the Company entered into Securities Purchase Agreements with nine accredited investors for the sale of 1,124,375 units at a purchase price of $0.32 per unit for total consideration of $359,800.
|
|
|
d.
|
In May 2011, the Company issued 176,923 shares of its common stock, valued at $47,769, in the aggregate, to Swiss Caps as settlement of our liability for services rendered in the past.
|
|
|
e.
|
On August 15, 2011, the Company entered into a consulting agreement with a third party (the "Advisor”) for a period of nine months, pursuant to which such Advisor provided investor relations services and received a monthly cash fee and shares of the Company's common stock in that were issued in three equal installments as follows: on
each of December 12, 2011, March 14, 2012 and May 15, 2012, the Company issued 83,000 shares of its common stock at fair value of $24,900, $26,560 and $24,900, respectively.
|
|
|
f.
|
On
each of March 14, 2012 and July 5, 2012, the Company issued 50,000 shares of its common stock to an advisor as remuneration for services provided. The fair value of the shares at the dates of grant was $15,500 and $16,000, respectively. See also note 9i.
|
|
g.
|
In August 2012, the Company entered into Securities Purchase Agreements with a number of investors for the sale of 9,622,142 units at a purchase price of $0.37 per unit for total consideration of $3,560,192. Each unit consisted of one share of the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.50 a share of common stock exercisable for five years at an exercise price of $0.50 per share.The investors were granted customary registration rights with respect to resales of shares, including the shares underlying the warrants. In addition, in August 2012, the Company entered into a Securities Purchase Agreement with an investor for the sale of 67,819 units at same terms as describe above. As the payment from said investor was received during September 2012, following which, the Company issued him its shares of common stock, the proceeds from that investment, of $25,093 are presented as shares and warrants to be issued for cash.
|
|
|
h.
|
As to shares issued as part of stock based compensation plan see note 11.
|
|
|
i.
|
As to a Clinical Trial Manufacturing Agreement with Swiss Caps, see note 11a.
|
|
|
a.
|
On October 30, 2006, the Company entered into a Clinical Trial Manufacturing Agreement with Swiss Caps, pursuant to which Swiss Caps would manufacture and deliver the oral insulin capsule developed by the Company. In consideration for the services being provided to the Company by Swiss Caps, the Company agreed to pay certain predetermined amounts which are to be paid in common stock of the Company, the number of shares to be issued is based on the invoice received from Swiss Caps, and the stock market price 10 days after the invoice is issued. During the year ended on August 31, 2011, the Company issued 530,637 shares of its common stock to Swiss Caps as remuneration for the services provided in the amount of $167,569. No shares were issued to Swiss Caps during the year ended on August 31, 2012.
|
|
b.
|
On February 15, 2011, the Company granted options under the 2008 Stock Incentive Plan to purchase up to 250,000 shares of our common stock at an exercise price of $0.50 to a consultant. The options vest in five annual installments commencing February 16, 2012 and expire on February 16, 2021. The initial fair value of the option on the date of grant, was $62,185, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 78.65%; risk-free interest rates of 3.42%; and the remaining contractual life of 10 years. The fair value of the options granted is measured on a final basis at the end of the related service period and is recognized over the related service period using the straight-line method.
|
|
|
c.
|
In March 2011, in connection with the securities purchase agreement, as described in note 10a, the Company issued 196,750 shares of the Company's common stock and warrants to purchase 70,864 shares of common stock to three individuals, as finders' fees. The fair value of the shares at the date of grant was $59,778, and the fair value of the warrants at that date was $12,630, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 78.54% - 78.68%; risk-free interest rates of 2.11% - 2.19%; and the remaining expected term of 5 years. The warrants have an exercise price of $0.50 per share
|
|
|
d.
|
In April 2011, the Company entered into Securities Purchase Agreements with nine accredited investors for the sale of 1,124,375 units at a purchase price of $0.32 per unit for total consideration of $359,800. Each unit consisted of one share of the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.35 a share of common stock exercisable for five years at an exercise price of $0.50 per share. The Company paid $21,588 and issued on July 2011, 67,462 warrants as finders' fees. The fair value of the warrants at that date was $11,050, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 79.28%; risk-free interest rates of 2.09%; and the remaining expected term of 5 years.
