Oramed Pharmaceuticals Inc.
Annual Report 2012

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-K xxANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended August 31, 2012orooTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 000-50298ORAMED PHARMACEUTICALS INC.(Exact Name of Registrant as Specified in its Charter)Delaware98-0376008(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.) Hi-Tech Park 2/5 Givat-RamP.O. Box 39098Jerusalem, Israel (Address of Principal Executive Offices) 91390(Zip Code) +972-2-566-0001(Registrant’s Telephone Number, Including Area Code)Securities registered pursuant to Section 12(b) of the Exchange Act: NoneSecurities registered pursuant to Section 12(g) of the Act: Common Stock, $.001 par value per share Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x  Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorterperiod that the registrant was required to submit and post such files). Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendmentto this Form 10-K. o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and askedprice of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $17,492,586 based on a price of$0.31, being the last price at which the shares of the registrant’s common stock were sold on the OTC Bulletin Board prior to the end of the most recentlycompleted second fiscal quarter. Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 86,505,020 shares ofcommon stock issued and outstanding as of December 6, 2012.  ORAMED PHARMACEUTICALS INC.FORM 10-K(FOR THE FISCAL YEAR ENDED AUGUST 31, 2012)TABLE OF CONTENTSCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS1PART I2ITEM 1. BUSINESS.2ITEM 1A. RISK FACTORS.14ITEM 2. PROPERTIES.26ITEM 3. LEGAL PROCEEDINGS.26ITEM 4. MINE SAFETY DISCLOSURES.26PART II27ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES.27ITEM 6. SELECTED FINANCIAL DATA.28ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.28ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.38ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.38ITEM 9A. CONTROLS AND PROCEDURES.38ITEM 9B. OTHER INFORMATION.40PART III41ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.41ITEM 11. EXECUTIVE COMPENSATION.45ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS.49ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.53ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.54ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.55 i  As used in this Annual Report on Form 10-K, the terms “we,” “us,” “our,” the “Company,” and “Oramed” mean Oramed Pharmaceuticals Inc.and our wholly-owned Israeli subsidiary, Oramed Ltd., unless otherwise indicated. All dollar amounts refer to U.S. Dollars unless otherwiseindicated.On August 31, 2012, the exchange rate between the NIS and the dollar, as quoted by the Bank of Israel, was NIS 4.028 to $1.00. Unless indicatedotherwise by the context, statements in this Annual Report on Form 10-K that provide the dollar equivalent of NIS amounts or provide the NISequivalent of dollar amounts are based on such exchange rate. ii  CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (including the section regarding Management’s Discussion and Analysis of Financial Condition and Resultsof Operations) contains forward-looking statements within the meaning of the federal securities laws regarding our business, clinical trials,financial condition, expenditures, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “plannedexpenditures,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-lookingstatements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Reporton Form 10-K. Additionally, statements concerning future matters are forward-looking statements. Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, suchstatements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject torisks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by theforward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, thosespecifically addressed under the heading “Item 1A. Risk Factors” below, as well as those discussed elsewhere in this Annual Report on Form10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Reporton Form 10-K. Except as required by law, we undertake no obligation to revise or update any forward-looking statements in order to reflect anyevent or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider thevarious disclosures made throughout the entirety of this Annual Report on Form 10-K which attempt to advise interested parties of the risks andfactors that may affect our business, financial condition, results of operations and prospects. 1 PART I ITEM 1. BUSINESS. DESCRIPTION OF BUSINESS Research and Development We are a pharmaceutical company currently engaged in the research and development of innovative pharmaceutical solutions, including anorally ingestible insulin capsule to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules or pills fordelivery of other polypeptides. Oral insulin: We are seeking to revolutionize the treatment of diabetes through our proprietary flagship product, an orally ingestibleinsulin capsule (ORMD0801) currently in non-U.S. Food and Drug Administration, or FDA, approved Phase 2 clinical trials. Our technology allowsinsulin to travel from the gastrointestinal tract via the portal vein to the bloodstream, revolutionizing the manner in which insulin is delivered. Itenables its passage in a more physiological manner than current delivery methods of insulin. Our technology is a platform that has the potential todeliver medications and vaccines orally that today can only be delivered via injection. Diabetes: Diabetes is a disease in which the body does not produce or properly use insulin. Insulin is a hormone that causes sugar to beabsorbed into cells, where the sugar is converted into energy needed for daily life. The cause of diabetes is attributed both to genetics (type 1diabetes) and, most often, to environmental factors such as obesity and lack of exercise (type 2 diabetes). According to the World HealthOrganization, or WHO, an estimated 347 million people worldwide suffered from diabetes in 2010. In 2004, an estimated 3.4 million people diedfrom consequences of high blood sugar, and the WHO projects that diabetes deaths will increase by two thirds between 2008 and 2030. According tothe American Diabetes Association, or ADA, in the United States there were approximately 25.8 million people with diabetes, or 8.3% of the UnitedStates population in 2010. Diabetes is a leading cause of blindness, kidney failure, heart attack, stroke and amputation.Intellectual property: We own a portfolio of patents and patent applications covering our technologies and we are aggressively protectingthese technology developments on a worldwide basis. Management: We are led by a highly-experienced management team knowledgeable in the treatment of diabetes. Our Chief Medical andTechnology Officer, Miriam Kidron, PhD, is a world-recognized pharmacologist and a biochemist and the innovator primarily responsible for ouroral insulin technology development and know-how. Scientific Advisory Board: Our management team has access to our internationally recognized Scientific Advisory Board whose membersare thought-leaders in their respective areas. The Scientific Advisory Board is comprised of Dr. Nir Barzilai, Professor Ele Ferrannini, ProfessorAvram Hershko, Dr. Derek LeRoith, Dr. John Amatruda and Dr. Michael Berelowitz acting as Chairman. Strategy Short Term Business Strategy We plan to conduct further research and development on the technology covered by the patent application “Methods and Composition forOral Administration of Proteins,” which we acquired from Hadasit Medical Research Services and Development Ltd., or Hadasit, in 2006 and whichis pending in various foreign jurisdictions, as well as the other patents we have filed in various foreign jurisdictions since then, as discussed belowunder “—Patents and Licenses” and “Item 1A. Risk Factors.” Through our research and development efforts, we are seeking to develop an oraldosage form that will withstand the harsh chemical environment of the stomach and intestines and will be effective in delivering active insulin forthe treatment of diabetes. The enzymes and vehicles that are added to the insulin in the formulation process must not modify the insulin chemicallyor biologically, and the dosage form must be safe to ingest. We plan to continue to conduct clinical trials to show the effectiveness of ourtechnology. We intend to conduct the clinical trials necessary to file an Investigational New Drug, or IND, application with the FDA. Additionalclinical trials are planned in Israel in order to substantiate our results as well as for purposes of making future filings for drug approval. We also planto conduct further research and development by deploying our proprietary drug delivery technology for the delivery of other polypeptides inaddition to insulin, and to develop other innovative pharmaceutical products. 2 Long Term Business Strategy If our oral insulin capsule or other drug delivery solutions show significant promise in clinical trials, we plan to ultimately seek astrategic commercial partner, or partners, with extensive experience in the development, commercialization, and marketing of insulin applicationsand/or other orally digestible drugs. We anticipate such partner or partners would be responsible for, or substantially support, late stage clinical trials(Phase 3) to increase the likelihood of obtaining regulatory approvals and registrations in the appropriate markets in a timely manner. We furtheranticipate that such partner, or partners, would also be responsible for sales and marketing of our oral insulin capsule in these markets. Such plannedstrategic partnership, or partnerships, may provide a marketing and sales infrastructure for our products as well as financial and operational supportfor global clinical trials, post marketing studies, label expansions and other regulatory requirements concerning future clinical development in theUnited States and elsewhere. Any future strategic partner, or partners, may also provide capital and expertise that would enable the partnership todevelop new oral dosage form for other polypeptides. While our strategy is to partner with an appropriate party, no assurance can be given that anythird party would be interested in partnering with us. Under certain circumstances, we may determine to develop one or more of our oral dosage formon our own, either world-wide or in select territories. Other Planned Strategic Activities In addition to developing our own oral dosage form drug portfolio, we are, on an on-going basis, considering in-licensing and other meansof obtaining additional technologies to complement and/or expand our current product portfolio. Our goal is to create a well-balanced productportfolio that will enhance and complement our existing drug portfolio. Product Development Orally Ingestible Insulin During fiscal year 2007 we conducted several clinical studies of our orally ingestible insulin. The studies were intended to assess both thesafety/tolerability and absorption properties of our proprietary oral insulin. Based on the pharmacokinetic and pharmacologic outcomes of thesetrials, we decided to continue the development of our oral insulin product. In November 2007, we successfully completed animal studies in preparation for the Phase 1B clinical trial of our oral insulin capsule(ORMD0801). In January 2008, we commenced the non-FDA approved Phase 1B clinical trials with our oral insulin capsule, in healthy humanvolunteers with the intent of dose optimization. In March 2008, we successfully completed our Phase 1B clinical trials. 3 In April 2008, we commenced a non-FDA approved Phase 2A study to evaluate the safety and efficacy of our oral insulin capsule in type 2diabetic volunteers at Hadassah Medical Center in Jerusalem. In August 2008, we announced the successful results of this trial. In July 2008 we were granted approval by the Institutional Review Board Committee of Hadassah Medical Center in Jerusalem, or the IRB,to conduct a non-FDA approved Phase 2A study to evaluate the safety and efficacy of our oral insulin capsule on type 1 diabetic volunteers. InSeptember 2008, we announced the beginning of this trial. In July 2009 we reported positive results from this trial. In April 2009, we entered into a consulting service agreement with ADRES Advanced Regulatory Services Ltd., or ADRES, (which wasamended in February 2012), pursuant to which ADRES will provide services for the purpose of filing an IND application with the FDA for a Phase 2study according to the FDA requirements. The FDA approval process and, if approved, registration for commercial use as an oral drug can takeseveral years. In May 2009, we commenced a non-FDA approved Phase 2B study in South Africa to evaluate the safety, tolerability and efficacy of ouroral insulin capsule on type 2 diabetic volunteers. In May 2010, we reported that the capsule was found to be well tolerated and exhibited a positivesafety profile. No cumulative adverse effects were reported throughout this first study of extended exposure to the capsule. In February 2010, we entered into agreements with Vetgenerics Research G. Ziv Ltd., a clinical research organization, to conduct atoxicology trial on our oral insulin capsules. In March 2011, we reported that we successfully completed the resulting comprehensive toxicity studyfor our oral insulin capsule. The study was completed under conditions prescribed by the FDA Good Laboratory Practices regulations. In September 2010, we reported the successful results of an exploratory clinical trial testing the effectiveness of our oral insulin capsule intype 1 diabetes patients suffering from uncontrolled diabetes. Unstable or labile diabetes is characterized by recurrent, unpredictable and dramaticblood glucose swings often linked with irregular hyperglycemia and sometimes serious hypoglycemia affecting type 1 diabetes patients. Thiscompleted exploratory study was a proof of concept study for defining a novel indication for ORMD0801. We believe the encouraging resultsjustify further clinical development of ORMD0801 capsule application toward management of uncontrolled diabetes. We intend to file an IND application with the FDA for Phase 2 clinical studies of our orally ingested insulin during the fourth calendarquarter of 2012. If we do not receive comments from the FDA on our IND application within 30 days from submission, we intend to immediatelycommence an FDA approved Phase 2 study to evaluate the safety, tolerability and efficacy of our oral insulin capsule on type 2 diabetic volunteers. In September 2012, we entered into a Master Service Agreement with Medpace, Inc., or Medpace, to retain Medpace as a clinical researchorganization for our upcoming Phase 2 clinical trial for an oral insulin capsule that is expected to start in the first calendar quarter of 2013 in theUnited States, and is expected to be completed in September 2013. GLP-1 Analog In September 2008 we announced the launch of pre-clinical trials of ORMD0901, an analog for GLP-1, a gastrointestinal hormone. Thepre-clinical trials include animal studies which suggest that the GLP-1 analog (exenatide-4) when combined with Oramed’s absorption promoters isabsorbed through the gastrointestinal tract and retains its biological activity. 4 Glucagon-like peptide-1 (GLP-1) is an incretin hormone - a type of gastrointestinal hormone that stimulates the secretion of insulin fromthe pancreas. The incretin concept was hypothesized when it was noted that glucose ingested by mouth (oral) stimulated two to three times moreinsulin release than the same amount of glucose administered intravenously. In addition to stimulating insulin release, GLP-1 was found to suppressglucagon release (hormone involved in regulation of glucose) from the pancreas, slow gastric emptying to reduce the rate of absorption of nutrientsinto the blood stream, and increase satiety. Other important beneficial attributes of GLP-1 are its effects of increasing the number of beta cells (cellsthat manufacture and release insulin) in the pancreas and, possibly, protection of the heart. In September 2009, we received approval from the IRB to commence human clinical trials of an oral GLP-1 analog. The approval wasgranted after successful pre-clinical results were reported. The trials are being conducted on healthy volunteers at Hadassah University MedicalCenter in Jerusalem. Oramed’s first-in-humans clinical trial was testing the safety and efficacy of ORMD0901, an encapsulated oral GLP-1 analogformulation. The study monitored the responses of healthy males to a single dose delivered 60 minutes before a glucose load and was completed inDecember 2009. ORMD0901 was well tolerated by all subjects and demonstrated physiological activity, as extrapolated from ensuing subjectinsulin levels when compared to those observed after treatment with placebo. In June 2012, we presented an abstract, which reported on the impact of our oral insulin capsule ORMD0801 delivered in combination withour oral exenatide capsule ORMD0901. The work that was presented assessed the safety and effectiveness of a combination of oral insulin and oralexenatide treatments delivered to pigs prior to food intake. The drug combination resulted in significantly improved blood glucose regulation whencompared to administration of each drug separately. Raw Materials Our oral insulin capsule is currently manufactured by Swiss Caps AG, or Swiss Caps. In May 2010, Oramed Ltd. entered into an agreement with SAFC Pharma, or SAFC, to develop a process to produce one of our oral capsuleingredients and in June, 2011, Oramed Ltd. issued a purchase order to SAFC for producing the ingredient. In July 2010, Oramed Ltd. entered into the Manufacturing and Supply Agreement, or MSA, with Sanofi-Aventis Deutschland GMBH, orSanofi-Aventis. According to the MSA, Sanofi-Aventis will supply Oramed Ltd. with specified quantities of recombinant human insulin to be usedfor clinical trials in the United States. We purchase, pursuant to separate agreements with third parties, the raw materials required for the manufacturing of our oral capsule. Wegenerally depend upon a limited number of suppliers for the raw materials. Although alternative sources of supply for these materials are generallyavailable, we could incur significant costs and disruptions if we would need to change suppliers. The termination of our relationships with oursuppliers or the failure of these suppliers to meet our requirements for raw materials on a timely and cost-effective basis could have a materialadverse affect on our business, prospects, financial condition and results of operations. Patents and Licenses We maintain a proactive intellectual property strategy which includes patent filings in multiple jurisdictions, including the United Statesand other commercially significant markets. We hold 36 patent applications currently pending, with respect to various compositions, methods ofproduction and oral administration of proteins and exenatide. Expiration dates for pending patents, if granted, will fall between 2026 and 2032. 5 In January 2012, we filed a provisional patent application with the U.S. Patent and Trademark Office for a combination therapy of our leadcompound, ORMD0801, in combination with our oral GLP-1 analog formulation, ORMD0901. We also hold three patents issued by the Australian,Israeli and New Zealand Patent Offices that cover a part of our technology which allows for the oral delivery of peptides. In February 2012, we filed a provisional patent application with the U.S. Patent and Trademark Office for the composition of a keyingredient of our oral capsules.In May 2012, we were issued a patent by the New Zealand Patent Office that covers part of our technology with respect to oral exenatidecompositions.Consistent with our strategy to seek protection in key markets worldwide, we have been and will continue to pursue the patent applicationsand corresponding foreign counterparts of such applications. We believe that our success will depend on our ability to obtain patent protection forour intellectual property.Our patent strategy is as follows:Aggressively protect all current and future technological developments to assure strong and broad protection by filing patents and/orcontinuations in part as appropriate, Protect technological developments at various levels, in a complementary manner, including the base technology, as well as specificapplications of the technology, and Establish comprehensive coverage in the United States and in all relevant foreign markets in anticipation of future commercializationopportunities. We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements. Our policy is torequire our employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, our board of directors, orour Board, technical review board and other advisors to execute confidentiality agreements upon the commencement of employment or consultingrelationships with us. These agreements provide that all confidential information developed or made known to the individual during the course ofthe individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific limited circumstances. We alsorequire signed confidentiality or material transfer agreements from any company that is to receive our confidential information. In the case ofemployees, consultants and contractors, the agreements provide that all inventions conceived by the individual while rendering services to us shallbe assigned to us as the exclusive property of our Company. There can be no assurance, however, that all persons who we desire to sign suchagreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that ourtrade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors. Partnerships and Collaborative Arrangements In April 2009, we entered into a consulting service agreement with ADRES pursuant to which ADRES will provide services for the purposeof filing an IND application with the FDA for a Phase 2 study in accordance with FDA requirements. In February 2012, we entered into anamendment agreement with ADRES, according to which we paid the remaining $51,000 of the original agreement upon execution of the amendmentagreement. In addition, beginning March 1, 2012 and until submission of the IND, we will pay ADRES a monthly fee of approximately $3,600. 6 In July 2010, we entered into the MSA with Sanofi-Aventis. Pursuant to the MSA, Sanofi-Aventis will supply specified quantities ofrecombinant human insulin to be used for clinical trials in the United States. In September 2011, we entered into the fourth agreement with Hadasit, Dr. Miriam Kidron and Dr. Daniel Schurr, or the Fourth Agreement,to facilitate clinical trials and provide other services. According to the Fourth Agreement, Hadasit will be entitled to total consideration of $200,000to be paid in accordance with the actual progress of the study, none of which was recognized or paid through August 31, 2012. See “Item13. Certain Relationships and Related Transactions, and Director Independence” below for a further description of the terms and conditions of theFourth Agreement. In December 2011, we received a quotation for the supply of insulin soft gel capsules for our clinical trials according to which Swiss Capsmanufactured insulin capsules for total consideration of CHF 395,000 (approximately $411,000). The manufacturing was completed duringNovember 2012. In February 2012, we entered into an advisory agreement with a third party advisor for a period of one year, pursuant to which the advisoragreed to provide investor relations services for share based compensation as follows: 300,000 shares of our common stock will be issued in sixinstallments over the engagement period, commencing as of February 15, 2012, and a warrant to purchase 750,000 shares of our common stock. Thewarrant has a term of five years and an exercise price of $0.50 per share and vests in 12 monthly installments over the first year of the agreement. InJuly 2012, we and the advisor entered into an amendment to the agreement, according to which the original agreement was extended until July 3,2013 (unless terminated earlier by one of the parties), and a new payment and vesting schedule was determined as of such date for the remainingshare based compensation and unvested warrant shares, respectively, until the end of the new term of the agreement. As of August 31, 2012, 100,000shares of our common stock had been issued to the advisor, and 400,000 of the warrant shares had vested. Out-Licensed Technology In June 2010, Oramed Ltd. entered into a joint venture agreement with D.N.A Biomedical Solutions Ltd. (formerly Laser Detect SystemsLtd), an Israeli company listed on the Tel Aviv Stock Exchange, or D.N.A, for the establishment of Entera Bio Ltd., or Entera. Under the terms of a license agreement that was entered into between Oramed and Entera in August 2010, we out-licensed technology toEntera, on an exclusive basis, for the development of oral delivery drugs for certain indications to be agreed upon between the parties. The out-licensed technology differs from our main delivery technology that is used for oral insulin and GLP-1 analog and is subject to different patentapplications. Entera’s initial development effort is for an oral formulation for the treatment of osteoporosis. The license was royalty-free unless ourownership interest in Entera decreased to 30% or less of its outstanding share capital, in which case royalties would have been payable with respectto revenues derived from certain indications. Under certain circumstances, Entera may have received ownership of the licensed technology, in whichcase we would have received a license back on the same terms. D.N.A initially invested $600,000 in Entera, and Entera was initially owned in equal parts by Oramed and D.N.A. Entera’s Chief ExecutiveOfficer, Dr. Phillip Schwartz, was granted options to purchase ordinary shares of Entera, reflecting 9.9% of Entera’s share capital, upon full exercise. In March 2011, we consummated a transaction with D.N.A, whereby we sold to D.N.A 47% of Entera’s outstanding share capital on anundiluted basis. As consideration for the Entera shares, we received a promissory note issued by D.N.A in the principal amount of $450,000, with anannual interest rate of 0.45%, to be paid within four months after closing, and 8,404,667 ordinary shares of D.N.A, having an aggregate market valueof approximately $581,977 as of March 31, 2011 ($200,311 as of August 31, 2012). The promissory note was secured by a personal guarantee of theD.N.A majority shareholders and its term was extended in August 2011. D.N.A paid off the promissory note in November 2011. The ordinary sharesof D.N.A were restricted for six months from the closing. In addition, D.N.A invested $250,000 in our private placement investment round, whichclosed in March 2011, for which it received 781,250 shares of our common stock and five-year warrants to purchase 273,438 shares of commonstock at an exercise price of $0.50 per share. 7 As part of the transaction with D.N.A, we entered into a patent transfer agreement (to replace the original license agreement upon closing)pursuant to which Oramed assigned to Entera all of its right, title and interest in and to the patent application that it had licensed to Entera in August2010. Under this agreement, Oramed Ltd. is entitled to receive from Entera royalties of 3% of Entera’s net revenues (as defined in the agreement)and a license back of that patent application for use in respect of diabetes and influenza. In March 2011, Oramed Ltd., Entera and D.N.A terminated the joint venture agreement entered into in June 2010 in connection with theformation of Entera. In September 2011, Entera reported successful Phase 1 clinical trial results. We believe the Phase 1 data supports the continueddevelopment of Entera’s oral osteoporosis drug. The Phase 1 clinical trial consisted of twelve healthy patients and was conducted at the HadassahMedical Center in Jerusalem. No adverse events were reported. Government Regulation The Drug Development Process Regulatory requirements for the approval of new drugs vary from one country to another. In order to obtain approval to market our drugportfolio, we need to go through a different regulatory process in each country in which we apply for such approval. In some cases informationgathered during the approval process in one country can be used as supporting information for the approval process in another country. As astrategic decision, we decided to first explore the FDA regulatory pathway. The following is a summary of the FDA’s requirements. The FDA requires that pharmaceutical and certain other therapeutic products undergo significant clinical experimentation and clinicaltesting prior to their marketing or introduction to the general public. Clinical testing, known as clinical trials or clinical studies, is either conductedinternally by life science, pharmaceutical, or biotechnology companies or is conducted on behalf of these companies by contract researchorganizations, or CROs. The process of conducting clinical studies is highly regulated by the FDA, as well as by other governmental and professionalbodies. Below we describe the principal framework in which clinical studies are conducted, as well as describe a number of the parties involved inthese studies. Protocols. Before commencing human clinical studies, the sponsor of a new drug or therapeutic product must submit an IND applicationto the FDA. The application contains, among other documents, what is known in the industry as a protocol. A protocol is the blueprint for each drugstudy. The protocol sets forth, among other things, the following: · Who must be recruited as qualified participants, 8 · How often to administer the drug or product, · What tests to perform on the participants, and · What dosage of the drug or amount of the product to give to the participants. Institutional Review Board. An institutional review board is an independent committee of professionals and lay persons which reviewsclinical research studies involving human beings and is required to adhere to guidelines issued by the FDA. The institutional review board does notreport to the FDA, but its records are audited by the FDA. Its members are not appointed by the FDA. All clinical studies must be approved by aninstitutional review board. The institutional review board’s role is to protect the rights of the participants in the clinical studies. It approves theprotocols to be used, the advertisements which the company or CRO conducting the study proposes to use to recruit participants, and the form ofconsent which the participants will be required to sign prior to their participation in the clinical studies. Clinical Trials. Human clinical studies or testing of a potential product are generally done in three stages known as Phase 1 through Phase3 testing. The names of the phases are derived from the regulations of the FDA. Generally, there are multiple studies conducted in each phase. Phase 1. Phase 1 studies involve testing a drug or product on a limited number of healthy participants, typically 24 to 100 people at a time.Phase 1 studies determine a product’s basic safety and how the product is absorbed by, and eliminated from, the body. This phase lasts an average ofsix months to a year. Phase 2. Phase 2 trials involve testing up to 200 participants at a time who may suffer from the targeted disease or condition. Phase 2 testingtypically lasts an average of one to two years. In Phase 2, the drug is tested to determine its safety and effectiveness for treating a specific illness orcondition. Phase 2 testing also involves determining acceptable dosage levels of the drug. If Phase 2 studies show that a new drug has anacceptable range of safety risks and probable effectiveness, a company will generally continue to review the substance in Phase 3 studies. Phase 3. Phase 3 studies involve testing large numbers of participants, typically several hundred to several thousand persons. The purposeis to verify effectiveness and long-term safety on a large scale. These studies generally last two to three years. Phase 3 studies are conducted atmultiple locations or sites. Like the other phases, Phase 3 requires the site to keep detailed records of data collected and procedures performed. New Drug Approval. The results of the clinical trials are submitted to the FDA as part of a new drug application, or NDA. Following thecompletion of Phase 3 studies, assuming the sponsor of a potential product in the United States believes it has sufficient information to support thesafety and effectiveness of its product, the sponsor will generally submit an NDA to the FDA requesting that the product be approved for marketing.The application is a comprehensive, multi-volume filing that includes the results of all clinical studies, information about the drug’s composition,and the sponsor’s plans for producing, packaging and labeling the product. The FDA’s review of an application can take a few months to manyyears, with the average review lasting 18 months. Once approved, drugs and other products may be marketed in the United States, subject to anyconditions imposed by the FDA. Phase 4. The FDA may require that the sponsor conduct additional clinical trials following new drug approval. The purpose of these trials,known as Phase 4 studies, is to monitor long-term risks and benefits, study different dosage levels or evaluate safety and effectiveness. In recentyears, the FDA has increased its reliance on these trials. Phase 4 studies usually involve thousands of participants. Phase 4 studies also may beinitiated by the company sponsoring the new drug to gain broader market value for an approved drug. 9 The drug approval process is time-consuming, involves substantial expenditures of resources, and depends upon a number of factors,including the severity of the illness in question, the availability of alternative treatments, and the risks and benefits demonstrated in the clinicaltrials. Other Regulations Various federal, state and local laws, regulations, and recommendations relating to safe working conditions, laboratory practices, theexperimental use of animals, the environment and the purchase, storage, movement, import, export, use, and disposal of hazardous or potentiallyhazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research are applicable to ouractivities. They include, among others, the U.S. Atomic Energy Act, the Clean Air Act, the Clean Water Act, the Occupational Safety and HealthAct, the National Environmental Policy Act, the Toxic Substances Control Act, and Resources Conservation and Recovery Act, national restrictionson technology transfer, import, export, and customs regulations, and other present and possible future local, state, or federal regulation. Thecompliance with these and other laws, regulations and recommendations can be time-consuming and involve substantial costs. In addition, theextent of governmental regulation which might result from future legislation or administrative action cannot be accurately predicted and may have amaterial adverse effect on our business, financial condition, results of operations and prospects. Competition Competition in General Competition in the area of biomedical and pharmaceutical research and development is intense and significantly depends on scientific andtechnological factors. These factors include the availability of patent and other protection for technology and products, the ability to commercializetechnological developments and the ability to obtain governmental approval for testing, manufacturing and marketing. Our competitors includemajor pharmaceutical, medical products, chemical and specialized biotechnology companies, many of which have financial, technical andmarketing resources significantly greater than ours. In addition, many biotechnology companies have formed collaborations with large, establishedcompanies to support research, development and commercialization of products that may be competitive with ours. Academic institutions,governmental agencies and other public and private research organizations are also conducting research activities and seeking patent protection andmay commercialize products on their own or through joint ventures. We are aware of certain other products manufactured or under development bycompetitors that are used for the treatment of the diseases and health conditions that we have targeted for product development. We can provide noassurance that developments by others will not render our technology obsolete or noncompetitive, that we will be able to keep pace with newtechnological developments or that our technology will be able to supplant established products and methodologies in the therapeutic areas that aretargeted by us. The foregoing factors could have a material adverse effect on our business, prospects, financial condition and results of operations.These companies, as well as academic institutions, governmental agencies and private research organizations, also compete with us in recruiting andretaining highly qualified scientific personnel and consultants. Competition within our sector is increasing, so we will encounter competition from existing firms that offer competitive solutions indiabetes treatment solutions. These competitive companies could develop products that are superior to, or have greater market acceptance, than theproducts being developed by us. We will have to compete against other biotechnology and pharmaceutical companies with greater marketrecognition and greater financial, marketing and other resources. 10 Our competition will be determined in part by the potential indications for which our technology is developed and ultimately approved byregulatory authorities. In addition, the first product to reach the market in a therapeutic or preventive area is often at a significant competitiveadvantage relative to later entrants to the market. Accordingly, the relative speed with which we, or our potential corporate partners, can developproducts, complete the clinical trials and approval processes and supply commercial quantities of the products to the market are expected to beimportant competitive factors. Our competitive position will also depend on our ability to attract and retain qualified scientific and other personnel,develop effective proprietary products, develop and implement production and marketing plans, obtain and maintain patent protection and secureadequate capital resources. We expect our technology, if approved for sale, to compete primarily on the basis of product efficacy, safety, patientconvenience, reliability, value and patent position. Competition for Our Oral Insulin Capsule We anticipate the oral insulin capsule to be a competitive diabetes drug because of its anticipated efficacy and safety profile. The followingare treatment options for type 1 and type 2 diabetic patients: · Insulin injections, · Insulin pumps, · Insulin inhalers, or · A combination of diet, exercise and oral medication which improve the body’s response to insulin or cause the body to produce moreinsulin. Several entities who are developing oral insulin capsules and other alternative oral insulin as well as the development stage are thought tobe: Novo Nordisk (Denmark), Biocon Limited (India) and Apollo Life Sciences Pvt. Limited (India). Scientific Advisory Board We maintain a Scientific Advisory Board consisting of internationally recognized scientists who advise us on scientific and technicalaspects of our business. The Scientific Advisory Board meets periodically to review specific projects and to assess the value of new technologies anddevelopments to us. In addition, individual members of the Scientific Advisory Board meet with us periodically to provide advice in their particularareas of expertise. The Scientific Advisory Board consists of the following members, information with respect to whom is set forth below: ProfessorAvram Hershko, Professor Nir Barzilai, Professor Ele Ferrannini, Professor Derek LeRoith, Dr. John Amatruda and one of our directors, Dr. MichaelBerelowitz, acting as Chairman. We have entered into an agreement with Dr. Berelowitz pursuant to which we will pay him certain fees as compensation for serving asChairman. See “Item 10. Directors, Executive Officers and Corporate Governance” and “Item 11. Executive Compensation—DirectorCompensation” for certain information about Dr. Berelowitz. Professor Avram Hershko, MD, PhD, joined the Oramed Scientific Advisory Board in July 2008. He earned his MD degree (1965) and PhDdegree (1969) from the Hebrew University- Hadassah Medical School of Jerusalem. Professor Hershko served as a physician in the Israel DefenseForces from 1965 to 1967. After a post-doctoral fellowship with Gordon Tomkins at the University of San Francisco (1969-72), he joined the facultyof the Haifa Technion becoming a professor in 1980. He is now Distinguished Professor in the Unit of Biochemistry in the B. Rappaport Faculty ofMedicine of the Technion. Professor Hershko’s main research interests concern the mechanisms by which cellular proteins are degraded, a formerlyneglected field of study. Professor Hershko and his colleagues showed that cellular proteins are degraded by a highly selective proteolytic system.This system tags proteins for destruction by linkage to a protein called ubiquitin, which had previously been identified in many tissues, but whosefunction was previously unknown. Subsequent work by Professor Hershko and many other laboratories has shown that the ubiquitin system has avital role in controlling a wide range of cellular processes, such as the regulation of cell division, signal transduction and DNA repair. ProfessorHershko was awarded the Nobel Prize in Chemistry (2004) jointly with his former PhD student Aaron Ciechanover and their colleague Irwin Rose.His many honors include the Israel Prize for Biochemistry (1994), the Gardner Award (1999), the Lasker Prize for Basic Medical Research (2000), theWolf Prize for Medicine (2001) and the Louisa Gross Horwitz Award (2001). Professor Hershko is a member of the Israel Academy of Sciences (2000)and a Foreign Associate of the U.S. Academy of Sciences (2003). 11 Professor Derek LeRoith, MD, PhD, joined the Oramed Scientific Advisory Board in January 2007. He is currently the Chief of theDivision of Endocrinology, Diabetes and Bone Diseases at Mt. Sinai School of Medicine in New York. Professor LeRoith has worked at the NationalInstitute of Health, or NIH, since 1979 in the field of Endocrinology and Diabetes and rose to be Chief of Diabetes Branch at the MDNIH inBethesda, Maryland, a position he held until 2005. His main interests have focused on the role of insulin and the insulin-like growth factors, or IGFs,in normal physiology and disease states. In these areas he has published over 500 peer-reviewed articles and reviews in high profile journals. He isalso the senior editor of a textbook on diabetes, now in its third edition, and has edited books on IGFs. Professor LeRoith has made majorcontributions in our understanding of the basic pathophysiology of type 2 diabetes and also the role of the IGFs in various disorders, especially incancer, and is considered a worldwide expert on these topics. In recognition of his contributions he has received many lecturing positions worldwideand has been the plenary speaker at numerous national and international symposia. He is the editor of a number of diabetes- and growth factor-related journals, has been on the advisory boards of a number of companies and co-chairs two national committees involved in the education ofendocrinologist and primary care physicians. Professor Ele Ferrannini, MD, PhD, joined the Oramed Scientific Advisory Board in February 2007. He is a past President to the,European Association for the Study of Diabetes, which supports scientists, physicians, laboratory workers, nurses and students from all over theworld who are interested in diabetes and related subjects in Europe, and performs functions similar to that of the ADA in the United States. ProfessorFerrannini has worked with various institutions including the Department of Internal Medicine, University of Pisa School of Medicine, and NRC(National Research Council) Institute of Clinical Physiology, Pisa, Italy; and the Diabetes Division, Department of Medicine, University of TexasHealth Science Center at San Antonio, Texas. He has also had extensive training focused on microbiology, immunology, and endocrinology, andspecializing in diabetes studies. Professor Ferrannini has received a Certificate of the Educational Council for Foreign Medical Graduates from theUniversity of Bologna, and with cum laude honors completed a subspecialty in Diabetes and Metabolic Diseases at the University of Torino. He haspublished over 350 original papers and 50 book chapters and he is a “highly cited researcher,” according to the Institute for Scientific Information,or ISI. ISI provides bibliographic database services and publishes list of highly cited researchers. Professor Nir Barzilai,MD, joined the Oramed Scientific Advisory Board in January 2007. He is the Director of the Institute for AgingResearch at the Albert Einstein College of Medicine, New York. He is currently an Associate Professor in the Department of Medicine, MolecularGenetics and the Diabetes Research Center and is a member of the Divisions of Endocrinology and Geriatrics. He is also the Director of theMontefiore Hospital Diabetes Clinic, New York. He has spent over 20 years assisting patients internationally and training in various fields includingMedicine, Geriatrics, Endocrinology and Molecular Genetics. Professor Barzilai has had a strong career in diabetes studies in Israel, London and theUnited States. He has worked for such esteemed institutions as Hadassah Research Hospital, NIH, and many esteemed U.S. based university hospitals,including Cornell and Yale. 12 Dr. John Amatruda, MD, joined the Oramed Scientific Advisory Board in February 2010. He graduated from Yale University, received hisMD degree from the Medical College of Wisconsin and did his internship and residency in Internal Medicine and Fellowship in Endocrinology andMetabolism at The Johns Hopkins Hospital. He is board certified in Internal Medicine and Endocrinology and Metabolism and continues to seepatients. From 1977 to 1992, Dr. Amatruda was a Professor of Medicine at The University of Rochester School of Medicine where he was head of theClinical Research Center, fully funded as principle investigator on two NIH grants, and acting Head of the Endocrine Metabolism Unit. From 1992to 2002, he started and ran a drug discovery group at Bayer Corp. where he served as Vice President and Therapeutic Area Research Head, as well asa Professor of Medicine Adjunct at Yale University School of Medicine. He assisted in the approval of Acarbose, an anti-diabetic drug distributed byBayer AG used to treat type 2 diabetes and, in some countries, prediabetes, and his group put several compounds into clinical developmentincluding the first glucagon receptor antagonist. From 2002 to 2009, Dr. Amatruda held various positions at Merck & Co. Inc., including VicePresident and Therapeutic Area Head for Metabolism and Atherosclerosis and acting Therapeutic Area head for Cardiovascular. These groups filedNDAs for the drugs Vytorin, Januvia and Janumet. Most recently Dr. Amatruda was Senior Vice President and Franchise Head for Diabetes andObesity and a member of the Research Management Committee at Merck. Dr. Amatruda is an author of over 150 papers, abstracts, reviews and bookchapters, primarily in the areas of insulin action in vitro systems and in clinical diabetes and obesity. Employees We have been successful in retaining experienced personnel involved in our research and development program. In addition, we believe wehave successfully recruited the clinical/regulatory, quality assurance and other personnel needed to advance through clinical studies or haveengaged the services of experts in the field for these requirements. As of August 31, 2012, we have contracted with eight individuals foremployment or consulting arrangements. Of our staff, three are senior management, three are engaged in research and development work, and theremaining two are involved in administration work. 13 ITEM 1A. RISK FACTORS. An investment in our securities involves a high degree of risk. You should consider carefully the following information about theserisks, together with the other information contained in this Annual Report on Form 10-K before making an investment decision. Ourbusiness, prospects, financial condition, and results of operations may be materially and adversely affected as a result of any of the followingrisks. The value of our securities could decline as a result of any of these risks. You could lose all or part of your investment in our securities.Some of the statements in “Item 1A. Risk Factors” are forward-looking statements. The following risk factors are not the only risk factorsfacing our Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect ourbusiness, prospects, financial condition and results of operations. Risks Related to Our Business We continue and expect to incur losses in the future. Successful completion of our development programs and our transition to normal operations are dependent upon obtaining necessaryregulatory approvals from the FDA prior to selling our products within the United States, and foreign regulatory approvals must be obtained to sellour products internationally. There can be no assurance that we will receive regulatory approval of any of our product candidates, and a substantialamount of time may pass before we achieve a level of revenues adequate to support our operations, if at all. We also expect to incur substantialexpenditures in connection with the regulatory approval process for each of our product candidates during their respective developmental periods.Obtaining marketing approval will be directly dependent on our ability to implement the necessary regulatory steps required to obtain marketingapproval in the United States and in other countries. We cannot predict the outcome of these activities. Based on our current cash resources and commitments, we believe we will be able to maintain our current planned development activitiesand the corresponding level of expenditures for at least the next 12 months, although no assurance can be given that we will not need additionalfunds prior to such time. If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12months. See “Item 1A. Risk Factors—We will need substantial additional capital in order to satisfy our business objectives.” We will need substantial additional capital in order to satisfy our business objectives. To date, we have financed our operations principally through offerings of securities exempt from the registration requirements of theSecurities Act of 1933, as amended, or the Securities Act. We believe that our available resources and cash flow will be sufficient to meet ouranticipated working capital needs for at least the next 12 months from the date of this Annual Report on Form 10-K. We will require substantialadditional financing at various intervals in order to continue our research and development programs, including significant requirements foroperating expenses including intellectual property protection and enforcement, for pursuit of regulatory approvals, and for commercialization of ourproducts. We can provide no assurance that additional funding will be available on a timely basis, on terms acceptable to us, or at all. In the eventthat we are unable to obtain such financing, we will not be able to fully develop and commercialize our technology. Our future capital requirementswill depend upon many factors, including: · Continued scientific progress in our research and development programs,· Costs and timing of conducting clinical trials and seeking regulatory approvals and patent prosecutions, 14 · Competing technological and market developments,· Our ability to establish additional collaborative relationships, and· Effects of commercialization activities and facility expansions if and as required.If we cannot secure adequate financing when needed, we may be required to delay, scale back or eliminate one or more of our research anddevelopment programs or to enter into license or other arrangements with third parties to commercialize products or technologies that we wouldotherwise seek to develop ourselves and commercialize ourselves. In such event, our business, prospects, financial condition, and results ofoperations may be adversely affected as we may be required to scale-back, eliminate, or delay development efforts or product introductions or enterinto royalty, sales or other agreements with third parties in order to commercialize our products.We are a development stage company with a history of losses and can provide no assurance as to our future operating results. We are a development stage company with no revenues from our research and development activities. Consequently, we have incurrednet losses and negative cash flows since inception. We currently have no product revenues, and may not succeed in developing orcommercializing any products which could generate product or licensing revenues. We do not expect to have any products on the market forseveral years. In addition, development of our product candidates requires a process of pre-clinical and clinical testing, during which ourproducts could fail. We may not be able to enter into agreements with one or more companies experienced in the manufacturing and marketingof therapeutic drugs and, to the extent that we are unable to do so, we will not be able to market our product candidates. Eventual profitabilitywill depend on our success in developing, manufacturing, and marketing our product candidates. As of August 31, 2012 and August 31, 2011,we had working capital of $4,439,438 and $3,842,790, respectively, and stockholders’ equity of $3,778,013 and $3,723,916, respectively. Wehave generated no revenues to date. For the period from our inception on April 12, 2002 through August 31, 2012, the year ended August 31,2012 and the year ended August 31, 2011, we incurred net losses of $17,891,777, $3,344,478 and $1,561,245, respectively. We may neverachieve profitability and expect to incur net losses in the foreseeable future. See “Item 7. Management’s Discussion and Analysis of FinancialCondition and Results of Operations.” We rely upon patents to protect our technology. The patent position of biopharmaceutical and biotechnology firms is generally uncertain and involves complex legal and factual questions.We do not know whether any of our current or future patent applications will result in the issuance of any patents. Even issued patents may bechallenged, invalidated or circumvented. Patents may not provide a competitive advantage or afford protection against competitors with similartechnology. Competitors or potential competitors may have filed applications for, or may have received patents and may obtain additional andproprietary rights to compounds or processes used by or competitive with ours. In addition, laws of certain foreign countries do not protectintellectual property rights to the same extent as do the laws of the United States. Patent litigation is becoming widespread in the biopharmaceutical and biotechnology industry and we cannot predict how this will affectour efforts to form strategic alliances, conduct clinical testing or manufacture and market any products under development. If challenged, our patentsmay not be held valid. We could also become involved in interference proceedings in connection with one or more of our patents or patentapplications to determine priority of invention. If we become involved in any litigation, interference or other administrative proceedings, we willlikely incur substantial expenses and the efforts of our technical and management personnel will be significantly diverted. In addition, an adversedetermination could subject us to significant liabilities or require us to seek licenses that may not be available on favorable terms, if at all. We maybe restricted or prevented from manufacturing and selling our products in the event of an adverse determination in a judicial or administrativeproceeding or if we fail to obtain necessary licenses. 