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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Oramed Pharmaceuticals Inc | NASDAQ:ORMP | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.03 | 1.19% | 2.56 | 2.50 | 2.63 | 2.6001 | 2.535 | 2.54 | 101,947 | 01:00:00 |
Prospectus Supplement No. 2
|
Filed pursuant to Rule 424(b)(3)
|
(to Prospectus dated February 20, 2013)
|
File Numbers 333-164288, 333-173058, 333-175216, 333-186375
|
Delaware
|
98-0376008
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer Identification
No.)
|
Hi-Tech Park 2/5 Givat Ram
PO Box 39098
Jerusalem, Israel
|
91390
|
(Address of Principal Executive
Offices)
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
1
|
|
1
|
|
2
|
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10
|
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10
|
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11 | |
11 | |
12
|
Page
|
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
|
|
F-2
|
|
F-3
|
|
F-4-F-6
|
|
F-7
|
|
F-8-F-18
|
Period
|
||||||||||||||||||||
from April
|
||||||||||||||||||||
12, 2002 | ||||||||||||||||||||
(inception)
|
||||||||||||||||||||
Nine months ended
|
Three months ended
|
through
|
||||||||||||||||||
May 31,
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
||||||||||||||||
2013
|
2012
|
2013
|
2012
|
2013 | ||||||||||||||||
RESEARCH AND DEVELOPMENT EXPENSES
, net
|
$ | 1,977,258 | $ | 1,144,415 | $ | 835,636 | $ | 249,752 | $ | 11,509,952 | ||||||||||
IMPAIRMENT OF INVESTMENT
|
- | - | - | - | 434,876 | |||||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
1,349,081 | 802,273 | 499,034 | 290,668 | 9,510,628 | |||||||||||||||
OPERATING LOSS
|
3,326,339 | 1,946,688 | 1,334,670 | 540,420 | 21,455,456 | |||||||||||||||
FINANCIAL INCOME
|
(223,638 | ) | (14,834 | ) | (84,594 | ) | (306 | ) | (430,796 | ) | ||||||||||
FINANCIAL EXPENSES
|
338,267 | 39,294 | 6,265 | 10,251 | 718,647 | |||||||||||||||
GAIN ON SALE OF INVESTMENT
|
- | - | - | - | (1,033,004 | ) | ||||||||||||||
IMPAIRMENT OF AVAILABLE- FOR-SALE SECURITIES
|
- | 43,111 | - | - | 381,666 | |||||||||||||||
LOSS BEFORE TAXES ON INCOME
|
3,440,968 | 2,014,259 | 1,256,341 | $ | 550,365 | 21,091,969 | ||||||||||||||
TAXES ON INCOME
|
- | - | - | - | 240,776 | |||||||||||||||
NET LOSS FOR THE PERIOD
|
$ | 3,440,968 | $ | 2,014,259 | $ | 1,256,341 | $ | 550,365 | $ | 21,332,745 | ||||||||||
SUBSEQUENT (INCREASE) DECREASE IN THE FAIR VALUE OF AVAILABLE FOR SALE SECURITIES PREVIOUSLY WRITTEN DOWN AS IMPAIRED
|
(84,010 | ) | - | 38,967 | 15,869 | (84,010 | ) | |||||||||||||
RECLASSIFICATION ADJUSTMENT FOR GAINS INCLUDED IN NET LOSS
|
69,178 | - | 18,491 | - | 69,178 | |||||||||||||||
UNREALIZED (GAIN) LOSS ON AVAILABLE FOR SALE SECURITIES
|
(117,092 | ) | - | 55,126 | - | (117,092 | ) | |||||||||||||
TOTAL OTHER COMPREHENSIVE (INCOME) LOSS
|
(131,924 | ) | - | 112,584 | 15,869 | (131,924 | ) | |||||||||||||
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD
|
$ | 3,309,044 | $ | 2,014,259 | $ | 1,368,925 | $ | 566,234 | $ | 21,200,821 | ||||||||||
LOSS PER COMMON SHARE
:
|
||||||||||||||||||||
BASIC AND DILUTED LOSS PER COMMON SHARE
|
$ | 0.49 | $ | 0.34 | $ | 0.17 | $ | 0.09 | ||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER COMMON STOCK
|
7,087,831 | 5,850,679 | 7,223,377 | 5,860,320 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
accumulated
|
|||||||||||||||||||||||
|
Additional
|
Other
|
during the
|
Total
|
||||||||||||||||||||
Common Stock
|
paid-in
|
Comprehensive
|
development
|
stockholders'
|
||||||||||||||||||||
Shares*
|
$ |
capital
|
Income
|
stage
|
equity
|
|||||||||||||||||||
BALANCE AS OF APRIL 12, 2002
(inception)
|
2,902,589 | $ | 34,828 | $ | 18,872 | - | - | $ | 53,700 | |||||||||||||||
CHANGES DURING THE PERIOD FROM APRIL 12, 2002 THROUGH
AUGUST 31, 2007 :
|
||||||||||||||||||||||||
SHARES CANCELLED
|
(1,650,000 | ) | (19,800 | ) | 19,800 | - | - | - | ||||||||||||||||
SHARES ISSUED FOR INVESTMENT IN ISTI-NJ
|