|
|
|
e.
|
On April 27, 2011, 43,000 options were granted to ExperiMind Ltd as remuneration for services rendered at an exercise price of $0.50 per share (higher than the traded market price on the date of grant). The options vested immediately on the date of grant and will expire on April 26, 2016. The fair value of these options on the date of grant, was $10,000, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 79.24%; risk-free interest rates of 2.06%; and the remaining expected term of 5 years.
|
|
|
f.
|
In May 2011, the Company issued 200,000 shares of its common stock, valued at $60,000, in the aggregate, to New Castle Consulting, LLC as remuneration for services rendered in the six month period that commenced on May 4, 2011.
|
|
|
g.
|
On July 25, 2011, the Company issued warrants to purchase 32,000 shares of its common stock at an exercise price of $0.50 per share to The Trout Group, LLC as remuneration for services to be rendered during the 12 month period commencing May 13, 2011. The warrants vest in twelve equal annual installments commencing on October 13, 2011 and will expire on July 25, 2016. The fair value of these warrants on the date of grant, was $5,057, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 77.39%; risk-free interest rates of 1.55%; and the remaining expected term of 5 years. The fair value of the option as of August 31, 2012, was $4,548, using the following assumptions: dividend yield of 0% and expected term of 4 years; expected volatility of 75.41%; and risk-free interest rate of 0.45%. The fair value of the option granted is remeasured at each balance sheet reporting date and is recognized over the related service period using the straight-line method.
|
|
|
h.
|
On August 8, 2012, an aggregate of 1,728,000 options was granted to Nadav Kidron, the Company’s President, Chief Executive Officer and director, and Miriam Kidron, the Company’s Chief Medical and Technology Officer and director, both related parties, at an exercise price of $0.34 per share (equivalent to the traded market price on the date of grant) 504,000 of the options vested immediately on the date of grant and the remainder will vest in seventeen equal monthly installments of 72,000 each. These options expire on August 7, 2022. The fair value of these options on the date of grant was $373,565, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 0.83%; and expected term of 5.5 years.
|
|
|
i.
|
On August 8, 2012, an aggregate of 520,000 options was granted to three Board of Directors members at an exercise price of $0.34 per share (equivalent to the traded market price on the date of grant). The options vest in two equal annual installments, commencing January 1, 2013, and expire on August 7, 2022. The fair value of these options on the date of grant was $114,694, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 1.0375%; and expected term of 5.75 years.
|
|
|
j.
|
On August 8, 2012, 609,000 options were granted to an employee of the Subsidiary, at an exercise price of $0.34 per share (equivalent to the traded market price on the date of grant). The options vest in 29 equal monthly installments of 21,000, commencing August 31, 2012, and expire on August 7, 2022. The fair value of these options on the date of grant was $134,324, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 1.0375%; and expected term of 5.75 years.
|
|
|
k.
|
On August 8, 2012, 75,000 options were granted to an employee of the Subsidiary, at an exercise price of $0.34 per share (equivalent to the traded market price on the date of grant). The options vest in three equal annual installments, commencing January 1, 2013, and expire on August 7, 2022. The fair value of these options on the date of grant was $16,780, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 0.935%; and expected term of 6 years.
|
|
|
l.
|
On August 8, 2012, the Company's Board of Directors approved an extension of the term of the 3,361,360 warrants held by Dr. Miriam Kidron by approximately two years from such approval , expiring on August 6, 2014. The incremental fair value of the warrant extension was negligible.
|
|
|
m.
|
As to options granted to third parties, see note 9i.