15 We may be unable to protect our intellectual property rights and we may be liable for infringing the intellectual property rightsof others. Our ability to compete effectively will depend on our ability to maintain the proprietary nature of our technologies. We currently holdseveral pending patent applications in the United States for our technologies covering oral administration of insulin and other proteins and oraladministration of exenatides and proteins, corresponding patent applications filed in Canada, Europe, Japan, China, Russia, Israel, Brazil,Australia, South Africa, New Zealand, Hong Kong and India and three patents issued by the Australian, Israeli ( for our technologies coveringoral administration of insulin and other proteins) and New Zealand (for our technologies covering oral administration of insulin and otherproteins and oral administration of exenatides) patent offices. Further, we intend to rely on a combination of trade secrets and non-disclosureand other contractual agreements and technical measures to protect our rights in our technology. We intend to depend upon confidentialityagreements with our officers, directors, employees, consultants, and subcontractors, as well as collaborative partners, to maintain the proprietarynature of our technology. These measures may not afford us sufficient or complete protection, and others may independently developtechnology similar to ours, otherwise avoid our confidentiality agreements, or produce patents that would materially and adversely affect ourbusiness, prospects, financial condition, and results of operations. We believe that our technology is not subject to any infringement actionsbased upon the patents of any third parties; however, our technology may in the future be found to infringe upon the rights of others. Othersmay assert infringement claims against us, and if we should be found to infringe upon their patents, or otherwise impermissibly utilize theirintellectual property, our ability to continue to use our technology could be materially restricted or prohibited. If this event occurs, we may berequired to obtain licenses from the holders of this intellectual property, enter into royalty agreements, or redesign our products so as not toutilize this intellectual property, each of which may prove to be uneconomical or otherwise impossible. Licenses or royalty agreements requiredin order for us to use this technology may not be available on terms acceptable to us, or at all. These claims could result in litigation, whichcould materially adversely affect our business, prospects, financial condition, and results of operations. Our commercial success will also depend significantly on our ability to operate without infringing the patents and other proprietary rightsof third parties. Patent applications are, in many cases, maintained in secrecy until patents are issued. The publication of discoveries in the scientificor patent literature frequently occurs substantially later than the date on which the underlying discoveries were made and patent applications arefiled. In the event of infringement or violation of another party’s patent, we may be prevented from pursuing product development orcommercialization. See “Item 1. Business—Description of Business—Patents and Licenses.” At present, our success depends primarily on the successful commercialization of our oral insulin capsule. The successful commercialization of oral insulin capsule is crucial for our success. At present, our principal product is the oral insulincapsule. Our oral insulin capsule is in a very early stage of clinical development and faces a variety of risks and uncertainties. Principally, theserisks include the following: · Future clinical trial results may show that the oral insulin capsule is not well tolerated by recipients at its effective doses or is notefficacious as compared to placebo, 16 · Future clinical trial results may be inconsistent with previous preliminary testing results and data from our earlier studies may beinconsistent with clinical data, · Even if our oral insulin capsule is shown to be safe and effective for its intended purposes, we may face significant or unforeseendifficulties in obtaining or manufacturing sufficient quantities or at reasonable prices, · Our ability to complete the development and commercialization of the oral insulin capsule for our intended use is significantlydependent upon our ability to obtain and maintain experienced and committed partners to assist us with obtaining clinical and regulatory approvalsfor, and the manufacturing, marketing and distribution of, the oral insulin capsule on a worldwide basis, · Even if our oral insulin capsule is successfully developed, commercially produced and receives all necessary regulatory approvals,there is no guarantee that there will be market acceptance of our product, and · Our competitors may develop therapeutics or other treatments which are superior or less costly than our own with the result that ourproducts, even if they are successfully developed, manufactured and approved, may not generate significant revenues. If we are unsuccessful in dealing with any of these risks, or if we are unable to successfully commercialize our oral insulin capsule for someother reason, it would likely seriously harm our business. We have limited experience in conducting clinical trials. Clinical trials must meet FDA and foreign regulatory requirements. We have limited experience in designing, conducting and managing thepreclinical studies and clinical trials necessary to obtain regulatory approval for our product candidates in any country. We have entered intoagreements with Hadasit to assist us in designing, conducting and managing our various clinical trials in Israel, as more fully described in “Item1. Business—Description of Business—Partnerships and Collaborative Agreements.” Any failure of Hadasit or any other consultant to fulfill theirobligations could result in significant additional costs as well as delays in designing, consulting and completing clinical trials on our products. Our clinical trials may encounter delays, suspensions or other problems. We may encounter problems in clinical trials that may cause us or the FDA or foreign regulatory agencies to delay, suspend or terminate ourclinical trials at any phase. These problems could include the possibility that we may not be able to conduct clinical trials at our preferred sites,enroll a sufficient number of patients for our clinical trials at one or more sites or begin or successfully complete clinical trials in a timely fashion, ifat all. Furthermore, we, the FDA or foreign regulatory agencies may suspend clinical trials at any time if we or they believe the subjects participatingin the trials are being exposed to unacceptable health risks or if we or they find deficiencies in the clinical trial process or conduct of theinvestigation. If clinical trials of any of the product candidates fail, we will not be able to market the product candidate which is the subject of thefailed clinical trials. The FDA and foreign regulatory agencies could also require additional clinical trials, which would result in increased costs andsignificant development delays. Our failure to adequately demonstrate the safety and effectiveness of a pharmaceutical product candidate underdevelopment could delay or prevent regulatory approval of the product candidate and could have a material adverse effect on our business,prospects, financial condition, and results of operations. 17 We can provide no assurance that our products will obtain regulatory approval or that the results of clinical studies will be favorable. The testing, marketing and manufacturing of any of our products will require the approval of the FDA or regulatory agencies of othercountries. We have completed certain non-FDA clinical trials and pre-clinical trials for our products but have yet to conduct any FDA approvedtrials. We have retained Advanced Regulatory Services Ltd. to assist us in the preparation of an IND application with the FDA to conduct an FDAapproved Phase 2 study on our oral insulin capsule product but no application has yet been filed. We cannot predict with any certainty the amount of time necessary to obtain regulatory approvals, including from the FDA or other foreignregulatory authorities, and whether any such approvals will ultimately be granted. In any event, review and approval by the regulatory bodies isanticipated to take a number of years. Preclinical and clinical trials may reveal that one or more of our products are ineffective or unsafe, in whichevent further development of such products could be seriously delayed or terminated. Moreover, obtaining approval for certain products mayrequire the testing on human subjects of substances whose effects on humans are not fully understood or documented. Delays in obtaining necessaryregulatory approvals of any proposed product and failure to receive such approvals would have an adverse effect on the product’s potentialcommercial success and on our business, prospects, financial condition, and results of operations. In addition, it is possible that a product may befound to be ineffective or unsafe due to conditions or facts which arise after development has been completed and regulatory approvals have beenobtained. In this event we may be required to withdraw such product from the market. See “Item 1. Business—Description of Business—Government Regulation.” We are dependent upon third party suppliers of our raw materials. We are dependent on outside vendors for our entire supply of the oral insulin capsule. While we believe that there are numerous sources ofsupply available, if the third party suppliers were to cease production or otherwise fail to supply us with quality raw materials in sufficient quantitieson a timely basis and we were unable to contract on acceptable terms for these services with alternative suppliers, our ability to produce our productsand to conduct testing and clinical trials would be materially adversely affected. We are highly dependent upon our ability to enter into agreements with collaborative partners to develop, commercialize, and marketour products. Our long-term strategy is to ultimately seek a strategic commercial partner, or partners, such as large pharmaceutical companies, withextensive experience in the development, commercialization, and marketing of insulin applications and/or other orally digestible drugs. Weanticipate such partner or partners would be responsible for, or substantially support, late stage clinical trials (Phase 3) and sales and marketing ofour oral insulin capsule and other products. Such planned strategic partnership, or partnerships, may provide a marketing and sales infrastructure forour products as well as financial and operational support for global clinical trials, post marketing studies, label expansions and other regulatoryrequirements concerning future clinical development in the United States and elsewhere. While our strategy is to partner with an appropriate party, no assurance can be given that any third party would be interested in partneringwith us. We currently lack the resources to manufacture any of our product candidates on a large scale and we have no sales, marketing ordistribution capabilities. In the event we are not able to enter into a collaborative agreement with a partner or partners, on commercially reasonableterms, or at all, we may be unable to commercialize our products, which would have a material adverse effect upon our business, prospects, financialcondition, and results of operations. 18 The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree ofcompetition. We may be unable to compete with more substantial enterprises. The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree ofcompetition. As a result, our products could become obsolete before we recoup any portion of our related research and development andcommercialization expenses. These industries are highly competitive, and this competition comes both from biotechnology firms and from majorpharmaceutical and chemical companies. Many of these companies have substantially greater financial, marketing, and human resources than we do(including, in some cases, substantially greater experience in clinical testing, manufacturing, and marketing of pharmaceutical products). We alsoexperience competition in the development of our products from universities and other research institutions and compete with others in acquiringtechnology from such universities and institutions. In addition, certain of our products may be subject to competition from products developedusing other technologies. See “Item 1. Business—Description of Business—Competition.” We have limited senior management resources and may be required to obtain more resources to manage our growth. We expect the expansion of our business to place a significant strain on our limited managerial, operational, and financial resources. Wewill be required to expand our operational and financial systems significantly and to expand, train, and manage our work force in order to managethe expansion of our operations. Our failure to fully integrate our new employees into our operations could have a material adverse effect on ourbusiness, prospects, financial condition, and results of operations. Our ability to attract and retain highly skilled personnel is critical to ouroperations and expansion. We face competition for these types of personnel from other technology companies and more established organizations,many of which have significantly larger operations and greater financial, technical, human, and other resources than we have. We may not besuccessful in attracting and retaining qualified personnel on a timely basis, on competitive terms, or at all. If we are not successful in attracting andretaining these personnel, our business, prospects, financial condition, and results of operations will be materially adversely affected. See “Item7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Item 1. Business—Description of Business—Strategy” and “—Employees.” We have limited financial personnel and may not provide reasonable assurance regarding the reliability of internal control overfinancial reporting. Due to the inherent limitations of our Company, derived from our small size and limited number of employees, management’s evaluation ofour internal control over financial reporting, as further discussed in “Item 9A. Controls and Procedures”, concluded that there is a material weaknesswith respect to segregation of duties that may not provide reasonable assurance regarding the reliability of internal control over financial reportingand may not prevent or detect misstatements. Specifically, our Chief Financial Officer serves as our only qualified internal accounting and financialreporting personnel and as such performs all accounting and financial reporting functions without the benefit of independent checks, confirmationsor backup other than bookkeeping functions performed by an outside accounting firm. In addition, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance withthe policies or procedures may deteriorate. We depend upon our senior management and skilled personnel and their loss or unavailability could put us at a competitivedisadvantage. We currently depend upon the efforts and abilities of our senior executives, as well as the services of several key consultants and other keypersonnel, including Dr. Miriam Kidron, our Chief Medical and Technology Officer. The loss or unavailability of the services of any of theseindividuals for any significant period of time could have a material adverse effect on our business, prospects, financial condition, and results ofoperations. We do not maintain “key man” life insurance policies for any of our senior executives. In addition, recruiting and retaining qualifiedscientific personnel to perform future research and development work will be critical to our success. There is currently a shortage of employees withexpertise in developing, manufacturing and commercialization of products and related clinical and regulatory affairs, and this shortage is likely tocontinue. Competition for skilled personnel is intense and turnover rates are high. Our ability to attract and retain qualified personnel may belimited. Our inability to attract and retain qualified skilled personnel would have a material adverse effect on our business, prospects, financialcondition, and results of operations. 19 Fulfilling our obligations incident to being a public company will be expensive and time consuming. As a public company, the Sarbanes-Oxley Act of 2002, Dodd-Frank Act, and the related rules and regulations of the Securities andExchange Commission, or the SEC, require us to maintain certain corporate governance practices and adhere to a variety of reporting requirementsand complex accounting rules. Compliance with these public company obligations increases our legal and financial compliance costs and placesignificant additional demands on our finance and accounting staff and on our financial, accounting and information systems. Healthcare policy changes, including pending legislation recently adopted and further proposals still pending to reform the U.S.healthcare system, may harm our future business. Healthcare costs have risen significantly over the past decade. There have been and continue to be proposals by legislators, regulators andthird-party payors to keep these costs down. Certain proposals, if passed, would impose limitations on the prices we will be able to charge for theproducts that we are developing, or the amounts of reimbursement available for these products from governmental agencies or third-party payors.These limitations could in turn reduce the amount of revenues that we will be able to generate in the future from sales of our products and licenses ofour technology. In March 2010, the U.S. Congress enacted and President Obama signed into law healthcare reform legislation that may significantly impactthe pharmaceutical industry. In addition to requiring most individuals to have health insurance and establishing new regulations on health plans,this legislation will require discounts under the Medicare drug benefit program and increased rebates on drugs covered by Medicaid. In addition, thelegislation imposes an annual fee, which will increase annually, on sales by branded pharmaceutical manufacturers starting in 2011. The financialimpact of these discounts, increased rebates and fees and the other provisions of the legislation on our business is unclear and there can be noassurance that our business will not be materially adversely affected. In addition, these and other ongoing initiatives in the United States haveincreased and will continue to increase pressure on drug pricing. The announcement or adoption of any such initiative could have an adverse effecton potential revenues from any product that we may successfully develop. Various healthcare reform proposals have also emerged at the state level. We cannot predict what healthcare initiatives, if any, will beimplemented at the federal or state level, or the effect any future legislation or regulation will have on us. However, an expansion in government’srole in the U.S. healthcare industry may lower the future revenues for the products we are developing and adversely affect our future business,possibly materially. We became a publicly traded company through the acquisition of a public shell company, and we could be liable for unanticipatedclaims or liabilities as a result thereof. We were originally incorporated on April 12, 2002 as an exploration stage company engaged in the acquisition and exploration of mineralproperties. We were unsuccessful in implementing our business plan as a mineral exploration company and became a public shell company. OnMay 27, 2004, we executed a share exchange with the shareholders of Integrated Security Technologies, Inc., a New Jersey corporation, orISTI. However, due to disappointing results, on May 31, 2005, effective as of May 27, 2004, we terminated the share exchange agreement with theshareholders of ISTI, and we again became a public shell company. We remained a public shell company until March 8, 2006, when we became apharmaceutical company engaged in the development of innovative pharmacological solutions. 20 We face substantial risks associated with being a former public shell company, including absence of accurate or adequate publicinformation concerning the public shell company; undisclosed liabilities; improper accounting; claims or litigation from former officers, directors,employees or stockholders; contractual obligations; and regulatory requirements. Although management performed due diligence on us, there canbe no assurance that such risks do not occur. The occurrence of any such risk could materially adversely affect our financial condition. Risks Related to our Common Stock As the market price of our common stock may fluctuate significantly, this may make it difficult for you to sell your shares of commonstock when you want or at prices you find attractive. The price of our common stock is currently quoted on the OTC Bulletin Board, or the OTCBB, and constantly changes. In recent years, thestock market in general has experienced extreme price and volume fluctuations. We expect that the market price of our common stock will continueto fluctuate, even if our shares begin trading on the Nasdaq Stock Market, or Nasdaq, where we have applied to have our shares listed. Thesefluctuations may result from a variety of factors, many of which are beyond our control. These factors include: · Clinical trial results and the timing of the release of such results, · The amount of cash resources and our ability to obtain additional funding, · Announcements of research activities, business developments, technological innovations or new products by us or our competitors, · Entering into or terminating strategic relationships, · Changes in government regulation, · Departure of key personnel, · Disputes concerning patents or proprietary rights, · Changes in expense level, · Future sales of our equity or equity-related securities, · Public concern regarding the safety, efficacy or other aspects of the products or methodologies being developed, · Activities of various interest groups or organizations, · Media coverage, and · Status of the investment markets. 21 We may effect a reverse stock split of our shares of common stock. Our Board and stockholders have approved a reverse stock split of our shares of common stock at a ratio not to exceed one-for-eighteen.Our Board has up to 24 months from July 24, 2012, to effect the reverse stock split and may need to do so in order to meet Nasdaq listingrequirements, but there can be no assurance that our Board will do so. While the Board believes that the potential advantages of a reverse stock splitoutweigh the risks, if the Board does effect a reverse stock split there can be no assurance that: · Our shares of common stock will trade at a price in proportion to the reduction in the number of outstanding shares resulting fromthe reverse shares split, · The reverse stock split will result in a per share price high enough to attract and retain employees and strategic partners, · The bid price of our shares of common stock after a reverse stock split can be maintained at or above the minimum bid pricerequirement, · Our shares of common stock will not be rejected from listing on Nasdaq for other reasons, · The liquidity of our shares of common stock will not be adversely affected by the reduced number of shares that would beoutstanding after the reverse stock split, · Engaging in a reverse stock split will not be perceived in a negative manner by investors, analysts or other stock marketparticipants, or · The reverse stock split will not result in some stockholders owning “odd-lots” of less than 100 shares of common stock, potentiallyresulting in higher brokerage commissions and other transaction costs than the commissions and costs of transactions in “round-lots” of evenmultiples of 100 shares. Future sales of common stock or the issuance of securities senior to our common stock or convertible into, or exchangeable orexercisable for, our common stock could materially adversely affect the trading price of our common stock, and our ability to raise funds innew equity offerings. Future sales of substantial amounts of our common stock or other equity-related securities in the public market or privately, or theperception that such sales could occur, could adversely affect prevailing trading prices of our common stock and could impair our ability to raisecapital through future offerings of equity or other equity-related securities. We anticipate that we will need to raise capital though offerings ofequity and equity related securities. We can make no prediction as to the effect, if any, that future sales of shares of our common stock or equity-related securities, or the availability of shares of common stock for future sale, will have on the trading price of our common stock. Our stockholders may experience significant dilution as a result of any additional financing using our equity securities. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Sale ofadditional equity securities at prices below certain levels may trigger anti-dilution provisions with respect to certain securities we have previouslysold. 22 Our common stock is deemed to be a “penny stock,” which may make it more difficult for investors to sell their shares due tosuitability requirements. Low-priced stocks are sometimes the subject of fraud and abuse. The SEC has adopted regulations that generally define “penny stock” to be an equity security that has a market price of less than $5.00 pershare (as calculated pursuant to SEC rules), subject to specific exemptions, such as if the issuer of the security has net tangible assets in excess of$2,000,000 and has been in continuous operation for at least three years. The market price of our common stock is currently less than $5.00 pershare, and there are no applicable exemptions available to us. Therefore, our common stock is currently a “penny stock” according to SEC rules.Designation as a “penny stock” requires any broker or dealer selling these securities to, among other things, disclose certain information concerningthe transaction, obtain a written agreement from the purchaser, furnish the customer a document describing the risks of investing in penny stocks andsend monthly account statements showing the market value of each penny stock held in the customer’s account. Such rules may restrict the ability ofbrokers or dealers to sell penny stocks. You should be aware that, according to the SEC, the market for penny stocks has suffered in recent years from patterns of fraud and abuse.These could affect low-priced stocks, such as ours, even if they do not qualify as “penny stocks” under the SEC rules. Such patterns include: · Control of the market for the security by one or a few broker-dealers, · “Boiler room” practices involving high-pressure sales tactics, · Manipulation of prices through prearranged matching of purchases and sales, · The release of misleading information, · Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers, and · Dumping of securities by broker-dealers after prices have been manipulated to a desired level, which hurts the price of the stockand causes investors to suffer losses. Future sales of our common stock by our existing stockholders could adversely affect our stock price. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, orthe perception that these sales could occur. These sales also might make it more difficult for us to sell equity securities in the future at a time and ata price that we deem appropriate. As of December 6, 2012, we had outstanding 86,505,020 shares of common stock, a large majority of which arefreely tradeable. Giving effect to the exercise in full of all of our outstanding warrants and options, we would have outstanding 111,557,056 sharesof common stock. Our issuance of warrants and options to investors, employees and consultants may have a negative effect on the trading prices of ourcommon stock as well as a dilutive effect. We have issued and may continue to issue warrants, options and convertible notes at, above or below the current market price. As of August31, 2012, we had outstanding warrants and options exercisable for 22,942,310 shares of common stock (15,200,044 as of August 31, 2011). Inaddition to the dilutive effect of a large number of shares and a low exercise price for the warrants and options, there is a potential that a largenumber of underlying shares may be sold in the open market at any given time, which could place downward pressure on the trading of our commonstock. 23 Delaware law could discourage a change in control, or an acquisition of us by a third party, even if the acquisition would be favorableto you, and thereby adversely affect existing stockholders. The Delaware General Corporation Law contains provisions that may have the effect of making more difficult or delaying attempts byothers to obtain control of our Company, even when these attempts may be in the best interests of stockholders. Delaware law imposes conditions oncertain business combination transactions with “interested stockholders.” These provisions and others that could be adopted in the future coulddeter unsolicited takeovers or delay or prevent changes in our control or management, including transactions in which stockholders might otherwisereceive a premium for their shares over then current market prices. These provisions may also limit the ability of stockholders to approvetransactions that they may deem to be in their best interests. Because we will not pay cash dividends, investors may have to sell shares in order to realize their investment. We have not paid any cash dividends on our common stock and do not intend to pay cash dividends in the foreseeable future. We intend toretain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements which we may enter intowith institutional lenders or otherwise may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretionof our Board and will be dependent upon our financial condition, results of operations, capital requirements, and any other factors that our Boarddecides is relevant. See “Item 5. Market Price for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities.” Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control overactions requiring stockholder approval. As of December 6, 2012, our directors, executive officers and principal affiliated stockholders beneficially own approximately 35.2% of ouroutstanding shares of common stock. As a result, these stockholders, should they act together, may have the ability to control the outcome ofmatters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially allof our assets. In addition, these stockholders, should they act together, may have the ability to control the management and affairs of our Company.Accordingly, this concentration of ownership might harm the market price of our common stock by: · Delaying, deferring or preventing a change in corporate control, · Impeding a merger, consolidation, takeover or other business combination involving us, or · Discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us. Our shares of common stock are not yet listed for trading on a national securities exchange. Although we have applied to have our common stock list for trading on Nasdaq, there is no assurance that such listing will be approved orhow long such approval could take. Our common stock currently only trades on the OTCBB and is not listed for trading on any national securitiesexchange. Investments in securities trading on the OTCBB are generally less liquid than investments in securities trading on a national securitiesexchange. The failure of our shares to be approved for trading on a national securities exchange may have the effect of limiting the trading activityof our common stock and reducing the liquidity of an investment in our common stock. 24 Risks Related to Conducting Business in Israel We are affected by the political, economic, and military risks of locating our principal operations in Israel. Our operations are located in the State of Israel, and we are directly affected by political, economic, and security conditions in that country.Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors and a stateof hostility, varying in degree and intensity, has led to security and economic problems for Israel. Since October 2000, there has been a high level ofviolence between Israel and the Palestinians. In addition, acts of terrorism, armed conflicts or political instability in the region could negativelyaffect local business conditions and harm our results of operations. We cannot predict the effect on the region of any diplomatic initiatives orpolitical developments involving Israel or the Palestinians or other countries in the Middle East. Recent political events, including politicaluprisings, social unrest and regime change, in various countries in the Middle East and North Africa have weakened the stability of those countries,which could result in extremists coming to power. In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclearweapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza and Hezbollah in Lebanon.This situation may potentially escalate in the future to violent events which may affect Israel and us. Our business, prospects, financial condition,and results of operations could be materially adversely affected if major hostilities involving Israel should occur or if trade between Israel and itscurrent trading partners is interrupted or curtailed. All adult male permanent residents of Israel, unless exempt, may be required to perform military reserve duty annually. Additionally, allsuch residents are subject to being called to active duty at any time under emergency circumstances. Some of our officers, directors, and employeescurrently are obligated to perform annual military reserve duty. We can provide no assurance that such requirements will not have a material adverseeffect on our business, prospects, financial condition, and results of operations in the future, particularly if emergency circumstances occur. Because almost all of our officers and directors are located in non-U.S. jurisdictions, you may have no effective recourse against ourmanagement for misconduct. Almost all of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantialportion of their assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States anyjudgments obtained against such officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of theUnited States or any U.S. state. Additionally, it may be difficult to enforce civil liabilities under U.S. securities law in original actions instituted inIsrael. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bringsuch a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to theclaim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costlyprocess. Certain matters of procedure will also be governed by Israeli law. 25 ITEM 1B. UNRESOLVED STAFF COMMENTS. Not applicable. ITEM 2. PROPERTIES. Our principal executive offices are comprised of approximately 117 square meters of leased office space in Givat-Ram, Jerusalem,Israel. The current lease term is from January 1, 2012 until September 30, 2016. The aggregate annual base rent for this space is currently$11,768 in fiscal year 2013, $15,338 in 2013 and $16,713 from 2014 onwards, and will be linked to the increase in the Israeli consumer priceindex. We believe that our existing facilities are suitable and adequate to meet our current business requirements. In the event that we shouldrequire additional or alternative facilities, we believe that such facilities can be obtained on short notice at competitive rates. As security for our obligations under the lease agreement, we have provided a bank guarantee in an amount equal to three monthlylease payments, valid until November 30, 2016. ITEM 3. LEGAL PROCEEDINGS. From time to time we may become subject to litigation incidental to our business. We are not currently a party to any material legalproceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 26 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES. Market Price for our Common Stock Our common stock is quoted on the OTCBB under the symbol “ORMP.” We have applied to have our common stock listed on Nasdaq. Thequarterly high and low reported bid prices for our common stock as quoted on the OTCBB for the periods indicated are as follows: High Low Year Ended August 31, 2011 Three Months Ended November 30, 2010 $0.42 $0.28 Three Months Ended February 28, 2011 $0.37 $0.27 Three Months Ended May 31, 2011 $0.35 $0.23 Three Months Ended August 31, 2011 $0.34 $0.20 Year Ended August 31, 2012 Three Months Ended November 30, 2011 $0.44 $0.25 Three Months Ended February 29, 2012 $0.38 $0.27 Three Months Ended May 31, 2012 $0.36 $0.27 Three Months Ended August 31, 2012 $0.36 $0.23 The foregoing quotations were provided by Yahoo! Finance and the quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The last reported bid price per share of common stock as quoted on the OTCBBwas $0.30 on December 10, 2012. Holders As of December 6, 2012, there were 86,505,020 shares of our common stock issued and outstanding held of record by approximately96 registered stockholders. We believe that a significant number of stockholders hold their shares of our common stock in brokerage accountsand registered in the name of stock depositories and are therefore not included in the number of stockholders of record. Dividend Policy We have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in theforeseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any futuredetermination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, results ofoperations, capital requirements and such other factors as our Board deems relevant. Unregistered Sales of Equity Securities and Use of Proceeds In July 2012, we issued 50,000 shares of our common stock, valued at $16,000, in the aggregate, to an advisor as remuneration for services provided. The above issuance and sale was exempt under Section 4(a)(2) of the Securities Act. 27 ITEM 6. SELECTED FINANCIAL DATA. Not applicable. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial conditions and results of operations should be read in conjunction with ouraccompanying consolidated financial statements and notes thereto for the years ended August 31, 2012 and 2011. In addition to our consolidatedfinancial statements, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual resultscould differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences includethose discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Cautionary Statement Regarding Forward-LookingStatements” and “Item 1A. Risk Factors.” Overview of Operations We are a pharmaceutical company currently engaged in the research and development of innovative pharmaceutical solutions, includingan orally ingestible insulin capsule to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules or pills fordelivery of other polypeptides. Short Term Business Strategy We plan to conduct further research and development on the technology covered by the patent application “Methods and Composition forOral Administration of Proteins,” which we acquired from Hadasit in 2006 and which is pending in various foreign jurisdictions, as well as the otherpatents we have filed in various foreign jurisdictions since then, as discussed above under “Item 1. Business—Description of Business—Patents andLicenses” and “Item 1A. Risk Factors.” Through our research and development efforts, we are seeking to develop an oral dosage form that willwithstand the harsh chemical environment of the stomach and intestines and will be effective in delivering active insulin for the treatment ofdiabetes. The enzymes and vehicles that are added to the insulin in the formulation process must not modify the insulin chemically or biologically,and the dosage form must be safe to ingest. We plan to continue to conduct clinical trials to show the effectiveness of our technology. We intend toconduct the clinical trials necessary to file an IND application with the FDA. Additional clinical trials are planned in Israel in order to substantiateour results as well as for purposes of making future filings for drug approval. We also plan to conduct further research and development bydeploying our proprietary drug delivery technology for the delivery of other polypeptides in addition to insulin, and to develop other innovativepharmaceutical products. Long Term Business Strategy If our oral insulin capsule or other drug delivery solutions show significant promise in clinical trials, we plan to ultimately seek a strategiccommercial partner, or partners, with extensive experience in the development, commercialization, and marketing of insulin applications and/orother orally digestible drugs. We anticipate such partner or partners would be responsible for, or substantially support, late stage clinical trials (Phase3) to increase the likelihood of obtaining regulatory approvals and registrations in the appropriate markets in a timely manner. We further anticipatethat such partner, or partners, would also be responsible for sales and marketing of our oral insulin capsule in these markets. Such planned strategicpartnership, or partnerships, may provide a marketing and sales infrastructure for our products as well as financial and operational support for globalclinical trials, post marketing studies, label expansions and other regulatory requirements concerning future clinical development in the UnitedStates and elsewhere. Any future strategic partner, or partners, may also provide capital and expertise that would enable the partnership to developnew oral dosage form for other polypeptides. While our strategy is to partner with an appropriate party, no assurance can be given that any thirdparty would be interested in partnering with us. Under certain circumstances, we may determine to develop one or more of our oral dosage form onour own, either world-wide or in select territories. 28 Other Planned Strategic Activities In addition to developing our own oral dosage form drug portfolio, we are, on an on-going basis, considering in-licensing and other meansof obtaining additional technologies to complement and/or expand our current product portfolio. Our goal is to create a well-balanced productportfolio that will enhance and complement our existing drug portfolio. Results of Operations Critical accounting policies Our significant accounting policies are more fully described in the notes to our accompanying consolidated financial statements. Webelieve that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations. The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements,which we prepared in accordance with U.S. generally accepted accounting principles. The preparation of our consolidated financial statementsrequires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the consolidated financial statements, as well as the reported revenues and expenses during the reporting periods.On an ongoing basis, we evaluate such estimates and judgments. We base our estimates on historical experience and on various other factorsthat we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value ofassets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptionsor conditions. Marketable securities: Consist mainly of equity securities classified as available-for-sale and are recorded at fair value. Until September30, 2011, the fair value of the restricted securities was measured based on the quoted prices of the otherwise identical unrestricted securities,adjusted for the effect of the restriction by applying a proper discount. The discount was determined with reference to other similar restrictedinstruments. Similar securities, with no restriction on tradability, are quoted on an active market. As of October 1, 2011, the securities are notrestricted and the fair value of the securities is measured based on the quoted prices of the securities on an active market. Changes in fair value, netof taxes, are reflected in other comprehensive income (loss). Factors considered in determining whether a loss is temporary include the extent to which fair value has been less than the cost basis, andthe financial condition and near-term prospects of the investee based on our intent and ability to hold the investment for a period of time sufficientto allow for any anticipated recovery in market value. The loss is recorded as a charge to earnings. Valuation of options and warrants: We grant options to purchase shares of our common stock to employees and consultants and issuewarrants in connection with some of our financings and to certain other consultants. 29 We account for share-based payments in accordance with the guidance that requires awards classified as equity awards be accounted forusing the grant-date fair value method. The fair value of share-based payment transactions is recognized as an expense over the requisite serviceperiod, net of estimated forfeitures. We estimate forfeitures based on historical experience and anticipated future conditions. We elected to recognize compensation cost for an award with only service conditions that has a graded vesting schedule using theaccelerated method based on the multiple-option award approach. When stock options are granted as consideration for services provided by consultants and other non-employees, the transaction isaccounted for based on the fair value of the consideration received or the fair value of the stock options issued, whichever is more reliablymeasurable, pursuant to the guidance. The fair value of the options granted is measured on each reporting date, and the gains (losses) are recorded toearnings over the related service period using the straight-line method. Valuation of warrants issued as part of capital raisings that are classified as a liability: Warrants that entitle the holder to down-roundprotection (through ratchet and anti-dilution provisions) are classified as liabilities in the statement of financial position. The liability is measuredboth initially and in subsequent periods in fair value, with changes in fair value are charged to finance expenses, net. The fair value of the warrants was determined by using Monte Carlo type model based on the risk neutral approach. The model takes as aninput the estimated future dates when new capital will be raised, and builds a multi-step dynamic model. The first step is to model the risk neutraldistribution of the share value on the new issue dates, then for each path to use the Black-Scholes model to estimate the value of the warrants on thelast issue date including all the changes in exercise price and quantity along this path. The significant unobservable input used in the fair valuemeasurement is the future expected issue dates. Significant delay in this input would result in a higher fair value measurement. Taxes on income: Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects ofdifferences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computedusing the tax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if,based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We haveprovided a full valuation allowance with respect to our deferred tax assets. Regarding our subsidiary, Oramed Ltd., relevant accounting guidance prohibits the recognition of deferred tax liabilities or assets thatarise from differences between the financial reporting and tax bases of assets and liabilities that are measured from the local currency intodollars using historical exchange rates, and that result from changes in exchange rates or indexing for tax purposes. Consequently, the above-mentioned differences were not reflected in the computation of deferred tax assets and liabilities. 30 Comparison of Fiscal Year 2012 to Fiscal Year 2011 The following table summarizes certain statements of operations data for us for the twelve month periods ended August 31, 2012 and2011: Year ended Operating Data: August 31,2012 August 31,2011 Research and development expenses, net $1,680,845 $1,159,309 General and administrative expenses 1,203,164 1,275,960 Gain on sale of investment - (1,033,004)Impairment of available for sale securities 184,254 197,412 Financial expenses (income), net 185,997 (14,452)Loss before taxes on income (3,254,260) (1,585,225)Taxes on income 90,218 (23,980)Net loss for the period (3,344,478) (1,561,245) Loss per common share – basic and diluted $(0.05) $(0.02)Weighted average common shares outstanding 70,605,814 64,999,026 Research and development expenses Research and development expenses include costs directly attributable to the conduct of research and development programs,including the cost of salaries, payroll taxes, employee benefits, costs of registered patents materials, supplies, the cost of services provided byoutside contractors, including services related to our clinical trials, clinical trial expenses, the full cost of manufacturing drug for use inresearch, preclinical development. All costs associated with research and development are expensed as incurred. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-partycontractors. We outsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinicalinvestigators, and other third-party service providers to assist us with the execution of our clinical studies. Clinical activities which relate principally to clinical sites and other administrative functions to manage our clinical trials areperformed primarily by CROs. CROs typically perform most of the start-up activities for our trials, including document preparation, siteidentification, screening and preparation, pre-study visits, training, and program management. Clinical trial and pre-clinical trial expenses include regulatory and scientific consultants’ compensation and fees, research expenses,purchase of materials, cost of manufacturing of the oral insulin capsules, payments for patient recruitment and treatment, costs related to themaintenance of our registered patents, costs related to the filings of patent applications, as well as salaries and related expenses of research anddevelopment staff. In August 2009, Oramed Ltd. was awarded a government grant amounting to a total net amount of NIS 3.1 million (approximately$813,000), from the Office of the Chief Scientist of the Ministry of Industry, Trade and Labor of Israel, or OCS. This grant was used for researchand development expenses for the period of February 2009 to June 2010. The funds were used by us to support further research anddevelopment and clinical study of our oral insulin capsule and oral GLP-1-analog. In December 2010, Oramed Ltd. was awarded a second grant,or the Second Grant, amounting to a total net amount of NIS 2.9 million (approximately $720,000) from the OCS, which was designated forresearch and development expenses for the period of July 2010 to November 2011. As a result of a delay in the research and development plan,as of November 30, 2011, Oramed Ltd. had used only NIS 1,473,000 (approximately $365,000) of the Second Grant. In May 2012, Oramed Ltd.was awarded an extension of nine months to use the funds of the Second Grant until August 2012. In addition, in May 2012, Oramed Ltd. wasgranted a third grant amounting to a total net amount of NIS 595,000 (approximately $148,000) from the OCS, which was designated forresearch and development expenses for the period of September 2012 to December 2012. We used the funds to support further research anddevelopment and clinical studies of our oral insulin capsule and oral GLP-1 analog. The three grants are subject to repayment according to theterms determined by the OCS and applicable law. See “—Government grants” below. 