95,368 | 1,144 | 433,732 | - | - | 434,876 | ||||||||||||||||||
SHARES ISSUED FOR OFFERING COSTS
|
146,079 | 1,753 | (1,753 | ) | - | - | - | |||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH– NET OF ISSUANCE EXPENSES
|
2,265,514 | 27,181 | 2,095,800 | - | - | 2,122,981 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES
|
10,417 | 125 | 98,625 | - | - | 98,750 | ||||||||||||||||||
CONTRIBUTIONS TO PAID IN CAPITAL
|
- | - | 18,991 | - | - | 18,991 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 1,968,547 | - | - | 1,968,547 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 177,782 | - | - | 177,782 | ||||||||||||||||||
DISCOUNT ON CONVERTIBLE NOTE RELATED TO BENEFICIAL CONVERSION FEATURE
|
- | - | 108,000 | - | - | 108,000 | ||||||||||||||||||
OTHER COMPREHENSIVE LOSS
|
- | - | - | (16 | ) | (16 | ) | |||||||||||||||||
IMPUTED INTEREST
|
- | - | 8,437 | - | - | 8,437 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (4,478,917 | ) | (4,478,917 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2007
|
3,769,967 | 45,231 | 4,946,833 | - | (4,478,933 | ) | 513,131 | |||||||||||||||||
RECEIPTS ON ACCOUNT OF SHARES
AND WARRANTS
|
- | - | 6,061 | - | - | 6,061 | ||||||||||||||||||
SHARES ISSUED FOR CONVERSION OF CONVERTIBLE NOTE
|
45,844 | 550 | 274,450 | - | - | 275,000 | ||||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH - NET OF ISSUANCE EXPENSES
|
848,288 | 10,178 | 5,774,622 | - | - | 5,784,800 | ||||||||||||||||||
SHARES ISSUED FOR SERVICES
|
24,419 | 293 | 115,817 | - | - | 116,110 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 459,467 | - | - | 459,467 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 203,982 | - | - | 203,982 | ||||||||||||||||||
IMPUTED INTEREST
|
- | - | 3,780 | - | - | 3,780 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (2,769,271 | ) | (2,769,271 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2008
|
4,688,518 | $ | 56,252 | $ | 11,785,012 | - | $ | (7,248,204 | ) | $ | 4,593,060 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
accumulated
|
|||||||||||||||||||||||
Additional
|
Other
|
during the
|
Total
|
|||||||||||||||||||||
Common Stock
|
paid-in
|
Comprehensive
|
development
|
stockholders'
|
||||||||||||||||||||
Shares*
|
$ |
capital
|
Income
|
stage
|
equity
|
|||||||||||||||||||
BALANCE AS OF AUGUST 31, 2008
|
4,688,518 | 56,252 | 11,785,012 | - | (7,248,204 | ) | 4,593,060 | |||||||||||||||||
SHARES ISSUED FOR SERVICES RENDERED
|
17,012 | 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
|
4,705,530 | $ | 56,456 | $ | 12,698,414 | - | $ | (10,008,678 | ) | $ | 2,746,192 | |||||||||||||
SHARES ISSUED FOR SERVICES RENDERED
|
92,416 | 1,109 | 248,741 | - | - | 249,850 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 690,882 | - | - | 690,882 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 116,944 | - | - | 116,944 | ||||||||||||||||||
IMPUTED INTEREST
|
- | - | 3,780 | - | - | 3,780 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (2, 977, 376 | ) | (2,977,376 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2010
|
4,797,946 | $ | 57,565 | $ | 13,758,761 | - | $ | (12,986,054 | ) | $ | 830,272 | |||||||||||||
SHARES ISSUED FOR SERVICES RENDERED
|
60,887 | 731 | 226,838 | - | - | 227,569 | ||||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH**
|
984,209 | 11,808 | 3,682,404 | - | - | 3,694,212 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 502,593 | - | - | 502,593 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 26,733 | - | - | 26,733 | ||||||||||||||||||
IMPUTED INTEREST
|
- | - | 3,782 | - | - | 3,782 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (1,561,245 | ) | (1,561,245 | ) | ||||||||||||||||
BALANCE AS OF AUGUST 31, 2011
|
5,843,042 | 70,104 | 18,201,111 | - | (14,547,299 | ) | 3,723,916 | |||||||||||||||||
SHARES ISSUED FOR SERVICES
|
29,084 | 349 | 107,511 | - | - | 107,860 | ||||||||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH, INCLUDING RECLASSIFICATION OF WARRANTS