|
|
For options granted in
|
||||||
|
the year ended August 31
|
||||||
|
2012
|
2011
|
|||||
|
Expected option life (years)
|
5-6 | 5-10 | ||||
|
Expected stock price volatility (%)
|
76.0 | 76.8-78.7 | ||||
|
Risk free interest rate (%)
|
0.8-1.0 | 1.6-3.6 | ||||
|
Expected dividend yield (%)
|
0.0 | 0.0 | ||||
|
Year ended August 31,
|
|||||||||||||||
|
2012
|
2011
|
||||||||||||||
|
Weighted
|
Weighted
|
||||||||||||||
|
Number
|
average
|
Number
|
average
|
||||||||||||
|
of
|
exercise
|
of
|
exercise
|
||||||||||||
|
options
|
price
|
options
|
price
|
||||||||||||
| $ | $ | ||||||||||||||
|
Options outstanding at
|
|||||||||||||||
|
beginning of year
|
10,009,360 | 0.32 | 10,009,360 | 0.32 | |||||||||||
|
Changes during the year:
|
|||||||||||||||
|
Granted - at market price
|
2,932,000 | 0.34 | - | ||||||||||||
|
Expired
|
(1,700,000 | ) | 0.45 | - | |||||||||||
|
Forfeited
|
(56,000 | ) | 0.47 | - | |||||||||||
|
Options outstanding at end
|
|||||||||||||||
|
of year
|
11,185,360 | 0.31 | 10,009,360 | 0.32 | |||||||||||
|
Options exercisable at end
|
|||||||||||||||
|
of year
|
8,605,026 | 8,925,359 | |||||||||||||
|
Weighted average fair
|
|||||||||||||||
|
value of options granted
|
|||||||||||||||
|
during the year
|
$ | 0.28 | - | ||||||||||||
|
Weighted
|
|||||||||||||||||
|
Average
|
Weighted
|
||||||||||||||||
|
Range of
|
Remaining
|
average
|
|||||||||||||||
|
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
|||||||||||||
|
prices
|
outstanding
|
Life
|
price
|
intrinsic value
|
|||||||||||||
| $ |
Years
|
$ | $ | ||||||||||||||
| 0.001 | 3,361,360 | 1.93 | 0.001 | 1,072,274 | |||||||||||||
|
0.34 to 0.54
|
7,824,000 | 7.95 | 0.44 | - | |||||||||||||
| 11,185,360 | 6.14 | 0.31 | 1,072,274 | ||||||||||||||
|
Weighted
|
|||||||||||||||||
|
Average
|
Weighted
|
||||||||||||||||
|
Range of
|
Remaining
|
average
|
|||||||||||||||
|
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
|||||||||||||
|
prices
|
exercisable
|
Life
|
price
|
intrinsic value
|
|||||||||||||
| $ |
Years
|
$ | $ | ||||||||||||||
| 0.001 | 3,361,360 | 1.93 | 0.001 | 1,072,274 | |||||||||||||
|
0.34 to 0.54
|
5,243,666 | 7.08 | 0.48 | - | |||||||||||||
| 8,605,026 | 5.07 | 0.29 | 1,072,274 | ||||||||||||||
|
Year ended August 31
|
||||||||||||||||
|
2012
|
2011
|
|||||||||||||||
|
Weighted
|
Weighted
|
|||||||||||||||
|
Number
|
average
|
Number
|
average
|
|||||||||||||
|
of
|
exercise
|
of
|
exercise
|
|||||||||||||
|
options
|
price
|
options
|
price
|
|||||||||||||
| $ | $ | |||||||||||||||
|
Options outstanding at
|
||||||||||||||||
|
beginning of year
|
988,200 | 0.60 | 813,200 | 0.63 | ||||||||||||
|
Changes during the year:
|
||||||||||||||||
|
Granted - at market price
|
- | - | ||||||||||||||
|
Granted - at an exercise
|
||||||||||||||||
|
price above market
|
||||||||||||||||
|
price
|
750,000 | 0.50 | 325,000 | 0.50 | ||||||||||||
|
Expired
|
- | (150,000 | ) | (0.71 | ) | |||||||||||
|
Options outstanding at end
|
||||||||||||||||
|
of year