31 During the year ended August 31, 2012, research and development expenses totaled $1,680,845, compared to $1,159,309 for the yearended August 31, 2011. The increase is mainly attributed to the preparation for the FDA approved Phase 2 study that will follow the expectedIND filing in the fourth calendar quarter of 2012. The research and development costs include stock based compensation costs, which duringthe year ended August 31, 2012 totaled $98,688, as compared to $265,327 during the year ended August 31, 2011. The decrease is mainlyattributable to the end of the vesting period at January 31, 2012 of the 864,000 options granted to Dr. Miriam Kidron in April 2010. Government grants The Government of Israel encourages research and development projects through the OCS, pursuant to the Law for the Encouragementof Industrial Research and Development, 1984, as amended, or the R&D Law. Under the R&D Law, a research and development plan that meetsspecified criteria is eligible for a grant of up to 50% of certain approved research and development expenditures. Each plan must be approvedby the OCS. In the years ended August 31, 2012 and 2011, we recognized research and development grants in an amount of $372,959 and$354,906, respectively. As of August 31, 2012, we had no contingent liabilities to the OCS. Under the terms of the grants we received from the OCS, we are obligated to pay royalties of 3% to 3.5% on all revenues derived fromthe sale of the products developed pursuant to the funded plans, including revenues from licensed ancillary services. Pursuant to a proposedamendment to the R&D Law, our royalty rate may be 3% to 6% per annum. Royalties are payable up to 100% of the amount of such grants, orup to 300% as detailed below, linked to the U.S. Dollar, plus annual interest at LIBOR. The R&D Law generally requires that a product developed under a program be manufactured in Israel. However, upon notification tothe OCS (and provided that the OCS does not object within 30 days), up to 10% of a company’s approved Israeli manufacturing volume,measured on an aggregate basis, may be transferred outside of Israel. In addition, upon the approval of the OCS, a greater portion of themanufacturing volume may be performed outside of Israel, provided that the grant recipient pays royalties at an increased rate, which may besubstantial, and the aggregate repayment amount is increased up to 300% of the grant, depending on the portion of the total manufacturingvolume that is performed outside of Israel. The R&D Law further permits the OCS, among other things, to approve the transfer of manufacturingrights outside of Israel in exchange for an import of different manufacturing into Israel as a substitute, in lieu of the increased royalties. TheR&D Law also allows for the approval of grants in cases in which the applicant declares that part of the manufacturing will be performedoutside of Israel or by non-Israeli residents and an OCS research committee is convinced that doing so is essential for the execution of theprogram. This declaration will be a significant factor in the determination of the OCS as to whether to approve a program and the amount andother terms of benefits to be granted. For example, an increased royalty rate and repayment amount might be required in such cases. 32 The R&D Law also provides that know-how developed under an approved research and development program may not be transferredto third parties in Israel without the approval of the research committee. Such approval is not required for the sale or export of any productsresulting from such research or development. The R&D Law further provides that the know-how developed under an approved research anddevelopment program may not be transferred to any third parties outside Israel absent OCS approval which may be granted under specialcircumstances such as those noted in the following cases: (a) the grant recipient pays to the OCS a portion of the sale price paid in considerationfor such OCS-funded know-how or the price paid in consideration for the sale of the grant recipient itself, as the case may be (according tocertain formulas; the portion to be paid in respect of a sale of the grant recipient itself changed under the applicable rules that came into effectin November 2012); (b) the grant recipient receives know-how from a third party in exchange for its OCS-funded know-how; or (c) such transferof OCS-funded know-how arises in connection with certain types of cooperation in research and development activities. The R&D Law imposes reporting requirements with respect to certain changes in the ownership of a grant recipient. The R&D Lawrequires the grant recipient and its controlling shareholders and foreign interested parties to notify the OCS of any change in control of therecipient or a change in the holdings of the means of control of the recipient that results in a non-Israeli becoming an interested party in therecipient, and requires the new interested party to undertake to the OCS to comply with the R&D Law. In addition, the rules of the OCS mayrequire additional information or representations in respect of certain such events. For this purpose, “control” is defined as the ability to directthe activities of a company other than any ability arising solely from serving as an officer or director of the company. A person is presumed tohave control if such person holds 50% or more of the means of control of a company. “Means of control” refers to voting rights or the right toappoint directors or the chief executive officer. An “interested party” of a company includes a holder of 5% or more of its outstanding sharecapital or voting rights, its chief executive officer and directors, someone who has the right to appoint its chief executive officer or at least onedirector, and a company with respect to which any of the foregoing interested parties owns 25% or more of the outstanding share capital orvoting rights or has the right to appoint 25% or more of the directors. Accordingly, any non-Israeli who acquires 5% or more of our commonstock will be required to notify the OCS that it has become an interested party and to sign an undertaking to comply with the R&D Law. Failure to meet the R&D Law’s requirements may subject us to mandatory repayment of grants received by us (together with interestand penalties), as well as expose us to criminal proceedings. In addition, the Israeli government may from time to time audit sales of productswhich it claims incorporate technology funded through OCS programs which may lead to additional royalties being payable on additionalproducts. Grants from Bio-Jerusalem The Bio-Jerusalem fund was founded by the Jerusalem Development Authority in order to support the biomed industry in Jerusalem. We arecommitted to pay royalties to the Bio-Jerusalem fund on proceeds from future sales at a rate of 4% and up to 100% of the amount of the grantsreceived by the Company (Israeli CPI linked) in the total aggregate amount of $52,733 as of August 31, 2012. For the year ended August 31, 2012,there were no grants received from the Bio-Jerusalem fund and in the year ended August 31, 2011, we received $20,950 from said fund. As we havenot yet realized any revenues since inception, we have not incurred any royalty liability to the Bio-Jerusalem fund. 33 General and administrative expenses General and administrative expenses include the salaries and related expenses of our management, consulting costs, legal andprofessional fees, traveling, business development costs, insurance expenses and other general costs. For the year ended August 31, 2012, general and administrative expenses totaled $1,203,164 compared to $1,275,960 for the yearended August 31, 2011. The increase in costs incurred related to general and administrative activities during the year ended August 31, 2012was mainly due to an increase in investor relations costs, which was partially offset by a decrease in consulting fees. During the year endedAugust 31, 2012, as part of our general and administrative expenses, we incurred $172,470 related to stock options granted to employees andconsultants, as compared to $263,999 during the year ended August 31, 2011. Financial income/expense, net Financial expenses for the year ended August 31, 2012 include an expense of $142,704 for changes in fair value of warrant liabilities,which was mainly derived from an amendment to certain warrants that reduced the exercise prices and increased the number of shares issuablepursuant thereto, as discussed below under “Liquidity and Capital Resources.” During the year ended August 31, 2012, we incurred increasedlosses, as compared to the year ended August 31, 2011, as a result of exchange rate differences and bank charges that were partially offset byinterest income on available cash and cash equivalents. The decrease in the interest income for the year ended August 31, 2012 was alsoattributable to the use of funds raised by share issuances described below in the year ended August 31, 2011. As of August 31, 2011, the warrants that were granted to Regals Fund LP, or Regals, during the year ended August 31, 2011 werepresented within stockholders’ equity. After further review, we have determined that these instruments should have been classified asliabilities. Changes in the fair value of these warrants require adjustments to the amount of the liabilities recorded on our balance sheet, and thecorresponding gain or loss is required to be recorded in our statement of operations. We assessed the materiality of the correction andconcluded that it was immaterial to previously reported annual and interim amounts and that the correction of the error in 2012 is not materialto the current year end results of operations. Accordingly, we corrected this error during the year ended August 31, 2012, as reflected in thefinancial expenses for the year ended August 31, 2012, and did not restate our consolidated financial statements for the prior years or interimperiods impacted. Gain on sale of investment and impairment of available for sale securities In March 2011, we consummated a transaction with D.N.A, whereby we sold to D.N.A 47% of Entera’s outstanding share capital on anundiluted basis, as discussed above under “Item 1. Business—Description of Business—Out-Licensed Technology.” As a result of the transaction,we recognized a gain on sale of investment of $1,033,004 for the year ended August 31, 2011. Also as a result of the transaction, we received8,404,667 ordinary shares of D.N.A, having an aggregate market value of approximately $581,977 as of March 31, 2011, the closing date of theEntera sale. The D.N.A shares were recorded at fair value as discussed above under “Item 7. Management’s Discussion and Analysis of FinancialCondition and Results of Operations—Results of Operations—Marketable securities.” As of August 31, 2012, these ordinary shares of D.N.A had anaggregate market value of approximately $200,311. Changes in fair value, net of taxes, are discussed in Note 3 to our accompanying consolidatedfinancial statements for the years ended August 31, 2011 and 2012. 34 Liquidity and Capital Resources From inception through August 31, 2012, we incurred losses in an aggregate amount of $17,891,777. We have financed ouroperations through the private placements of equity financing, raising a total of $15,169,728, net of transaction costs. We will seek to obtainadditional financing through similar sources in the future as needed. As of August 31, 2012, we had $4,430,740 of available cash as well as$454,381 in short term interest bearing investments. We anticipate that we will require approximately $5.2 million to finance our activitiesduring the 12 months following August 31, 2012, of which we engaged in equity financings that raised a total amount of $1,489,518 fromSeptember 2012 through November 2012. Management is in the process of evaluating various financing alternatives as we will need to finance future research and developmentactivities and general and administrative expenses through fund raising in the public or private equity markets. Although there is no assurancethat we will be successful with those initiatives, management believes that it will be able to secure the necessary financing as a result of ongoingfinancing discussions with third party investors and existing stockholders as well as through additional funding from the OCS. During the year ended August 31, 2012, cash and cash equivalents increased by $2,917,375 from the $1,513,365 reported as of August31, 2011, which is primarily due to proceeds from the issuance of common stock and warrants and proceeds from the sale of our investment inEntera. Operating activities used cash of $2,301,608 in the year ended August 31, 2012 and $1,705,844 in the year ended August 31, 2011. Cashused for operating activities in the year ended August 31, 2012 primarily consisted of net loss resulting from research and development andgeneral and administrative expenses, partially offset by stock based compensation adjustments, common stock issued for services and increases inaccounts payable and accrued expenses. The increase in cash used by operating activities in the year ended August 31, 2012, as compared to theyear ended August 31, 2011, is mainly due to the gain on sale of investment of $1,033,004 from our sale of Entera’s shares as discussed aboveunder “Item 1. Business—Description of Business—Out-Licensed Technology,” that was recognized in the year ended August 31, 2011. Investing activities provided cash of $1,768,898 in the year ended August 31, 2012, as compared to $1,703,430 used in investingactivities in the year ended August 31, 2011. Cash provided by investing activities in the year ended August 31, 2012 consisted primarily ofproceeds from short-term bank deposits and proceeds from the sale of our investment in Entera. In the year ended August 31, 2011, cash used ininvesting activities consisted primarily of purchasing short term investments. Financing activities provided cash of $3,488,942 in the year ended August 31, 2012 and $3,694,212 in the year ended August 31, 2011.Cash provided by financing activities during both periods consisted of proceeds from our issuance of common stock and warrants. During the year ended August 31, 2012, of the $372,959 OCS grants we recognized during such period, we received approximately$305,984 from the OCS towards our research and development expenses, as compared to $284,817 received in the year ended August 31,2011. The amounts that were recognized but not received during the year ended August 31, 2012 are expected to be received by the OCSfollowing the submission of periodic and final reports by Oramed Ltd., and their examination by the OCS. The OCS has supported our activity inthe past two years. In May 2012, Oramed Ltd. was awarded a nine month extension through August 2012 for its existing Second Grant, and anadditional grant amounting to a total net amount of NIS 595,000 (approximately $148,000) from the OCS, which extended Second Grant andadditional grant were designated to support further research and development and clinical studies of our oral insulin capsule and oral GLP-1analog from December 2011 to December 2012. 35 During fiscal years 2012 and 2011 we issued a total of 1,079,637 shares of common stock to various third party vendors for servicesrendered. The aggregate value of those shares was approximately $335,429. We also consummated three private placements by selling11,611,875 and 9,622,142 “units” at a purchase price of $0.32 and $0.37 per unit, respectively, for total consideration of $3,715,800 and$3,560,192, respectively. Each unit consisted of one share of common stock and a five-year warrant to purchase 0.35 and 0.50, respectively, of ashare of common stock at an exercise price of $0.50 per share. Our recent financing activities include the following: · In September 2010 and January 2011, we issued a total of 353,714 shares of our common stock, valued at $119,800, in the aggregate, toSwiss Caps as remuneration for services rendered. · In March 2011, we completed a private placement pursuant to which we agreed to sell to the investors an aggregate of 10,487,500“units” at a purchase price of $0.32 per unit for total consideration of $3,356,000. Each unit consisted of one share of common stock and a five-yearwarrant to purchase 0.35 of a share of common stock at an exercise price of $0.50 per share. We also issued 196,750 shares of common stock andwarrants to purchase 70,863 shares of common stock as finders’ fees in connection with the private placement. These amounts include the $250,000investment by D.N.A in connection with our technology transaction on March 31, 2011. · In April 2011, we completed a private placement pursuant to which we agreed to sell to the investors an aggregate 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 common stock and a five-year warrantto purchase 0.35 of a share of common stock at an exercise price of $0.50 per share. We also issued five year warrants to purchase 67,462 shares ofcommon stock at an exercise price of $0.50 per share and paid $21,588 as finders’ fees in connection with the private placement. · In May 2011, we issued 176,923 shares of our common stock, valued at $47,769, in the aggregate, to Swiss Caps as remuneration forservices rendered in the past. · In May 2011, we issued 200,000 shares of our common stock, valued at $60,000, in the aggregate, to New Castle Consulting, LLC asremuneration for services to be rendered. · In December 2011, we issued 83,000 shares of our common stock, valued at $24,900, in the aggregate, to an advisor as remuneration forservices provided. · In March 2012, we issued 133,000 shares in the aggregate of our common stock, valued at $38,570, to two advisory companies asremuneration for services provided. · In May 2012, we issued 83,000 shares of our common stock, valued at $24,900, in the aggregate, to an advisor as remuneration forservices provided. · In July 2012, we issued 50,000 shares of our common stock, valued at $16,000, in the aggregate, to an advisor as remuneration forservices provided. · Between August and November 2012, we completed private placements pursuant to which we agreed to sell to the investors anaggregate of 13,647,866 “units” at a purchase price of $0.37 per unit for total consideration of $5,049,710. Each unit consisted of one share ofcommon stock and a five-year warrant to purchase 0.50 of a share of common stock at an exercise price of $0.50 per share. We paid cashcompensation of $76,635 and might be required to pay additional cash compensation of $7,500. We also issued 13,514 shares of common stock andwarrants to purchase 6,757 shares of common stock as finders’ fees in connection with the private placements and will issue 149,561 shares ofcommon stock and warrants to purchase 74,780 shares of common stock as finder's fee to one of our directors, Leonard Sank. 36 · In October 2012, we entered into a Securities Purchase Agreement with D.N.A, according to which, we issued to D.N.A 2,390,057 sharesof our common stock in consideration for a warrant to purchase up to 21,637,611 ordinary shares of D.N.A at no additional cost. D.N.A. has filed anapplication for the approval of the Tel Aviv Stock Exchange Board of Directors to list the ordinary shares of D.N.A issuable upon exercise of thewarrant. We plan to exercise the warrant if and when such approval is received. Should we exercise this warrant, we would hold approximately14.5% of D.N.A’s outstanding ordinary shares, including the D.N.A ordinary shares we received in March 2011 as further discussed in “Item1. Business—Description of Business—Out-Licensed Technology.” · On November 29, 2012, we entered into a letter agreement, or the Agreement, with Regals in connection with (i) the warrant originallyissued in January 2011, as amended in August 2012 and November 2012, to purchase up to 3,485,500 shares of our common stock, (ii) the warrantdated August 28, 2012, to purchase up to 1,351,352 shares of our common stock and (iii) the warrant dated November 5, 2012, to purchase up to202,703 shares of our common stock , or together, the Warrants. Pursuant to the Agreement, we and Regals agreed to amend the Warrants (and toprepare and execute amendments to the Warrants setting forth such terms as soon as reasonably practicable) to provide that the anti-dilutionprotection of the Warrants shall be deleted in its entirety. In addition, as to the warrants issued in August and November 2012, the parties agreedthat the exercise price shall be reduced to $0.3138 per share, the current exercise price per share of the warrants originally issued to Regals inJanuary 2011. On that day, we also issued to Regals a warrant, or the New Warrant, pursuant to which Regals shall have the right to purchase up to1,647,722 shares of our common stock over a period of four years at an exercise price of $0.60 per share. In connection with the New Warrant, Nadav Kidron, our President, Chief Executive Officer and a director, in his personal capacity as one ofour shareholders, undertook and agreed that following the execution and delivery of the Agreement, in the event that an adjustment pursuant to theanti-dilution protection of the Warrants (had they not been amended by the Agreement) would have been triggered and the number of shares of ourcommon stock that Regals would have been able to purchase under the Warrants would have increased by an aggregate number in excess of1,647,722 common shares, then Regals shall have the right to purchase from Mr. Kidron such number of shares of our common stock owned by Mr.Kidron equal to such excess, up to a maximum of 1,352,278 shares of our common stock at an exercise price of $0.3138 per share. The foregoingright shall survive until the termination of the Warrants. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements. Planned Expenditures The estimated expenses referenced herein are in accordance with our business plan. Since our technology is still in the developmentstage, it can be expected that there will be changes in some budgetary items. Our planned expenditures for the twelve months beginningSeptember 1, 2012 are as follows: Category Amount Research and development, net of OCS funds $4,198,000 General and administrative expenses 1,038,000 Financial income, net (10,000)Total $5,246,000 37 As previously indicated, we are planning to conduct further clinical studies as well as file an IND application with the FDA for our orallyingested insulin during the fourth calendar quarter of 2012. We expect to have a significant increase in research and development expenses as aresult of preparation for the FDA approved Phase 2 study that will follow the IND filing, and during the term of the study. Our ability tocomplete these activities is dependent on several major factors including the ability to attract sufficient financing on terms acceptable to us andreceiving additional grants from the OCS. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. See Item 15 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM 9A. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosurecontrols and procedures as of August 31, 2012. Based on such review, our Chief Executive Officer and Chief Financial Officer have determinedthat in light of their conclusion with respect to the effectiveness of our internal control over our financial reporting as of such date (as describedbelow), that the Company did not have in place effective controls and procedures designed to ensure that information required to be disclosedby us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is accumulated andcommunicated to our management, including our Chief Executive and Chief Financial Officers, or persons performing similar functions, asappropriate to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported, within the timeperiods specified in the SEC’s rules and forms. Management’s Annual Report on Internal Control over Financial Reporting Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing andmaintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under theExchange Act. The Company’s internal control over financial reporting is defined as a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that: ·pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions; 38 ·provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements inaccordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only inaccordance with authorizations of our management and directors; and ·provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assetsthat could have a material effect on our financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief FinancialOfficer, we evaluated the effectiveness of our internal control over financial reporting as of August 31, 2012 based on the framework for InternalControl-Integrated Framework set forth by The Committee of Sponsoring Organizations of the Treadway Commission. Due to the inherentlimitations of our Company, derived from our small size and the limited number of employees, the management evaluation concluded that thereis a material weakness with respect to segregation of duties that may not provide reasonable assurance regarding the reliability of internalcontrol over financial reporting and may not prevent or detect misstatements. Specifically, our Chief Financial Officer serves as our onlyqualified internal accounting and financial reporting personnel and as such performs all accounting and financial reporting functions withoutthe benefit of independent checks, confirmations or backup other than bookkeeping functions performed by an outside accounting firm. Inaddition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of August 31, 2011, we presented warrants that were granted to an investor during the year ended August 31, 2011 withinstockholders’ equity; after further review, we have determined that these instruments should have been classified as liabilities. Changes in thefair value of these warrants require adjustments to the amount of the liabilities recorded on our balance sheet, and the corresponding gain or lossis required to be recorded in our statement of operations. We assessed the materiality of the correction and concluded that it was immaterial topreviously reported annual and interim amounts and that the correction of the error in 2012 is not material to the current year end results ofoperations. Accordingly, we corrected this error during the year ended August 31, 2012 and did not restate our consolidated financialstatements for the prior periods impacted. This error was considered a “material weakness” in our internal control over financial reporting. Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was not effective asof August 31, 2012 at a reasonable assurance level. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended August 31, 2012 thathave materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. 39 ITEM 9B. OTHER INFORMATION. On August 8, 2012, our Board cancelled the 2006 Stock Option Plan, or the 2006 Plan, and will no longer issue any securities pursuantto the 2006 Plan, and reallocated the pool of 3,000,000 shares of the Company’s common stock that were reserved for issuance under the 2006Plan and transferred such shares to the 2008 Stock Incentive Plan, or the 2008 Plan. As of such date, there were no longer any outstandingsecurities under the 2006 Plan. On August 8, 2012, our Board reserved an additional 4,000,000 shares of the Company’s common stock for the grant of awards underthe 2008 Plan, resulting in a total of 12,000,000 shares of the Company’s common stock now being reserved for issuance under the 2008 Plan,including the shares reallocated to the 2008 Plan from the 2006 Plan. 40 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Set forth below is certain information with respect to the individuals who are our directors and executive officers. NameAgePosition Nadav Kidron38President, Chief Executive Officer and DirectorMiriam Kidron72Chief Medical and Technology Officer and DirectorLeonard Sank47DirectorHarold Jacob59DirectorMichael Berelowitz68Director and Chairman of the Scientific Advisory BoardGerald Ostrov62DirectorYifat Zommer38Chief Financial Officer, Treasurer and Secretary Dr. Miriam Kidron is Mr. Nadav Kidron’s mother. There are no other directors or officers of our Company who are related by blood ormarriage. Business Experience The following is a brief account of the education and business experience during at least the past five years of each director and our onlyexecutive officer who is not a director, indicating the principal occupation during that period, and the name and principal business of theorganization in which such occupation and employment were carried out. Mr. Nadav Kidron was appointed President, Chief Executive Officer and director in March 2006. He is also a director of Entera (of whichthe Company owns 3% of the outstanding shares). In 2009, he was a fellow at the Merage Foundation for U.S.-Israel Trade Programs for executives inthe life sciences field. From 2003 to 2006, he was the managing director of the Institute of Advanced Jewish Studies at Bar Ilan University. From2001 to 2003, he was a legal intern at Wine, Mishaiker & Ernstoff Law Offices in Jerusalem, Israel. Mr. Kidron holds an LL.B. and an InternationalMBA from Bar Ilan University, Israel, and is a member of the Israel Bar Association.We believe that Mr. Kidron’s qualifications to serve on our Board include his familiarity with the Company as its founder, his experience incapital markets, as well as his knowledge and familiarity with corporate management.Dr. Miriam Kidron was appointed Chief Medical and Technology Officer and director in March 2006. Dr. Kidron is a pharmacologistand a biochemist with a Ph.D. in biochemistry. From 1990 to 2007, Dr. Kidron was a senior researcher in the Diabetes Unit at HadassahUniversity Hospital in Jerusalem, Israel. During 2003 and 2004, Dr. Kidron served as a consultant to Emisphere Technologies Inc., a companythat specializes in developing broad-based proprietary drug delivery platforms. Dr. Kidron was formerly a visiting professor at the MedicalSchool at the University of Toronto (Canada), and is a member of the American, European and Israeli Diabetes Associations. Dr. Kidron is arecipient of the Bern Schlanger Award. 41 We believe that Dr. Kidron’s qualifications to serve on our Board include her expertise in the Company’s technology, as it is based onher research, as well as her experience and relevant education in the fields of pharmacology and diabetes. Mr. Leonard Sank was appointed a director in October 2007. Mr. Sank is a South African entrepreneur and businessman, who isdevoted to entrepreneurial endeavors and initiatives. He has over 20 years of experience playing important leadership roles in developingbusinesses. Since December 2011, Mr. Sank has served as a director in Eastvaal Motors Pty Ltd., a diversified retail motor business, and servedas a director there in the past. Since 2010, Mr. Sank has served as a director in Bradbury Finance Pty Ltd. From 2000 to 2007, Mr. Sank served asa director in Vecto Finance Pty Ltd., a credit lending business. For the past fifteen years Mr. Sank has served as a director of Macsteel ServiceCentres SA Pty Ltd., South Africa’s largest private company. He also serves on the boards of small businesses and local non-profit charityorganizations in Cape Town, where he resides. We believe that Mr. Sank’s qualifications to serve on our Board include his years of experience in development stage businesses, aswell as his experience serving as a director of many entities. Dr. Harold Jacob was appointed a director in July 2008. Since 1998, Dr. Jacob has served as the president of Medical InstrumentDevelopment Inc., a company which provides a range of support and consulting services to start-up and early stage companies as well aspatenting its own proprietary medical devices. Dr. Jacob has advised a spectrum of companies in the past and he served as a consultant and thenas the Director of Medical Affairs at Given Imaging Ltd., from 1997 to 2003, a company that developed the first swallowable wireless pillcamera for inspection of the intestine. He has licensed patents to a number of companies including Kimberly-Clark Corporation. Since 2003, Dr.Jacob has served as the Chief Executive Officer of NanoVibronix, Inc., a medical device company using surface acoustics to prevent catheteracquired infection as well as other applications. He practiced clinical gastroenterology in New York and served as Chief of Gastroenterology atSt. Johns Episcopal Hospital and South Nassau Communities Hospital from 1986 to 1995, and was a Clinical Assistant Professor of Medicine atSUNY from 1983 to 1990. Dr. Jacob founded and served as Editor in Chief of Endoscopy Review and has authored numerous publications inthe field of gastroenterology. We believe that Dr. Jacob’s qualifications to serve on our Board include his years of experience in the biomed industry, his experienceserving in management roles of various companies, as well as his knowledge and familiarity with gastroenterology. Dr. Michael Berelowitz was appointed a director in June 2010 and Chairman of our Scientific Advisory Board in June 2011. From2009 to 2010, Dr. Berelowitz served as Senior Vice President and Head of Clinical Development and Medical Affairs in the Specialty CareBusiness Unit at Pfizer, Inc. From 1996 to 2009, he served in various other roles at Pfizer, Inc., beginning as a Medical Director in the DiabetesClinical Research team and then assuming positions of increasing responsibility until being appointed to his present role. Prior to that, Dr.Berelowitz spent a number of years in academia. Among his public activities, Dr. Berelowitz has served on the board of directors of the ADA,the Clinical Initiatives Committee of the Endocrine Society, and has chaired the Task Force on Research of the New York State Council onDiabetes. He has also served on several editorial boards, including the Journal of Clinical Endocrinology and Metabolism and Endocrinology,Reviews in Endocrine and Metabolic Disorders and Clinical Diabetes. Dr. Berelowitz has authored and co-authored more than 100 peer-reviewed journal articles and book chapters in the areas of pituitary growth hormone regulation, diabetes and metabolic disorders. Dr.Berelowitz holds adjunct appointments as Professor of Medicine in the Divisions of Endocrinology and Metabolism at SUNY – StonyBrookand Mt. Sinai School of Medicine in New York. 42 We believe that Dr. Berelowitz’s qualifications to serve on our Board include his years of experience in management roles in thepharmaceuticals industry, as well as his vast skill and expertise in the fields of endocrinology and diabetes. Mr. Gerald Ostrov was appointed a director in September 2012. Mr. Ostrov currently serves on the board of directors of OrasureTechnologies Inc., a Nasdaq listed company which develops, manufactures, markets and sells oral fluid diagnostic products and specimen collectiondevices, is a founder and a board of directors member of Adlens Beacon, a privately held company developing self adjustable reading glasses, servesas a board of directors member of the Robert Wood Johnson University Hospital Foundation and serves on the Johnson & Johnson CorporateContributions Committee. From 2008 to 2010, Mr. Ostrov served as Chairman and Chief Executive Officer of Bausch & Lomb Incorporated, wherehe helped to stabilize and restructure the business following its privatization. From 1998 to 2006, Mr. Ostrov acted as Company Group Chairmanfor Johnson & Johnson’s Worldwide Vision Care businesses. Mr. Ostrov began his career with Johnson & Johnson’s Health Care Division in1976. In 1982, he left Johnson & Johnson to become Vice President of Marketing for Ciba-Geigy’s Consumer Pharmaceuticals Company, where hewas named President of Ciba Consumer Pharmaceuticals in 1985 and served in that capacity until rejoining Johnson & Johnson in 1991 as Presidentof the corporation’s Personal Products Company. Mr. Ostrov holds a Bachelor of Science degree with distinction in Industrial Engineering andOperations Research from Cornell University and holds an M.B.A. from Harvard University.We believe that Mr. Ostrov’s qualifications to serve on our Board include his years of experience in management roles in thepharmaceuticals industry, as well as his experience serving as a director of many entities. Ms. Yifat Zommer was appointed as Chief Financial Officer, Treasurer and Secretary in April 2009. From April 2007 to October2008, Ms. Zommer served as Chief Financial Officer of Witech Communications Ltd., a subsidiary of IIS Intelligence Information Systems Ltd.,a company operating in the field of video transmission using wireless communications. From April 2006 to April 2007, Ms. Zommer acted asChief Financial Officer for CTWARE Ltd., a telecommunication company. Prior to that she was an audit manager in Kesselman & Kesselman, amember of PricewaterhouseCoopers International Limited, where she served for five years. Ms. Zommer holds a Bachelor of Accounting andEconomics degree from the Hebrew University, a Business Administration degree (MBA) from Tel-Aviv University and a Masters degree in Law(LL.M.) from Bar-Ilan University, Israel. Ms. Zommer is a certified public accountant in Israel. Board of Directors There are no agreements with respect to the election of directors. Each director is elected for a period of one year at our annual meeting ofstockholders and serves until the next such meeting and until his or her successor is duly elected. The Board may also appoint additionaldirectors up to a maximum of fifteen directors. A director so chosen or appointed will hold office until the next annual meeting of stockholders.The Board has determined that Leonard Sank, Harold Jacob, Michael Berelowitz and Gerald Ostrov are independent as defined under the rulespromulgated by Nasdaq. 43 We have determined that each of the directors is qualified to serve as a director of the Company based on a review of the experience,qualifications, attributes and skills of each director. In reaching this determination, we have considered a variety of criteria, including, amongother things: character and integrity; ability to review critically, evaluate, question and discuss information provided, to exercise effectivebusiness judgment and to interact effectively with the other directors; and willingness and ability to commit the time necessary to perform theduties of a director. Board Meeting Attendance During the year ended August 31, 2012, our Board held four meetings and took actions by written consent on five occasions. Noincumbent director of the meeting attended fewer than 75% of the aggregate of: (i) the total number of meetings of the Board (during the periodfor which such director served as a director); and (ii) the total number of meetings held by all committees of the Board on which such directorserved (during the period for which such director served on such committees). Board members are encouraged to attend our annual meetings ofstockholders. At the annual meeting of stockholders held on July 24, 2012, three Board members were present. Committees Audit Committee and Audit Committee Financial Expert The members of our Audit Committee are Leonard Sank, Michael Berelowitz and Gerald Ostrov. Our Board has determined that GeraldOstrov is an “audit committee financial expert” as set forth in Item 407(d)(5) of Regulation S-K and that all members of the Audit Committee are“independent” as defined by the rules of the SEC and the Nasdaq rules and regulations. The Audit Committee operates under a charter that wasapproved by our Board on September 28, 2012. The primary responsibilities of our Audit Committee include: · Appointing, compensating and retaining our registered independent public accounting firm; · Overseeing the work performed by any outside accounting firm; · Assisting the Board in fulfilling its responsibilities by reviewing: (i) the financial reports provided by us to the SEC, our stockholders orto the general public, and (ii) our internal financial and accounting controls; and · Recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our financialcondition and results of operations.Compensation Committee The members of our Compensation Committee are Leonard Sank, Michael Berelowitz and Gerald Ostrov. The Board has determined that allof the members of the Compensation Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. TheCompensation Committee operates under a written charter that was approved by our Board on September 28, 2012. The primary responsibilities ofour Compensation Committee include: · Reviewing, negotiating and approving, or recommending for approval by our Board of the salaries and incentive compensation of ourexecutive officers; · Administering our equity based plans and making recommendations to our Board with respect to our incentive–compensation plans andequity–based plans; and 44 · Periodically reviewing and making recommendations to our Board with respect to director compensation. Section 16(a) Beneficial Ownership Reporting Compliance Based solely upon a review of Forms 3, 4 and 5, and amendments thereto, furnished to us during fiscal year 2012, we believe thatduring fiscal year 2012, our executive officers, directors and all persons who own more than ten percent of a registered class of our equitysecurities complied with all Section 16(a) filing requirements, except as follows: Dr. Miriam Kidron, our Chief Medical and Technology Officer and a director, failed to timely file a Form 4 reporting her August 14,2007 grant of a warrant to purchase up to 3,361,360 shares of our common stock, as well as a Form 4 reporting the August 8, 2012 amendmentof such warrant, extending the expiration of such warrant from August 14, 2012 to August 6, 2014. Dr. Kidron filed a Form 4 with the SECreporting such transactions on November 23, 2012. Leonard Sank, a director, failed to timely file a Form 4 reporting his August 22, 2012 acquisition of 270,270 shares of our commonstock and a warrant to purchase 135,135 shares of our common stock in connection with one of our 2012 private placements. Mr. Sank filed aForm 4 reporting this transaction on November 6, 2012. Dr. Harold Jacob, a director, failed to report ownership of 10,000 shares of our common stock in his initial statement of beneficialownership on Form 3 filed with the SEC on September 8, 2008. Dr. Jacob filed a Form 3/A with the SEC reporting such ownership on November30, 2012. Code of Ethics We have adopted a Code of Ethics and Business Conduct for our senior officers, directors and employees. A copy of the Code of Ethics andBusiness Conduct is located at our website at www.oramed.com. ITEM 11. EXECUTIVE COMPENSATION. Summary Compensation Table The following table sets forth the compensation earned during the fiscal years ended August 31, 2012 and 2011 by our President and ChiefExecutive Officer, our Chief Medical and Technology Officer and our Chief Financial Officer, or the Named Executive Officers: Name and PrincipalPositionYear(1) Salary($)(7) Option Awards($)(2) All OtherCompensation($)(3) (7) Total($)Nadav KidronPresident and CEO and director (4)2012 159,136 88,927 17,989 266,0522011 171,167 163,304 28,213 362,684Miriam KidronChief Medical and Technology Officer anddirector (5)(6)2012 159,136 88,927 13,200 261,2632011 172,172 163,304 13,581 349,057Yifat ZommerCFO, Treasurer and Secretary2012 58,686 32,915 29,719 121,3202011 85,700 46,162 32,034 163,896_______________(1)The information is provided for each fiscal year, which begins on September 1 and ends on August 31.(2)The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards. The assumptions used todetermine the fair value of the option awards for fiscal years ended August 31, 2012 and 2011 are set forth in Note 10 to our audited consolidatedfinancial statements included in this Annual Report on Form 10-K. Our Named Executive Officers will not realize the value of these awards in cashunless and until these awards are exercised and the underlying shares subsequently sold.(3)See “All Other Compensation Table” below.(4)Mr. Kidron receives compensation from Oramed Ltd. through KNRY, Ltd., an Israeli entity owned by Mr. Kidron, or KNRY. See “—Employmentand Consulting Agreements” below.(5)Dr. Kidron receives compensation from Oramed Ltd. through KNRY. See “—Employment and Consulting Agreements” below.(6)See “Item 13. Certain Relationships and Related Transactions, and Director Independence” for a description of management fees received by Dr.Kidron from Hadasit.(7)Amounts paid for Salary and All Other Compensation were originally denominated in NIS and were translated into U.S. Dollars at the then currentexchange rate for each payment. 45 All Other Compensation Table The “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following: Name Year Automobile-RelatedExpenses($) Manager’sInsurance*($) EducationFund*($) Total($) Nadav Kidron2012 17,989 -- -- 17,989 2011 21,044 -- -- 21,044 Miriam Kidron2012 13,200 -- -- 13,200 2011 13,581 -- -- 13,581 Yifat Zommer2012 12,976 11,024 5,719 29,719 2011 21,017 7,169 3,849 32,035 ______________*Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination ofseverance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance premiums. Aneducation fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes. Outstanding Equity Awards at Fiscal Year-End The following table sets forth information concerning stock options and stock awards held by the Named Executive Officers as of August 31,2012. Option Awards Name Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable OptionExercisePrice($) OptionExpirationDateNadav Kidron 864,000(1) - 0.54 05/07/18 864,000(3) - 0.49 04/20/20 288,000(4) 576,000(4) 0.34 08/08/22Miriam Kidron 864,000(1) - 0.54 05/07/18 864,000(3) - 0.49 04/20/20 288,000(4) 576,000(4) 0.34 08/08/22Yifat Zommer 266,666(2) 133,334(2) 0.47 10/19/19 21,000(5) 588,000(5) 0.34 08/08/22____________ (1)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 pershare; 144,000 of such options vested immediately on the date of grant and the remainder vested in twenty equal monthly installments, commencingon June 30, 2008. The options have an expiration date of May 7, 2018.(2)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 threeequal annual installments, commencing October 19, 2010, and expire on October 19, 2019.(3)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 pershare; 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.(4)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 pershare; 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.(5)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 intwenty-nine equal monthly installments, commencing on August 31, 2012, and expire on August 8, 2022. 46 Employment and Consulting Agreements On July 1, 2008, Oramed Ltd. entered into a consulting agreement with KNRY, whereby Mr. Nadav Kidron, through KNRY, provides services asPresident and Chief Executive Officer of both the Company and Oramed Ltd., or the Nadav Kidron Consulting Agreement. Additionally, onJuly 1, 2008, Oramed Ltd. entered into a consulting agreement with KNRY whereby Dr. Miriam Kidron, through KNRY, provides services asChief Medical and Technology Officer of both the Company and Oramed Ltd., or the Miriam Kidron Consulting Agreement, and together withthe Nadav Kidron Consulting Agreement, the Consulting Agreements. The Consulting Agreements are both terminable by either party upon 60 days prior written notice. The Consulting Agreements provide thatKNRY (i) will be paid, under each of the Consulting Agreements, in a gross amount of NIS 50,400 per month and (ii) will be reimbursed forreasonable expenses incurred in connection with performance of the Consulting Agreements. Pursuant to the Consulting Agreements, KNRY,Nadav Kidron and Miriam Kidron each agree that during the term of the Consulting Agreements and for a 12 month period thereafter, none ofthem will compete with Oramed Ltd. nor solicit employees of Oramed Ltd. On March 11, 2011, we entered into new indemnification agreements with our directors and executive officers, pursuant to which we agreed toindemnify each director and executive officer for any liability he or she may incur by reason of the fact that he or she serves as our director orexecutive officer, to the maximum extent permitted by Delaware law. We, through Oramed Ltd., have entered into an employment agreement with Yifat Zommer as of April 19, 2009, pursuant to which Ms. Zommerwas appointed as Chief Financial Officer, Treasurer and Secretary of the Company and Oramed Ltd. In accordance with the employmentagreement, as amended, Ms. Zommer’s current gross monthly salary is NIS 24,200. Director Compensation Our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection withattendance at meetings of our Board. Effective June 1, 2010, each independent director is entitled to receive as remuneration for his or herservice as a member of the Board a sum equal to $10,000 per annum, to be paid quarterly and shortly after the close of each quarter. Ourexecutive officers did not receive additional compensation for service as directors. The Board may award special remuneration to any directorundertaking any special services on behalf of us other than services ordinarily required of a director. 47 On June 22, 2011, we appointed one of our directors, Michael Berelowitz, to serve as the Chairman of our Scientific Advisory Board. In thisrole, Dr. Berelowitz will be actively involved in our scientific decisions, clinical strategy, and partnership negotiations. Dr. Berelwoitz will bepaid a fee of $300 per hour, up to $1,500 per day, as compensation for serving in this position. Other than as indicated in this Annual Report on Form 10-K, no director received and/or accrued any compensation for his or her services as adirector, including committee participation and/or special assignments, during the year ended August 31, 2012. 48 The following table sets forth director compensation for the year ended August 31, 2012. Name of Director Fees Earned orPaid in Cash($) Option Awards(6)($) All OtherCompensation($) Total($) Nadav Kidron (1) - - - - Miriam Kidron (1) - - - - Leonard Sank (2) (4) 10,000 11,106 - 21,106 Harold Jacob (2) (4) 10,000 11,106 - 21,106 Michael Berelowitz (3) (5) 10,000 32,528 4,500 47,028 Gerald Ostrov (7) - - - - _______________(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 pershare. The options vested in three equal annual installments, commencing January 1, 2010, and expire on January 10, 2019.(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 inthree equal annual installments, commencing July 8, 2011, and expire on July 7, 2020.(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 pershare. The options vest in two equal annual installments, commencing January 1, 2013, and expire on August 8, 2022.(5)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 vestin two equal annual installments, commencing January 1, 2013, and expire on August 8, 2022.(6)The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards. The assumptions used todetermine 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 financialstatements 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 awardsare exercised and the underlying shares subsequently sold.(7)Mr. Ostrov was appointed as a director on September 24, 2012. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS. Stock Option Plans 2006 Stock Option Plan On October 15, 2006, our Board adopted the 2006 Plan in order to attract and retain quality personnel. Under the 2006 Plan, 3,000,000shares have been reserved for the grant of options by the Board. In addition, under the terms of the 2006 Plan, options that have expired orbeen terminated for any reason prior to being exercised may be reissued. 49 On August 8, 2012, our Board cancelled the 2006 Plan and will no longer issue any securities pursuant to the 2006 Plan, andreallocated the pool of 3,000,000 shares of the Company’s common stock that were reserved for issuance under the 2006 Plan and transferredsuch shares to the 2008 Plan. As of such date, there were no longer any outstanding securities under the 2006 Plan. 2008 Stock Incentive Plan On May 5, 2008, our Board adopted the 2008 Plan in order to attract and retain quality personnel. The 2008 Plan provides for thegrant of stock options, restricted stock, restricted stock units and stock appreciation rights, collectively referred to as “awards.” Stock optionsgranted under the 2008 Plan may be either incentive stock options under the provisions of Section 422 of the Internal Revenue Code, or non-qualified stock options. Incentive stock options may be granted only to our employees or to employees of our parent or subsidiary. Awardsother than incentive stock options may be granted to employees, directors and consultants. Under the 2008 Plan, 8,000,000 shares werereserved for the grant of awards, which may be issued at the discretion of our Board from time to time. On August 8, 2012, our Board reserved an additional 4,000,000 shares of the Company’s common stock for the grant of awards underthe 2008 Plan, resulting in a total of 12,000,000 shares of the Company’s common stock now being reserved for the issuance of awards underthe 2008 Plan, including the shares reallocated to the 2008 Plan from the 2006 Plan. As of August 31, 2012, options with respect to 9,964,200 shares have been granted under the 2008 Plan, of which 1,034,000 havebeen forfeited and 100,000 have expired. Other On August 14, 2007, we granted Dr. Miriam Kidron a warrant to purchase up to 3,361,360 shares at an exercise price of $0.001 per share;the warrant vested immediately and had an expiration date of August 14, 2012. On August 8, 2012, our Board resolved to extend the termof Dr. Kidron’s warrant until August 6, 2014. The warrant is not governed by either of the plans detailed above. The following table sets forth additional information with respect to our equity compensation plans as of August 31, 2012: Plan category Number of securities tobe issued upon exerciseof outstanding options,warrants and rights(a) Weight-average exerciseprice of outstandingoptions, warrants andrights (b) Number of securitiesremaining available forfuture issuance underequity compensationplans (excludingsecurities reflected incolumn (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 50 Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 6, 2012 by:(i) each person who is known by us to own beneficially more than 5% of our common stock; (ii) each director; (iii) each of our Named ExecutiveOfficers listed above under “Summary Compensation Table”; and (iv) all of our directors and executive officers as a group. On such date, wehad 86,505,020 shares of common stock outstanding. As used in the table below and elsewhere in this Annual Report on Form 10-K, the term “beneficial ownership” with respect to a securityconsists of sole or shared voting power, including the power to vote or direct the vote and/or sole or shared investment power, including the powerto dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship, or otherwise,including a right to acquire such power(s) during the next 60 days following December 6, 2012. Inclusion of shares in the table does not, however,constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, each personor entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares ofcommon stock listed as owned by that person or entity. Name and Address ofBeneficial Owner Number of SharesPercentage 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 BayCape Town, South Africa 6,318,050 (3) 7.2% Harold Jacob †Haadmur Mebuyon 26Jerusalem, Israel 430,000 (4) * Michael Berelowitz †415 East 37th StreetNew York, NY, USA 220,000 (5) * Yifat Zommer ‡P.O. Box 39098,Jerusalem, Israel 526,000 (6) * 51 Regals Fund LP767 Fifth Ave. New York, NY, USA 15,814,947 (7) 17.0% Zeev Bronfeld6 Uri St.Tel-Aviv, Israel 8,366,212 (8) 9.6% All current executive officers and directors, as a group(seven persons)25,619,145 (9) 26.6%_______________ *Less than 1%†Indicates Director‡Indicates Executive Officer(1)Includes 2,196,000 shares of common stock issuable upon the exercise of outstanding stock options.