|
801,942 | 9,622 | 2,984,842 | - | - | 2,944,464 | ||||||||||||||||||
SHARES AND WARRANTS TO BE ISSUED FOR CASH
|
- | - | 25,093 | - | - | 25,093 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 200,866 | - | - | 200,866 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 70,292 | - | - | 70,292 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (3,344,478 | ) | (3,344,478 | ) | ||||||||||||||||
BALANCE AS OF
AUGUST
31, 2012
|
6,674,068 | $ | 80,075 | $ | 21,589,715 | - | $ | (17,891,777 | ) | $ | 3,778,013 |
Deficit
|
||||||||||||||||||||||||
Accumulated
|
accumulated
|
|||||||||||||||||||||||
Additional
|
other
|
during the
|
Total
|
|||||||||||||||||||||
Common Stock
|
paid-in
|
Comprehensive
|
development
|
stockholders'
|
||||||||||||||||||||
Shares*
|
$ |
capital
|
Income
|
stage
|
equity
|
|||||||||||||||||||
BALANCE AS OF AUGUST 31, 2012
|
6,674,068 | $ | 80,075 | $ | 21,589,715 | - | $ | (17,891,777 | ) | $ | 3,778,013 | |||||||||||||
SHARES AND WARRANTS ISSUED FOR CASH, NET**
|
349,396 | 4,192 | 1,418,400 | - | - | 1,422,592 | ||||||||||||||||||
SHARES ISSUED FOR MARKETABLE SECURITIES
|
199,172 | 2,390 | 626,240 | - | - | 628,630 | ||||||||||||||||||
SHARES TO BE ISSUED FOR SERVICES RENDERED
|
- | - | 93,713 | - | - | 93,713 | ||||||||||||||||||
EXCHANGE OF WARRANTS (see note 5)
|
- | - | 917,809 | - | - | 917,809 | ||||||||||||||||||
EXERCISE OF WARRANTS
|
3,787 | 45 | (45 | ) | - | - | - | |||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO EMPLOYEES AND DIRECTORS
|
- | - | 487,034 | - | - | 487,034 | ||||||||||||||||||
STOCK BASED COMPENSATION RELATED TO OPTIONS GRANTED TO CONSULTANTS
|
- | - | 140,477 | - | - | 140,477 | ||||||||||||||||||
NET LOSS
|
- | - | - | - | (3,440,968 | ) | (3,440,968 | ) | ||||||||||||||||
OTHER COMPREHENSIVE INCOME
|
- | - | - | 131,924 | - | 131,924 | ||||||||||||||||||
BALANCE AS OF
MAY 31
, 2013
|
7,226,423 | $ | 86,702 | $ | 25,273,343 | $ | 131,924 | $ | (21,332,745 | ) | $ | 4,159,224 |
Nine months ended
|
Period from April 12, 2002 (inception date) through
|
|||||||||||
May 31,
|
May 31,
|
May 31,
|
||||||||||
2013
|
2012
|
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (3,440,968 | ) | $ | (2,014,259 | ) | $ | (21,332,745 | ) | |||
Adjustments required to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation
|
3,697 | 17,384 | 124,541 | |||||||||
Amortization of debt discount
|
- | - | 108,000 | |||||||||
Exchange differences on deposits and investments
|
10,880 | (1 | ) | 41,917 | ||||||||
Stock based compensation
|
627,511 | 154,199 | 5,598,798 | |||||||||
Shares issued for services rendered
|
- | 91,860 | 1,155,956 | |||||||||
Shares to be issued for services rendered
|
93,713 | - | 93,713 | |||||||||
Gain on sale of investment
|
(69,178 | ) | - | (1,102,182 | ) | |||||||
Impairment of investment
|
- | - | 434,876 | |||||||||
Imputed interest
|
- | - | 23,559 | |||||||||
Impairment of available for sale security
|
- | 43,111 | 381,666 | |||||||||
Exchange of warrants
|
296,982 | - | 296,982 | |||||||||
Changes in fair value of warrant liabilities
|
(44,699 | ) | - | 98,005 | ||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivables and other current assets
|
(400,523 | ) | (166,540 | ) | (560,682 | ) | ||||||
Restricted cash
|
- | - | (16,000 | ) | ||||||||
Accounts payable and accrued expenses
|
(198,401 | ) | (85,435 | ) | 398,772 | |||||||
Liability of employee rights upon retirement
|
5,821 | 419 | 26,007 | |||||||||
Provision for uncertain tax position
|
- | - | 228,272 | |||||||||
Total net cash used in operating activities
|
(3,115,165 | ) | (1,959,262 | ) | (14,000,545 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase of property and equipment
|
(4,659 | ) | (2,129 | ) | (130,271 | ) | ||||||
Acquisition of short-term investments and short term deposits
|
(1,862,817 | ) | (500,000 | ) | (7,766,552 | ) | ||||||
Funds in respect of employee rights upon retirement
|
(3,023 | ) | (2,109 | ) | (9,918 | ) | ||||||