|
1,738,200 | 0.56 | 988,200 | 0.60 | ||||||||||||
|
Options exercisable at end
|
||||||||||||||||
|
of year
|
1,064,201 | 606,200 | ||||||||||||||
|
Weighted
|
|||||||||||||||||
|
Average
|
Weighted
|
||||||||||||||||
|
Range of
|
Remaining
|
average
|
|||||||||||||||
|
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
|||||||||||||
|
prices
|
outstanding
|
Life
|
price
|
intrinsic value
|
|||||||||||||
| $ |
Years
|
$ | $ | ||||||||||||||
|
0.34 to 0.54
|
1,338,200 | 4.79 | 0.49 | - | |||||||||||||
| 0.76 | 400,000 | 4.83 | 0.76 | - | |||||||||||||
| 1,738,200 | 4.80 | 0.56 | - | ||||||||||||||
|
Weighted
|
|||||||||||||||||
|
Average
|
Weighted
|
||||||||||||||||
|
Range of
|
Remaining
|
average
|
|||||||||||||||
|
exercise
|
Number
|
Contractual
|
exercise
|
Aggregate
|
|||||||||||||
|
prices
|
exercisable
|
Life
|
price
|
intrinsic value
|
|||||||||||||
| $ |
Years
|
$ | $ | ||||||||||||||
|
0.34 to 0.54
|
697,535 | 4.15 | 0.49 | - | |||||||||||||
| 0.76 | 366,666 | 5.25 | 0.76 | - | |||||||||||||
| 1,064,201 | 4.53 | 0.58 | - | ||||||||||||||
|
Year ended
|
||||||||
|
August 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Service providers
|
$ | 580,714 | $ | 339,052 | ||||
|
Payroll and related expenses
|
16,459 | 36,486 | ||||||
| $ | 597,173 | $ | 375,538 | |||||
|
Period from April
|
||||||||||||
| 12, 2002 | ||||||||||||
|
(inception)
|
||||||||||||
|
Year ended
|
through
|
|||||||||||
|
August 31,
|
August 31,
|
|||||||||||
|
2012
|
2011
|
2012 | ||||||||||
|
Clinical trials
|
$ | 1,298,310 | $ | 591,733 | $ | 5,163,353 | ||||||
|
Payroll and consulting fees
|
385,646 | 413,191 | 1,921,533 | |||||||||
|
Costs for registration of patents
|
110,811 | 189,342 | 451,610 | |||||||||
|
Compensation costs in respect of options
granted to employees, directors and
consultants
|
98,688 | 265,327 | 2,921,881 | |||||||||
|
Other
|
160,350 | 49,444 | 547,608 | |||||||||
|
Less - grants from the OCS and Bio Jerusalem Fund
|
(372,959 | ) | (349,728 | ) | (1,468,290 | ) | ||||||
| $ | 1,680,845 | $ | 1,159,309 | $ | 9,532,694 | |||||||
|
Period from April
|
||||||||||||
| 12, 2002 | ||||||||||||
|
(inception)
|
||||||||||||
|
Year ended
|
through
|
|||||||||||
|
August 31
|
August 31,
|
|||||||||||
|
2012
|
2011
|
2012 | ||||||||||
|
Compensation costs in respect of options
granted to employees, directors and
consultants
|
$ | 172,470 | $ | 263,999 | $ | 2,049,406 | ||||||
|
Professional services
|
221,218 | 344,277 | 1,899,744 | |||||||||
|
Consulting fees
|
159,136 | 171,167 | 970,900 | |||||||||
|
Travel costs
|
71,529 | 54,976 | 545,930 | |||||||||
|
Write off of debt
|
- | - | 275,000 | |||||||||
|
Business development
|
284,899 | 151,886 | 815,945 | |||||||||
|
Payroll and related expenses
|
144,101 | 174,229 | 753,208 | |||||||||
|
Insurance
|
22,375 | 23,890 | 118,921 | |||||||||
|
Other
|
127,436 | 91,536 | 732,493 | |||||||||
| $ | 1,203,164 | $ | 1,275,960 | $ | 8,161,547 | |||||||
|
|
a.
|
Corporate taxation in the U.S.
|
|
|
b.