(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 issuableupon 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 ofcommon 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 issuableupon 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 whichMr. Sank is a trustee. Mr. Sank disclaims beneficial ownership of the securities referenced in (ii) and (iv) above. The foregoing is based on Form4’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 commonstock issuable upon the exercise of outstanding stock options.(5)Includes 220,000 shares of common stock issuable upon the exercise of outstanding stock options.(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, theowner of record of these shares of common stock. Mr. David M. Slager is the managing member of the general partner of Regals CapitalManagement 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 ManagementLP. 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 wasfiled 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. MeniMor 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% ofD.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 bedeemed 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 beneficialownership 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 onsubsequent 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 ofoutstanding stock options. 52 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. Except as otherwise indicated below, during fiscal years 2012 and 2011, we did not participate in any transaction, and we are notcurrently participating in any proposed transaction, or series of transactions, in which the amount involved exceeds the lesser of $120,000 orone percent of the average of our total assets at year-end for the last two completed fiscal years, and in which, to our knowledge, any of ourdirectors, officers, five percent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, adirect or indirect material interest. Our policy is to enter into transactions with related persons on terms that, on the whole, are no less favorable than those available fromunaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliatedthird parties, we believe that all of the transactions described below met this policy standard at the time they occurred. All related persontransactions are approved by our Board. On February 17, 2006, we entered into an agreement with Hadasit, or the First Agreement, to retain Hadasit to provide consulting andclinical trial services for a total consideration of $200,000, and to acquire the provisional patent related to our research and development of anorally ingestible insulin pill to be used for the treatment of individuals with diabetes. On January 7, 2009, we entered into a second agreementwith Hadasit which replaced in its entirety the First Agreement and confirms that Hadasit has conveyed, transferred and assigned all of itsownership rights in the patents acquired under the First Agreement and certain other patents filed by us after the First Agreement as a result ofthe collaboration between us and Hadasit, and that Hadasit acknowledges and agrees that the 4,141,532 shares of our common stock that wereissued to Hadasit on February 17, 2006 constitute the sole and complete compensation for said sale. On July 8, 2009, we entered into a thirdagreement with Hadasit to retain consulting and clinical trial services from Hadasit for a total consideration of $400,000, with $200,000 of thisamount having first been agreed to in the terms of the First Agreement. The clinical trials conducted by Hadasit are managed by Dr. MiriamKidron, our Chief Medical and Technology Officer and one of our directors, through a research fund account at Hadasit in Dr. Kidron’s name.The fees paid by us to Hadasit are deposited into such Hadasit research account. Pursuant to the general policy of Hadasit with respect to itsresearch funds, Dr. Kidron is entitled to receive a management fee in the amount of 10% of all the funds deposited into this research fundaccount, including the funds paid by us under the aforementioned agreements. Since March 2006, only the funds paid by us have beendeposited in this account, of which, $10,214 has been paid to Dr. Kidron. On September 11, 2011, we entered into the Fourth Agreement tofacilitate clinical trials and provide other services. According to this agreement, Hadasit will be entitled to total consideration of $200,000 to bepaid in accordance with the actual progress of the study, none of which was recognized or paid through August 31, 2012. Hadasit will deduct16.7% of the payments that will be received from us as overhead. All other terms and conditions of this agreement are substantially similar tothose of the previous Hadasit agreements. On June 1, 2010, Oramed Ltd. entered into a joint venture agreement with D.N.A for the establishment of Entera, according to whichD.N.A invested $600,000, Oramed Ltd. entered into a patent license agreement with Entera, and Entera was owned in equal parts by OramedLtd. and D.N.A. On February 22, 2011, Oramed Ltd. entered into a share purchase agreement with D.N.A for the sale of 47% of Entera’soutstanding share capital on an undiluted basis, for total consideration of approximately $1,032,000 to be paid in D.N.A shares and in apromissory note. As part of the transaction, Oramed Ltd. entered into a patent transfer agreement with Entera that replaced the original patentlicense agreement. These two transactions closed on March 31, 2011. In addition, on the closing date, D.N.A participated in our privateplacement, on the same investment terms as other investors at that time, for which D.N.A received 781,250 shares of our common stock and five-year warrants to purchase 273,438 shares of common stock at an exercise price of $0.50 per share for consideration of $250,000. We currentlyown 3% of the outstanding shares of Entera. Mr. Zeev Bronfeld, who is one of D.N.A’s directors and controlling shareholders, holdsapproximately 9.6% of our outstanding common stock (see “Item 12. Security Ownership of Certain Beneficial Owners and Management andRelated Stockholder Matters”). Mr. Nadav Kidron, our President, Chief Executive Officer and one of our directors, is also a director of Entera. 53 On October 30 2012, we entered into a Securities Purchase Agreement with D.N.A, according to which, we issued to D.N.A 2,390,057shares of our common stock, valued at such time at approximately $628,630, in consideration for a warrant to purchase up to 21,637,611ordinary shares of D.N.A at no additional cost. D.N.A. has filed an application for the approval of the Tel Aviv Stock Exchange Board ofDirectors to list the ordinary shares of D.N.A issuable upon exercise of the warrant. We plan to exercise the warrant if and when such approval isreceived. Should we exercise this warrant, we would hold approximately 14.5% of D.N.A’s outstanding ordinary shares, including the D.N.Aordinary shares we received in March 2011 as further discussed in “Item 1. Business—Description of Business—Out-Licensed Technology.” On November 29, 2012, we entered into the Agreement with Regals in connection with the Warrants. Pursuant to the Agreement, we andRegals agreed to amend the Warrants (and to prepare and execute amendments to the Warrants setting forth such terms as soon as reasonablypracticable) to provide that the anti-dilution protection of the Warrants shall be deleted in its entirety. In addition, as to the warrants issued inAugust and November 2012, the parties agreed that the exercise price shall be reduced to $0.3138 per share, the current exercise price per share ofthe warrants originally issued to Regals in January 2011. On that day, we also issued to Regals the New Warrant pursuant to which Regals shall havethe right to purchase up to 1,647,722 shares of our common stock over a period of four years at an exercise price of $0.60 per share.In connection with the New Warrant, Nadav Kidron, our President, Chief Executive Officer and a director, in his personal capacity asone of our shareholders, undertook and agreed that following the execution and delivery of the Agreement, in the event that an adjustmentpursuant to the anti-dilution protection of the Warrants (had they not been amended by the Agreement) would have been triggered and thenumber of shares of our common stock that Regals would have been able to purchase under the Warrants would have increased by an aggregatenumber in excess of 1,647,722 common shares, then Regals shall have the right to purchase from Mr. Kidron such number of shares of ourcommon stock owned by Mr. Kidron equal to such excess, up to a maximum of 1,352,278 shares of our common stock at an exercise price of$0.3138 per share. The foregoing right shall survive until the termination of the Warrants. See “Item 11. Executive Compensation—Director Compensation” above for information as to one of our directors and the Chairmanof our Scientific Advisory Board, Michael Berelowitz. The Board has determined that Leonard Sank, Harold Jacob, Michael Berelowitz and Gerald Ostrov are independent as defined underthe rules promulgated by Nasdaq. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The aggregate fees billed by Kesselman & Kesselman, independent registered public accounting firm, and member firm ofPricewaterhouseCoopers International Limited, for services rendered to us during the fiscal years ended August 31, 2012 and 2011: 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 ourinterim condensed consolidated financial statements included in quarterly reports and services that are normally provided by ourindependent 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.During the year ended August 31, 2012, we did not have an audit committee. As such, our three independent directors acted as ouraudit committee. No formal pre-approval process has been adopted. The Board established our Audit Committee on September 28, 2012. 54 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Index to Financial Statements The following financial statements are filed as part of this Annual Report on Form 10-K: Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - Report of Kesselman & Kesselman F - 2REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - Report of Malone & Bailey, PC F - 3CONSOLIDATED FINANCIAL STATEMENTS: Balance sheets F - 4Statements of operations F - 5Statements of changes in stockholders’ equity F - 6 - F - 7Statements of cash flows F - 8Notes to financial statements F - 9 - F - 39  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders ofOramed Pharmaceuticals Inc.(A Development Stage Company)We have audited the accompanying consolidated balance sheets of Oramed Pharmaceuticals Inc. (A Development Stage Company) and its subsidiary (the“Company”) as of August 31, 2012 and 2011, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for theyears then ended and cumulatively, for the period from September 1, 2007 to August 31, 2012 (not separately presented herein). These financial statementsare the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We didnot audit the cumulative totals of the Company for the period from April 12, 2002 (date of incorporation) to August 31, 2007, which totals reflect a deficit of$4,478,933 accumulated during the development stage. Those cumulative totals were audited by other independent auditors, whose report, dated December10, 2007, expressed an unqualified opinion on the cumulative amounts but included an emphasis of a matter. Our opinion, insofar as it relates to amountsincluded for that period is based on the report of the other independent auditors. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion. In our opinion, based upon our audits and the report of the other independent auditors, the consolidated financial statements referred to above present fairly,in all material respects, the consolidated financial position of the Company as of August 31, 2012 and 2011, and the consolidated results of their operationsand their cash flows for the years then ended and cumulatively, for the period from September 1, 2007 to August 31, 2012 (not separately presented herein),in conformity with accounting principles generally accepted in the United States of America. Tel Aviv, Israel/s/ Kesselman & KesselmanDecember 11, 2012Kesselman & Kesselman Certified Public Accountant (Isr.) A member firm of PricewaterhouseCoopers International Limited F - 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of DirectorsOramed Pharmaceuticals, Inc. (a development stage company)Jerusalem, Israel We have audited the consolidated statements of expenses, changes in stockholders’ deficit, and cash flows for the period from April 12, 2002 (Inception)through August 31, 2007. These financial statements are the responsibility of Oramed’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit. We conducted our audit in accordance with standards of the Public Accounting Oversight Board (United States). Those standards require that we plan andperform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required tohave, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control overfinancial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonablebasis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of its consolidated operations and itscash flows for the periods described in conformity with accounting principles generally accepted in the United States of America. /s/ MALONE & BAILEY, PCwww.malone-bailey.comHouston, Texas December 10, 2007 F - 3 ORAMED PHARMACEUTICALS INC.(A Development Stage Company)CONSOLIDATED BALANCE SHEETSU.S. dollars 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; 80,075,725and 70,104,583 shares issued and outstanding as of August 31, 2012 and2011, 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 The accompanying notes are an integral part of the financial statements. F - 4 ORAMED PHARMACEUTICALS INC.(A Development Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONSU.S. dollars 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 The accompanying notes are an integral part of the financial statements. F - 5 ORAMED PHARMACEUTICALS INC.(A development stage company)CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYU.S. dollars 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 ANDDIRECTORS - - 1,968,547 - 1,968,547 STOCK BASED COMPENSATION RELATED TOOPTIONS GRANTED TO CONSULTANTS - - 177,782 - 177,782 DISCOUNT ON CONVERTIBLE NOTE RELATED TOBENEFICIAL 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 SHARESAND 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 – NETOF 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 F - 6 ORAMED PHARMACEUTICALS INC.(A development stage company)CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYU.S. dollars 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 TOOPTIONS GRANTED TO EMPLOYEES ANDDIRECTORS - - 436,025 - 436,025 STOCK BASED COMPENSATION RELATED TOOPTIONS 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 TOOPTIONS GRANTED TO EMPLOYEES ANDDIRECTORS - - 690,882 - 690,882 STOCK BASED COMPENSATION RELATED TOOPTIONS 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 TOOPTIONS GRANTED TO EMPLOYEES ANDDIRECTORS - - 502,593 - 502,593 STOCK BASED COMPENSATION RELATED TOOPTIONS 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 TOOPTIONS GRANTED TO EMPLOYEES ANDDIRECTORS - - 200,866 - 200,866 STOCK BASED COMPENSATION RELATED TOOPTIONS 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 * Including 196,750 issued as finders' fee. See also note 10a. The accompanying notes are an integral part of the financial statements. F - 7 ORAMED PHARMACEUTICALS INC.(A Development Stage Company)CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars Period fromApril 12, 2002(inceptiondate) 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 andwarrants - 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 OFPERIOD 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 beneficialconversion 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 As disclosed in note 5, in the year ended August 31, 2011, the Subsidiary sold 47% of Entera's shares for non-cash proceeds of net $1,031,977. The accompanying notes are an integral part of the financial statements. F - 8 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: a.General Oramed Pharmaceuticals Inc. (the “Company”) was incorporated on April 12, 2002, under the laws of the State of Nevada. Fromincorporation until March 3, 2006, the Company was an exploration stage company engaged in the acquisition and exploration ofmineral properties. On February 17, 2006, the Company entered into an agreement with Hadasit Medical Services and Development Ltd(“Hadasit”) (the “First Agreement”) to acquire the provisional patent related to orally ingestible insulin pill to be used for the treatment ofindividuals with diabetes, see also note 9a. On March 11, 2011, the Company was reincorporated from the State of Nevada to the State of Delaware. The Company has been in the development stage since its formation and has not yet generated any revenues from its operations. On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd., which is engaged in research anddevelopment. Unless the context indicates otherwise, the term “Group” refers to Oramed Pharmaceuticals Inc. and its Israeli subsidiary,Oramed Ltd. (the “Subsidiary”), (together with the Company, "the Group"). The Group is engaged in research and development in the biotechnology field and is considered a development stage company inaccordance with the ASC Topic 915 "Development Stage Entities".Successful completion of the Company’s development programs and its transition to normal operations is dependent upon obtainingnecessary regulatory approvals from the FDA prior to selling its products within the United States, and foreign regulatory approvals mustbe obtained to sell its products internationally. There can be no assurance that the Company will receive regulatory approval of any of itsproduct candidates, and a substantial amount of time may pass before the Company achieves a level of revenues adequate to support itsoperations, if at all. The Company also expects to incur substantial expenditures in connection with the regulatory approval process foreach of its product candidates during their respective developmental periods. Obtaining marketing approval will be directly dependenton the Company’s ability to implement the necessary regulatory steps required to obtain marketing approval in the United States and inother countries. The Company cannot predict the outcome of these activities. Based on its current cash resources and commitments, and cash received in private offerings in 2012 (see notes 10g and 17b), theCompany believes it will be able to maintain its current planned development activities and the corresponding level of expenditures forat least the next 12 months, although no assurance can be given that it will not need additional funds prior to such time. If there areunexpected increases in general and administrative expenses or research and development expenses, the Company may need to seekadditional financing during the next 12 months. F - 9 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): b.Accounting principles The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the UnitedStates of America (“U.S. GAAP”). c.Use of estimates in the preparation of financial statements The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the financialstatements date and the reported expenses during the reporting periods. Actual results could differ from those estimates.As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to stock basedcompensation, valuation and impairment of marketable securities and valuation of tax exposure. d.Functional currency The currency of the primary economic environment in which the operations of the Group are conducted is the U.S. dollar (“$” or“dollar”).Most of the group’s operating expenses are incurred in dollars. Thus, the functional currency of the Group is the dollar. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in foreign currencies aretranslated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For foreigntransactions and other items reflected in the statements of operations, the following exchange rates are used: (1) for transactions -exchange rates at transaction dates or average rates and (2) for other items (derived from non-monetary balance sheet items such asdepreciation) - historical exchange rates. The resulting transaction gains or losses are carried to financial income or expenses, asappropriate. e.Principles of consolidation The consolidated financial statements include the accounts of the Company and its Subsidiary. All inter-company transactions andbalances have been eliminated in consolidation. F - 10 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): f.Property and equipment Property and equipment are recorded at cost and depreciated by the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows: % Computers and peripheral equipment 33 Office furniture and equipment 15-33 Leasehold improvements are amortized over the term of the lease which is shorter than the estimated useful life of the improvements. g.Income taxes 1.Deferred taxesDeferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between thefinancial accounting and tax bases of assets and liabilities under the applicable tax laws. Deferred tax balances are computed using thetax rates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if,based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. TheCompany has provided a full valuation allowance with respect to its deferred tax assets. Regarding the Subsidiary, the recognition is prohibited for deferred tax liabilities or assets that arise from differences between thefinancial reporting and tax bases of assets and liabilities that are measured from the local currency into dollars using historical exchangerates, and that result from changes in exchange rates or indexing for tax purposes. Consequently, the abovementioned differences werenot reflected in the computation of deferred tax assets and liabilities. Taxes that would apply in the event of disposal of investments in the subsidiary have not been taken into account in computing deferredtaxes, as it is the Company’s intention to hold this investment, not to realize it. 2. Uncertainty in income tax The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the taxposition for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position willbe sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realizedupon ultimate settlement. Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve monthsfrom the balance sheet date. The Company's policy is to include interest and penalties related to unrecognized tax benefits within incometax expenses. F - 11 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): h.Research and development, netResearch and development expenses include costs directly attributable to the conduct of research and development programs, includingthe cost of salaries, employee benefits, costs of registered patents materials, supplies, the cost of services provided by outside contractors,including services related to the Company’s clinical trials, clinical trial expenses and the full cost of manufacturing drug for use inresearch and preclinical development. All costs associated with research and development are expensed as incurred. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-partycontractors. The Company out sources a substantial portion of its clinical trial activities, utilizing external entities such as ContractResearch Organizations, independent clinical investigators, and other third-party service providers to assist the Company with theexecution of its clinical studies. For each clinical trial that the Company conducts, clinical trial costs are expensed immediately. Grants received from the OCS and Bio-Jerusalem are recognized as grant income when the grants become receivable, provided there isreasonable assurance that the Company will comply with the conditions attached to the grant and there is reasonable assurance the grantwill be received. The grants are deducted from the related research and development expenses as the costs are incurred and are presentedin R&D expenses, net. See also notes 9j and 9k. i.Cash equivalentsThe Company considers all short term, highly liquid investments, which include short-term deposits with original maturities of threemonths or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts ofcash, to be 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 Basic and diluted net loss per common share are computed by dividing the net loss for the period by the weighted average number ofshares of common stock outstanding and shares relating to receipts on account of shares in equity during the period. Outstanding stockoptions and warrants have been excluded from the calculation of the diluted loss per share because all such securities are anti-dilutive forall periods presented. The total number of common stock options and warrants excluded from the calculation of diluted net loss was21,937,116 for the year ended August 31, 2012 (15,200,044 for the year ended August 31, 2011). F - 12 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): l.Impairment in value of long-lived assets The Company reviews long-lived assets, to be held and used, for impairment whenever events or changes in circumstances indicate thatthe carrying amount of the assets may not be recoverable. In the event the sum of the expected future cash flows (undiscounted andwithout interest charges) of the long-lived assets is less than the carrying amount of such assets, an impairment loss would be recognized,and the assets are written down to their estimated fair values. m.Stock based compensation Equity awards granted to employees are accounted for using the grant-date fair value method. The fair value of share-based paymenttransactions is recognized as an expense over the requisite service period, net of estimated forfeitures. The Company estimated forfeituresbased on historical experience and anticipated future conditions. The Company elected to recognize compensation cost for an award with only service conditions that has a graded vesting schedule usingthe accelerated method based on the multiple-option award approach. When stock options are granted as consideration for servicesprovided by consultants and other non-employees, the transaction is accounted for based on the fair value of the consideration receivedor the fair value of the stock options issued, whichever is more reliably measurable. The fair value of the options granted is measured on afinal basis at the end of the related service period and is recognized over the related service period using the straight-line method. n.Warrants issued as part of capital raisings that are classified as a liability Warrants that entitle the holder to down-round protection (through ratchet and anti-dilution provisions) are classified as liabilities in thestatement of financial position. The liability is measured both initially and in subsequent periods in fair value, with changes in fair value charged to finance expenses,net. See note 7. F - 13 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): o.Fair value measurement: Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidanceestablishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels,which are described as follows: Level 1:Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair valuehierarchy 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 toLevel 3 inputs. As of August 31, 2012 the assets or liabilities measured at fair value comprise of: - available for sale securities (level 1).- warrants (level 3). In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use ofunobservable inputs to the extent. In order to secure the fulfillment of the Company’s obligations under the derivatives agreements, the Company has placed a restricteddeposit with the bank in an amount of $16,000. Available-for-sale securities are reported at fair value with unrealized gains and losses, net of related tax, recorded as a separatecomponent of other comprehensive income in equity until realized. Unrealized losses that are considered to be other-than-temporary arecharged to statement of operations as an impairment charge and are included in the consolidated statement of operations underimpairment of available-for-sale securities. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent towhich fair value is less than cost, and the Company’s ability and intent to hold the investment. Realized gains and losses on sales of thesecurities are included in the consolidated statement of operations as financial income or expenses. p.Concentration of credit risks Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, deposit and short terminvestments which are deposited in major financial institutions. The Company is of the opinion that the credit risk in respect of thesebalances is remote. F - 14 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): 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, "FairValue Measurement" regarding fair value measurements and disclosure requirements. The amendments are effective during interimand annual periods beginning after December 15, 2011 and are to be applied prospectively. The Company adopted the accountingupdate beginning in the third quarter of fiscal year 2012. As applicable to the Company, the adoption of the new guidance did nothave 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 topresent other comprehensive income and its components in the statement of shareholders’ equity. The Company can elect to presentthe items of net income and other comprehensive income in a single continuous statement of comprehensive income or in twoseparate, but consecutive, statements. Under either method the statement would need to be presented with equal prominence as theother primary financial statements. The amended guidance, which must be applied retroactively, is effective for fiscal years, andinterim periods within those years, beginning after December 15, 2011, with earlier adoption permitted. In December 2011, the FASBissued another update on the topic, which deferred the effective date pertaining only to the presentation of reclassificationadjustments on the face of the financial statements. The accounting update will be applicable to the Company beginning in the firstquarter of fiscal year 2013. The adoption of the new guidance is not expected to have a material impact on the consolidated financialstatements. r.ReclassificationsCertain figures in respect of prior years have been reclassified to conform to the current year presentation. NOTE 2 - SHORT TERM INVESTEMNTS:Amount represents bank deposits with an original maturity of more than three months but less than one year. August 31 2012 2011 Annualinterest rate Amount Annualinterest 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 F - 15 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 3 - MARKETABLE SECURITIES:Marketable securities consist wholly of equity securities of D.N.A Biomedical Solutions Ltd. which were received in March 2011 as part of theconsideration for selling the Company's equity method investee Entera. Those securities are classified as available-for-sale and are recorded atfair value. The D.N.A Shares are listed on the Tel Aviv Stock Exchange ("TASE") and their tradability was restricted for a period of 6 monthsfrom the closing date of the transaction according to TASE policy with regards to private placements. Until September 30, 2011, the fair valueof the restricted securities was measured based on the quoted prices of the otherwise identical unrestricted securities, adjusted for the effect ofthe restriction by applying a proper discount. The discount was determined with reference to other similar restricted instruments. Similarsecurities, with no restriction on tradability, are quoted on an active market. As of the first quarter of 2011, the securities are not restricted andthe fair value of the securities is measured based on the quoted prices of the securities on an active market. Financial assets carried at fair value as of August 31, 2012 and August 31, 2011 are classified in the tables below in one of the three categoriesdescribed above: Level 1 Level 3 Total Marketable securities: August 31, 2012 $200,311 - $200,311 August 31, 2011 - $384,565 $384,565 The following table summarizes the activity for those financial assets where fair value measurements are estimated utilizing Level 3 inputs: 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 As of August 31, 2012, the carrying amount of cash and cash equivalents, accounts receivables, other current assets and accounts payables andaccrued expenses approximates their fair values due to the short-term maturities of these instruments. The fair value of long-term deposits also approximates their carrying value, since they bear interest at rates close to the prevailing market rates.The amounts funded in respect of employee rights are stated at cash surrender value which approximates its fair value. As to financial liabilities carried at fair value, see note 7. F - 16 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 4 - ACCOUNTS RECEIVABLE:Composition of accounts receivable , grouped by major classifications, is as follows: 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 NOTE 5 - AGREEMENT WITH D.N.A BIOMEDICAL SOLUTIONS LTD 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 JVAgreement, 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. Inconsideration for 50% of Entera's shares, the Subsidiary entered into a Patent License Agreement with Entera, according to which, theSubsidiary out-licensed to Entera a technology for the development of oral delivery drugs for certain actions. Mr. Zeev Bronfeld, who is one of D.N.A 's directors and controlling shareholders, is also an affiliated stockholder of the Company.The Group has concluded Entera was a variable interest entity (a "VIE"), according to the terms of the JV Agreement until its sale inMarch 2011, as described below. 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 outstandingshare 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 asof the closing date of the transaction. The D.N.A Shares are listed on the Tel Aviv Stock Exchange ("TASE") and their tradability wasrestricted for a period of 6 months from the closing date of the transaction according to TASE policy with regards to private placements. D.N.A.'s securities are classified as available-for-sale, during 2012 and 2011 the Company recognized an impairment of $184,254 and$197,412, respectively. In addition, on the closing date, D.N.A participated in the Company's private placement, at same investment terms granted to otherinvestors at that period, for which it received 781,250 shares of our common stock and five-year warrants to purchase 273,438 shares ofcommon stock at an exercise price of $0.50 per share for $250,000. As part of the transaction, the Subsidiary entered into a patent transfer agreement (that replaced the original license agreement) accordingto which, the Subsidiary assigned to Entera all of its right, title and interest in and to the patent application that it has licensed to Enterasince August 2010. Under this agreement, the Subsidiary is entitled to receive from Entera royalties of 3% of Entera's net revenues (asdefined in the agreement) and a license back of that patent application for use in respect of diabetes and influenza. On August 31, 2012,Entera had not yet realized any revenues and did not pay any royalties to the Subsidiary. F - 17 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 5 - AGREEMENT WITH D.N.A BIOMEDICAL SOLUTIONS LTD (continued): Upon the closing, Oramed, Entera and D.N.A terminated the joint venture agreement, as amended, entered into on June 1, 2010 inconnection with the formation of Entera. In 2011, the Subsidiary recognized a gain on sale of investment of $1,033,004 from the transaction, as followed: 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 As a result of the above transaction, the Company no longer has the ability to exert significant influence over Entera and the remaining3% interest, in the amount of $1,027, is accounted for at a cost method investment. NOTE 6 - PROPERTY AND EQUIPMENT, NET: 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. F - 18 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 7 - WARRANTS As part of the Company's private placements as described in notes 10a and 10f, warrants were granted to an investor who was considered as aleading investor (the "Leading Investor). 2,187,500 warrants were granted in January 2011 (the "2011 Warrants") and 1,351,352 were grantedin August 2012. Each warrant was granted for five years at an initial exercise price of $0.50 per share. The warrants include anti-dilutionprotection (the "full ratchet anti-dilution protection"), from the second year anniversary date after issuing the warrant, subject to certainlimitations and while the warrant is outstanding. In the event the Company shall issue or sell any common stock for a consideration per sharelower than the exercise price then in effect, or shall issue or sell any options, warrants or other rights for the purchase or acquisition of suchshares at a consideration per share of less than the exercise price then in effect, the warrants will be amended to (a) reduce the exercise price toan amount equal to the per share consideration payable to the company in such sale or issuance, and (b) the quantity of warrants will beupdated, based on certain rules as determined in the Warrants Agreements with the Leading Investor. As a result of the August 2012 private placements, and pursuant to the adjustment terms of the 2011 Warrants held by the Leading Investor,prior to such private placements, the warrant held by the Leading Investor was amended to: (i) reduce the exercise price from $0.50 to $0.37,(ii) increase the number of shares issuable upon the exercise of the warrant from 2,187,500 to 2,956,081, and (iii) delete the limitation whichrestricted the Leading Investor 's ability from receiving more than 9.9% of the Company's outstanding shares. As to amendment to the Warrant after August 31, 2012, see also note 17d. As of August 31, 2011, the Warrants that were granted to this investor during the year ended August 31, 2011 were presented withinstockholders’ equity. After further review, the Company has determined that these instruments should have been classified asliabilities. Changes in the fair value of these Warrants require adjustments to the amount of the liabilities recorded on the Company's balancesheet, and the corresponding gain or loss is required to be recorded in the Company's statement of operations. The Company assessed themateriality of the correction and concluded that it was immaterial to previously reported annual and interim amounts and that the correctionof the error in 2012 is not material to the current year results of operations. Accordingly, the Company corrected this error during the yearended August 31, 2012 and did not restate its consolidated financial statements for the prior years or interim periods impacted. The fair value of the warrants was determined by using Monte Carlo type model based on the risk neutral approach. The model takes as aninput the estimated future dates when new capital will be raised, and builds a multi-step dynamic model. The first step is to model the riskneutral distribution of the share value on the new issue dates, then for each path to use the Black-Scholes model to estimate the value of thewarrants on the last issue date including all the changes in exercise price and quantity along this path. The significant unobservable inputused in the fair value measurement is the future expected issue dates. Significant delay in this input would result a higher fair valuemeasurement. Financial liabilities carried at fair value as of August 31, 2012 are classified in the tables below in one of the three fair value categories: Fair valuemeasurementsat reportingdate using Level 3 Total Warrants - August 31, 2012 $637,182 $637,182 The following table summarizes the activity for those financial liabilities where fair value measurements are estimated utilizing Level 3 inputs: 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 As to the change in the terms of the warrants after August 31, 2012, see note 17e. F - 19 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)NOTE 8 - EMPLOYEES RIGHTS UPON RETIREMENT: The Subsidiary is required to make a severance payment upon dismissal of an employee, or upon termination of employment in certaincircumstances. The severance pay liability to the employees (based upon length of service and the latest monthly salary - one month’s salary foreach year employed) is recorded on the Subsidiary’s balance sheets under “Liability for employee rights upon retirement.” The liability isrecorded as if it were payable at each balance sheet date on an undiscounted basis. The liability is funded in part from the purchase of insurance policies or by the establishment of pension funds with dedicated deposits in thefunds. The amounts used to fund these liabilities are included in the Subsidiary’s balance sheets under “Funds in respect of employee rightsupon retirement.” These policies are the Subsidiary’s assets. However, under labor agreements and subject to certain limitations, any policymay be transferred to the ownership of the individual employee for whose benefit the funds were deposited. In the years ended August 31, 2012and 2011, the Subsidiary deposited $3,620 and $3,275, respectively, with insurance companies in connection with its severance paymentobligations. In accordance with the current employment agreements with certain employees, the Subsidiary makes regular deposits with certain insurancecompanies for accounts controlled by each applicable employee in order to secure the employee’s rights upon retirement. The Subsidiary isfully relieved from any severance pay liability with respect to each such employee after it makes the payments on behalf of the employee. Theliability accrued in respect of these employees and the amounts funded, as of the respective agreement dates, are not reflected in the Subsidiary's balance sheets, as the amounts funded are not under the control and management of the Subsidiary and the pension or severance pay riskshave been irrevocably transferred to the applicable insurance companies (the “Contribution Plans”). The amounts of severance pay expenses were $5,615 and $10,241 for the years ended August 31, 2012 and 2011, respectively. $7,089 and$6,966 in the years ended August 31, 2012 and 2011, respectively, were in respect of a Contribution Plan. The Subsidiary expects to contribute approximately $10,155 in the year ending August 31, 2013 to insurance companies in connection with itsseverance liabilities for its operations for that year, $7,619 of which will be contributed to one or more Contribution Plans. NOTE 9 - COMMITMENTS: a.Under the terms of the First Agreement with Hadasit (note 1a above), the Company retained Hadasit to provide consulting and clinicaltrial services. As remuneration for the services provided under the agreement, Hadasit is entitled to $200,000. The primary researcher forHadasit is Dr. Miriam Kidron, a director and officer of the Company. The funds paid to Hadasit under the agreement are deposited byHadasit 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 amountpaid to Dr. Kidron out of this fund was $10,214.On January 7, 2009, the Company entered into a second agreement with Hadasit (the “Second Agreement”) which confirms that Hadasithas conveyed, transferred and assigned all of its ownership rights in the patents acquired under the First Agreement to the Company, andcertain other patents filed by the Company after the First Agreement as a result of the collaboration between the Company and Hadasit. F - 20 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 9 - COMMITMENTS (continued):On July 8, 2009, the Company entered into a third agreement with Hadasit, Prof. Itamar Raz and Dr. Miriam Kidron ("the ThirdAgreement"), to retain consulting and clinical trial services from Hadasit. According to the Third Agreement, Hadasit was entitled to totalconsideration of $400,000 to be paid by Oramed. $200,000 of this amount was agreed in the terms of the First Agreement, and theremaining of $200,000 was paid in accordance with the actual progress of the study. The total amount was paid through May 31, 2011.On September 11, 2011, the Company entered into a fourth agreement with Hadasit, Dr. Miriam Kidron and Dr. Daniel Schurr (the "FourthAgreement"), to retain consulting and clinical trial services. According to the Fourth Agreement, Hadasit will be entitled to considerationof $200,000 to be paid by the Company in accordance with the actual progress of the study. None of which was recognized or paidthrough August 31, 2012. b.The Subsidiary has entered into operating lease agreements for vehicles used by its employees for a period of 3 years. The lease expenses for the years ended August 31, 2012 and 2011 were $29,543 and $37,144, respectively. The future lease paymentsunder the lease agreement are $21,201, $8,237 and $686 for the years ending August 31, 2013, 2014 and 2015, respectively. As security for its obligation under the lease agreements the Subsidiary deposited $7,840, which are classified as long term deposits. 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 of57 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 from2014 onwards, and will be linked to the increase in the Israeli consumer price index (as of August 31, 2012, the monthly payment in theCompany's functional currency is $844, the future annual lease payments under the agreement will be $11,768 in 2013, $15,338 in 2013and $16,713 from 2014 onwards). As security for its obligation under this lease agreement the Company provided a bank guarantee in an amount equal to three monthlylease payments. 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 andregulatory processes and procedures in order to assist the Subsidiary in submission of a U.S. Investigational New Drug (“IND”) accordingto 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 certainmilestones. $160,000 of the total amount was paid through November 30, 2011, $50,000 of which was paid for completing the first threemilestones.On February 26, 2012, the parties entered into an amendment agreement, according to which the Subsidiary paid the remaining $51,000of the Original Agreement upon execution of the amendment agreement. In addition, beginning March 1, 2012 and until submission ofthe IND, the Subsidiary will pay ADRES a monthly fee of approximately $3,600. The Company recognized the $51,000 as an expenseduring 2012. F - 21 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 9 - COMMITMENTS (continued): e.On February 10, 2010, the Subsidiary entered into an agreement with Vetgenerics Research G. Ziv Ltd, a clinical research organization, toconduct 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 saidagreement. 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 fixedmonthly fee of $8,000, royalties of 8% of the net royalties actually received by the Subsidiary in respect of the patent that was sold toEntera 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. Theinitial fair value of the option on the date of grant was $62,185, using the Black Scholes option-pricing model and was based on thefollowing assumptions: dividend yield of 0% for all years; expected volatility of 78.65%; risk-free interest rates of 3.62%; and theremaining 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 ofthe 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 amountof $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, SwissCaps 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 whichsuch third party will provide investors relations services and will be entitled to a share based compensation as follows: 300,000 shares ofcommon stock of the Company will be issued in six installments over the engagement period, commencing February 15, 2012, and awarrant to purchase 750,000 shares of common stock of the Company at an exercise price of $0.50 per share. The warrant vests in 12monthly installments commencing February 15, 2012 and expires on February 15, 2017. The initial fair value of the option on the date ofgrant 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. F - 22 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 9 - COMMITMENTS (continued):On July 3, 2012, the Company and the third party entered into an amendment to the agreement, according to which the originalagreement will be extended until July 3, 2013 (unless terminated earlier by one of the parties), and a new payment schedule wasdetermined for the remainder of the share based compensation until July 3, 2013. The Company records expenses in respect of thiswarrant during the term of the services.The fair value of the option as of August 31, 2012, was $115,698, using the following assumptions: dividend yield of 0% and expectedterm of 4.5 years; expected volatility of 75.41%; and risk-free interest rate of 0.52%. The fair value of the option granted is remeasured ateach balance sheet reporting date and is recognized over the related service period using the straight-line method. j.Grants from Bio-JerusalemThe Subsidiary is committed to pay royalties to the Bio-Jerusalem fund on proceeds from future sales at a rate of 4% and up to 100% ofthe amount of the grant received by the Company (Israeli CPI linked) at the total amount of $52,733. As of August 31, 2012, theSubsidiary had not yet realized any revenues and did not incur any royalty liability.During the year ended August 31, 2012 no grants were received from Bio-Jerusalem . For the period from inception on April 12,2002 through August 31, 2012, the research and development expenses are presented net of Bio-Jerusalem grants, in the total amount of$52,733. k.Grants from the Chief Scientist Office ("OCS")Under the terms of the Company’s funding from the Israeli Government, royalties of 3%-3.5% are payable on sales of products developedfrom a project so funded, up to 100% of the amount of the grant received by the Company (dollar linked) with the addition of annualinterest at a rate based on LIBOR. At the time the grants were received, successful development of the related projects was not assured. In case of failure of a project that waspartly financed as above, the Company is not obligated to pay any such royalties.On August 31, 2012, the Subsidiary had not yet realized any revenues from the said project and did not incur any royalty liability. Thetotal amount that was actually received through August 31, 2012 was $1,332,374.For the years ended August 31, 2012, and 2011, and for the period from inception on April 12, 2002 through August 31, 2012, theresearch and development expenses are presented net of OCS Grants, in the total amount of $372,959, $296,995 and $1,415,557,respectively. F - 23 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)NOTE 10 - STOCK HOLDERS’ EQUITY: The Company’s shares are traded on the Over-The-Counter Bulletin Board. The following are capital stock transactions that took place during the years ended August 31, 2012 and 2011: a.Between November 2010 and February 2011, the Company entered into Securities Purchase Agreements with a few accredited investorsfor 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 shareof the Company's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.35 a share ofcommon stock exercisable for five years at an exercise price of $0.50 per share. For finder's fee with respect to these Securities PurchaseAgreements, see note 11c.. As to the warrants purchased by the Leading Investor - see note 7. 