Proceeds from sale of investment and marketable securities
|
226,671 | 450,000 | 676,671 | |||||||||
Proceeds from sale of Short term deposits
|
- | 1,800,000 | 5,428,000 | |||||||||
Lease deposits, net
|
- | - | (7,509 | ) | ||||||||
Total net cash derived from (used in) investing activities
|
(1,643,828 | ) | 1,745,762 | (1,809,579 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from sales of common stock and
warrants - net of issuance expenses
|
1,450,936 | - | 16,595,571 | |||||||||
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 derived from financing activities
|
1,450,936 | - | 16,942,875 | |||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(17,786 | ) | - | (27,854 | ) | |||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(3,325,843 | ) | (213,500 | ) | 1,104,897 | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
4,430,740 | 1,513,365 | - | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 1,104,897 | $ | 1,299,865 | $ | 1,104,897 | ||||||
Non cash investing and financing activities:
|
||||||||||||
Shares issued for offering costs
|
- | - | $ | 77,779 | ||||||||
Contribution to paid in capital
|
- | - | $ | 18,991 | ||||||||
Discount on convertible note related to beneficial conversion feature
|
- | - | $ | 108,000 | ||||||||
Exchange of warrants
|
$ | 917,809 | - | $ | 917,809 | |||||||
Shares and warrants issued for marketable securities-
|
$ | 628,630 | - | $ | 628,630 |
ORAMED
PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
a.
|
General:
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
b.
|
Newly issued and recently adopted Accounting Pronouncements
|
1)
|
In June 2011, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (ASU) 2011-05, an update to ASC No. 220, “Presentation of Comprehensive Income,” which eliminates the option to present other comprehensive income and its components in the statement of shareholders’ equity. The Company can elect to present the items of net income and other comprehensive income in a single continuous statement of comprehensive income or in two separate, but consecutive, statements. Under either method the statement would need to be presented with equal prominence as the other primary financial statements. The amended guidance, which must be applied retroactively, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with earlier adoption permitted. In December 2011, the FASB issued another update on the topic, which deferred the effective date pertaining only to the presentation of reclassification adjustments on the face of the financial statements. The Company adopted the pronouncement in the first quarter of fiscal year 2013.
|
2)
|
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, ASU 2013-02 requires presentation, either on the face of the income statement or in the notes, of significant amounts reclassified out of accumulated other comprehensive income by respective line items of net income, but only if the amounts reclassified are required to be reclassified in their entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about these amounts. The amendments in ASU 2013-02 will be effective prospectively for annual reporting periods beginning after December 15, 2012, and interim periods within those annual periods. ASU 2013-02 is effective for the Company on August, 31, 2013. The Company does not expect the adoption of ASU 2013-02 to have a material effect on the consolidated financial statement presentation.
|
|
c.
|
Condensed Consolidated Financial Statements Preparation
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
d.
|
Reclassifications
|
|
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.
|
On July 5, 2010, the Subsidiary of the Company entered into a Manufacturing Supply Agreement (MSA) with Sanofi-Aventis Deutschland GMBH (“sanofi-aventis”). According to the MSA, sanofi-aventis will supply the subsidiary with specified quantities of recombinant human insulin to be used for clinical trials in the United States.