|
Corporate taxation in Israel:
|
|
August 31
|
||||||||
|
2012
|
2011
|
|||||||
|
In respect of:
|
||||||||
|
Net operating loss carryforward
|
3,190,152 | 1,813,108 | ||||||
|
Less - Valuation allowance
|
(3,190,152 | ) | (1,813,108 | ) | ||||
|
Net deferred tax assets
|
-,- | -,- | ||||||
|
|
c.
|
|
|
Period from April
|
||||||||||||
| 12, 2002 | ||||||||||||
|
(inception)
|
||||||||||||
|
Year ended
|
through
|
|||||||||||
|
August 31
|
August 31,
|
|||||||||||
|
2012
|
2011
|
2012 | ||||||||||
|
Loss before taxes on income:
|
||||||||||||
|
U.S.
|
599,067 | 415,836 | 8,440,543 | |||||||||
|
Outside U.S.
|
2,655,193 | 1,169,389 | 9,210,458 | |||||||||
| $ | 3,254,260 | $ | 1,585,225 | $ | 17,651,001 | |||||||
|
Taxes on income:
|
||||||||||||
|
Current:
|
||||||||||||
|
U.S.
|
(7,569 | ) | (33,567 | ) | 62,001 | |||||||
|
Outside U.S.
|
97,787 | 9,587 | 202,755 | |||||||||
| $ | 90,218 | $ | (23,980 | ) | $ | 264,756 | ||||||
|
|
d.
|
Reconciliation of the statutory tax benefit to effective tax expense
|
|
Period from April
|
||||||||||||
| 12, 2002 | ||||||||||||
|
(inception)
|
||||||||||||
|
Year ended
|
through
|
|||||||||||
|
August 31
|
August 31,
|
|||||||||||
|
2012
|
2011
|
2012 | ||||||||||
|
Loss before income taxes as reported in
|
||||||||||||
|
the consolidated statement of operations
|
$ | (3,254,260 | ) | $ | (1,585,225 | ) | $ | (17,651,001 | ) | |||
|
Statutory tax benefit
|
(1,138,991 | ) | (554,829 | ) | (6,177,851 | ) | ||||||
|
Increase (decrease) in income taxes
|
||||||||||||
|
resulting from:
|
||||||||||||
|
Change in the balance of the valuation
|
||||||||||||
|
allowance for deferred tax losses
|
516,749 | (58,357 | ) | 2,762,468 | ||||||||
|
Disallowable deductions
|
120,156 | 481,122 | 2,244,091 | |||||||||
|
Increase in taxes resulting from
|
||||||||||||
|
different tax rates applicable to
|
||||||||||||
|
Subsidiary
|
502,086 | 132,064 |
1,183,796
|
|||||||||
|
Uncertain tax position
|
90,218 | (23,980 | ) | 228,272 | ||||||||
|
Taxes on income for the reported year
|
$ | 90,218 | $ | (23,980 | ) | $ | 240,776 | |||||
|
|
e.
|
Uncertainty in Income Taxes
|
|
Year ended August 31
|
|||||||||
|
2012
|
2011
|
||||||||
|
Balance at Beginning of Year
|
$ | 138,054 | $ | 162,034 | |||||
|
Increase (decrease) in tax positions for the current year
|
90,218 | (23,980 | ) | ||||||
|
Balance at End of Year
|
$ | 228,272 | $ | 138,054 | |||||
|
|
a.
|
During each of the fiscal years of 2012 and 2011 the Company paid to directors $30,000, for managerial services.
|
|
|
b.
|
As to the agreements with Hadasit, see note 9a.
|
|
|
c.