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 topurchase up to 273,438 shares of common stock, for a total purchase price of $250,000 in cash. The shares and warrants were sold inunits 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 commonstock. The warrants have an exercise price of $0.50 per share, and a term of five years commencing from the closing of the transaction. Seealso note 5. F - 24 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 10 - STOCK HOLDERS’ EQUITY (continued): c.In April 2011, the Company entered into Securities Purchase Agreements with nine accredited investors for the sale of 1,124,375 units ata 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 settlementof 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'scommon 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 forservices 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 apurchase price of $0.37 per unit for total consideration of $3,560,192. Each unit consisted of one share of the Company's common stockand one common stock purchase warrant. Each warrant entitles the holder to purchase 0.50 a share of common stock exercisable for fiveyears 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 Agreementwith an investor for the sale of 67,819 units at same terms as describe above. As the payment from said investor was received duringSeptember 2012, following which, the Company issued him its shares of common stock, the proceeds from that investment, of $25,093are presented as shares and warrants to be issued for cash.As to the units purchased by the Leading Investor and the amendment to the 2011 Warrants, see note 7.The Company paid cash consideration of $71,250 as finders' fees in connection with the securities purchase agreements. F - 25 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 10 - STOCK HOLDERS’ EQUITY (continued): 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. F - 26 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION: On October 15, 2006, the Company’s Board of Directors adopted the 2006 Stock Option Plan (the “2006 Stock Option Plan”) for reserving apool of 3,000,000 shares of the Company’s common stock which may be issued at the discretion of the Company’s Board of Directors from timeto time. On May 5, 2008, the Company’s Board of Directors adopted the 2008 Stock Option Plan (the “2008 Stock Option Plan”) for reserving a pool of8,000,000 shares of the Company’s common stock which may be issued at the discretion of the Company’s Board of Directors from time to time. On August 8, 2012, the Company’s Board of Directors decided to cancel the 2006 Stock Option Plan, under which there were no longer anyoutstanding securities, and to reserve an additional 4,000,000 shares of the Company’s common stock to the 2008 Stock Option Plan, whichreflected a net increase of 1,000,000 shares with respect to the total amount of shares in both plans. Under the 2008 Stock Option Plan 12,000,000 shares have been reserved for the grant of options, which may be issued at the discretion of theCompany’s Board of Directors from time to time. Under this Plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with vesting schedules which will be determined by the Board of Directors foreach grant. The maximum term of the options is 10 years. The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based ona historical volatility, by statistical analysis of the daily share price for past periods. The expected term is the length of time until the expecteddates of exercising the options, based on estimated data regarding employees’ exercise behavior.The following are stock options and warrants transactions made during the years ended August 31, 2012 and 2011: a.On October 30, 2006, the Company entered into a Clinical Trial Manufacturing Agreement with Swiss Caps, pursuant to which SwissCaps would manufacture and deliver the oral insulin capsule developed by the Company. In consideration for the services beingprovided to the Company by Swiss Caps, the Company agreed to pay certain predetermined amounts which are to be paid in commonstock of the Company, the number of shares to be issued is based on the invoice received from Swiss Caps, and the stock market price 10days after the invoice is issued. During the year ended on August 31, 2011, the Company issued 530,637 shares of its common stock toSwiss Caps as remuneration for the services provided in the amount of $167,569. No shares were issued to Swiss Caps during the yearended 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 ourcommon stock at an exercise price of $0.50 to a consultant. The options vest in five annual installments commencing February 16, 2012and 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-freeinterest 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 atthe end of the related service period and is recognized over the related service period using the straight-line method. F - 27 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION (continued): c.In March 2011, in connection with the securities purchase agreement, as described in note 10a, the Company issued 196,750 shares of theCompany's common stock and warrants to purchase 70,864 shares of common stock to three individuals, as finders' fees. The fair value ofthe 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 pershare d.In April 2011, the Company entered into Securities Purchase Agreements with nine accredited investors for the sale of 1,124,375 units ata purchase price of $0.32 per unit for total consideration of $359,800. Each unit consisted of one share of the Company's common stockand one common stock purchase warrant. Each warrant entitles the holder to purchase 0.35 a share of common stock exercisable for fiveyears 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. Thefair value of the warrants at that date was $11,050, using the Black Scholes option-pricing model and was based on the followingassumptions: dividend yield of 0% for all years; expected volatility of 79.28%; risk-free interest rates of 2.09%; and the remainingexpected 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 pershare (higher than the traded market price on the date of grant). The options vested immediately on the date of grant and will expire onApril 26, 2016. The fair value of these options on the date of grant, was $10,000, using the Black Scholes option-pricing model and wasbased 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 toThe Trout Group, LLC as remuneration for services to be rendered during the 12 month period commencing May 13, 2011. The warrantsvest in twelve equal annual installments commencing on October 13, 2011 and will expire on July 25, 2016. The fair value of thesewarrants 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 5years. The fair value of the option as of August 31, 2012, was $4,548, using the following assumptions: dividend yield of 0% andexpected term of 4 years; expected volatility of 75.41%; and risk-free interest rate of 0.45%. The fair value of the option granted isremeasured at each balance sheet reporting date and is recognized over the related service period using the straight-line method. F - 28 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION (continued): h.On August 8, 2012, an aggregate of 1,728,000 options was granted to Nadav Kidron, the Company’s President, Chief Executive Officerand director, and Miriam Kidron, the Company’s Chief Medical and Technology Officer and director, both related parties, at an exerciseprice 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 dateof 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 onthe following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of 0.83%; andexpected 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 pershare (equivalent to the traded market price on the date of grant). The options vest in two equal annual installments, commencing January1, 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-freeinterest 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 tothe 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-pricingmodel and was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interestrates 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 tothe traded market price on the date of grant). The options vest in three equal annual installments, commencing January 1, 2013, andexpire on August 7, 2022. The fair value of these options on the date of grant was $16,780, using the Black Scholes option-pricing modeland was based on the following assumptions: dividend yield of 0% for all years; expected volatility of 76.03%; risk-free interest rates of0.935%; 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. MiriamKidron by approximately two years from such approval , expiring on August 6, 2014. The incremental fair value of the warrant extensionwas negligible. m.As to options granted to third parties, see note 9i. F - 29 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION (continued):The fair value of each option grant is estimated on the date of grant using the Black Scholes option-pricing model with the followingassumptions: 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 A summary of the status of the stock options granted to employees and directors as of August 31, 2012 and 2011, and changes during the yearsended on those dates, is presented below: 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 - Costs incurred in respect of stock based compensation for employees and directors, for the years ended August 31, 2012 and 2011 were$200,866 and $502,593, respectively. F - 30 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION (continued):The following table presents summary information concerning the options granted to employees and directors outstanding as of August 31,2012: 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 The following table presents summary information concerning the options granted to employees and directors exercisable as of August 31,2012: 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 As of August 31, 2012, there were $574,758 of unrecognized compensation costs related to non-vested employees and directors, to be recordedover the next 28 months. F - 31 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION (continued):A summary of the status of the stock options granted to non-employees as of August 31, 2012, and changes during the years ended on this date,is presented below: 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 The Company recorded stock compensation of $117,098 and $26,733 during the years ended August 31, 2012 and 2011, respectively, relatedto consulting services.The following table presents summary information concerning the options granted to non-employees outstanding as of August 31, 2012: 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 - F - 32 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 11 - STOCK BASED COMPENSATION (continued):The following table presents summary information concerning the options granted to non-employee exercisable as of August 31, 2012: 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 - As of August 31, 2012 there were $124,948 of unrecognized compensation costs related to non-vested non-employees, to be recorded over thenext 45 months. NOTE 12 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Year ended August 31, 2012 2011 Service providers $580,714 $339,052 Payroll and related expenses 16,459 36,486 $597,173 $375,538 NOTE 13 - RESEARCH AND DEVELOPMENT EXPENSES, NET: Period fromApril 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 optionsgranted to employees, directors andconsultants 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 F - 33 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 14 - GENERAL AND ADMINISTRATIVE EXPENSES Period fromApril 12, 2002 (inception) Year ended through August 31 August 31, 2012 2011 2012 Compensation costs in respect of optionsgranted to employees, directors andconsultants $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 NOTE 15 - TAXES ON INCOME:Taxes on income included in the consolidated statements of operations represent current taxes due to taxable income of the Companyand its Subsidiary. a.Corporate taxation in the U.S.The applicable corporate tax rate for the Company is 35%.As of August 31, 2012, the Company has an accumulated tax loss carryforward of approximately $4,896,605 (as of August 31, 2011,approximately $3,468,280). Under U.S. tax laws, carryforward tax losses expire 20 years after the year in which incurred. In the case of theCompany the net loss carryforward will expire in the years 2025 through 2032. b.Corporate taxation in Israel:The Subsidiary is taxed in accordance with Israeli tax laws. The regular corporate tax rate in Israel for 2012 is 25%. F - 34 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 15 - TAXES ON INCOME (continued):On December 6, 2011, the “Tax Burden Distribution Law” Legislation Amendment (2011) was published in the Official Gazette. Underthis law, the previously approved gradual decrease in the corporate tax rate was cancelled. The Corporate tax rate will increase to 25%beginning 2012.As of August 31, 2012, the Subsidiary has an accumulated tax loss carryforward of approximately $5,905,361 (as of August 31, 2011,approximately $3,328,946).Deferred income taxes: 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 -,- -,- Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporarydifferences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxableincome is uncertain, the Company recorded a full valuation allowance. c.Loss before taxes on income and income taxes included in the income statements of operations: Period fromApril 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 F - 35 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)NOTE 15 - TAXES ON INCOME (continued): d.Reconciliation of the statutory tax benefit to effective tax expenseFollowing is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companiesin the United States, and the actual tax expense: Period fromApril 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 ASC No.740 "Income Taxes" requires significant judgment in determining what constitutes an individual tax position as well asassessing the outcome of each tax position. Changes in judgment as to recognition or measurement of tax positions can materially affectthe estimate of the effective tax rate and consequently, affect the operating results of the Company. The Company recognizes interest andpenalties related to its tax contingencies as income tax expense. As of August 31, 2012 and 2011, the Company recorded $15,539 and$34,105, respectively, of penalties related to tax contingencies.The following table summarizes the activity of the Company unrecognized tax benefits: Year ended August 31 2012 2011Balance 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 F - 36 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 15 - TAXES ON INCOME (continued): The Company does not expect unrecognized tax expenses to change significantly over the next 12 months.The Company and the Subsidiary are subject to Israeli income tax examinations and to U.S. Federal income tax examinations for the taxyears of 2008 through 2012. As of August 31, 2012, the Group did not record any change to its unrecognized tax benefits.NOTE 16 - RELATED PARTIES - TRANSACTIONS: 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 NadavKidron, whereby Mr. Nadav Kidron, through KNRY, will provide services as President and Chief Executive Officer of both Oramed andthe Subsidiary (the “Nadav Kidron Consulting Agreement”). Additionally, on July 1, 2008, the Subsidiary entered into a consultingagreement with KNRY whereby Dr. Miriam Kidron, through KNRY, will provide services as Chief Medical and Technology Officer ofboth Oramed and the Subsidiary (the “Miriam Kidron Consulting Agreement” and together with the Nadav Kidron ConsultingAgreement, the “Consulting Agreements”). The Consulting Agreements replaced the employment agreements entered into between theCompany and KNRY, dated as of August 1, 2007, pursuant to which Nadav Kidron and Miriam Kidron, respectively, provided services tothe Company and the Subsidiary. The Consulting Agreements are both terminable by either party upon 60 days prior written notice. TheConsulting Agreements provide that KNRY (i) will be paid, under each of the Consulting Agreements, in NIS a gross amount ofNIS50,400 per month (as of August 31, 2012 the monthly payment in the Company's functional currency is $12,512) and (ii) will bereimbursed 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 monthscommencing 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 theamount 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 F - 37 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 17 - SUBSEQUENT EVENTS: 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 thesale 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 theCompany's common stock and one common stock purchase warrant. Each warrant entitles the holder to purchase 0.50 a share of commonstock exercisable for five years at an exercise price of $0.50 per share. The investors were granted customary registration rights withrespect to resales of shares, including the shares underlying the warrants. In addition, the Leading Investor, who purchased 405,405 of theunits, was granted the right to maintain its percentage of the shares of the Company’s common stock outstanding by purchasing moreshares whenever the Company proposes to issue certain additional shares to other investors. Such right only exists so long as suchinvestor 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'sSecurities 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 berequired to pay additional $7,500, as well as issued 13,514 shares of the Company's common stock 6,757 common stock purchasewarrant for other individual. The Company will also issue 152,939 shares of the Company's common stock and 76,470 common stockpurchase 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 UnitedStates. As consideration for its services, the subsidiary will pay Medpace a total amount of approximately $3,500,000 that will be paidduring 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 issuedon 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, inconsideration for the option to purchase up to 21,637,611 ordinary shares of D.N.A with no additional cost. Following the exercise of theoption by the Company, it will hold approximately 14.5% of D.N.A shareholders equity, including D.N.A shares that were received inMarch 2011, see note 5.In addition, as a result of this agreement with D.N.A, and pursuant to the adjustment terms of the 2011 Warrants held by the LeadingInvestor, as described in note 10a and 10g, the Company further amended the 2011 Warrants by: (i) reducing the exercise price from$0.37 to $0.3138 and (ii) increasing the number of shares issuable upon the exercise of the 2011 Warrants from 2,956,081 to 3,485,500. F - 38 ORAMED PHARMACEUTICALS INC.(A Development Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)NOTE 17 - SUBSEQUENT EVENTS (continued): e.On November 29, 2012, the Company and the Leading Investor entered into a letter agreement (the "Agreement") in connection withthree warrants issued by the Company to the Leading Investor in January 2011, August 2012 and November 2012 (together, the "ThreeWarrants"). Pursuant to the Agreement, the Company and the Leading Investor agreed to amend the Three Warrants to provide that theanti-dilution protection of each of the Three Warrants shall be removed in its entirety. In addition, as to the Warrants issued in August andNovember 2012, the parties agreed that the exercise price shall be reduced to $0.3138. On that day, the Company also issued to theLeading Investor a Common Stock Purchase Warrant (the "New Warrant") pursuant to which, the Leading Investor shall have the right topurchase 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 asa shareholder of the Company, undertook and agreed that following the execution and delivery of the Agreement, in the event that anadjustment 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 topurchase under the Three Warrants would have increased by an aggregate number in excess of 1,647,722 shares, then the LeadingInvestor shall have the right to purchase from Mr. Kidron such number of shares of common stock of the Company owned by Mr. Kidronequal 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. Theforegoing right shall survive until the termination of such Three Warrants. F - 39 All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, or areinapplicable, and therefore have been omitted.(b) Exhibits3.1Certificate 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).4.1Specimen Stock Certificate (incorporated by reference from our registration statement on Form S-1 filed March 24, 2011).4.2Common 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).4.3Form of Common Stock Purchase Warrant used in 2010-2011 private placement (incorporated by reference from our registration statement onForm 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). 55 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 filedon 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 currentreport on Form 8-K filed on April 22, 2009).10.6Consulting Service Agreement dated April 21, 2009, between Oramed Ltd. and ADRES Advanced Regulatory Services Ltd. (incorporated byreference 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 andItamar Raz (incorporated by reference from our current report on Form 8-K filed July 9, 2009).10.10Agreement 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).10.11Joint Venture Agreement dated June 1, 2010, between Oramed Ltd. and LASER Detect Systems Ltd (now known as D.N.A Biomedical SolutionsLtd.) (incorporated by reference from our quarterly report on Form 10-Q filed July 14, 2010).10.12Manufacturing and Supply Agreement dated July 5, 2010, between Oramed Ltd. and Sanofi-Aventis Deutschland GMBH (incorporated byreference from our current report on Form 8-K filed July 14, 2010). 10.13Securities Purchase Agreement between Oramed Pharmaceuticals Inc. and Attara Fund, Ltd., dated as of December 21, 2010 (incorporated byreference from our quarterly report on Form 10-Q filed January 13, 2011).10.14Share Purchase Agreement dated February 22, 2011, between Oramed Ltd. and D.N.A Biomedical Solutions Ltd. (incorporated by reference fromour registration statement on Form S-1 filed March 24, 2011).10.15Patent Transfer Agreement dated February 22, 2011, between Oramed Ltd. and Entera Bio Ltd. (incorporated by reference from our registrationstatement on Form S-1 filed March 24, 2011).10.16Form of Securities Purchase Agreement used in 2010-2011 private placement (incorporated by reference from our registration statement on FormS-1 filed March 24, 2011). 56 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 omittedpursuant 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, asamended.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, asamended.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) ConsolidatedStatements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated FinancialStatements, tagged as blocks of text.____________________* Filed herewith.** Furnished herewith.+ Management contract or compensation plan. 57 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized. ORAMED PHARMACEUTICALS INC. By:/s/ NADAV KIDRON Nadav Kidron, President and Chief Executive Officer Date: December 11, 2012 Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. /s/ NADAV KIDRON December 11, 2012Nadav Kidron, President and Chief Executive Officer and Director (principal executive officer) /s/ YIFAT ZOMMER December 11, 2012Yifat Zommer, Chief Financial Officer (principal financial and accounting officer) /s/ MIRIAM KIDRON December 11, 2012Miriam Kidron, Chief Medical and Technology Officer and Director /s/ LEONARD SANK December 11, 2012Leonard Sank, Director /s/ HAROLD JACOB December 11, 2012Harold Jacob, Director /s/ MICHAEL BERELOWITZ December 11, 2012Michael Berelowitz, Director /s/ GERALD OSTROV December 11, 2012Gerald Ostrov, 58Exhibit 4.4 NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTEREDWITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPONAN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDERTHE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THEREGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIESLAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OFWHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPONEXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOANSECURED BY SUCH SECURITIES. COMMON STOCK PURCHASE WARRANT To Purchase ____________ Shares of Common Stock of ORAMED PHARMACEUTICALS INC. THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, ______________________ (the “Holder”), is entitled,upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial ExerciseDate”) and on or prior to the close of business on the fifth anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe forand purchase from Oramed Pharmaceuticals Inc. a Delaware corporation (the “Company”), up to ____________ shares (the “Warrant Shares”) of CommonStock, par value $0.001 per share, of the Company (the “Common Stock”). The purchase price of one share of Common Stock under this Warrant shall beequal to the Exercise Price, as defined in Section 2(b).Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certainSecurities Purchase Agreement (the “Purchase Agreement”), dated November __, 2012, among the Company and the purchasers signatory thereto. Section 2. Exercise.  (a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time ortimes on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the Noticeof Exercise Form annexed hereto at the headquarters of the Company (or such other office or agency of the Company as it may designate by notice in writingto the registered Holder at the address of such Holder appearing on the books of the Company); and within 5 Trading Days of the date said Notice of Exerciseis delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer orcashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender thisWarrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in whichcase the Holder shall surrender this Warrant to the Company for cancellation within 5 Trading Days of the date the final Notice of Exercise is delivered to theCompany. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effectof lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. TheHolder and the Company shall maintain records showing the number of Warrant Shares purchased hereunder and the date of such purchases. The Companyshall deliver any objection to any Notice of Exercise Form within three Business Days of receipt of such notice. The Holder and any assignee, by acceptanceof this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shareshereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. (b) Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $0.50, subject to adjustmenthereunder (the “Exercise Price”). (c) Intentionally Left Blank (d) Mechanics of Exercise. (i) Authorization of Warrant Shares. The Company covenants that all Warrant Shares which may be issued upon the exerciseof the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued,fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect ofany transfer occurring contemporaneously with such issue). (ii) Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the transferagent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its DepositWithdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system, so long as the certificates therefor are not required to bear alegend regarding restriction on transferability, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise withinthree (3) Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant (if required) and payment of the aggregateExercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price isreceived by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shallbe deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of theExercise Price (or cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vii) prior to the issuance ofsuch shares, have been paid. 2 (iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at therequest of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliverto Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall inall other respects be identical with this Warrant. (iv) Rescission Rights. If the Company fails to deliver to the Holder a certificate or certificates representing the WarrantShares by the close of business on the third Trading Day after the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise byproviding written notice that is received by the Company prior to the issuance of the Warrant Shares. (v) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rightsavailable to the Holder, if the Company fails to deliver to the Holder a certificate representing the Warrant Shares pursuant to an exercise by the close ofbusiness on the third Trading Day after the Warrant Share Delivery Date, and if after such date the Holder is required to purchase (in an open markettransaction or otherwise) shares of Common Stock to deliver in satisfaction of a prior sale by the Holder of the Warrant Shares which the Holder anticipatedreceiving upon such exercise (a “Buy-In”), then the Company shall within three Trading Days after the Holder’s request and in the Holder’s discretion, either(1) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stockless the aggregate Exercise Price (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Stock),solely with respect to such exercise, shall terminate or (2) promptly honor its obligation to deliver to the Holder a certificate representing such CommonStock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In-Price over the product of (A) such number of shares of CommonStock, times (B) the closing price on the date of the event giving rise to the Company’s obligation to deliver such certificates. Nothing herein shall limit aHolder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/orinjunctive relief with respect to the Company’s failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant as requiredpursuant to the terms hereof. (vi) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon theexercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall at itselection, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to thenext whole share. 3 (vii) Charges, Taxes and Expenses. Issuance and delivery of certificates for Warrant Shares shall be made without charge tothe Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificate, allof which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as maybe directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder,this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Companymay require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. (e) Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exerciseof this Warrant, pursuant to the terms hereof. Section 3. Certain Adjustments. (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) pays a stock dividend or otherwisemake a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of Warrant), (B) subdivides outstandingshares of Common Stock into a larger number of shares, or (C) combines (including by way of reverse stock split) outstanding shares of Common Stock into asmaller number of shares, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares ofCommon Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares ofCommon Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after therecord date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effectivedate in the case of a subdivision or combination. (b) Reclassification Transaction. In the event of a reclassification or reorganization of the outstanding shares of the Common Stock ofthe Company at any time while this Warrant is outstanding, including, without limitation, as a result of a merger or consolidation, the Company shallthereafter deliver at the time of purchase of Warrant Shares under this Warrant and in lieu of the number of Warrant Shares in respect of which the right topurchase is then being exercised, the number of shares of the Company of the appropriate class or classes resulting from said reclassification orreclassifications as the Holder would have been entitled to receive in respect of the number of Warrant Shares in respect of which the right of purchasehereunder is then being exercised had the right of purchase been exercised before such reclassification or reorganization. 4 (c) Adjustments for Other Dividends and Distributions. In the event the Company, at any time or from time to time while this Warrantis outstanding, shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive a dividend or other distributionpayable in securities of the Company (other than shares of Common Stock) or in cash or other property (other than cash out of earnings or earned surplus,determined in accordance with generally accepted accounting principles), then and in each such event provision shall be made so that the Holder shallreceive upon exercise hereof, in addition to the number of shares of Common Stock issuable hereunder, the kind and amount of securities of the Companyand/or cash and other property to which the Holder would have been entitled to receive had this Warrant been exercised into Common Stock on the date ofsuch event and had the Holder thereafter, during the period from the date of such event to and including the Exercise Date, retained any such securitiesreceivable, giving application to all adjustments called for during such period under this Section 3 with respect to the rights of the Holder, provided,however, (x) in the event that the holders of Common Stock have received options, warrants or rights that have expired prior to the date of exercise of thisWarrant, the Holder shall not be entitled to receive such options, warrants or rights and (y) in the event of a distribution consisting of cash as referred toabove, the Exercise Price in effect immediately prior to such distribution will be proportionately reduced by the amount of the distribution per share ofCommon Stock such Holder would have been entitled to receive had such Holder been the holder of record of such Common Stock as of the date on whichholders of Common Stock received or became entitled to receive such cash distribution. (d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation ofthe Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C)any tender offer or exchange offer is accepted by the holders of more than the 50% of the outstanding shares of Common Stock (not including any CommonStock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such tender or exchange offer), or (D)the Company effects any reclassification of the Warrant Shares or any compulsory share exchange (other than a share split or reverse share split) pursuant towhich the Warrant Shares are effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”),then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable uponsuch exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, upon exercise of this Warrant, the number ofshares of stock, or other securities or property of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and anyadditional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation ordisposition of assets by a Holder to which the Holder would have been entitled if the Holder had exercised its rights pursuant to the Warrant immediatelyprior thereto, provided, however, that if the Fundamental Transaction involves the acquisition by a third party of all of the outstanding Common Stock of theCompany for cash, this Warrant shall terminate upon, and be no longer exercisable after, the consummation of such Fundamental Transaction. For purposesof any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount ofAlternate Consideration issuable in respect of one Warrant Share in such Fundamental Transaction, and the Company shall apportion the Exercise Priceamong the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. Ifholders of Warrant Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall begiven the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extentnecessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holdera new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms ofany agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply withthe provisions of this Section 3(d) and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequenttransaction analogous to a Fundamental Transaction. 5 (e) Voluntary Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then currentExercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company. (f) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to of this Section 3, the number ofshares issuable upon exercise of this Warrant shall be proportionately adjusted so that after such adjustment the aggregate Exercise Price payable hereunderfor the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment. (g) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the casemay be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of thenumber of shares of Common Stock (excluding treasury shares, if any) issued and outstanding. (h) Notice to Holders. (i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, theCompany shall promptly mail to each Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the factsrequiring such adjustment. (ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whateverform) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) theCompany shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of anyclass or of any rights; (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock,any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsoryshare exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntarydissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall notify the Holder at least 10 calendar days priorto the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend,distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled tosuch dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale,transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shallbe entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger,sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of thecorporate action required to be specified in such notice. Any such notice or information published via international wire or furnished to or filed with the U.S.Securities and Exchange Commission shall satisfy this notice requirement. 6 Section 4. Transfer of Warrant. (a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof andto the provisions of Section 5.7 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) aretransferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a writtenassignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay anytransfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a newWarrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shallissue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, ifproperly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. (b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office ofthe Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or itsagent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shallexecute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. (c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as theabsolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. (d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer ofthis Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue skylaws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to theCompany a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) tothe effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that theholder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee bean “accredited investor” as defined in Regulation D under the Securities Act or a qualified institutional buyer as defined in Rule 144A under the SecuritiesAct. 7 Section 5. Miscellaneous. (a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as ashareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the WarrantShares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the dateof such surrender or payment. (b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidencereasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case ofloss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond),and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificateof like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate. (c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required orgranted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day. (d) Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissuedCommon Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stockcertificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Companywill take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of anyapplicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. 8 Except and to the extent waived or consented to by the Holder, the Company shall not by any action, including, withoutlimitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in goodfaith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as setforth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any WarrantShares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary orappropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c)use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof asmay be necessary to enable the Company to perform its obligations under this Warrant. (e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall bedetermined in accordance with the provisions of the Purchase Agreement. (f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, willhave restrictions upon resale imposed by state and federal securities laws. (g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shalloperate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on theTermination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any damages to the Holder,and if the Holder shall prevail against the Company in a final non-appealable court judgment, the Company shall pay to Holder such amounts as shall besufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred byHolder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. (h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shallbe delivered in accordance with the notice provisions of the Purchase Agreement. (i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant topurchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price ofany Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company. (j) Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will beentitled to specific performance of its rights under this Warrant, without duplication. The Company agrees that monetary damages would not be adequatecompensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense inany action for specific performance that a remedy at law would be adequate. 9 (k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shallinure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrantare intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares. (l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Companyand the Holder. (m Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and validunder applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to theextent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant. (n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed apart of this Warrant. 10 IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized. ORAMED PHARMACEUTICALS INC. By:/s/ Name: Nadav Kidron Title: Chief Executive Officer Dated: November __, 2012 11 NOTICE OF EXERCISE TO: Oramed Pharmaceuticals Inc.Hi-Tech Park 2/5Givat-RamPO Box 39098Jerusalem 91390 IsraelAttn: Nadav Kidron (1) The undersigned hereby elects to purchase __________ Warrant Shares of the Company pursuant to the terms of the attached Warrant(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. (2) Payment shall take the form of (check applicable box): o in lawful money of the United States; or o the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 2(c), toexercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exerciseprocedure set forth in Section 2(c). [Attached hereto is a true and correct copy of a print-out of the Bloomberg screen showing theFair Market Value of the Common Stock, as defined therein.] (3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as isspecified below: _________________________________________ The Warrant Shares shall be delivered to the following: __________________________________________ __________________________________________ __________________________________________ (4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of1933, as amended. 12 [SIGNATURE OF HOLDER] Name of Investing Entity: __________________________________________Signature of Authorized Signatory of Investing Entity: _______________________________Name of Authorized Signatory: __________________________________________Title of Authorized Signatory: ___________________________________________Date: _______________________ 13 ASSIGNMENT FORM (To assign the foregoing warrant, executethis form and supply required information.Do not use this form to exercise the warrant.) FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to whose address is__________________________________________________________________________________________________________________________________________________________________________ Dated: _____________________ Holder’s Signature:Holder’s Address: ___________________________________________________________________________ Signature Guaranteed: _____________________________ NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement orany change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representativecapacity should file proper evidence of authority to assign the foregoing Warrant. 14Exhibit 10.7 26 February 2012 Amendment to Consultant Service Agreement Dated April 21, 2009Between Oramed (Company) and ADRES (Contractor) According to the original agreement dated April 21, 2009, the last milestone payment of 71,000 US$ was due on IND submission. Because of delays in theproduct development resulted in delay in IND submission, the following changes to the original agreement are introduced as agreed by the parties: 1.20,000 US$ out of the 71,000 US$ were already paid to CBR and ADRES 2.The last milestone payment of 51,000 US$ will be paid upon issuance this amendment (invoice to be issued 1 March 2012) 3.As of 1 March 2012 until the IND submission, monthly retainer payment to ADRES equivalent to 15 hours per month at a rate of 400 NIS per hour (itis expected to submit the IND within 6-8 months) 4.As of 1 March 2012 until the IND submission, fee for sercive payment to CBR. The total budget should not exceed 16,000 US$ 5.As stated in the service agreement, correspondence with the FDA after IND submission and prior to its approval, limited to 20 hours, will be free ofcharge.In case IND is not submitted by 1 November 2012 the companies will negotiate in good faith extension of this amendment. CompanyContractor OramedCBR International Corp.ADRES Advanced Regulatory Services Ltd.By Print NameNadav KidronJeanne M. Novak, Ph.DRivka ZaibelTitle:CEOCEO and Principal ConsultantCEO and ConsultantDate: Exhibit 10.8 CLINICAL TRIAL AGREEMENTThis Agreement is entered into as of September 11, 2011 by and between HADASIT MEDICAL RESEARCH SERVICES AND DEVELOPMENT LIMITED, acompany duly incorporated under the laws of Israel, of P.O. Box 12000, Jerusalem 91120, (hereinafter: “Hadasit” or the “Institution”) and Dr. Daniel Schurrand Dr. Miriam Kidron (the ”Investigator”) on one hand and Oramed Ltd., a corporation organized under the laws of the state of Delaware, with its registeredoffice located at 2/5 Hi-Tech Park Givat-Ram P.O. Box 39098, Jerusalem 91390, (hereinafter: “Sponsor”), on the other hand.PREAMBLE11.STUDY, INVESTIGATOR AND SITE22.COMPLIANCE WITH LAWS, REGULATIONS AND GUIDELINES33.INFORMED CONSENT34.RECORDKEEPING, REPORTING AND ACCESS35.COMPENSATION FOR STUDY56.CONFIDENTIAL INFORMATION57.PUBLICATIONS68.INTELLECTUAL PROPERTY79.TANGIBLE MATERIALS810.INDEMNIFICATION, INSURANCE, LIMITED LIABILITIES811.TERM AND TERMINATION1012.CHANGES TO THE PROTOCOL1113.ASSIGNMENTS1114.APPLICABLE LAW1115.INDEPENDENT CONTRACTORS1116.NOTICES1117.ENTIRE AGREEMENT12Schedule A - Protocols14Schedule B - Compensation15Schedule C - Materials16Schedule D - Insurance policy17Schedule E – First Agreement18Schedule F – Second Agreement19 PREAMBLEWHEREAS Hadasit is a wholly owned subsidiary of Hadassah Medical Organization (“HMO”) and is authorized to enter this Agreement and to utilizeHMO’s facilities, employees and agents for purpose of this Agreement;Whereas, the Sponsor is the successor of Integrated Security Technologies, Inc. ("IST"); andWhereas, on February 17, 2006 Hadasit and IST have entered into the agreement regarding Method of Replacing Insulin Injections with Oral Insulinattached hereto as Schedule E (the "First Agreement"); andWhereas, Section 5 of the First Agreement contains certain terms and conditions in connection with Clinical Trials (as defined in the original agreement) tobe performed by IST and Hadasit as well as funding requirements for said Clinical Trials; and  Whereas, on January 9, 2009 Hadasit and Oramed have entered into an agreement replacing the First Agreement (the "Second Agreement"); andWhereas, on July 8, 2009 Hadasit and Oramed have entered into a Clinical Trial Agreement (the "Third Agreement"); andWhereas the Sponsor is in the process of development of administration and delivery of peptides into the body (hereinafter: the “Product”) and has preparedthe Protocol in order to conduct clinical trials for further investigation of the Product.Whereas the Sponsor represents that it is the sole owner of any and all intellectual property rights in the Product and the Protocol (as such term is definedherein), and that the execution and delivery of this Agreement does not infringe any third parties’ rights and/or any applicable law;Whereas, the Sponsor has previously invested and is willing to invest certain funds in the Study (as hereinafter defined) to be carried at HMO’s facilities bythe Investigator under the terms and conditions herein;NOW THEREFORE, the parties agree as follows:1. STUDY, INVESTIGATOR AND SITE A.Hadasit shall contribute the Investigator for purpose of carrying out clinical trials (the: "Study") in accordance with the Sponsor Protocols (the“Protocols”), which have been drafted by the Sponsor at its sole responsibility. A list of said protocols and a copy of each Protocol is attachedherein as Schedule A.The Investigator will be responsible for performing the Study and for the direct supervision of any individual performing portions of the Study. B.In the event that the Investigator ceases to be available for purpose of the Study (including without limitation the event of termination ofemployment between HMO and the Investigator for any reason whatsoever), Hadasit shall use its best efforts to procure within 30 days his/hersubstitution by a suitably qualified person acceptable to Sponsor. If such substitute is not acceptable to the Sponsor, Sponsor shall be entitled toterminate this Agreement without further notice, and this shall be Sponsor’s sole remedy in such circumstances except as further defined inSchedule B. C.Notwithstanding anything to the contrary herein, the Sponsor hereby represents and warrants that it has examined the facilities of the Institutionand found them entirely adequate and suitable for the purpose of performance of the Protocol and the Study. In addition, nothing containedherein shall be construed as casting upon the Institution, the Investigator or HMO an undertaking to purchase any equipment for purpose of theStudy or to improve its existing equipment. 2 2. COMPLIANCE WITH LAWS, REGULATIONS AND GUIDELINES A.The Investigator will perform the Study in conformance (i) with the Protocols, (ii) with all applicable laws and regulations, including laws andregulations governing the performance of clinical studies and (iii) with all applicable standards, regulations or guidelines for good clinicalpractice (“GCP”) and ethical conduct in connection with clinical studies, including those of the Institution and HMO. B.Prior to commencement of the Study, the Investigator will seek at the Sponsor’s expense any consents or approvals that must be obtained fromthe HMO’s ethics committee (the “Committee”). The Investigator will comply with all requirements established by the Committee and agreesto execute such assurances and other documents as the Committee may reasonably request. The Sponsor shall assist the Investigator to theextent required in this regard including, without limitation, signing the relevant forms and amending the Sponsor’s documents which shall befiled with the Committee. The Investigator will not enroll patients in the Study until the Protocol has been reviewed and approved by theCommittee. The Sponsor shall be liable to obtain any further approval that may be required under applicable law. Any delay in the performanceby the Institution and/or the Investigator’ of any of their undertakings hereunder due to insufficient approvals shall not be deemed to be abreach of this Agreement by them.3. INFORMED CONSENT A.The Investigator will be responsible for obtaining the written informed consent of each subject participating in the Study (or his or herauthorized legal representative) before his or her participation in the Study. The form that shall be used in this regard shall be drafted by theSponsor and approved by the Investigator; however the Sponsor shall be solely responsible for the content thereof as part of the Study’sdocuments. B.Without derogating from the generality of the aforementioned, the parties agree that such informed consent shall be granted only undercircumstances that provide the prospective Study subject (or his or her representative) with sufficient opportunity to consider whether or not toparticipate and that minimize the possibility of coercion or undue influence. The parties further agree that any such written informed consentshall be obtained in compliance with all applicable laws, regulations, standards or guidelines.4. RECORDKEEPING, REPORTING AND ACCESS A.ACCESS. The Sponsor and/or any regulatory authorities may, to the extent reasonably necessary or to the extent required by applicable laws,regulations, standards or guidelines, subject to prior coordination with the Investigator and at the normal working hours in HMO (i.e. 8:00AM-16:00 PM): (1)Examine and inspect the Investigator’ and the Institution's facilities required for performance of the Study; and 3 (2)Confidentially inspect all data and work product relating to the Study. (3)Receive, on a quarterly basis, a detailed report on the expenses incurred in connection with the study which are charged to Dr. Kidron’sResearch Fund (4)Notwithstanding anything to the contrary herein, any information and/or data to be provided to the Sponsor under Sub Sections 1-3above or under any other provision hereunder, shall be subject to the provisions of section 6(D) below and to the rights of the Subjectof the Study for medical confidentiality and privacy under any applicable law or regulation (including, without limitation, HMO’sinternal procedures). B.The Investigator shall prepare and maintain reasonably complete and accurate written records, accounts, notes, reports and data of the Study,including case report forms and shall provide Sponsor with copies of all such documentation upon request. The Investigator will retain or willcause the Institution to retain all such materials and data that the Institution has to retain under any applicable law for such periods as such lawdetermines. After the termination of such applicable retention periods, the Institution shall no longer have any duty whatsoever to retain anysuch materials and data. C.REPORTING OF ADVERSE EVENTSThe Investigator shall promptly advise the Sponsor of any serious adverse event or unanticipated adverse effect occurring during the Study, orsubsequent to the completion or termination of the Study, that becomes known to him. D.INTERVAL AND FINAL STUDY REPORTSDuring the course of the Study, the Investigator shall provide the Sponsor with quarterly interval reports (to be provided within 60 days of theend of each quarter with respect to such quarter) including copies of patient case report forms. The Investigator will deliver a final written Studyreport to the Sponsor within 3 months from the Study’s completion. 