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
c.
|
On February 15, 2011, the Subsidiary entered into a consulting agreement with a third party (the "Consultant”) for a period of five years, pursuant to which the Consultant will provide consultation on scientific and clinical matters. The Consultant is entitled to a fixed monthly fee of $8,000, royalties of 8% of the net royalties actually received by the Subsidiary in respect of the patent that was sold to Entera Bio Ltd. (“Entera”) on February 22, 2011 and an option to purchase up to 20,834 shares of common stock of the Company at an exercise price of $6.00 per share. The option vests in five annual installments commencing February 16, 2012 and expires on February 16, 2021. The initial fair value of the option on the date of grant was $62,185, using the Black Scholes option-pricing model and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 78.65%; risk-free interest rates of 3.62%; and the remaining expected term of 10 years. The fair value of the option as of May 31, 2013 was $129,683, using the following assumptions: dividend yield of 0% and expected term of 7.72 years; expected volatility of 76.16%; and risk-free interest rate of 1.75%.
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.
|
|
d.
|
On February 15, 2012, the Company entered into an advisory agreement with a third party for a period of one year, pursuant to which such third party will provide investors relations services and will be entitled to a share based compensation as follows: 25,000 shares of common stock of the Company will be issued in six installments over the engagement period, commencing February 15, 2012, and a warrant to purchase 62,500 shares of common stock of the Company at an exercise price of $6.00 per share. The warrant vested in 12 monthly installments commencing February 15, 2012 and expires on February 15, 2017. The initial fair value of the 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.
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
e.
|
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 May 31, 2013, the monthly payment in the Company's functional currency is $1,147, the future lease payments under the agreement will be $4,558 from July to September 2013). As security for its obligation under this lease agreement the Company provided a bank guarantee in an amount equal to three monthly lease payments.
|
|
f.
|
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 was 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, $540,579 of which was paid through May 31, 2013. On March 17, 2013, due to a request from the FDA to perform a sub study before proceeding with the Phase 2 clinical trial, the Subsidiary instructed Medpace to temporarily
cease all work. As a result, Medpace is required to return to the Subsidiary all funds in excess
of the actual expenses paid for the clinical trial, at the amount of $219,867 and are presented as accounts receivable - other.
|
|
g.
|
Grants from Bio-Jerusalem
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
h.
|
Grants from the Office of the Chief Scientist ("OCS")
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Level 1
|
Level 3
|
Total
|
||||||||||
Marketable securities:
|
||||||||||||
May 31, 2013
|
$ | 113,920 | $ | 689,452 | $ | 803,372 | ||||||
August 31, 2012
|
$ | 200,311 | - | $ | 200,311 |
Nine months ended
|
||||
May 31, 2013
|
||||
Carrying value at the beginning of the period
|
$ | - | ||
Additions
|
628,630 | |||
Changes in fair value
|
113,165 | |||
Reclassification adjustment for gains included in net loss
|
(52,343 | ) | ||
Carrying value at the end of the period
|
$ | 689,452 |
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
a.
|
In September 2012, the Company issued 5,652 shares of its common stock and 2,826 common stock purchase warrant to an investor, with whom the Company entered into Securities Purchase Agreement in August 2012 for the same investment terms as described in note 4b. below.
|
|
b.
|
Between
September and November 2012, the Company entered into Securities Purchase Agreements with a number of investors for the sale of 329,832 units at a purchase price of $4.44 per unit for total consideration of $1,464,425. Each unit consisted of one share of the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.50 a share of common stock exercisable for five years at an exercise price of $6.00 per share. The investors were granted customary registration rights with respect to resales of shares, including the shares underlying the warrants. In addition, one of the investors who was previously considered as a leading investor (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 contained anti-dilution protection (the "full ratchet anti-dilution protection") and cashless exercise provisions not contained in the other investors’ warrants. The other terms of the Leading Investor's Securities Purchase Agreement were substantially the same as those granted to him in 2011 for his first investment. See also note 5.