|
On July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY Ltd. (“KNRY”), an Israeli company owned by Nadav Kidron, whereby Mr. Nadav Kidron, through KNRY, will provide services as President and Chief Executive Officer of both Oramed and the Subsidiary (the “Nadav Kidron Consulting Agreement”). Additionally, on July 1, 2008, the Subsidiary entered into a consulting agreement with KNRY whereby Dr. Miriam Kidron, through KNRY, will provide services as Chief Medical and Technology Officer of both Oramed and the Subsidiary (the “Miriam Kidron Consulting Agreement” and together with the Nadav Kidron Consulting Agreement, the “Consulting Agreements”). The Consulting Agreements replaced the employment agreements entered into between the Company and KNRY, dated as of August 1, 2007, pursuant to which Nadav Kidron and Miriam Kidron, respectively, provided services to the Company and the Subsidiary. The Consulting Agreements are both terminable by either party upon 60 days prior written notice. The Consulting Agreements provide that KNRY (i) will be paid, under each of the Consulting Agreements, in NIS a gross amount of NIS50,400 per month (as of August 31, 2012 the monthly payment in the Company's functional currency is $12,512) and (ii) will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreements.
|
|
|
d.
|
As to options granted to related parties, see note 11h.
|
|
|
e.
|
According to the JV Agreement (note 5), Entera rented office space and services from the Subsidiary for a period of up to 24 months commencing August 19, 2010, for a non-refundable, up-front fee in the amount of $36,000. The rent period ended on March 31, 2011, when the JV Agreement was terminated.
|
|
|
f.
|
According to the JV agreement (note 5), the subsidiary of the Company provided accounting services to Entera at a monthly fee in the amount of NIS 3,500 ($869). These services were ceased on March 31, 2011, when the JV agreement was terminated.
|
|
|
g.
|
Balances with related parties:
|
|
August 31
|
||||||||
|
2012
|
2011
|
|||||||
|
Accounts Receivables - KNRY
|
$ | 404 | - | |||||
|
Accounts payable and accrued expenses - KNRY
|
- | $ | 18,502 | |||||
|
|
a.
|
In September 2012, the Company issued 67,819 shares of its common stock and 33,910 common stock purchase warrant to an investor. See also note 10g.
|
|
|
b.
|
Between
September and November 2012, the Company entered into Securities Purchase Agreements with a number of investors for the sale of 3,957,905 units at a purchase price of $0.37 per unit for total consideration of $1,464,425. Each unit consisted of one share of the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.50 a share of common stock exercisable for five years at an exercise price of $0.50 per share. The investors were granted customary registration rights with respect to resales of shares, including the shares underlying the warrants. In addition, the Leading Investor, who purchased 405,405 of the units, was granted the right to maintain its percentage of the shares of the Company’s common stock outstanding by purchasing more shares whenever the Company proposes to issue certain additional shares to other investors. Such right only exists so long as such investor holds at least 5% of the Company's outstanding common stock. In addition, such investor’s warrants contain full ratchet anti-dilution protection and cashless exercise provisions not contained in the other investors’ warrants. The terms of the Leading Investor's Securities Purchase Agreement are substantially the same as those from 2011. See note 10a above.
|
|
|
As finder's fee, in connection with the securities purchase agreements, the Company paid
cash consideration of $5,385 and might be required to pay additional $7,500, as well as issued 13,514 shares of the Company's common stock 6,757 common stock purchase warrant for other individual. The Company will also issue 152,939 shares of the Company's common stock and 76,470 common stock purchase warrant to a director as finder's fee with respect to the Securities Purchase Agreements described above and in note 10g.
|
|
|
c.
|
On
September 27, 2012, the Subsidiary entered into a Master Services Agreement with Medpace, Inc.
("Medpace"),
to retain it as a CRO, for its upcoming Phase 2 clinical trial for an oral insulin capsule, that is expected to start in the first calendar quarter of 2013 in the United States
.