4 5. COMPENSATION FOR STUDY The Sponsor will pay compensation to the Institution for the performance of the Study as set forth in SCHEDULE B hereto.6. CONFIDENTIAL INFORMATION A.Subject to the publication rights set out in section 7 below, the Investigator and the Institution agree to keep in confidence any writteninformation expressly marked as “confidential” that is forwarded by the Sponsor to the Investigator or the Institution for purpose of the Study(or such oral information which is clearly defined as confidential upon its disclosure provided it is followed by a written notice specifying theinformation so disclosed and its being confidential within 30 days of such disclosure); or (b) information that the Proprietary Data of theSponsor as defined in section 8 hereto (the information described in clauses (a) and (b) above being collectively the "ConfidentialInformation"). However, the obligation of non-disclosure and non-use shall not apply to the following: (1)Information that is or becomes publicly available other than as a result of disclosure by the Investigator or the Institution; (2)Information that is already independently known by the Investigator, , prior to its disclosure; or (3)Information that was independently developed by employees of the Institution or of HMO who have not been exposed to theConfidential Information; (4)Information at or after such time that is disclosed on a non confidential basis to the Investigator or the Institution or the HMO, or theiremployees, by a third party; or (5)Information that the disclosure thereof is required under any law, court writ or any competent authority. However, if the Investigatorand/or the Institution are legally required to disclose any Confidential Information to a court or governmental authority, promptwritten notice thereof shall be given to the Sponsor. B.The obligations of non-disclosure and non-use hereunder shall continue for 5 years after the termination of this Agreement for any reasonwhatsoever. C.At the request of the Sponsor, the Investigator or the Institution, as the case may be, will return to the Sponsor all copies or other manifestationsof Confidential Information that may be in the possession of the Investigator or the Institution, except for materials that have to be retained bythe Investigator or the Institution as aforementioned and subject further to Section 4(B) hereto. 5 D.Confidentiality of Medical Records Sponsor, Investigator, and Institution understand, acknowledge and agree that they share the common goal of securing all individuallyidentifiable health information and according that information the highest possible degree of confidentiality and protection from disclosure;accordingly, all individually identifiable health information shall at all times be treated as confidential by the parties in accordance with allfederal, state and local laws, rules and regulations governing the confidentiality and privacy of individually identifiable health information asapplicable, including, but not limited to, the Health Insurance Portability and Accountability Act of 1996 (“HIP AA”) and any regulations andofficial guidance promulgated thereunder, as well as the Israeli Patient’s Rights Law, 1996 (the “PR Law”), the Israeli Protection of Privacy Law,1981 (the “PP Law”) and any regulations and rules promulgated thereunder, and the parties agree to take such additional steps and/or tonegotiate such amendments to this Agreement as may be required to ensure that the parties are and remain in compliance with the HIP AAregulations and official guidance, as well as the PR and PP Laws and any regulations and rules promulgated thereunder. It is hereby agreed thatany undertaking of the Institution and/or Investigator hereunder whatsoever is subject to any restrictions and/or limitations deemed necessaryby the Institution and/or Investigator in their sole discretion, to comply with the above provisions. It is hereby made expressly clear that nopatient identifiable information will be provided, or made available, to the Sponsor or any party acting on its behalf, without the express writtenconsent of the patient.7. PUBLICATIONS A.Notwithstanding anything contained herein to the contrary, the Investigator and/or Institution may publish the results of the Study, providedthat the Investigator and/or Institution have notified the Sponsor of their intent to publish as set forth in Sub-Section B below. The Investigatorand/or Institution and the Sponsor shall be listed as co-authors on said publication. Any said publication will require Sponsor’s prior writtenapproval and will not contain the Sponsor’s Confidential Information, which for the purpose of this section shall not include the Study results. B.The Investigator will provide Sponsor with a copy of any proposed publication or presentation materials (“Material”) and a written notice ofintent (on behalf of the Investigator or any Study staff at the Institution) to publish or present the Material at least 45 days prior to the scheduledpresentation or publication submission date (the “Evaluation Period”). The Sponsor shall use said 45 days to determine whether it wishes toseek patent protection for said Material and shall notify Investigator and Institution in writing, prior to the end of the Evaluation Period, if itintends to seek patent protection. If Sponsor decides to seek patent protection, it shall have an additional 30 days, beginning from the end of theEvaluation Period (“Preparation Period”), to prepare and submit any patent application it wishes. After such time, Investigator and/or Institutionshall be free to publish the Material, subject to the limitations contained herein. 6 C.If the Sponsor, in its reasonable judgement, needs additional time to seek patent or other protection for the Material intended to be published orpresented, the Sponsor will notify the Investigator of such need within the Evaluation Period and publication or presentation will be deferreduntil such time that the Sponsor gives notification that such protection has been applied for. Such deferrals will in no event extend for a total ofmore than 15 days beyond the Preparation Period without written agreement of the Investigator.Notwithstanding anything to the contrary herein, the Sponsor shall not use the names of the Institution, HMO or the Investigator and shall not disclose theirinvolvement in the Study or the Products without the Institution’s prior written approval, all except for (a) references to scientific publications which arealready in the public domain at the time of publication and (b) applications for regulatory approvals to official authorities, and (c) as requested by regulatoryauthorities as required by law or applicable regulation. Subject to the foregoing, the Sponsor shall include appropriate acknowledgement and credit to theInstitution, HMO, the Investigator and their employees in any publication relating to the Study and/or to the Product in whatever media, includingapplication(s) to official authorities or presentations to potential investors.8. INTELLECTUAL PROPERTY A.Subject to Sub-Section C hereto, all intellectual property, including ideas, documents, information, know-how, trade secrets, reports, analyses,data and inventions, generated by the Investigator or the Institution or their respective employees, agents or contractors, directly from theperformance of the Study and this Agreement (collectively, the “Proprietary Data”) shall be owned by the Sponsor. B.The Investigator and the Institution hereby assign and transfer to the Sponsor all right, title and interest in such Proprietary Data and agree totake all further acts reasonably required, at the Sponsor’s expense, to convey title in such property to the Sponsor and/or to assist the Sponsor toperfect and protect such rights. C.The Proprietary Data shall not include and Institution and/or the Investigator shall retain any and all rights, including intellectual propertyrights, to any development processes, software (including codes), technology, means, and know-how developed by the Institution and/orInvestigator and/or HMO, including, but not limited to, that which relate to data collection, data management or project management. 7 D.Nothing contained herein shall prevent Institution and/or HMO and/or Investigator from using the Proprietary Data for academic research, noncommercial therapeutic and educational purposes only, provided that every person or entity making use of the proprietary data is explicitlymade aware by the Institution or the Investigator or HMO of the Sponsor’s proprietary interest therein. Such use will be subject to Sponsor’sprior written consent. 9. TANGIBLE MATERIALS The Sponsor shall provide the Institution and the Investigator free of charge with all such materials, drugs, accessories and other items as shall berequired for the conduct of the Study including, without limitation, those listed in Schedule C hereto. It is being clarified; however, that any use ofany drugs under the Study shall only be made via HMO’s internal pharmacy and shall be subjected to its procedures. Upon completion of the Studyor termination of this Agreement, the Investigator shall promptly return, at the Sponsor’s expense, all unused compounds, drugs, devices and otherrelated materials. 10. INDEMNIFICATION, INSURANCE, LIMITED LIABILITIES A.Each party shall defend, indemnify and hold harmless (the “Indemnifying Party”) the other parties and any of their employees, agents orcontractors (collectively the "Indemnitees") promptly upon their first demand from and against any loss, damage, liability and expense(including legal fees) arising out of or resulting from the results or performance of the Study and/or from the direct or indirect use, sale ormanufacture of the Study and/or the Study results and /or of products incorporating or involving such results and, without limitation to theforegoing, from or against product liability claims or claims regarding third party’s intellectual property rights; provided however: (1)that the Indemnifying Party’s indemnification obligations under this Section shall be proportionately reduced to the extent the loss wascaused or increased by the negligence or willful misconduct of an Indemnitee (but only to the extent that such demands, claims, orjudgments are due to the negligence or willful malfeasance of the Indemnitees); (2)that the Indemnifying Party is notified in writing as soon as practicable under the circumstances of any complaint or claim potentiallysubject to indemnification; B.The Indemnitees shall be entitled, at their sole discretion, to either (i) instruct the Indemnifying Party to assume defense of any litigation orother legal procedure which entitles them to indemnification under this Agreement, in which case the Indemnitees shall be entitled to approvethe choice of the legal counsel of the Indemnifying Party, such approval shall not be unreasonably withheld, or (ii) to manage their defensethemselves, in which case the Indemnifying Party shall be responsible to any legal expenses (including reasonable attorney fees) stemming fromsuch procedure and the results thereof. 8 C.The Sponsor shall reimburse Institution for reasonable and necessary medical expenses incurred by Study Subjects as a direct result of thetreatment of adverse reactions resulting from the administration of Study drugs and/or devices or procedures performed in accordance with theProtocol, provided such expenses are not covered by the Study Subject's medical or hospital insurance coverage and are in no way attributableto the negligence or misconduct of any agent or employee of the Institution. No other compensation of any type will be provided by theSponsor to the Study Subjects. D.Without derogating from the aforementioned, the Sponsor warrants and undertakes that it has purchased, and shall maintain during the entireterm of the Agreement and for all relevant times subsequent thereto (including under applicable statues of limitation), sufficient insurancecoverage for the Study and for the Sponsor’s liabilities hereunder, including without limitation, for claims relating to negligence of bothSponsor and of personnel performing the Study, and for claims relating to product liability, which insurance coverage shall be satisfactory to theInstitution. The Sponsor further undertakes that HMO, the Institution, the Investigator and their employees will be included as co-insured insuch insurance policy/ies. The Sponsor represents that as of the date hereof, it maintains the insurance policy that is annexed hereto as ScheduleD1. E.Disclaimer of Warranty. Nothing contained in this Agreement shall be construed as a warranty by the Institution and the Investigator that theresults of the Study will be useful or commercially exploitable or of any value whatsoever. In addition, and without derogating from theaforementioned the Institution and the Investigator disclaim all warranties, either express or implied, with respect to the Study and any productsthat incorporate, integrate or are designed based in whole or part, on the Study results (“Products”), including without limitation impliedwarranties of merchantability, efficacy and fitness for a particular purpose. The entire risk arising out of the production and use of the Study andthe Products and any accompanying materials remains solely with the Sponsor, and the Sponsor shall be solely responsible for any use of theWork and/or the Product. 1 make sure an insurance policy is attached. 9 F.Limitation on liability. Without derogating from the above, and except in the event of gross negligence, willful misconduct or medicalmalpractice to the Study subjects, if the Institution or the Investigator are found liable (whether under contract, tort (including negligence) orotherwise), then the cumulative liability thereof for all claims whatsoever related to the Study or the Products or otherwise arising out of thisAgreement, shall not exceed a total consideration actually paid to it by the Sponsor under this Agreement. This limitation of liability isintended to apply to all claims of the Sponsor without regard to which other provisions of this Agreement have been breached or have provedineffective. G.Exclusion of Consequential Damages. Neither party shall be liable (whether under contract, tort (including negligence) or otherwise) to theother party, or any third party for any indirect, incidental or consequential damages, including, without limitation, any loss or damage tobusiness earnings, lost profits or goodwill and lost or damaged data or documentation, suffered by any person, arising from and/or related withand/or connected to this agreement even if such party is advised of the possibility of such damages. 11. TERM AND TERMINATION A.This Agreement shall become effective upon its execution by both parties and shall be in effect during the entire period of the Study as set forthin Schedule A hereto, unless terminated by the parties as set forth herein. B.Hadasit and the Sponsor may either terminate this Agreement upon the filing by any person of a petition for the winding-up or liquidation or theappointment of a receiver on most of the assets of the terminated party, if petition has not been withdrawn or dismissed within 21 days of itsfiling. In addition, each party may terminate this Agreement without further notice in case the terminated party has breached this Agreement anddid not cure such breach within 21 days of delivery of a written notice from the non-defaulting party. The Sponsor may terminate thisAgreement without prior notice as set in Section 1 (B) hereto. C.In addition, this Agreement may be terminated by either Hadasit or the Sponsor for any other reason upon 60 days written notice. D.In the event that this agreement is terminated by the Sponsor, the Sponsor shall reimburse the Institution for all costs and non-cancelablecommitments incurred prior such termination with regard to the performance of this Agreement. E.Subject to Sub-Section D above, upon termination of this Agreement, the Investigator and the Institution shall return to the Sponsor any fundsnot expended or irrevocably committed prior to the effective termination date. However, and without derogating from the Institution’s rightsunder any applicable law, the Institution may set-off from such funds any debts of the Sponsor towards the Institution or the Investigator. 10 F.The Sponsor shall be obliged notwithstanding the termination of this Agreement for any reason to continue supplying any material and drugsupplied by the Sponsor and used in the Study in order to comply with applicable laws and regulations and/or to avoid injury or harm to theStudy subjects. G.Termination of this Agreement by either party shall not affect the rights and obligations of the parties accrued prior to the effective date of thetermination. The rights and duties under Sections 6, 7, 8, 10, 14, and 16 will survive the termination or expiration of this Agreement.12. CHANGES TO THE PROTOCOLAny amendment or modification of the Protocol must be agreed upon by both the Investigator and the Sponsor and documented in writing, howeverany such change shall not exempt the Sponsor of its liabilities and responsibilities hereunder.13. ASSIGNMENTSExcept as specifically permissible under Section 1 (B) hereto, this Agreement, and the rights and obligations hereunder, may not be assigned by anyparty hereto without the express written consent of the other parties, which shall not be unreasonably withheld.14. APPLICABLE LAWThis Agreement shall be governed by and construed in accordance with the laws of Israel. The competent courts in Jerusalem shall have exclusivejurisdiction over any dispute that may arise with respect to this Agreement.15. INDEPENDENT CONTRACTORSEach party hereto (including the Investigator) is an independent contractor. Nothing contained herein shall be construed as forming employee-employer relations between the Sponsor’s employees and the Institution or HMO or between the Institution’s and HMO’s employees (including theInvestigator) and the Sponsor.16. NOTICESAll notices required or permitted to be given under the Agreement shall be sent as follows:If to the Sponsor:Oramed LTD2/5 Hi-Tech Park, Givat RamPOB 39098, Jerusalem 91390, IsraelAttention: Nadav Kidron 11 If to the Institution or to the Investigator:Hadasit Medical Research Services And Development LtdPOB 12000 Jerusalem 91120 IsraelAttention _______________17. ENTIRE AGREEMENTThis Agreement represents the entire understanding of the parties with respect to the subject matter hereof. In the event of any inconsistencybetween this Agreement and the Protocol, the terms of this Agreement shall govern. The invalidity or unenforceability of any term or provision ofthis Agreement shall not affect the validity or enforceability of any other term or provision hereof. This Agreement may be amended only by awritten document signed by Hadasit and the Sponsor. The Investigator’s signature shall only be required with respects to changes that cast furtherliabilities on the Investigator that are not already included hereunder.[Signatures appear on the following page] 12 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement effective as of the date first set forth above. ORAMED LTDBy:___________________________ Name: Nadav KidronTitle: Chief Executive OfficerDate:______________________ INVESTIGATOR: _____________________________Dr. Miriam Kidron _____________________________Dr. Daniel Schurr HADASIT MEDICAL RESEARCH SERVICES AND DEVELOPMENT LTDBy:___________________________Name:_____________________ Title:______________________ Date:______________________ 13 Schedule A - Protocols 14 Schedule B - Compensation 1.For the performance of the Study, the Sponsor shall pay Hadasit the amount of $200,000 (two hundred thousand U.S. Dollars) (the “Study fee”),payable in accordance with the actual progress of the study. All payments will be due upon invoice issued by Hadassit to the sponsor. Invoices to Oramed LTD will add the applicable VAT. Hadasit undertakes to transfer the Study Fee to Dr. Kidron’s Research Fund after deduction of 16.7% Overhead. The Study will include a dose response study and a GLP1 study. 2.Payments shall be made within 30 days of invoice date. Payment shall be made in U.S. Dollars or New Israeli Shekels, according to exchange rate ineffect on the date of payment.Method of Payment: Either via check, made out to “Hadasit Medical Research Services and Development Ltd.”, or via a bank transfer to thefollowing account:Account name: Hadasit medical research services & development Ltd.Account no. 605 100 / 21BANK LEUMI LEISRAELMain Branch no. 901Jaffa Street 21 - JerusalemInterbank Swift Code (TID): LUMIILITTLV In the event of bank transfer, Sponsor shall send Institution a notice that payment has been made, and will provide Institution with full details of thepayment transaction. 3.The compensation detailed above shall constitute the complete compensation to be paid by the Sponsor to Hadasit for the Study and include allfees, charges and expenses that the Sponsor is obligated to pay under the Agreement. 4.Sponsor will have no obligation or liability in respect of payments to be made by Dr. Kidron and/or her research fund. 5.At the termination, for any reason, of the Agreement any unused funds in Dr. Kidron’s research fund will be returned to the Sponsor. 6.TAXES. If required under Israel law, Sponsor shall add VAT to any payments made under this Agreement to the Institution. Any payment shall bemade against the provision of tax invoice by the Institution. 7.INTEREST. Any amount payable hereunder, which has not been made upon its due date of payment, shall bear interest from the date such paymentis due until the date of its actual payment, according to the following: (i) any amounts due in Israeli currency shall bear the maximum interestcharged by Bank Leumi Le Israel B.M. for unapproved overdrafts; (ii) any amount due in foreign currency shall bear the same interest charged byBank Leumi Le Israel B.M. for a loan of the said amount in the said currency plus an annual compounded interest at a rate of 3%. 15 Schedule C - Materials ·Insulin capsules ·GLP1 capsules. 16 Schedule D - Insurance policy 17 Schedule E – First Agreement 18 Schedule F – Second Agreement 19Exhibit 10.19SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this "Agreement") is dated as of November ___, 2012, among Oramed Pharmaceuticals Inc., a Delawarecorporation (the "Company"), and the investors identified on the signature page hereto (each, an "Investor" and collectively the “Investors”). WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended(the “Securities Act”) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Investor, and each Investor, severally and notjointly, desires to purchase from the Company certain securities of the Company, as more fully described in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration thereceipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: ARTICLE I.DEFINITIONS 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall havethe meanings indicated in this Section 1.1: "Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is undercommon control with a Person, as such terms are used in and construed under Rule 144. “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1. "Closing Date" means the Trading Day when all of the all conditions precedent to (A) the Investors’ obligations to pay the InvestmentAmount and (B) the Company’s obligations to deliver the Securities have been satisfied or waived. "Common Stock" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which suchcommon stock may hereafter be reclassified or changed into. "Investment Amount" means, with respect to each Investor, the aggregate amount to be paid for Shares and Warrants purchased hereunderas indicated below such Investor's name on the signature page of this Agreement and as set forth on Schedule 1.  “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction. "Per Unit Purchase Price" means $0.37. "Person" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liabilitycompany, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. "Rule 144" means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, orany similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule. "SEC" means the U.S. Securities and Exchange Commission. "Securities" means the Shares, the Warrants and the Warrant Shares. "Shares" means the shares of Common Stock issued or issuable to the Investors pursuant to this Agreement. "Short Sales" means, without limitation, all "short sales" as defined in Rule 200 of Regulation SHO promulgated under the Exchange Act. "Trading Day" means any day other than Friday, Saturday, Sunday or other day on which commercial banks in The City of New York orIsrael are authorized or required by law to remain closed. "Transaction Documents" means this Agreement, the Warrants and any other documents or agreements executed in connection with thetransactions contemplated hereunder. "Warrants" means the Common Stock purchase warrants in the form of Exhibit A. "Warrant Shares" means the shares of Common Stock issuable upon exercise of the Warrants. ARTICLE II.PURCHASE AND SALE 2.1 Closing. On the Closing Date, subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to eachInvestor, severally and not jointly, and each Investor, severally and not jointly, shall purchase from the Company, the Shares and the Warrants set forthopposite such Investor’s name on Schedule 1. Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at such location asthe parties shall mutually agree. 2 2.2 Deliveries. (a) On the date hereof, the Company and each of the Investors shall deliver or cause to be delivered to the other, this Agreement, togetherwith all exhibits and schedules attached thereto, duly executed by an authorized representative. (b) On the Closing Date, the Company shall deliver or cause to be delivered to each Investor the following: (i) a certificate evidencing the number of Shares equal to such Investor’s Investment Amount divided by the Per UnitPurchase Price, registered in the name of such Investor as set forth on Schedule 1; and (ii) a warrant, registered in the name of such Investor, pursuant to which such Investor shall have the right to acquire thenumber of shares of Common Stock equal to 50% of the number of Shares issuable to such Investor pursuant to Section 2.2(i). (c) On the Closing Date, each Investor shall deliver or cause to be delivered (by check or wire transfer) the aggregate amount of theInvestor’s Investment Amount in payment for the Shares and Warrants in accordance with the instructions set forth on Schedule 2 hereof. 2.3 Closing Conditions. (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions having been met: (i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of theInvestors contained herein; (ii) all obligations, covenants and agreements of the Investors contained herein required to be performed at or prior to theClosing Date shall have been performed; and (iii) the delivery by the Investors of the items set forth in Section 2.2(c) of this Agreement. (b) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions havingbeen met: 3 (i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Company containedherein; (ii) all obligations, covenants and agreements of the Company contained herein required to be performed at or prior to theClosing Date shall have been performed; (iii) the delivery by the Company of the items set forth in Section 2.2(b) of this Agreement; (iv) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the SEC or theNational Association of Securities Dealers over-the-counter electronic bulletin board (the “OTCBB”). ARTICLE III.REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors as follows on the datehereof and as of the Closing Date: (a) Organization, Good Standing and Qualification of the Company. The Company is a corporation duly organized, validly existing andin good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own and operate its properties andto carry on its business as now being conducted and as proposed to be conducted. The Company is duly qualified to do business as a foreign corporation andis in good standing in each jurisdiction in which failure to so qualify would materially and adversely affect the business, properties, operations, prospects orcondition, financial or otherwise, of the Company. The resolutions adopted by the directors of the Company on August 8, 2012 authorizing the transactionscontemplated by the Transaction Documents have not been amended or modified in any way, have not been rescinded and are in full force and effect on thedate hereof. (b) Corporate Authority; Enforceability. The Company has full right, power and authority to issue and sell the Securities as hereincontemplated and the Company has full power and authority to enter into and perform its obligations under the Transaction Documents. The execution anddelivery of the Transaction Documents and the consummation of the transactions contemplated herein and therein have been duly authorized and approvedby all requisite corporate action, and each of the Transaction Documents are a valid and legally binding obligation of the Company. (c) Conflicts. Neither the authorization, execution and delivery of the Transaction Documents nor the consummation of the transactionsherein and therein contemplated, will (i) conflict with or result in a breach of any of the terms of the Company’s Certificate of Incorporation or By-Laws, (ii)violate any judgment, order, injunction, decree or award of any court or governmental body, having jurisdiction over the Company, against or binding on theCompany or to which its property is subject, (iii) violate any material law or regulation of any jurisdiction which is applicable to the Company, (iv) violate,conflict with or result in the breach or termination of, or constitute a default under, the terms of any material agreement to which the Company is a party,except for such violations or defaults which do not materially and adversely affect the business, assets, operations, prospects or condition, financial orotherwise of the Company, or (v) violate or conflict with the rules and regulations of the OTCBB applicable to the Company. 4 (d) Capitalization. The authorized capital of the Company as of the date hereof consists of 200,000,000 shares of Common Stock, ofwhich there were (i) 84,788,784 issued and outstanding as of the date hereof as fully paid and non-assessable shares; (ii) options and/or warrants to purchase16,043,201 shares of Common Stock; and (iii) employee and directors options to purchase 7,824,000 shares of Common Stock. As of the date hereof, theCompany has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise ofemployee stock options under the Company’s stock option plans and the issuance of shares of Common Stock to employees pursuant to the Company’semployee stock purchase plan outstanding as of the date of the most recently filed periodic report under the Exchange Act. All of the outstanding shares ofcapital stock of the Company are validly issued, fully paid and nonassessable. No further approval or authorization of any stockholder or the Board ofDirectors of the Company is required for the issuance and sale of the Securities. The issuance of the Securities pursuant to the provisions of this Agreementwill not violate any preemptive rights or rights of first refusal granted by the Company that will not be validly waived or complied with, and will be free ofany liens or encumbrances, other than any liens or encumbrances created by or imposed upon the Investors through no action of the Company. There are nostockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, tothe knowledge of the Company, between or among any of the Company’s stockholders. (e) Litigation. There are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or otheragency or regulatory authority now pending, or, to the best knowledge of the Company, threatened against the Company which, if adversely determined,could materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Company. There is no action, suitor proceeding by the Company currently pending or that the Company currently intends to initiate. (f) Compliance with Laws. The Company is not in violation of any statute, law, rule or regulation, or in default with respect to anyjudgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, except for such violations or defaults which donot materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Company. 5 (g) Governmental Consents. Subject to the accuracy of the representations and warranties of the Investors set forth herein, no registrationor filing with, or consent or approval of or other action by, any Federal, state or other government agency under laws and regulations thereof as now in effectis or will be necessary for the valid execution, delivery and performance by the Company of the Transaction Documents, and the issuance, sale and deliveryof the Securities, other than the filing of a Form D with the SEC and the filings required by state securities law. (h) Regulatory Matters. The clinical, pre-clinical and other trials, studies and tests conducted by or on behalf of or sponsored by theCompany relating to its pharmaceutical product candidates were and, if still pending, are being conducted in all material respects in accordance with medicaland scientific protocols and research procedures that the Company reasonably believes are appropriate. The descriptions of the results of such trials, studiesand tests as set forth in the SEC Documents (as defined in Section 3(i) of this Agreement), provided to the Investors are accurate in all material respects andfairly present the data derived from such trials, studies and tests. All clinical trials conducted by the Company have been in compliance in all materialrespects with applicable laws and regulations. The Company has not received any warning letters or written correspondence from the FDA and/or any othergovernmental entity or agency requiring the termination, suspension or modification of any clinical, pre-clinical and other trials, studies or tests that arematerial to the Company. None of the clinical trials that the Company is currently conducting or sponsoring is subject to any temporary or permanentclinical hold by the FDA or any other governmental entity or agency, and the Company has no reason to believe that such clinical trials will be subject toany such action. The Company is planning to file an Investigational New Drug Application with the United States Food and Drug Administration (“FDA”)for a phase II clinical trial it intends to conduct with respect to its orally ingestible insulin capsule (ORMD0801) (the “IND Application”). The INDApplication will be in material compliance with applicable laws and rules and regulations when filed. (i) SEC Documents; Financial Statements. For the past twelve (12) months, the Company has filed all reports, schedules, forms,statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing filedprior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by referencetherein being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Investors or their respective representatives true, correctand complete copies of each of the SEC Documents not available on the Electronic Data Gathering, Analysis, and Retrieval system of the SEC (“EDGAR”)that have been requested by an Investor. As of their respective dates, the SEC Documents complied as to form in all material respects with the requirements ofthe Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, atthe time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein ornecessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates,the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accountingrequirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have beenprepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may beotherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may excludefootnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereofand the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end auditadjustments). The Company has no liabilities or obligations required to be disclosed in the SEC Documents that are not so disclosed in the SEC Documents,other than those incurred in the ordinary course of the Company’s business. 6 (j) Sarbanes-Oxley; Internal Accounting Controls. Each SEC Document containing financial statements that has been filed with orsubmitted to the SEC was accompanied by the certifications required to be filed or submitted by the Company’s chief executive officer and chief financialofficer pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); at the time of filing or submission of each such certification, suchcertification was true and accurate and complied with the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder; such certificationscontain no qualifications or exceptions to the matters certified therein and have not been modified or withdrawn; and neither the Company nor any of itsofficers has received notice from any governmental entity questioning or challenging the accuracy, completeness, form or manner of filing or submission ofsuch certification; (k) Absence of Changes. The Common Stock is quoted for trading on the OTCBB. No order ceasing, halting or suspending trading inthe Common Stock nor prohibiting the sale of the Common Stock has been issued to and is outstanding against the Company or its directors, officers orpromoters, and, to the best of the Company’s knowledge, no investigations or proceedings for such purposes are pending or threatened. The Company hasnot taken any action which would be reasonably expected to result in the delisting or suspension of quotation of the Common Stock on or from the OTCBBand the Company has complied in all material respects with the rules and regulations of eligibility on the OTCBB. The Company has not taken any steps toseek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiateinvoluntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead any creditor or creditors to do so. Based on thefinancial condition of the Company as of the date hereof, after giving effect to the receipt by the Company of the proceeds from the transactionscontemplated hereby, the Company reasonably believes that (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to bepaid on or in respect of the Company’s existing debts and other liabilities as they mature; (ii) the Company’s assets do not constitute unreasonably smallcapital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capitalrequirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow ofthe Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of thecash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend toincur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of itsdebt). The SEC Documents set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or forwhich the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowedmoney or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingentobligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto),except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) thepresent value of any lease payments due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is indefault with respect to any Indebtedness. 7 (l) Patents and Trademarks. The Company has rights to use all patents, patent applications, trademarks, trademark applications, servicemarks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use inconnection with its business as described in the SEC Documents and which the failure to so have would have a material adverse effect on the results ofoperations, assets, business, prospects, or condition, financial or otherwise, of the Company (collectively, the “Intellectual Property Rights”). The Companyhas not received any notice (written or otherwise) that the Intellectual Property Rights used by the Company violate or infringe upon the rights of any otherperson or entity. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by anotherperson or entity of any of the Intellectual Property Rights. The Company has taken reasonable security measures to protect the secrecy, confidentiality andvalue of all of its Intellectual Property Rights. (m) Offering. Assuming the accuracy of the representations and warranties of the Investors contained in Section 3.2 of this Agreement,the offer, issue, and sale of the Securities are exempt from the registration and prospectus delivery requirements of the Securities Act and the registration orqualification requirements of all applicable state securities laws. Neither the Company nor any authorized agent acting on its behalf will knowingly take anyaction hereafter that would cause the loss of such exemptions. 8 (n) Acknowledgment. The Company acknowledges and agrees that each Investor is acting solely in the capacity of an arm’s lengthpurchaser with respect to the Securities and the transactions contemplated hereby and thereby and that no Investor is (i) an officer of the Company, (ii) anAffiliate of the Company or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined forpurposes of Rule 13d-3 of the Exchange Act), except Regals Fund LP. The Company further acknowledges that no Investor is acting as a financial advisor orfiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by anyInvestor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to suchInvestor’s purchase of the Securities. The Company further represents to each Investor that the Company’s decision to enter into the Transaction Documentsand issue the Securities has been based solely on the independent evaluation by the Company and its representatives. (o) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Affiliates, nor any person acting on its or theirbehalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection withthe offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’commissions (other than for persons engaged by any Investor or its investment advisor) relating to or arising out of the transactions contemplated hereby. (p) No Integrated Offering. Neither the Company nor any person acting on its behalf has, directly or indirectly, made any offers or salesof any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the Securities Actor cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholderapproval provisions, which would undermine the private placement exemption of this offering or cause it to require shareholder approval, including, withoutlimitation, under the rules and regulations of the OTCBB or any other exchange or automated quotation system on which any of the securities of theCompany are listed or designated. (q) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of anyof the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to anyperson any compensation for soliciting another to purchase any other securities of the Company. (r) Disclosure. All disclosure provided to the Investors with regard to the representations and warranties contained in this Section 3.1regarding the Company, its business and the transactions contemplated hereby, furnished in writing by the Company is true and correct in all materialrespects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,in the light of the circumstances under which they were made, together with the disclosure in the SEC Documents, not misleading. 9 (s) Investor Reliance. The Company expressly acknowledges and agrees that the Investors are relying upon the Company’srepresentations contained in this Agreement. 3.2 Representations and Warranties of the Investor. Each Investor, severally and not jointly, hereby represents and warrants to the Company asfollows: (a) Authorization; Enforcement. Such Investor represents and warrants that it is an entity duly organized, validly existing and in goodstanding under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummatethe transactions contemplated by the applicable this Agreement and otherwise to carry out its obligations hereunder. This Agreement has been duly executedby such Investor, and when delivered by such Investor in accordance with terms hereof, will constitute the valid and legally binding obligation of suchInvestor, enforceable against it in accordance with its terms. (b) Investment Intent. Such Investor is acquiring the Securities as principal for its own account for investment purposes only and notwith a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Investor's right at all times to sell orotherwise dispose of all or any part of such Securities in compliance with applicable securities laws. Such Investor is acquiring the Securities hereunder inthe ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with any Person to distribute any ofthe Securities. (c) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, and on each date on which itexercises the Warrants it will be, an "accredited investor" as defined in Rule 501(a) under the Securities Act and a non-"U.S. person" within the meaning ofRule 902(k) promulgated under the Securities Act (and the Investor is not purchasing for the account or benefit of a U.S. Person). At the time of the offer andsale of the Securities, the Investor was not located in the United States. Such Investor is not required to be registered as a broker-dealer under Section 15 ofthe Securities Exchange Act of 1934, as amended. (d) General Solicitation. Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or othercommunication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at anyseminar or any other general solicitation or general advertisement. 10 (e) Access to Information. Such Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it hasdeemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and themerits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business,properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information thatthe Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to theinvestment. Such Investor understands that a purchase of the Securities is a speculative investment involving a high degree of risk. Such Investor is awarethat there is no guarantee that such Investor will realize any gain from this investment, and that such Investor could lose the total amount of this investment.Such Investor acknowledges that it has received no representations or warranties from the Company or its employees or agents in making this investmentdecision other than as set forth in this Agreement. (f) Independent Investment Decision. Such Investor has independently evaluated the merits of its decision to purchase Securitiespursuant to this Agreement, such decision has been independently made by such Investor and such Investor confirms that it has only relied on the advice ofits own business and/or legal counsel and not on the advice of any other Investor’s business and/or legal counsel in making such decision. (g) Short Sales. Such Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding withsuch Investor, executed any Short Sales in the securities of the Company since the date that such Investor was first contacted regarding an investment in theCompany. (h) Limitations on Transfers. Such Investor acknowledges that the Securities must be held indefinitely unless subsequently registeredunder the Securities Act or unless an exemption from such registration is available. Such Investor is aware of the provisions of Rule 144 promulgated underthe Securities Act which permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, which mayinclude, among other things, the existence of a public market for the securities, the availability of certain current public information about the Company, theresale occurring not less than six months after a party has purchased and paid for the security to be sold, the sale being effected through a “broker’stransaction” or in transactions directly with a “market maker” and the number of securities being sold during any three month period not exceeding specifiedlimitations. (i) Company Reliance. Such Investor expressly acknowledges and agrees that the Company is relying upon such Investor’srepresentations contained in this Agreement. 11 ARTICLE IV.REGISTRATION RIGHTS 4.1 Registration Statement. (a) The Company shall prepare and file with the SEC within one hundred and twenty (120) calendar days after the Closing Date (the“Filing Deadline”) a registration statement (on Form S-1, or other appropriate registration statement form) under the Securities Act (the “RegistrationStatement”), at the sole expense of the Company (except as specifically provided in Section ​4.2 of this Agreement) so as to permit a public offering andresale of the Shares and the Warrant Shares (the “Registrable Securities”) in the United States under the Securities Act by the Investors as sellingstockholders. The Company shall use its reasonable best efforts to cause such Registration Statement to become effective as soon as possible thereafter, andwithin the earlier of: (i) one hundred and eighty (180) calendar days after the Closing Date (or two hundred and ten (210) calendar days in the event the SECshall elect to review the Registration Statement), or (ii) five (5) calendar days after the SEC clearance to request acceleration of effectiveness (the“Effectiveness Deadline”). The Company will notify the Investors of the effectiveness of the Registration Statement (the “Effective Date”) within three (3)Trading Days. (b) The Company will maintain the Registration Statement filed under Section 4 of this Agreement effective under the Securities Actuntil the earlier of the date (i) all of the Registrable Securities have been sold pursuant to such Registration Statement, (ii) the Investors receive an opinion ofcounsel to the Company, which opinion and counsel shall be reasonably acceptable to the Investors, that the Registrable Securities may be sold under theprovisions of Rule 144 without limitation as to volume, (iii) all Registrable Securities (or all Warrants, in the case of Warrants not then exercised) have beenotherwise transferred to persons who may trade the Registrable Securities without restriction under the Securities Act, and the Company has delivered a newcertificate or other evidence of ownership for such Registrable Securities not bearing a restrictive legend, (iv) all Registrable Securities may be sold withoutany time, volume or manner limitations pursuant to Rule 144 or any similar provision then in effect under the Securities Act in the opinion of counsel to theCompany, which counsel shall be reasonably acceptable to the Investors, or (v) one (1) year from the Effective Date. (c) Prior to the Effective Date, the rights to cause the Company to register Registrable Securities granted to the Investors by the Companyunder Section 4 of this Agreement may be assigned in full by an Investor in connection with a transfer by such Investor of not less than 1,000,000 shares ofCommon Stock in a single transaction to a single transferee purchasing as principal, provided, however, that (i) such transfer is otherwise effected inaccordance with applicable securities laws; (ii) such Investor gives prior written notice to the Company; and (iii) such transferee agrees to comply with theterms and provisions of this Agreement in a form reasonably satisfactory to the Company, and such transfer is otherwise in compliance with this Agreement. 