|
|
c.
|
On October 30, 2012, the Company entered into a Securities Purchase Agreement with D.N.A, according to which, the Company issued on that day to D.N.A 199,172 shares of its common stock, in consideration for the option to purchase up to 21,637,611 ordinary shares of D.N.A, valued at approximately $628,630 at the day of the transaction. The Company exercised the option in February 2013. As described in note 3, the Subsidiary had previously acquired 8,404,667 ordinary shares of D.N.A issued in March 2011. On February 14, 2013 the Subsidiary sold 3,500,000 of the D.N.A
shares
in a private transaction for a total of NIS 420,000 (or approximately $114,130). On March 5, 2013 the Subsidiary sold additional 3,500,000 of the D.N.A
shares
in a private transaction for a total of NIS 420,000 (or approximately $112,540). As of May 31, 2013 the Group own approximately 11.1% of D.N.A’s outstanding ordinary shares.
|
|
d.
|
On January 10, 2013, the Company's board of directors approved a reverse stock split at a ratio of one-for-twelve, effective January 22, 2013, which decreased the number of common shares issued and outstanding as of January 23, 2013, from approximately 86.5 million shares to approximately 7.2 million shares and the number of authorized common shares from 200 million shares to approximately 16.7 million shares. All share and per share amounts included in the condensed consolidated financial statements have been adjusted retroactively to reflect the effects of the reverse stock split.
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Fair value measurements at reporting
date using
|
||||||||
Level 3
|
Total
|
|||||||
Warrants -
|
||||||||
August 31, 2012
|
$ | 637,182 | $ | 637,182 |
Nine months ended May 31,
|
||||
2013
|
||||
Carrying value at the beginning of the period
|
$ | 637,182 | ||
Additional warrant liabilities granted
|
28,344 | |||
Changes in fair value of warrant liabilities
|
(44,699 | ) | ||
Exchange of warrants
|
(620,827 | ) | ||
Carrying value at the end of the period
|
$ | - |
ORAMED PHARMACEUTICALS Inc.
|
(A development stage company)
|
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Nine months ended
|
Three months ended
|
|||||||||||||||
May 31,
2013
|
May 31,
2012
|
May 31,
2013
|
May 31,
2012
|
|||||||||||||
Research and development expenses
|
$ | 1,977,258 | $ | 1,144,415 | $ | 835,636 | $ | 249,752 | ||||||||
General and administrative expenses
|
1,349,081 | 802,273 | 499,034 | 290,668 | ||||||||||||
Impairment of available for sale securities
|
- | 43,111 | - | - | ||||||||||||
Financial (income) expense, net
|
114,629 | 24,460 | (78,329 | ) | 9,945 | |||||||||||
Net loss for the period
|
$ | 3,440,968 | $ | 2,014,259 | $ | 1,256,341 | $ | 550,365 |
Category
|
Amount
|
|||
Research and development, net of OCS funds
|
$ | 3,592,000 | ||
General and administrative expenses
|
1,628,000 | |||
Total
|
$ | 5,220,000 |
Name and Principal Position
|
Base Salary
|
|||
Nadav Kidron
President and CEO and director
|
$ | 250,000 | ||
Miriam Kidron
Chief Medical and Technology Officer and director
|
$ | 200,000 | ||
Yifat Zommer
CFO, Treasurer and Secretary
|
$ | 150,000 |
Number
|
|
Exhibit
|
10.1
|
Employment Agreement, dated April 14, 2013, between Oramed Ltd. and Joshua Hexter.
(incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed April 16, 2013, File No. 000-50298).
|
|
31.1 *
|
Certification Statement of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
31.2 *
|
Certification Statement of Principal 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 Principal Executive Officer pursuant to 18 U.S.C. Section 1350.
|
|
32.2 **
|
Certification Statement of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
101.1 **
|
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2013, formatted in XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Loss, (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and in detail.
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
ORAMED PHARMACEUTICALS INC.
|
|||
Date: July 17, 2013
|
By:
|
/s/ Nadav Kidron
|
|
Nadav Kidron
|
|||
President and Chief Executive Officer
|
|||
Date: July 17, 2013
|
By:
|
/s/ Yifat Zommer
|
|
Yifat Zommer
|
|||
Chief Financial Officer
|
|||
(principal financial and accounting officer)
|
1 Year Oramed Pharmaceuticals Chart |
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