As consideration for its services, the subsidiary will pay Medpace a total amount of approximately $3,500,000 that will be paid during the term of the engagement and based on achievement of certain milestones
.
|
|
|
d.
|
On October 30, 2012, the Company entered into a Securities Purchase Agreement with D.N.A, according to which, the Company issued on that day to D.N.A 2,390,057 shares of its common stock, valued at approximately $628,630 at the day of the transaction, in consideration for the option to purchase up to 21,637,611 ordinary shares of D.N.A with no additional cost. Following the exercise of the option by the Company, it will hold approximately 14.5% of D.N.A shareholders equity, including D.N.A shares that were received in March 2011, see note 5.
|
|
|
e.
|
On November 29, 2012, the Company and the Leading Investor entered into a letter agreement (the "Agreement") in connection with three warrants issued by the Company to the Leading Investor in January 2011, August 2012 and November 2012 (together, the "Three Warrants"). Pursuant to the Agreement, the Company and the Leading Investor agreed to amend the Three Warrants to provide that the anti-dilution protection of each of the Three Warrants shall be removed in its entirety. In addition, as to the Warrants issued in August and November 2012, the parties agreed that the exercise price shall be reduced to $0.3138. On that day, the Company also issued to the Leading Investor a Common Stock Purchase Warrant (the "New Warrant") pursuant to which, the Leading Investor shall have the right to purchase up to 1,647,722 shares of the common stock of the Company over a period of four years at an exercise price of $0.60 per share.
|
|
|
In addition to the New Warrant, Nadav Kidron, the Company’s President, Chief Executive Officer and director, in his personal capacity as a shareholder of the Company, undertook and agreed that following the execution and delivery of the Agreement, in the event that an adjustment pursuant to the anti-dilution protection of any of the Three Warrants (had it not been amended by the Agreement thereof) would have been triggered and the number of shares of common stock of the Company that the Leading Investor would have been able to purchase under the Three Warrants would have increased by an aggregate number in excess of 1,647,722 shares, then the Leading Investor shall have the right to purchase from Mr. Kidron such number of shares of common stock of the Company owned by Mr. Kidron equal to such excess, up to a maximum of 1,352,278 shares of common stock of the Company at an exercise price of $0.3138. The foregoing right shall survive until the termination of such Three Warrants
.
|
|
3.1
|
Certificate of Incorporation (incorporated by reference from our current report on Form 8-K filed March 14, 2011).
|
|
3.2
|
By-laws (incorporated by reference from our current report on Form 8-K filed March 14, 2011).
|
|
4.1
|
Specimen Stock Certificate (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
|
4.2
|
Common Stock Purchase Warrant issued to Attara Fund, Ltd. on January 10, 2011 (incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2011).
|
|
4.3
|
Form of Common Stock Purchase Warrant used in 2010-2011 private placement (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
|
4.4*
|
Form of Common Stock Purchase Warrant used in 2012 private placements.
|
|
10.1+
|
Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Nadav Kidron (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
|
10.2+
|
Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Miriam Kidron (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
|
10.3+
|
Oramed Pharmaceuticals Inc. 2008 Stock Incentive Plan (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
|
10.4+
|
Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our current report on Form 8-K filed on July 2, 2008).
|
|
10.5+
|
Employment Agreement dated as of April 19, 2009, by and between Oramed Ltd. and Yifat Zommer (incorporated by reference from our current report on Form 8-K filed on April 22, 2009).
|
|
10.6
|
Consulting Service Agreement dated April 21, 2009, between Oramed Ltd. and ADRES Advanced Regulatory Services Ltd. (incorporated by reference from our current report on Form 8-K filed April 22, 2009).
|
|
10.7*
|
Amendment to Consulting Service Agreement dated February 26, 2012, between Oramed Ltd. and ADRES Advanced Regulatory Services Ltd.
|
|
10.8*+
|
Clinical Trial Agreement dated September 11, 2011, between Oramed
Ltd
..
and Hadasit Medical Research Services and Development Ltd.
|
|
10.9+
|
Clinical Trial Agreement dated July 8, 2009, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., Miriam Kidron and Itamar Raz (incorporated by reference from our current report on Form 8-K filed July 9, 2009).
|
|
10.10
|
Agreement dated January 7, 2009, between Oramed Pharmaceuticals Inc. and Hadasit Medical Research Services and Development Ltd. (incorporated by reference from our current report on Form 8-K filed January 7, 2009).
|
|
10.11
|
Joint Venture Agreement dated June 1, 2010, between Oramed Ltd. and LASER Detect Systems Ltd (now known as D.N.A Biomedical Solutions Ltd.) (incorporated by reference from our quarterly report on Form 10-Q filed July 14, 2010).