12 (d) If at any time or from time to time after the Effective Date, the Company notifies the Investors in writing of the existence of aPotential Material Event (as defined in Section 4(e) below), the Investors shall not offer or sell any Registrable Securities or engage in any other transactioninvolving or relating to Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until the Investors receiveswritten notice from the Company that such Potential Material Event either has been disclosed to the public or no longer constitutes a Potential MaterialEvent. If a Potential Material Event shall occur prior to the Filing Deadline, then the Company’s obligation to file such Registration Statement shall bedelayed for not more than fifty (50) calendar days. The Company must, if lawful and practicable, give the Investors notice in writing at least two (2) TradingDays prior to the first day of the blackout period. (e) “Potential Material Event” means any of the following: (i) the possession by the Company of material information not ripe fordisclosure in a registration statement, as determined in good faith by the Chief Executive Officer or the Board of Directors of the Company that disclosure ofsuch information in a Registration Statement would be detrimental to the business and affairs of the Company; or (ii) any material engagement or activity bythe Company which would, in the good faith determination of the Chief Executive Officer or the Board of Directors of the Company, be adversely affected bydisclosure in a registration statement at such time, which determination shall be accompanied by a good faith determination by the Chief Executive Officer orthe Board of Directors of the Company that the applicable Registration Statement would be materially misleading absent the inclusion of such information;provided that, (i) the Company shall not use such right with respect to the Registration Statement for more than an aggregate of 90 days in any 12-monthperiod; and (ii) the number of days the Company is required to keep the Registration Statement effective under Section 4(b)(v) above shall be extended bythe number of days for which the Company shall have used such right. (f) The Investors will cooperate with the Company in all respects in connection with this Agreement, including timely supplying allinformation reasonably requested by the Company (which shall include all information regarding the Investors and proposed manner of sale of theRegistrable Securities required to be disclosed in any Registration Statement) and executing and returning all documents reasonably requested in connectionwith the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting agreement, if the offeringis an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering. Any delay or delayscaused by the Investors, or by any other purchaser of securities of the Company having registration rights similar to those contained herein, by failure tocooperate as required hereunder shall not constitute a breach or default of the Company under this Agreement. 13 (g) Notwithstanding anything in this Agreement to the contrary, if the SEC limits the number of Registrable Securities that may beincluded in the Registration Statement due to limitations on the use of Rule 415 of the Securities Act, then the Company shall so advise all the Investorsholding Registrable Securities which were proposed to be registered in such Registration Statement, and the number of shares of Common Stock that may beincluded in the Registration Statement shall be allocated to the holders of such Registrable Securities so requesting to be registered on a pro rata basis, basedon the number of Registrable Securities then held by all such Investors. 4.2 Registration Expenses. All fees, disbursements and out-of-pocket expenses and costs incurred by the Company in connection with thepreparation and filing of the Registration Statement and in complying with applicable securities and “blue sky” laws (including, without limitation, allattorneys' fees of the Company, registration, qualification, notification and filing fees, printing expenses, escrow fees, blue sky fees and expenses and theexpense of any special audits incident to or required by any such registration) shall be borne by the Company. The Investors shall bear the cost ofunderwriting and/or brokerage discounts, fees and commissions, if any, applicable to the Registrable Securities being registered and the fees and expenses ofits counsel. The Company shall qualify any of the Registrable Securities for sale in such states as an Investor reasonably designates. However, the Companyshall not be required to qualify in any state which will require an escrow or other restriction relating to the Company and/or the sellers, or which will requirethe Company to qualify to do business in such state or require the Company to file therein any general consent to service of process. The Company at itsexpense will supply each Investor with copies of the applicable Registration Statement and the prospectus included therein and other related documents insuch quantities as may be reasonably requested by such Investor. 4.3 Registration Procedures. Whenever the Company is required by any of the provisions of this Agreement to effect the registration of any ofthe Registrable Securities under the Securities Act, the Company shall (except as otherwise provided in this Agreement), as expeditiously as possible, subjectto the assistance and cooperation as reasonably required of the Investors with respect to each Registration Statement: (a) prior to the filing with the SEC of any Registration Statement (including any amendments thereto) and the distribution or delivery ofany prospectus (including any supplements thereto), provide draft copies thereof to the Investor and reflect in such documents all such comments as theInvestor (and its counsel), reasonably may propose respecting the Selling Shareholders and Plan of Distribution sections (or equivalents) and (B) furnish tothe Investor such numbers of copies of a prospectus including a preliminary prospectus or any amendment or supplement to any prospectus, as applicable, inconformity with the requirements of the Securities Act, and such other documents, as the Investor may reasonably request in order to facilitate the public saleor other disposition of the Registrable Securities owned by the Investor; 14 (b) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws ofsuch jurisdictions as the Investor shall reasonably request (subject to the limitations set forth in Section 4.2 above), and do any and all other acts and thingswhich may be necessary or advisable to enable the Investor to consummate the public sale or other disposition in such jurisdiction of the securities owned bythe Investor; (c) cause the Registrable Securities to be quoted or listed on each service on which the Common Stock of the Company is then quoted orlisted; (d) notify the Investor, at any time when a prospectus relating thereto covered by the Registration Statement is required to be deliveredunder the Securities Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in the Registration Statement,as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make thestatements therein not misleading in the light of the circumstances then existing, and the Company shall prepare and file a curative amendment as promptlyas commercially reasonable; (e) as promptly as practicable after becoming aware of such event, notify the Investor (or, in the event of an underwritten offering, themanaging underwriters) of the issuance by the SEC of any stop order or other suspension of the effectiveness of the Registration Statement at the earliestpossible time and take all lawful action to effect the withdrawal, recession or removal of such stop order or other suspension; and (f) provide a transfer agent and registrar for all securities registered pursuant to the Registration Statement and a CUSIP number for allsuch securities. 4.4 Piggyback Registration Rights. In addition to the registration rights set forth in Section 4.1 of this Agreement, if the Registration Statementto be filed pursuant to Section 4.1 is not filed by the Filing Deadline, or otherwise declared effective by the SEC, then the Investors shall also have certain“piggy-back” registration rights as follows: (a) If at any time after the issuance of the Registrable Securities, the Company shall file with the SEC a registration statement under theSecurities Act registering any shares of equity securities (but other than registration relating solely to employee benefit plans on Form S-8 or similar formsthat may be promulgated in the future, or a registration relating solely to a SEC Rule 145 transaction on Form S-4 or similar forms that may be promulgated inthe future), the Company shall give written notice to the Investors prior to such filing. (b) Within twenty (20) calendar days after such notice from the Company, each Investor shall give written notice to the Companywhether or not it desires to have all of its Registrable Securities included in the registration statement. If an Investor fails to give such notice within suchperiod, such Investor shall not have further rights hereunder to have its Registrable Securities registered pursuant to such registration statement. If an Investorgives such notice, then the Company shall include such Investor’s Registrable Securities in the registration statement, at Company’s sole cost and expense,subject to the remaining terms of this Section 4.4. 15 (c) If the registration statement relates to an underwritten offering, and the underwriter shall determine in writing that the total number ofshares of equity securities to be included in the offering, including the Registrable Securities, shall exceed the amount which the underwriter deems to beappropriate for the offering, the number of shares of the Registrable Securities shall be reduced in the same proportion as the remainder of the shares in theoffering and the Investor’s Registrable Securities included in such registration statement will be reduced proportionately, provided, however, that securitiesbeing offered by the Company or by a shareholder pursuant to demand registration rights shall be entitled to priority over the Registrable Securities. AnyRegistrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For this purpose, if othersecurities in the registration statement are derivative securities, their underlying shares shall be included in the computation. The Investor shall enter intosuch agreements as may be reasonably required by the underwriters and the Investor shall pay the underwriters commissions relating to the sale of theirrespective Registrable Securities. (d) The Investors shall have an unlimited number of opportunities to have the Registrable Securities registered under this Section 4.4,provided that the Company shall not be required to register any Registrable Security or keep any Registration Statement effective beyond such periodrequired under Section 4.1(b) of this Agreement. (e) The Investors shall furnish in writing to the Company such information as the Company shall reasonably require in connection with aregistration statement. (f) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section ​4.4 prior to theeffectiveness of such registration, whether or not any Investor has elected to include securities in such registration. 4.5 Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Investor, its officers, directors, employees, partners, legal counsel andaccountants, and each person controlling such Investor within the meaning of Section 15 of the Securities Act, from and against any direct losses, claims,damages, expenses or liabilities (or actions or proceedings in respect thereof) to which such Investor or such other indemnified persons may becomesubject (including in settlement of litigation, whether commenced or threatened) insofar as such losses, claims, damages, expenses or liabilities (or actions orproceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact or omission or allegedomission to state a material fact in the Registration Statement, including all documents filed as a part thereof and information deemed to be a part thereof, onthe effective date thereof, or any amendment or supplements thereto, and the Company will, as incurred, reimburse such Investor, each of its officers,directors, employees, partners, legal counsel and accountants, and each person controlling such Investor, for any legal or other expenses reasonably incurredin investigating, defending or preparing to defend or settling such action, proceeding or claim; provided, however, that the Company shall not be liable inany such case to the extent that such loss, claim, damage, expense or liability (or action or proceeding in respect thereof) arises out of, or is based upon, (i) thefailure of such Investor, or any of its agents, affiliates or persons acting on its behalf, to comply with such Investor's covenants and agreements contained inthis Agreement with respect to the sale of Registrable Securities, (ii) an untrue statement or omission in such Registration Statement in reliance upon and inconformity with written information furnished to the Company by an instrument duly executed by or on behalf of such Investor, or any of its agents, affiliatesor persons acting on its behalf, and stated to be specifically for use in preparation of the Registration Statement and not corrected in a timely manner by suchInvestor in writing or (iii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendmentthereto, that was delivered to such Investor prior to the pertinent sale or sales by such Investor and not delivered by such Investor to the individual or entityto which it made such sale(s) prior to such sale(s). 16 (b) Each Investor, severally and not jointly, agrees to indemnify and hold harmless the Company, its officers, directors, employees,partners, legal counsel and accountants, and each person controlling the Company within the meaning of Section 15 of the Securities Act, from and againstany direct losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which the Company or such other indemnifiedpersons may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedingsin respect thereof) arise out of, or are based upon (i) the failure of such Investor or any of its agents, affiliates or persons acting on its behalf, to comply withthe covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities; or (ii) an untrue statement or alleged untruestatement of a material fact or omission to state a material fact in the Registration Statement in reliance upon and in conformity with written informationfurnished to the Company by an instrument duly executed by or on behalf of such Investor and stated to be specifically for use in preparation of theRegistration Statement; provided, however, that such Investor shall not be liable in any such case for (i) any untrue statement or alleged untrue statement oromission in any prospectus or Registration Statement which statement has been corrected, in writing, by such Investor and delivered to the Company beforethe sale from which such loss occurred; or (ii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, orsupplement or amendment thereto, that was delivered to such Investor prior to the pertinent sale or sales by such Investor and delivered by such Investor tothe individual or entity to which it made such sale(s) prior to such sale(s), and such Investor will, as incurred, reimburse the Company for any legal or otherexpenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. Notwithstanding the foregoing, suchInvestor shall not be liable or required to indemnify the Company or such other indemnified persons in the aggregate for any amount in excess of the netamount received by such Investor from the sale of the Registrable Securities, to which such loss, claim, damage, expense or liability (or action proceeding inrespect thereof) relates. 17 (c) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnityis to be sought against an indemnifying person pursuant to this Section 4.5, such indemnified person shall notify the indemnifying person in writing of suchclaim or of the commencement of such action and, subject to the provisions hereinafter stated, in case any such action shall be brought against anindemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall wish, to assume the defense thereof. Afternotice from the indemnifying person to such indemnified person of the indemnifying person’s election to assume the defense thereof, the indemnifyingperson shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with thedefense thereof; provided, however, that if there exists or shall exist a conflict of interest that would, in the opinion of counsel to the indemnified party, makeit inappropriate under applicable laws or codes of professional responsibility for the same counsel to represent both the indemnified person and suchindemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of suchindemnifying person; provided, further, that the indemnifying person shall not be obligated to assume the expenses of more than one counsel to represent allindemnified persons. In the event of such separate counsel, such counsel shall agree to reasonably cooperate. Notwithstanding anything to the contraryherein, no indemnifying person shall be required to pay any amounts of indemnification or contribution with respect to a settlement of any Proceeding orlosses, claims, damages, expenses or liabilities if such settlement is effected without the consent of the indemnifying person. (d) If the indemnification provided for in this Section 4.5 is unavailable or insufficient to hold harmless an indemnified party undersubsection (a) or (b) above in respect of any direct losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred totherein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages,expenses or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the onehand and the Investors, or its respective agents, affiliates or persons acting on its behalf, on the other in connection with the statements or omissions whichresulted in such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitableconsiderations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact orthe omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or an Investor, or its agents,affiliates or persons acting on its behalf, on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or preventsuch statement or omission. The Company and such Investor agree that it would not be just and equitable if contribution pursuant to this subsection (d) weredetermined by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (d). Theamount paid or payable by an indemnified party as a result of the losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof)referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connectionwith investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of theSecurities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In any event, such Investor shallnot be liable or required to contribute to the Company in the aggregate for any amount in excess of the net amount received by such Investor from the sale ofits Registrable Securities. 18 4.6 Market Standoff. Each Investor hereby agrees that, if so requested by the representative of the lead or managing underwriters of a publicoffering (the “Managing Underwriter”), such Investor shall not, without the prior consent of the Managing Underwriter (i) lend, offer, pledge, sell, contractto sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer ordispose of, directly or indirectly, any Registrable Securities or any other securities of the Company or (ii) enter into any swap or other arrangement thattransfers to another, in whole or in part, any of the economic consequences of ownership of the Registrable Securities, whether any such transaction describedin clause (i) or (ii) above is to be settled by delivery of Registrable Securities or such other securities, in cash or otherwise, during the period specified by theManaging Underwriter (the “Market Standoff Period”), with such period not to exceed 10 days prior to the anticipated effective date of such registrationstatement and 90 days following the effective date of such registration statement. Each Investor further agrees to execute such agreements as may bereasonably requested by the underwriters in the Company’s offering on the same terms of this Section 4.6. ARTICLE V.TERMINATION 5.1 Intentionally omitted. ARTICLE VI.MISCELLANEOUS 6.1 Certificates; Resales. (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Securities other thanpursuant to an effective registration statement or Rule 144(b)(1), to the Company or to an Affiliate of an Investor, the Company may require the transferorthereof to provide to the Company an opinion of counsel selected by the transferor, reasonably acceptable to the Company, the form and substance of whichopinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under theSecurities Act. 19 (b) Certificates evidencing the Securities will contain the following legend, until such time as they are not required: [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEENREGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION ORTHE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDEXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINIONOF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TOTHE COMPANY. [THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESESECURITIES] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. (c) Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 5.1(b) of this Agreement),(i) following a sale of such securities pursuant to an effective registration statement, or (ii) following any sale of such Shares or Warrant Shares pursuant toRule 144 (assuming the transferor was not an Affiliate of the Company), or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(b)(1), or(iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by thestaff of the SEC). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if requiredby the Company’s transfer agent to effect the removal of the legend hereunder in contemplation of a sale of Registrable Securities pursuant to theRegistration Statement. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of theWarrant Shares, such Warrant Shares shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under thisSection 5.1(c), it will, no later than three Trading Days following the delivery by an Investor to the Company or the Company’s transfer agent of a certificaterepresenting Warrant Shares issued with a restrictive legend accompanied by a customary representation letter , deliver or cause to be delivered to suchInvestor a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records orgive instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section 5.1(c) except in the case of an Investoror its permitted transferee becoming an Affiliate. Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent ofthe Company to the Investors by crediting the account of the Investor’s prime broker with the Depository Trust Company System. 20 6.2 Indemnification. (a) Each Investor acknowledges that he, she or it understands the meaning and legal consequences of the representations and warrantiesthat are contained herein and hereby agrees, severally and not jointly, to indemnify, save and hold harmless the Company and its directors, officers,employees and counsel, from and against any and all claims or actions arising out of a breach of any representation, warranty or acknowledgment of suchInvestor contained in this Agreement. Such indemnification shall be deemed to include not only the specific liabilities or obligations with respect to whichsuch indemnity is provided, but also all reasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liabilityor obligation shall have been reduced to judgment. In addition, each Investor’s representations, warranties and indemnification contained herein shallsurvive such Investor’s purchase of the Securities hereunder for a period of one year following the date hereof. (b) The Company acknowledges it understands the meaning and legal consequences of the representations and warranties that arecontained herein and hereby agrees to indemnify, save and hold harmless each Investor and its directors, officers, employees and counsel, from and againstany and all claims or actions arising out of a breach of any representation, warranty or acknowledgment of the Company contained in this Agreement. Suchindemnification shall be deemed to include not only the specific liabilities or obligations with respect to which such indemnity is provided, but also allreasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liability or obligation shall have been reducedto judgment. In addition, the Company’s representations, warranties and indemnification contained herein shall survive the purchase of the Securitieshereunder for a period of one year following the date hereof. 6.3 Abstention from Trading. From the date hereof until the Closing Date, (i) the Investors will not engage in any financial market transactions(whether long, short or other hedging transactions) with respect to the Company’s Common Stock and (ii) the Company will not, and the Company shallcause its directors and officers and each of its and their respective Affiliates to not, engage in any financial market transactions (whether long, short or otherhedging transactions) with respect to the Company’s Common Stock. 21 6.4 Entire Agreement; Amendment. The parties have not made any representations or warranties with respect to the subject matter hereof notset forth herein. This Agreement, together with the Warrants and any other instruments executed simultaneously herewith, constitute the entire agreementbetween the parties with respect to the subject matter hereof. All understandings and agreements heretofore between the parties with respect to the subjectmatter hereof are merged in this Agreement and any such instruments, which alone fully and completely expresses their agreement. This Agreement may notbe changed, modified, extended, terminated or discharged orally, but only by an agreement in writing, which is signed by all of the parties to this Agreement. 6.5 Notices. Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will beeffective on (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Agreement prior to5:30 p.m. (in the time zone of the recipient of such notice) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice orcommunication is delivered via facsimile at the facsimile number set forth in this Agreement on a day that is not a Trading Day or later than 5:30 p.m. (in thetime zone of the recipient of such notice) on any Trading Day, (iii) the 2nd Trading Day following the date of mailing, if sent by U.S. nationally recognizedovernight courier service, including Express Mail, for United States deliveries or (iii) five (5) Trading Days after deposit in the United States mail byregistered or certified mail for United States deliveries. All notices not delivered personally or by facsimile will be sent with postage and other chargesprepaid and properly addressed to the party to be notified at the address set forth below such party’s signature of this Agreement or at such other address assuch party may designate by ten (10) days advance written notice to the other parties hereto. The address for such notices and communications shall be asfollows: If to the Company:Oramed Pharmaceuticals Inc. Hi-Tech Park 2/5 Givat-Ram PO Box 39098 Jerusalem 91390 Israel Attn: Nadav Kidron Facsimile: +972-2-566-0004With a copy to:Goldfarb Seligman & Co., Law OfficesElectra Tower, 98 Yigal Alon StreetTel Aviv 67891, IsraelAttn: Adam M. Klein, Adv.Facsimile: +972-3-608-9855 22 If to an Investor:To the address set forth under such Investor's name on the signature pages hereof. 6.6 Delays or Omissions. Except as otherwise specifically provided for hereunder, no party shall be deemed to have waived any of his or her orits rights hereunder or under any other agreement, instrument or document signed by any of them with respect to the subject matter hereof unless such waiveris in writing and signed by the party waiving said right. Except as otherwise specifically provided for hereunder, no delay or omission by any party inexercising any right with respect to the subject matter hereof shall operate as a waiver of such right or of any such other right. A waiver on any one occasionwith respect to the subject matter hereof shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion. All rights and remedieswith respect to the subject matter hereof, whether evidenced hereby or by any other agreement, instrument or document, will be cumulative, and may beexercised separately or concurrently. 6.7 Severability. If any provision of this Agreement is held to be unenforceable under applicable law, then such provision shall be excludedfrom this Agreement, and the balance of this Agreement shall be interpreted as if such provision was so excluded and shall be enforceable in accordance withits terms. 6.8 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be bindingupon, the successors, assigns, heirs, executors and administrators of the parties hereto. 6.9 Counterparts; Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, andall of which together shall constitute one instrument. Signatures transmitted by facsimile or scanned and transmitted by electronic mail shall be consideredvalid and binding signatures. 6.10 Survival of Warranties. The representations, warranties, covenants and agreements of the Company and the Investors contained in or madepursuant to this Agreement shall survive the execution and delivery of this Agreement and shall in no way be affected by any investigation made by anInvestor or the Company. 6.11 Further Action. The parties agree to execute any and all such other and further instruments and documents, and to take any and all suchfurther actions reasonably required to effectuate this Agreement and the intent and purposes hereof. 6.12 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit oraffect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutualintent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and nopresumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement. 23 6.13 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors andpermitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 6.14 Governing Law; Venue and Waiver of Jury Trial. This Agreement is to be construed in accordance with and governed bythe internal laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction tothe rights and duties of the parties. The Company and the Investors agree that any suit, action, or proceeding arising out of or relating to this Agreementshall be brought to any court of competent jurisdiction sitting in Wilmington, Delaware and that the parties shall submit to the jurisdiction of such court. Theparties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action orproceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANYSUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 6.14 shall for any reason be held invalid or unenforceable, it is thespecific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable. 6.15 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Companyshall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate orinstrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonableindemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associatedwith the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof,the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement. 6.16 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are severaland not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of theobligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken byany Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or createa presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by theTransaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out ofthis Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in anyproceeding for such purpose. 24 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorizedsignatories as of the date first indicated above. ORAMED PHARMACEUTICALS INC. By:/s/ Name: Nadav Kidron Title: Chief Executive Officer [REMAINDER OF PAGE INTENTIONALLY LEFT BLANKSIGNATURE PAGES FOR INVESTORS FOLLOW] 25 IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the date first written above. Investment Amount: ___________________Units x $0.37 per Unit = $_____________ (Each Unit consists of one Share and a Warrant convertible into 0.50 Shares) Name of Investor: _______________________Signature of Authorized Signatory of Investor:_____________________________Name of Authorized Signatory: _______________________________________________Title of Authorized Signatory: _________________________________________________Email Address of Investor: _____________________Phone number of Investor: _______________________ Social Security or Taxpayer Identification Number _______________________________Address for Notice of Investor:___________________________________________________________________________________________________________________Facsimile: ________________ Address for Delivery of Securities for Investor (if not same as above):________________________________________________________________________________________________________________________________________________________________________________ 26 SCHEDULE 1Investor NameNumber of SharesNumber of Warrant Shares (50% ofthe Number of Shares)InvestmentAmount ___________ __________ ___________ $________ 27 SCHEDULE 2WIRE TRANSFER INSTRUCTIONS (US DOLLARS)HSBC BANK USA ABA 021001088452 FIFTH AVENUENEW YORK, N. Y. 10018FAVOR OF ACCOUNT NAME: ORAMED PHARMACEUTICALS INC.ACCOUNT NUMBER: 605154082SWIFT MRMDUS3328Exhibit 10.20 EXECUTION VERSION SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this "Agreement") is dated as of November ___, 2012, among Oramed Pharmaceuticals Inc., a Delawarecorporation (the "Company"), and the investors identified on the signature page hereto (each, an "Investor" and collectively the “Investors”). WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended(the “Securities Act”) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Investor, and each Investor, severally and notjointly, desires to purchase from the Company certain securities of the Company, as more fully described in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration thereceipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: ARTICLE I.DEFINITIONS 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall havethe meanings indicated in this Section 1.1: "Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is undercommon control with a Person, as such terms are used in and construed under Rule 144. “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1. "Closing Date" means the Trading Day when all of the all conditions precedent to (A) the Investors’ obligations to pay the InvestmentAmount and (B) the Company’s obligations to deliver the Securities have been satisfied or waived. "Common Stock" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which suchcommon stock may hereafter be reclassified or changed into.  "Investment Amount" means, with respect to each Investor, the aggregate amount to be paid for Shares and Warrants purchased hereunderas indicated below such Investor's name on the signature page of this Agreement and as set forth on Schedule 1. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction. "Per Unit Purchase Price" means $0.37. "Person" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liabilitycompany, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. "Rule 144" means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, orany similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule. "SEC" means the U.S. Securities and Exchange Commission. "Securities" means the Shares, the Warrants and the Warrant Shares. "Shares" means the shares of Common Stock issued or issuable to the Investors pursuant to this Agreement. "Short Sales" means, without limitation, all "short sales" as defined in Rule 200 of Regulation SHO promulgated under the Exchange Act. "Trading Day" means any day other than Friday, Saturday, Sunday or other day on which commercial banks in The City of New York orIsrael are authorized or required by law to remain closed. "Transaction Documents" means this Agreement, the Warrants and any other documents or agreements executed in connection with thetransactions contemplated hereunder. "Warrants" means the Common Stock purchase warrants in the form of Exhibit A. "Warrant Shares" means the shares of Common Stock issuable upon exercise of the Warrants. 2 ARTICLE II.PURCHASE AND SALE 2.1 Closing. On the Closing Date, subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to eachInvestor, severally and not jointly, and each Investor, severally and not jointly, shall purchase from the Company, the Shares and the Warrants set forthopposite such Investor’s name on Schedule 1. Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at such location asthe parties shall mutually agree. 2.2 Deliveries. (a) On the date hereof, the Company and each of the Investors shall deliver or cause to be delivered to the other, this Agreement, togetherwith all exhibits and schedules attached thereto, duly executed by an authorized representative. (b) On the Closing Date, the Company shall deliver or cause to be delivered to each Investor the following: (i) a certificate evidencing the number of Shares equal to such Investor’s Investment Amount divided by the Per UnitPurchase Price, registered in the name of such Investor as set forth on Schedule 1; and (ii) a warrant, registered in the name of such Investor, pursuant to which such Investor shall have the right to acquire thenumber of shares of Common Stock equal to 50% of the number of Shares issuable to such Investor pursuant to Section 2.2(i) and (iii) a certificate of the Secretary of the Company dated the Closing Date, certifying the incumbency and authority of theofficers or authorized signatories of the Company who execute this Agreement and the other Transaction Documents and the truth, correctness andcompleteness of the following exhibits which shall be attached thereto: (i) a copy of resolutions duly adopted by the Board of Directors of the Company, infull force and effect at the time this Agreement is entered into, authorizing the execution of this Agreement and the other Transaction Documents and theconsummation of the transactions contemplated herein and therein, (ii) a copy of the Certificate of Incorporation of the Company, as amended through theClosing Date, and as filed with and accepted and certified by an appropriate official of the Company’s jurisdiction of incorporation, and (iii) a copy of theBy-Laws of the Company, as amended through the Closing Date. (c) On the Closing Date, each Investor shall deliver or cause to be delivered (by check or wire transfer) the aggregate amount of theInvestor’s Investment Amount in payment for the Shares and Warrants in accordance with the instructions set forth on Schedule 2 hereof. 3 2.3 Closing Conditions. (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions having been met: (i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of theInvestors contained herein; (ii) all obligations, covenants and agreements of the Investors contained herein required to be performed at or prior to theClosing Date shall have been performed; and (iii) the delivery by the Investors of the items set forth in Section 2.2(c) of this Agreement. (b) The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions havingbeen met: (i) the accuracy in all material respects on the Closing Date of the representations and warranties of the Company containedherein;(ii) all obligations, covenants and agreements of the Company contained herein required to be performed at or prior to theClosing Date shall have been performed; (iii) the delivery by the Company of the items set forth in Section 2.2(b) of this Agreement; (iv) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the SEC or theNational Association of Securities Dealers over-the-counter electronic bulletin board (the “OTCBB”). ARTICLE III.REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors as follows on the datehereof and as of the Closing Date: (a) Organization, Good Standing and Qualification of the Company. The Company is a corporation duly organized, validly existing andin good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own and operate its properties andto carry on its business as now being conducted and as proposed to be conducted. The Company is duly qualified to do business as a foreign corporation andis in good standing in each jurisdiction in which failure to so qualify would materially and adversely affect the business, properties, operations, prospects orcondition, financial or otherwise, of the Company. The resolutions adopted by the directors of the Company on August 6, 2012 authorizing the transactionscontemplated by the Transaction Documents have not been amended or modified in any way, have not been rescinded and are in full force and effect on thedate hereof. 4 (b) Corporate Authority; Enforceability. The Company has full right, power and authority to issue and sell the Securities as hereincontemplated and the Company has full power and authority to enter into and perform its obligations under the Transaction Documents. The execution anddelivery of the Transaction Documents and the consummation of the transactions contemplated herein and therein have been duly authorized and approvedby all requisite corporate action, and each of the Transaction Documents are a valid and legally binding obligation of the Company. (c) Conflicts. Neither the authorization, execution and delivery of the Transaction Documents nor the consummation of the transactionsherein and therein contemplated, will (i) conflict with or result in a breach of any of the terms of the Company’s Certificate of Incorporation or By-Laws, (ii)violate any judgment, order, injunction, decree or award of any court or governmental body, having jurisdiction over the Company, against or binding on theCompany or to which its property is subject, (iii) violate any material law or regulation of any jurisdiction which is applicable to the Company, (iv) violate,conflict with or result in the breach or termination of, or constitute a default under, the terms of any material agreement to which the Company is a party,except for such violations or defaults which do not materially and adversely affect the business, assets, operations, prospects or condition, financial orotherwise of the Company, or (v) violate or conflict with the rules and regulations of the OTCBB applicable to the Company. (d) Capitalization. The authorized capital of the Company as of the date hereof consists of 200,000,000 shares of Common Stock, ofwhich there were (i) 82,939,006 issued and outstanding as of the date hereof as fully paid and non-assessable shares; (ii) options and/or warrants to purchase15,118,310 shares of Common Stock; and (iii) employee and directors options to purchase 7,824,000 shares of Common Stock. As of the date hereof, theCompany has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise ofemployee stock options under the Company’s stock option plans and the issuance of shares of Common Stock to employees pursuant to the Company’semployee stock purchase plan outstanding as of the date of the most recently filed periodic report under the Exchange Act. All of the outstanding shares ofcapital stock of the Company are validly issued, fully paid and nonassessable. No further approval or authorization of any stockholder or the Board ofDirectors of the Company is required for the issuance and sale of the Securities. The issuance of the Securities pursuant to the provisions of this Agreementwill not violate any preemptive rights or rights of first refusal granted by the Company that will not be validly waived or complied with, and will be free ofany liens or encumbrances, other than any liens or encumbrances created by or imposed upon the Investors through no action of the Company. There are nostockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, tothe knowledge of the Company, between or among any of the Company’s stockholders. 5 (e) Litigation. There are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or otheragency or regulatory authority now pending, or, to the best knowledge of the Company, threatened against the Company which, if adversely determined,could materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Company. There is no action, suitor proceeding by the Company currently pending or that the Company currently intends to initiate. (f) Compliance with Laws. The Company is not in violation of any statute, law, rule or regulation, or in default with respect to anyjudgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, except for such violations or defaults which donot materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Company. (g) Governmental Consents. Subject to the accuracy of the representations and warranties of the Investors set forth herein, no registrationor filing with, or consent or approval of or other action by, any Federal, state or other government agency under laws and regulations thereof as now in effectis or will be necessary for the valid execution, delivery and performance by the Company of the Transaction Documents, and the issuance, sale and deliveryof the Securities, other than the filing of a Form D with the SEC and the filings required by state securities law. (h) Regulatory Matters. The clinical, pre-clinical and other trials, studies and tests conducted by or on behalf of or sponsored by theCompany relating to its pharmaceutical product candidates were and, if still pending, are being conducted in all material respects in accordance with medicaland scientific protocols and research procedures that the Company reasonably believes are appropriate. The descriptions of the results of such trials, studiesand tests as set forth in the SEC Documents (as defined in Section 3(i) of this Agreement), provided to the Investors are accurate in all material respects andfairly present the data derived from such trials, studies and tests. All clinical trials conducted by the Company have been in compliance in all materialrespects with applicable laws and regulations. The Company has not received any warning letters or written correspondence from the FDA and/or any othergovernmental entity or agency requiring the termination, suspension or modification of any clinical, pre-clinical and other trials, studies or tests that arematerial to the Company. None of the clinical trials that the Company is currently conducting or sponsoring is subject to any temporary or permanentclinical hold by the FDA or any other governmental entity or agency, and the Company has no reason to believe that such clinical trials will be subject toany such action. The Company is planning to file an Investigational New Drug Application with the United States Food and Drug Administration (“FDA”)for a phase II clinical trial it intends to conduct with respect to its orally ingestible insulin capsule (ORMD0801) (the “IND Application”). The INDApplication will be in material compliance with applicable laws and rules and regulations when filed. 6 (i) SEC Documents; Financial Statements. For the past twelve (12) months, the Company has filed all reports, schedules, forms,statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing filedprior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by referencetherein being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Investors or their respective representatives true, correctand complete copies of each of the SEC Documents not available on the Electronic Data Gathering, Analysis, and Retrieval system of the SEC (“EDGAR”)that have been requested by an Investor. As of their respective dates, the SEC Documents complied as to form in all material respects with the requirements ofthe Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, atthe time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein ornecessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates,the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accountingrequirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have beenprepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may beotherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may excludefootnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereofand the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end auditadjustments). The Company has no liabilities or obligations required to be disclosed in the SEC Documents that are not so disclosed in the SEC Documents,other than those incurred in the ordinary course of the Company’s business. (j) Sarbanes-Oxley; Internal Accounting Controls. Each SEC Document containing financial statements that has been filed with orsubmitted to the SEC was accompanied by the certifications required to be filed or submitted by the Company’s chief executive officer and chief financialofficer pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); at the time of filing or submission of each such certification, suchcertification was true and accurate and complied with the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder; such certificationscontain no qualifications or exceptions to the matters certified therein and have not been modified or withdrawn; and neither the Company nor any of itsofficers has received notice from any governmental entity questioning or challenging the accuracy, completeness, form or manner of filing or submission ofsuch certification; 7 (k) Absence of Changes. The Common Stock is quoted for trading on the OTCBB. No order ceasing, halting or suspending trading inthe Common Stock nor prohibiting the sale of the Common Stock has been issued to and is outstanding against the Company or its directors, officers orpromoters, and, to the best of the Company’s knowledge, no investigations or proceedings for such purposes are pending or threatened. The Company hasnot taken any action which would be reasonably expected to result in the delisting or suspension of quotation of the Common Stock on or from the OTCBBand the Company has complied in all material respects with the rules and regulations of eligibility on the OTCBB. The Company has not taken any steps toseek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiateinvoluntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead any creditor or creditors to do so. Based on thefinancial condition of the Company as of the date hereof, after giving effect to the receipt by the Company of the proceeds from the transactionscontemplated hereby, the Company reasonably believes that (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to bepaid on or in respect of the Company’s existing debts and other liabilities as they mature; (ii) the Company’s assets do not constitute unreasonably smallcapital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capitalrequirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow ofthe Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of thecash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend toincur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of itsdebt). The SEC Documents set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or forwhich the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowedmoney or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingentobligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto),except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) thepresent value of any lease payments due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is indefault with respect to any Indebtedness. (l) Patents and Trademarks. The Company has rights to use all patents, patent applications, trademarks, trademark applications, servicemarks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use inconnection with its business as described in the SEC Documents and which the failure to so have would have a material adverse effect on the results ofoperations, assets, business, prospects, or condition, financial or otherwise, of the Company (collectively, the “Intellectual Property Rights”). The Companyhas not received any notice (written or otherwise) that the Intellectual Property Rights used by the Company violate or infringe upon the rights of any otherperson or entity. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by anotherperson or entity of any of the Intellectual Property Rights. The Company has taken reasonable security measures to protect the secrecy, confidentiality andvalue of all of its Intellectual Property Rights. 8 (m) Offering. Assuming the accuracy of the representations and warranties of the Investors contained in Section 3.2 of this Agreement,the offer, issue, and sale of the Securities are exempt from the registration and prospectus delivery requirements of the Securities Act and the registration orqualification requirements of all applicable state securities laws. Neither the Company nor any authorized agent acting on its behalf will knowingly take anyaction hereafter that would cause the loss of such exemptions. (n) Acknowledgment. The Company acknowledges and agrees that each Investor is acting solely in the capacity of an arm’s lengthpurchaser with respect to the Securities and the transactions contemplated hereby and thereby and that no Investor is (i) an officer of the Company, (ii) anAffiliate of the Company or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined forpurposes of Rule 13d-3 of the Exchange Act), except Regals Fund LP. The Company further acknowledges that no Investor is acting as a financial advisor orfiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by anyInvestor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to suchInvestor’s purchase of the Securities. The Company further represents to each Investor that the Company’s decision to enter into the Transaction Documentsand issue the Securities has been based solely on the independent evaluation by the Company and its representatives. (o) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Affiliates, nor any person acting on its or theirbehalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection withthe offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’commissions (other than for persons engaged by any Investor or its investment advisor) relating to or arising out of the transactions contemplated hereby. (p) No Integrated Offering. Neither the Company nor any person acting on its behalf has, directly or indirectly, made any offers or salesof any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the Securities Actor cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholderapproval provisions, which would undermine the private placement exemption of this offering or cause it to require shareholder approval, including, withoutlimitation, under the rules and regulations of the OTCBB or any other exchange or automated quotation system on which any of the securities of theCompany are listed or designated. 9 (q) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of anyof the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to anyperson any compensation for soliciting another to purchase any other securities of the Company. (r) Disclosure. All disclosure provided to the Investors with regard to the representations and warranties contained in this Section 3.1regarding the Company, its business and the transactions contemplated hereby, furnished in writing by the Company is true and correct in all materialrespects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,in the light of the circumstances under which they were made, together with the disclosure in the SEC Documents, not misleading. (s) Investor Reliance. The Company expressly acknowledges and agrees that the Investors are relying upon the Company’srepresentations contained in this Agreement. 