|
|
10.12
|
Manufacturing and Supply Agreement dated July 5, 2010, between Oramed Ltd. and Sanofi-Aventis Deutschland GMBH (incorporated by reference from our current report on Form 8-K filed July 14, 2010).
|
|
10.13
|
Securities Purchase Agreement between Oramed Pharmaceuticals Inc. and Attara Fund, Ltd., dated as of December 21, 2010 (incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2011).
|
|
10.14
|
Share Purchase Agreement dated February 22, 2011, between Oramed Ltd. and D.N.A Biomedical Solutions Ltd. (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
|
10.15
|
Patent Transfer Agreement dated February 22, 2011, between Oramed Ltd. and Entera Bio Ltd. (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
|
10.16
|
Form of Securities Purchase Agreement used in 2010-2011 private placement (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).
|
|
10.17+
|
Form of Indemnification Agreements dated March 11, 2011, between Oramed Pharmaceuticals Inc. and each of our directors and officers (incorporated by reference from our definitive proxy statement on Schedule 14A filed on January 31, 2011).
|
|
10.18+
|
Agreement dated June 21, 2011, with Dr. Michael Berelowitz (incorporated by reference from our current report on Form 8-K filed June 22, 2011).
|
|
10.19*
|
Form of Securities Purchase Agreement used in 2012 private placements.
|
|
10.20*
|
Form of Securities Purchase Agreement used in 2012 private placement with Regals Fund LP.
|
|
10.21*
|
Master Service Agreement dated September 27, 2012, between Oramed Ltd. and Medpace, Inc.
|
|
10.22*
|
MEDPACE Task Order Number: 1 dated September 27, 2012, between Oramed Ltd. and Medpace, Inc. (portions of this exhibit have been omitted pursuant to a request for confidential treatment)
|
|
10.23*
|
Securities Purchase Agreement dated October 30, 2012, between Oramed Pharmaceuticals Inc. and D.N.A Biomedical Solutions Ltd.
|
|
21.1*
|
Subsidiary.
|
|
23.1*
|
Consent of Kesselman & Kesselman, Independent Registered Public Accounting Firm.
|
|
23.2*
|
Consent of Malone & Bailey, PC, Independent Registered Public Accounting Firm.
|
|
31.1*
|
Certification Statement of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
31.2*
|
Certification Statement of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
32.1**
|
Certification Statement of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
|
|
32.2**
|
Certification Statement of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
101.1**
|
The following financial statements from the Company’s annual report on Form 10-K for the year ended August 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text.
|
|
ORAMED PHARMACEUTICALS INC.
|
|||
|
|
By:
|
/s/ NADAV KIDRON | |
| Nadav Kidron, | |||
| President and Chief Executive Officer | |||
|
Date: December 11, 2012
|
|||
|
/s/ NADAV KIDRON
|
December 11, 2012 | ||
|
Nadav Kidron
,
|
|||
|
President and Chief Executive Officer and Director
|
|||
|
(principal executive officer)
|
|||
|
/s/ YIFAT ZOMMER
|
December 11, 2012
|
||
|
Yifat Zommer,
|
|||
|
Chief Financial Officer
|
|||
|
(principal financial and accounting officer)
|
|||
|
/s/ MIRIAM KIDRON
|
December 11, 2012 | ||
|
Miriam Kidron,
|
|||
|
Chief Medical and Technology Officer and Director
|
|||
|
/s/ LEONARD SANK
|
December 11, 2012 | ||
|
Leonard Sank,
|
|||
|
Director
|
|||
|
/s/ HAROLD JACOB
|
December 11, 2012 | ||
|
Harold Jacob,
|
|||
|
Director
|
|||
|
/s/ MICHAEL BERELOWITZ
|
December 11, 2012 | ||
|
Michael Berelowitz,
|
|||
|
Director
|
|||
|
/s/ GERALD OSTROV
|
December 11, 2012 | ||
|
Gerald Ostrov,
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|