3.2 Representations and Warranties of the Investor. Each Investor, severally and not jointly, hereby represents and warrants to the Company asfollows: (a) Authorization; Enforcement. Such Investor represents and warrants that it is an entity duly organized, validly existing and in goodstanding under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummatethe transactions contemplated by the applicable this Agreement and otherwise to carry out its obligations hereunder. This Agreement has been duly executedby such Investor, and when delivered by such Investor in accordance with terms hereof, will constitute the valid and legally binding obligation of suchInvestor, enforceable against it in accordance with its terms. (b) Investment Intent. Such Investor is acquiring the Securities as principal for its own account for investment purposes only and notwith a view to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Investor's right at all times to sell orotherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Such Investor is acquiring theSecurities hereunder in the ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with anyPerson to distribute any of the Securities. 10 (c) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, and on each date on which itexercises the Warrants it will be, an "accredited investor" as defined in Rule 501(a) under the Securities Act. Such Investor is not required to be registered as abroker-dealer under Section 15 of the Securities Exchange Act of 1934, as amended. (d) General Solicitation. Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or othercommunication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at anyseminar or any other general solicitation or general advertisement. (e) Access to Information. Such Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it hasdeemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and themerits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business,properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information thatthe Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to theinvestment. Such Investor understands that a purchase of the Securities is a speculative investment involving a high degree of risk. Such Investor is awarethat there is no guarantee that such Investor will realize any gain from this investment, and that such Investor could lose the total amount of this investment.Such Investor acknowledges that it has received no representations or warranties from the Company or its employees or agents in making this investmentdecision other than as set forth in this Agreement. (f) Independent Investment Decision. Such Investor has independently evaluated the merits of its decision to purchase Securitiespursuant to this Agreement, such decision has been independently made by such Investor and such Investor confirms that it has only relied on the advice ofits own business and/or legal counsel and not on the advice of any other Investor’s business and/or legal counsel in making such decision. (g) Short Sales. Such Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding withsuch Investor, executed any Short Sales in the securities of the Company since the date that such Investor was first contacted regarding an investment in theCompany. (h) Limitations on Transfers. Such Investor acknowledges that the Securities must be held indefinitely unless subsequently registeredunder the Securities Act or unless an exemption from such registration is available. Such Investor is aware of the provisions of Rule 144 promulgated underthe Securities Act which permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, which mayinclude, among other things, the existence of a public market for the securities, the availability of certain current public information about the Company, theresale occurring not less than six months after a party has purchased and paid for the security to be sold, the sale being effected through a “broker’stransaction” or in transactions directly with a “market maker” and the number of securities being sold during any three month period not exceeding specifiedlimitations. 11 (i) Company Reliance. Such Investor expressly acknowledges and agrees that the Company is relying upon such Investor’srepresentations contained in this Agreement. ARTICLE IV.REGISTRATION RIGHTS 4.1 Registration Statement. (a) The Company shall prepare and file with the SEC within one hundred and twenty (120) calendar days after the Closing Date (the“Filing Deadline”) a registration statement (on Form S-1, or other appropriate registration statement form) under the Securities Act (the “RegistrationStatement”), at the sole expense of the Company (except as specifically provided in Section ​4.2 of this Agreement) so as to permit a public offering andresale of the Shares and the Warrant Shares (the “Registrable Securities”) in the United States under the Securities Act by the Investors as sellingstockholders. The Company shall use its reasonable best efforts to cause such Registration Statement to become effective as soon as possible thereafter, andwithin the earlier of: (i) one hundred and eighty (180) calendar days after the Closing Date (or two hundred and ten (210) calendar days in the event the SECshall elect to review the Registration Statement), or (ii) five (5) calendar days after the SEC clearance to request acceleration of effectiveness (the“Effectiveness Deadline”). The Company will notify the Investors of the effectiveness of the Registration Statement (the “Effective Date”) within five (5)Trading Days. (b) The Company will maintain the Registration Statement filed under Section 4 of this Agreement effective under the Securities Actuntil the earlier of the date (i) all of the Registrable Securities have been sold pursuant to such Registration Statement, (ii) the Investors receive an opinion ofcounsel to the Company, which opinion and counsel shall be reasonably acceptable to the Investors, that the Registrable Securities may be sold under theprovisions of Rule 144 without limitation as to volume, (iii) all Registrable Securities (or all Warrants, in the case of Warrants not then exercised) have beenotherwise transferred to persons who may trade the Registrable Securities without restriction under the Securities Act, and the Company has delivered a newcertificate or other evidence of ownership for such Registrable Securities not bearing a restrictive legend, (iv) all Registrable Securities may be sold withoutany time, volume or manner limitations pursuant to Rule 144 or any similar provision then in effect under the Securities Act in the opinion of counsel to theCompany, which counsel shall be reasonably acceptable to the Investors, or (v) one (1) year from the Effective Date. 12 (c) Prior to the Effective Date, the rights to cause the Company to register Registrable Securities granted to the Investors by the Companyunder Section 4 of this Agreement may be assigned in full by an Investor in connection with a transfer by such Investor of not less than 1,000,000 shares ofCommon Stock in a single transaction to a single transferee purchasing as principal, provided, however, that (i) such transfer is otherwise effected inaccordance with applicable securities laws; (ii) such Investor gives prior written notice to the Company; and (iii) such transferee agrees to comply with theterms and provisions of this Agreement in a form reasonably satisfactory to the Company, and such transfer is otherwise in compliance with this Agreement. (d) If at any time or from time to time after the Effective Date, the Company notifies the Investors in writing of the existence of aPotential Material Event (as defined in Section 4(e) below), the Investors shall not offer or sell any Registrable Securities or engage in any other transactioninvolving or relating to Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until the Investors receiveswritten notice from the Company that such Potential Material Event either has been disclosed to the public or no longer constitutes a Potential MaterialEvent. If a Potential Material Event shall occur prior to the Filing Deadline, then the Company’s obligation to file such Registration Statement shall bedelayed without penalty for not more than fifty (50) calendar days. The Company must, if lawful and practicable, give the Investors notice in writing at leasttwo (2) Trading Days prior to the first day of the blackout period. (e) “Potential Material Event” means any of the following: (i) the possession by the Company of material information not ripe fordisclosure in a registration statement, as determined in good faith by the Chief Executive Officer or the Board of Directors of the Company that disclosure ofsuch information in a Registration Statement would be detrimental to the business and affairs of the Company; or (ii) any material engagement or activity bythe Company which would, in the good faith determination of the Chief Executive Officer or the Board of Directors of the Company, be adversely affected bydisclosure in a registration statement at such time, which determination shall be accompanied by a good faith determination by the Chief Executive Officer orthe Board of Directors of the Company that the applicable Registration Statement would be materially misleading absent the inclusion of such information;provided that, (i) the Company shall not use such right with respect to the Registration Statement for more than an aggregate of 90 days in any 12-monthperiod; and (ii) the number of days the Company is required to keep the Registration Statement effective under Section 4(b)(v) above shall be extended bythe number of days for which the Company shall have used such right. (f) The Investors will cooperate with the Company in all respects in connection with this Agreement, including timely supplying allinformation reasonably requested by the Company (which shall include all information regarding the Investors and proposed manner of sale of theRegistrable Securities required to be disclosed in any Registration Statement) and executing and returning all documents reasonably requested in connectionwith the registration and sale of the Registrable Securities and entering into and performing its obligations under any underwriting agreement, if the offeringis an underwritten offering, in usual and customary form, with the managing underwriter or underwriters of such underwritten offering. Any delay or delayscaused by the Investors, or by any other purchaser of securities of the Company having registration rights similar to those contained herein, by failure tocooperate as required hereunder shall not constitute a breach or default of the Company under this Agreement. 13 (g) The Company acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of Section 4 ofthis Agreement and that such failure would not be adequately compensable in damages. Therefore, the Company agrees that in the event that theRegistration Statement to be filed by the Company pursuant to paragraph 4(a) above (i) is not filed with the SEC on or before the Filing Deadline, or (ii) suchRegistration Statement is not declared effective by the SEC on or before the Effectiveness Deadline, then the Company shall (x) for the period commencingon the seventy sixth (76th) day after the Closing Date and on the 30th day thereafter until the date that the Registration Statement is filed and (y) for theperiod commencing on the one hundred twenty first (121st) day after the Closing Date (or the one hundred fifty first (151st) day after the Closing Date in theevent the SEC shall elect to review the Registration Statement) and on the 30th day thereafter until the date that the Registration Statement is declaredeffective by the SEC, the Company will pay to each Investor as liquidated damages and not as a penalty for such failure (the “Liquidated Damages”) either:(A) a cash payment equal to a certain percentage (the "Percentage") of such Investor’s Investment Amount or (B) at the sole election of such Investor, sharesof Common Stock equal to the Percentage of the number of Shares purchased by such Investor pursuant to this Agreement. The Percentage shall initiallyequal 0.5% and, after the first three payments of the Liquidated Damages, to the extent that the Liquidated Damages are still required to be paid, thePercentage shall increase to 1.0%. In no event shall the Liquidated Damages exceed, in the aggregate, 10% of such Investor’s Investment Amount. On eitherthe Filing Deadline, if the Registration Statement has not be filed, or the Effectiveness Deadline, if the Registration Statement has not be declared effective,the Company will provide written notice of failure to the Investor and promptly pay the Investor the Liquidated Damages The Company and the Investorsagree that the agreements contained in Section 4 of this Agreement may be specifically enforced, and the Liquidated Damages are in addition to any otherrights or remedies the Investors may have at law or in equity. In addition, the Company shall also reimburse the Investors for any and all reasonable legal feesand expenses incurred by it in enforcing their rights pursuant to Section 4 of this Agreement, regardless of whether any litigation wascommenced. Notwithstanding anything in this Agreement to the contrary, (i) if the SEC limits the number of Registrable Securities that may be included inthe Registration Statement due to limitations on the use of Rule 415 of the Securities Act, then the Company shall so advise all the Investors holdingRegistrable Securities which were proposed to be registered in such Registration Statement, and the number of shares of Common Stock that may be includedin the Registration Statement shall be allocated to the holders of such Registrable Securities so requesting to be registered on a pro rata basis, based on thenumber of Registrable Securities then held by all such Investors and no Liquidated Damages shall be paid in respect of the Registrable Securities excludedfrom the Registration Statement pursuant thereto, (ii) no Investor shall be entitled to receive any Liquidated Damages with respect to any period duringwhich such Investor is permitted to sell all its Registrable Securities without any time, volume or manner limitations pursuant to Rule 144 or any similarprovision then in effect under the Securities Act in the opinion of counsel to the Company, which counsel shall be reasonably acceptable to the Investors and(iii) no Liquidated Damages shall be payable in respect of any delay in the effectiveness of the Registration Statement caused by the existence of anti-dilution adjustment provisions in the Warrants. 14 4.2 Registration Expenses. All fees, disbursements and out-of-pocket expenses and costs incurred by the Company in connection with thepreparation and filing of the Registration Statement and in complying with applicable securities and “blue sky” laws (including, without limitation, allattorneys' fees of the Company, registration, qualification, notification and filing fees, printing expenses, escrow fees, blue sky fees and expenses and theexpense of any special audits incident to or required by any such registration) shall be borne by the Company. The Investors shall bear the cost ofunderwriting and/or brokerage discounts, fees and commissions, if any, applicable to the Registrable Securities being registered and the fees and expenses ofits counsel. The Company shall qualify any of the Registrable Securities for sale in such states as an Investor reasonably designates. However, the Companyshall not be required to qualify in any state which will require an escrow or other restriction relating to the Company and/or the sellers, or which will requirethe Company to qualify to do business in such state or require the Company to file therein any general consent to service of process. The Company at itsexpense will supply each Investor with copies of the applicable Registration Statement and the prospectus included therein and other related documents insuch quantities as may be reasonably requested by such Investor. 4.3 Registration Procedures. Whenever the Company is required by any of the provisions of this Agreement to effect the registration of any ofthe Registrable Securities under the Securities Act, the Company shall (except as otherwise provided in this Agreement), as expeditiously as possible, subjectto the assistance and cooperation as reasonably required of the Investors with respect to each Registration Statement: (a) prior to the filing with the SEC of any Registration Statement (including any amendments thereto) and the distribution or delivery ofany prospectus (including any supplements thereto), provide draft copies thereof to the Investor and reflect in such documents all such comments as theInvestor (and its counsel), reasonably may propose respecting the Selling Shareholders and Plan of Distribution sections (or equivalents) and (B) furnish tothe Investor such numbers of copies of a prospectus including a preliminary prospectus or any amendment or supplement to any prospectus, as applicable, inconformity with the requirements of the Securities Act, and such other documents, as the Investor may reasonably request in order to facilitate the public saleor other disposition of the Registrable Securities owned by the Investor; 15 (b) register and qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws ofsuch jurisdictions as the Investor shall reasonably request (subject to the limitations set forth in Section 4.2 above), and do any and all other acts and thingswhich may be necessary or advisable to enable the Investor to consummate the public sale or other disposition in such jurisdiction of the securities owned bythe Investor; (c) cause the Registrable Securities to be quoted or listed on each service on which the Common Stock of the Company is then quoted orlisted; (d) notify the Investor, at any time when a prospectus relating thereto covered by the Registration Statement is required to be deliveredunder the Securities Act, of the happening of any event of which it has knowledge as a result of which the prospectus included in the Registration Statement,as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make thestatements therein not misleading in the light of the circumstances then existing, and the Company shall prepare and file a curative amendment as promptlyas commercially reasonable; (e) as promptly as practicable after becoming aware of such event, notify the Investor (or, in the event of an underwritten offering, themanaging underwriters) of the issuance by the SEC of any stop order or other suspension of the effectiveness of the Registration Statement at the earliestpossible time and take all lawful action to effect the withdrawal, recession or removal of such stop order or other suspension; and (f) provide a transfer agent and registrar for all securities registered pursuant to the Registration Statement and a CUSIP number for allsuch securities. 4.4 Piggyback Registration Rights. In addition to the registration rights set forth in Section 4.1 of this Agreement, if the Registration Statementto be filed pursuant to Section 4.1 is not filed by the Filing Deadline, or otherwise declared effective by the SEC, then the Investors shall also have certain“piggy-back” registration rights as follows: (a) If at any time after the issuance of the Registrable Securities, the Company shall file with the SEC a registration statement under theSecurities Act registering any shares of equity securities (but other than registration relating solely to employee benefit plans on Form S-8 or similar formsthat may be promulgated in the future, or a registration relating solely to a SEC Rule 145 transaction on Form S-4 or similar forms that may be promulgated inthe future), the Company shall give written notice to the Investors prior to such filing. 16 (b) Within twenty (20) calendar days after such notice from the Company, each Investor shall give written notice to the Companywhether or not it desires to have all of its Registrable Securities included in the registration statement. If an Investor fails to give such notice within suchperiod, such Investor shall not have further rights hereunder to have its Registrable Securities registered pursuant to such registration statement. If an Investorgives such notice, then the Company shall include such Investor’s Registrable Securities in the registration statement, at Company’s sole cost and expense,subject to the remaining terms of this Section 4.4. (c) If the registration statement relates to an underwritten offering, and the underwriter shall determine in writing that the total number ofshares of equity securities to be included in the offering, including the Registrable Securities, shall exceed the amount which the underwriter deems to beappropriate for the offering, the number of shares of the Registrable Securities shall be reduced in the same proportion as the remainder of the shares in theoffering and the Investor’s Registrable Securities included in such registration statement will be reduced proportionately, provided, however, that securitiesbeing offered by the Company or by a shareholder pursuant to demand registration rights shall be entitled to priority over the Registrable Securities. AnyRegistrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For this purpose, if othersecurities in the registration statement are derivative securities, their underlying shares shall be included in the computation. The Investor shall enter intosuch agreements as may be reasonably required by the underwriters and the Investor shall pay the underwriters commissions relating to the sale of theirrespective Registrable Securities. (d) The Investors shall have an unlimited number of opportunities to have the Registrable Securities registered under this Section 4.4,provided that the Company shall not be required to register any Registrable Security or keep any Registration Statement effective beyond such periodrequired under Section 4.1(b) of this Agreement. (e) The Investors shall furnish in writing to the Company such information as the Company shall reasonably require in connection with aregistration statement. (f) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section ​4.4 prior to theeffectiveness of such registration, whether or not any Investor has elected to include securities in such registration. 17 4.5 Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Investor, its officers, directors, employees, partners, legal counsel andaccountants, and each person controlling such Investor within the meaning of Section 15 of the Securities Act, from and against any direct losses, claims,damages, expenses or liabilities (or actions or proceedings in respect thereof) to which such Investor or such other indemnified persons may becomesubject (including in settlement of litigation, whether commenced or threatened) insofar as such losses, claims, damages, expenses or liabilities (or actions orproceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact or omission or allegedomission to state a material fact in the Registration Statement, including all documents filed as a part thereof and information deemed to be a part thereof, onthe effective date thereof, or any amendment or supplements thereto, and the Company will, as incurred, reimburse such Investor, each of its officers,directors, employees, partners, legal counsel and accountants, and each person controlling such Investor, for any legal or other expenses reasonably incurredin investigating, defending or preparing to defend or settling such action, proceeding or claim; provided, however, that the Company shall not be liable inany such case to the extent that such loss, claim, damage, expense or liability (or action or proceeding in respect thereof) arises out of, or is based upon, (i) thefailure of such Investor, or any of its agents, affiliates or persons acting on its behalf, to comply with such Investor's covenants and agreements contained inthis Agreement with respect to the sale of Registrable Securities, (ii) an untrue statement or omission in such Registration Statement in reliance upon and inconformity with written information furnished to the Company by an instrument duly executed by or on behalf of such Investor, or any of its agents, affiliatesor persons acting on its behalf, and stated to be specifically for use in preparation of the Registration Statement and not corrected in a timely manner by suchInvestor in writing or (iii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, or supplement or amendmentthereto, that was delivered to such Investor prior to the pertinent sale or sales by such Investor and not delivered by such Investor to the individual or entityto which it made such sale(s) prior to such sale(s). (b) Each Investor, severally and not jointly, agrees to indemnify and hold harmless the Company, its officers, directors, employees,partners, legal counsel and accountants, and each person controlling the Company within the meaning of Section 15 of the Securities Act, from and againstany direct losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) to which the Company or such other indemnifiedpersons may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedingsin respect thereof) arise out of, or are based upon (i) the failure of such Investor or any of its agents, affiliates or persons acting on its behalf, to comply withthe covenants and agreements contained in this Agreement with respect to the sale of Registrable Securities; or (ii) an untrue statement or alleged untruestatement of a material fact or omission to state a material fact in the Registration Statement in reliance upon and in conformity with written informationfurnished to the Company by an instrument duly executed by or on behalf of such Investor and stated to be specifically for use in preparation of theRegistration Statement; provided, however, that such Investor shall not be liable in any such case for (i) any untrue statement or alleged untrue statement oromission in any prospectus or Registration Statement which statement has been corrected, in writing, by such Investor and delivered to the Company beforethe sale from which such loss occurred; or (ii) an untrue statement or omission in any prospectus that is corrected in any subsequent prospectus, orsupplement or amendment thereto, that was delivered to such Investor prior to the pertinent sale or sales by such Investor and delivered by such Investor tothe individual or entity to which it made such sale(s) prior to such sale(s), and such Investor will, as incurred, reimburse the Company for any legal or otherexpenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. Notwithstanding the foregoing, suchInvestor shall not be liable or required to indemnify the Company or such other indemnified persons in the aggregate for any amount in excess of the netamount received by such Investor from the sale of the Registrable Securities, to which such loss, claim, damage, expense or liability (or action proceeding inrespect thereof) relates. 18 (c) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnityis to be sought against an indemnifying person pursuant to this Section 4.5, such indemnified person shall notify the indemnifying person in writing of suchclaim or of the commencement of such action and, subject to the provisions hereinafter stated, in case any such action shall be brought against anindemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall wish, to assume the defense thereof. Afternotice from the indemnifying person to such indemnified person of the indemnifying person’s election to assume the defense thereof, the indemnifyingperson shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with thedefense thereof; provided, however, that if there exists or shall exist a conflict of interest that would, in the opinion of counsel to the indemnified party, makeit inappropriate under applicable laws or codes of professional responsibility for the same counsel to represent both the indemnified person and suchindemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of suchindemnifying person; provided, further, that the indemnifying person shall not be obligated to assume the expenses of more than one counsel to represent allindemnified persons. In the event of such separate counsel, such counsel shall agree to reasonably cooperate. Notwithstanding anything to the contraryherein, no indemnifying person shall be required to pay any amounts of indemnification or contribution with respect to a settlement of any Proceeding orlosses, claims, damages, expenses or liabilities if such settlement is effected without the consent of the indemnifying person. (d) If the indemnification provided for in this Section 4.5 is unavailable or insufficient to hold harmless an indemnified party undersubsection (a) or (b) above in respect of any direct losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) referred totherein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages,expenses or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the onehand and the Investors, or its respective agents, affiliates or persons acting on its behalf, on the other in connection with the statements or omissions whichresulted in such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitableconsiderations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact orthe omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or an Investor, or its agents,affiliates or persons acting on its behalf, on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or preventsuch statement or omission. The Company and such Investor agree that it would not be just and equitable if contribution pursuant to this subsection (d) weredetermined by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (d). Theamount paid or payable by an indemnified party as a result of the losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof)referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connectionwith investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of theSecurities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. In any event, such Investor shallnot be liable or required to contribute to the Company in the aggregate for any amount in excess of the net amount received by such Investor from the sale ofits Registrable Securities. 19 4.6 Market Standoff. Each Investor hereby agrees that, if so requested by the representative of the lead or managing underwriters of a publicoffering (the “Managing Underwriter”), such Investor shall not, without the prior consent of the Managing Underwriter (i) lend, offer, pledge, sell, contractto sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer ordispose of, directly or indirectly, any Registrable Securities or any other securities of the Company or (ii) enter into any swap or other arrangement thattransfers to another, in whole or in part, any of the economic consequences of ownership of the Registrable Securities, whether any such transaction describedin clause (i) or (ii) above is to be settled by delivery of Registrable Securities or such other securities, in cash or otherwise, during the period specified by theManaging Underwriter (the “Market Standoff Period”), with such period not to exceed 10 days prior to the anticipated effective date of such registrationstatement and 90 days following the effective date of such registration statement. Each Investor further agrees to execute such agreements as may bereasonably requested by the underwriters in the Company’s offering on the same terms of this Section 4.6. ARTICLE V.TERMINATION 5.1 Termination. If the conditions to the Investors’ obligations at Closing have not been satisfied or waived on before November 15, 2012,then this Agreement may be terminated at any time thereafter upon written notice to the Company by Investors representing at least a majority in interest ofthe Shares to be purchased hereunder. The provisions of Sections 6.2 and 6.5 to 6.17 shall survive the termination of this Agreement. 20 ARTICLE VI.MISCELLANEOUS 6.1 Certificates; Resales. (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Securities other thanpursuant to an effective registration statement or Rule 144(b)(1), to the Company or to an Affiliate of an Investor, the Company may require the transferorthereof to provide to the Company an opinion of counsel selected by the transferor, reasonably acceptable to the Company, the form and substance of whichopinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under theSecurities Act. (b) Certificates evidencing the Securities will contain the following legend, until such time as they are not required: [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEENREGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION ORTHE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDEXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINIONOF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TOTHE COMPANY. [THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESESECURITIES] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. (c) Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 5.1(b) of this Agreement),(i) following a sale of such securities pursuant to an effective registration statement, or (ii) following any sale of such Shares or Warrant Shares pursuant toRule 144 (assuming the transferor was not an Affiliate of the Company), or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(b)(1), or(iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by thestaff of the SEC). The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if requiredby the Company’s transfer agent to effect the removal of the legend hereunder in contemplation of a sale of Registrable Securities pursuant to theRegistration Statement. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of theWarrant Shares, such Warrant Shares shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under thisSection 5.1(c), it will, no later than three Trading Days following the delivery by an Investor to the Company or the Company’s transfer agent of a certificaterepresenting Warrant Shares issued with a restrictive legend accompanied by a customary representation letter , deliver or cause to be delivered to suchInvestor a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records orgive instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section 5.1(c) except in the case of an Investoror its permitted transferee becoming an Affiliate. Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent ofthe Company to the Investors by crediting the account of the Investor’s prime broker with the Depository Trust Company System. 21 6.2 Indemnification. (a) Each Investor acknowledges that he, she or it understands the meaning and legal consequences of the representations and warrantiesthat are contained herein and hereby agrees, severally and not jointly, to indemnify, save and hold harmless the Company and its directors, officers,employees and counsel, from and against any and all claims or actions arising out of a breach of any representation, warranty or acknowledgment of suchInvestor contained in this Agreement. Such indemnification shall be deemed to include not only the specific liabilities or obligations with respect to whichsuch indemnity is provided, but also all reasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liabilityor obligation shall have been reduced to judgment. In addition, each Investor’s representations, warranties and indemnification contained herein shallsurvive such Investor’s purchase of the Securities hereunder for a period of one year following the date hereof. (b) The Company acknowledges it understands the meaning and legal consequences of the representations and warranties that arecontained herein and hereby agrees to indemnify, save and hold harmless each Investor and its directors, officers, employees and counsel, from and againstany and all claims or actions arising out of a breach of any representation, warranty or acknowledgment of the Company contained in this Agreement. Suchindemnification shall be deemed to include not only the specific liabilities or obligations with respect to which such indemnity is provided, but also allreasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liability or obligation shall have been reducedto judgment. In addition, the Company’s representations, warranties and indemnification contained herein shall survive the purchase of the Securitieshereunder for a period of one year following the date hereof. 22 6.3 Preemptive Right. (a) Following the Closing Date, for so long as any Investor holds shares of Common Stock constituting 5% or more of the outstandingshares of Common Stock, if the Company proposes to issue Additional Securities (other than upon the exercise or conversion of options, warrants or otherrights to purchase Common Stock), it shall give such Investor a written notice thereof of its intention to do so (the “Rights Notice”), describing theAdditional Securities, the price and the general terms upon which the Company proposes to issue them. Each Investor shall have fourteen (14) calendar daysfrom delivery of the Rights Notice to agree to purchase all or any part of its pro-rata portion of such Additional Securities, which pro-rata portion is equal tothe ratio of (i) the number of outstanding shares of Common Stock which such Investor holds immediately prior to the issuance of such Additional Securitiesto (ii) the total number of outstanding shares of Common Stock prior to issuance of the Additional Securities, for the price and upon the general termsspecified in the Rights Notice, by giving written notice to the Company setting forth the quantity of Additional Securities which such Investor wishes topurchase. (b) If the Investors fail to exercise in full their preemptive right within the period specified in Section 5.3(a), then the Company shallhave sixty (60) Days after delivery of the Rights Notice to sell the unsold Additional Securities at a price and upon general terms no more favorable to thepurchasers thereof than specified in the Rights Notice. If the Company has not sold the Additional Securities within said sixty (60) Day period, the Companyshall not thereafter issue or sell any Additional Securities without first offering such securities to the Investors in the manner provided above. (c) The preemptive right granted to the Investors hereunder is personal and is not transferable to any other Person. (d) "Additional Securities" means any shares of Common Stock or options, warrants or other rights to purchase shares of Common Stock,other than (i) securities issued in any investment round raising less than $500,000 at the closing thereof, (ii) securities issued to directors, officers oremployees of the Company or a wholly owned subsidiary thereof in their capacity as such in the ordinary course pursuant to an incentive plan approved bythe Board of Directors of the Company and (iii) securities having a market value of up to $1,000,000 in the aggregate issued in bona fide, arm's-lengthtransactions to service providers of the Company or a wholly owned subsidiary thereof in consideration for services provided. 6.4 Abstention from Trading. From the date hereof until the Closing Date, (i) the Investors will not engage in any financial market transactions(whether long, short or other hedging transactions) with respect to the Company’s Common Stock and (ii) the Company will not, and the Company shallcause its directors and officers and each of its and their respective Affiliates to not, engage in any financial market transactions (whether long, short or otherhedging transactions) with respect to the Company’s Common Stock. 23 6.5 Entire Agreement; Amendment. The parties have not made any representations or warranties with respect to the subject matter hereof notset forth herein. This Agreement, together with the Warrants and any other instruments executed simultaneously herewith, constitute the entire agreementbetween the parties with respect to the subject matter hereof. All understandings and agreements heretofore between the parties with respect to the subjectmatter hereof are merged in this Agreement and any such instruments, which alone fully and completely expresses their agreement. This Agreement may notbe changed, modified, extended, terminated or discharged orally, but only by an agreement in writing, which is signed by all of the parties to this Agreement. 6.6 Notices. Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will beeffective on (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Agreement prior to5:30 p.m. (in the time zone of the recipient of such notice) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice orcommunication is delivered via facsimile at the facsimile number set forth in this Agreement on a day that is not a Trading Day or later than 5:30 p.m. (in thetime zone of the recipient of such notice) on any Trading Day, (iii) the 2nd Trading Day following the date of mailing, if sent by U.S. nationally recognizedovernight courier service, including Express Mail, for United States deliveries or (iii) five (5) Trading Days after deposit in the United States mail byregistered or certified mail for United States deliveries. All notices not delivered personally or by facsimile will be sent with postage and other chargesprepaid and properly addressed to the party to be notified at the address set forth below such party’s signature of this Agreement or at such other address assuch party may designate by ten (10) days advance written notice to the other parties hereto. The address for such notices and communications shall be asfollows: If to the Company:Oramed Pharmaceuticals Inc.Hi-Tech Park 2/5Givat-RamPO Box 39098Jerusalem 91390 IsraelAttn: Nadav KidronFacsimile: +972-2-566-0004With a copy to:Goldfarb Seligman & Co., Law OfficesElectra Tower, 98 Yigal Alon StreetTel Aviv 67891, IsraelAttn: Adam M. Klein, Adv.Facsimile: +972-3-608-9855 24 If to an Investor:To the address set forth under such Investor's name on the signature pages hereof. 6.7 Delays or Omissions. Except as otherwise specifically provided for hereunder, no party shall be deemed to have waived any of his or her orits rights hereunder or under any other agreement, instrument or document signed by any of them with respect to the subject matter hereof unless such waiveris in writing and signed by the party waiving said right. Except as otherwise specifically provided for hereunder, no delay or omission by any party inexercising any right with respect to the subject matter hereof shall operate as a waiver of such right or of any such other right. A waiver on any one occasionwith respect to the subject matter hereof shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion. All rights and remedieswith respect to the subject matter hereof, whether evidenced hereby or by any other agreement, instrument or document, will be cumulative, and may beexercised separately or concurrently. 6.8 Severability. If any provision of this Agreement is held to be unenforceable under applicable law, then such provision shall be excludedfrom this Agreement, and the balance of this Agreement shall be interpreted as if such provision was so excluded and shall be enforceable in accordance withits terms. 6.9 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be bindingupon, the successors, assigns, heirs, executors and administrators of the parties hereto. 6.10 Counterparts; Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, andall of which together shall constitute one instrument. Signatures transmitted by facsimile or scanned and transmitted by electronic mail shall be consideredvalid and binding signatures. 6.11 Survival of Warranties. The representations, warranties, covenants and agreements of the Company and the Investors contained in or madepursuant to this Agreement shall survive the execution and delivery of this Agreement and shall in no way be affected by any investigation made by anInvestor or the Company. 6.12 Further Action. The parties agree to execute any and all such other and further instruments and documents, and to take any and all suchfurther actions reasonably required to effectuate this Agreement and the intent and purposes hereof. 6.13 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit oraffect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutualintent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and nopresumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement. 25 6.14 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permittedassigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 6.15 Governing Law; Venue and Waiver of Jury Trial. This Agreement is to be construed in accordance with and governed bythe internal laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction tothe rights and duties of the parties. The Company and the Investors agree that any suit, action, or proceeding arising out of or relating to this Agreementshall be brought to any court of competent jurisdiction sitting in Wilmington, Delaware and that the parties shall submit to the jurisdiction of such court. Theparties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action orproceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANYSUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 6.15 shall for any reason be held invalid or unenforceable, it is thespecific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable. 6.16 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Companyshall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate orinstrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonableindemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associatedwith the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to a mutilation thereof,the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement. 6.17 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are severaland not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of theobligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken byany Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or createa presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by theTransaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out ofthis Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in anyproceeding for such purpose. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANKSIGNATURE PAGES FOLLOW] 26 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorizedsignatories as of the date first indicated above. ORAMED PHARMACEUTICALS INC. By: Name:Nadav Kidron Title:Chief Executive Officer [REMAINDER OF PAGE INTENTIONALLY LEFT BLANKSIGNATURE PAGES FOR INVESTORS FOLLOW] 27 IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the date first written above. Investment Amount: 405,405 Units x $0.37 per Unit = $150,000 (Each Unit consists of one Share and a Warrant convertible into 0.50 Shares) Name of Investor: Regals Fund LP.Signature of Authorized Signatory of Investor:_____________________________Name of Authorized Signatory: David SlagerTitle of Authorized Signatory: Managing Member Of The General PartnerEmail Address of Investor: atoohey@regalsholdings.comPhone number of Investor: 212-256-8402 Social Security or Taxpayer Identification Number 45-4227948Address for Notice of Investor:C/O Regals Capital LP152 West 57th Street, 9th floorNew York, NY 10019Tel: 212-256-8402_______________________Facsimile: ______________ Address for Delivery of Securities for Investor (if not same as above):________________________________________________________________________________________________________________________________________________________________________________ 28 SCHEDULE 1 Investor Number of Shares Number of WarrantShares (50% of theNumber of Shares) InvestmentAmount Regals Fund $ 29 SCHEDULE 2 WIRE TRANSFER INSTRUCTIONS (US DOLLARS)HSBC BANK USA ABA 021001088452 FIFTH AVENUENEW YORK, N. Y. 10018FAVOR OF ACCOUNT NAME: ORAMED PHARMACEUTICALS INC.ACCOUNT NUMBER: 605154082SWIFT MRMDUS3330Exhibit 10.21 Master Services Agreement Medpace, Inc. This Master Services Agreement (the “Agreement”), dated as of 27 September, 2012 (the “Effective Date”), is between Medpace, Inc., an OhioCorporation with a principal place of business at 5375 Medpace Way, Cincinnati, OH 45227 (“MEDPACE”) and Oramed, Ltd., a company establishedpursuant to the laws of the State of Israel, with a principal place of business at Hi-Tech Park 2/5 Givat Ram, PO Box 39098, Jerusalem, 91390, Israel,(“SPONSOR”). MEDPACE and SPONSOR are sometimes referred to herein individually as a “Party” and together as the “Parties”.RECITALS:WHEREAS, SPONSOR is in the business of developing and obtaining regulatory approval of the marketing and sale of pharmaceutical products and orbiological products, and or medical devices; and WHEREAS, MEDPACE is engaged in the business of providing services related to the design and execution of clinical development programs involvingdrugs, biologics, and medical devices through engagement by its clients, the sponsors of clinical development programs, to perform such services; and WHEREAS, SPONSOR desires to engage MEDPACE to perform certain services (“Services”) as set forth hereinafter in connection with certain clinical trials,all in accordance with and subject to the terms of this Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Parties agree as follows:1. PROJECT SPECIFICATIONS A.MEDPACE hereby agrees to perform Services for SPONSOR from time to time. The precise Services to be performed by MEDPACE shall bemutually agreed upon by the Parties and set forth in one or more task orders (each a “Task Order”), a form of which is attached hereto asExhibit A. Each Task Order shall be signed by an authorized representative of each Party and shall include detailed informationconcerning a given project, including a description of the specific services to be provided (“Scope of Work”), project milestones and targetcompletion dates (“Project Schedule”), the applicable protocol, a detailed budget (“Project Budget”), and a schedule of payments relatedto the Project Schedule and the Project Budget (“Payment Schedule”). Each Task Order shall contain a Transfer of Obligations list(“Transfer of Obligations”) in conjunction with the relevant Task Order and consistent with the regulations set forth in 21 C.F.R. Section312, Subpart D (Responsibilities of Sponsors and Investigators). Any responsibilities not specifically transferred in the Transfer ofObligations shall remain the regulatory responsibility of SPONSOR.  Master Services Agreement Medpace, Inc. B.Unless otherwise stated in the applicable Task Order, the Services will be conducted in compliance with MEDPACE SOPs and Policies,copies of which have been or will be provided to SPONSOR during the negotiation of the relevant Task Order. C.From time to time, SPONSOR may wish to enter into a Task Order with a MEDPACE Affiliate for Services under this Agreement (“AffiliateTask Order”), and such MEDPACE Affiliate may wish enter into the Affiliate Task Order with SPONSOR. Any such Affiliate Task Ordermust be in writing and signed by the parties to the Affiliate Task Order, and each signatory to an Affiliate Task Order is solely responsiblefor all obligations it undertakes under the Affiliate Task Order. For the purposes of a particular Affiliate Task Order, the Affiliate signingsuch Affiliate Task Order will be substituted for MEDPACE everywhere it appears in this Agreement, and the term “Affiliate Task Order”will be substituted for Task Order everywhere it appears in this Agreement. D.As used herein, “Affiliate” means in relation to a Party, any entity, directly or indirectly, controlling such Party, controlled by such Party, orunder common control with such Party. For purposes of this definition, “control” shall mean the possession, directly or indirectly, of thepower to direct or cause the direction of the activities, management or policies of such party, whether through the ownership of votingsecurities, by contract or otherwise. Without limiting the foregoing, control shall be presumed to exist when a person, organization orentity (i) owns or directly controls fifty percent (50%) or more of the outstanding voting stock or other ownership interest of the otherorganization or entity, or (ii) possesses, directly or indirectly, the power to elect or appoint fifty percent (50%) or more of the members ofthe governing body of the organization or other entity. E.To avoid any doubt, the Parties agree that any and all regulatory filings and submissions that may be made with respect to the Servicesprovided under this Agreement shall be (i) coordinated with and approved by SPONSOR in advance at all times, (ii) made solely inSPONSOR’s name, (iii) owned solely by SPONSOR. The extent of MEDPACE’s responsibility for such filings and submissions shall be setout in the applicable Task Order. Page 2 Master Services Agreement Medpace, Inc. F.As part of the Services and as an accommodation to SPONSOR, MEDPACE may contract with third parties for the provision of services notcustomarily performed or provided by MEDPACE (“Pre-funded Vendors”). While MEDPACE may contract with and/or facilitate theactivities of such Pre-funded Vendors, MEDPACE does not undertake by virtue of this Agreement, the relevant Task Order or such thirdparty contract, responsibility for the Pre-funded Vendor’s business, professional conduct, performance, or breaches by such Pre-fundedVendors. MEDPACE’s responsibility with respect to such Pre-funded Vendors shall be to coordinate the services of such Pre-fundedVendors and to make payments after receipt of sufficient funds from SPONSOR (“Pre-funded Expenses”). Pre - funded Expenses mayinclude but are not limited to third party advance payments for investigator meetings, vendors, Study Site payments (“Study Site” shallmean the physical location at which a particular investigator conducts a study), and any payments to investigators, institutions, and sitemaintenance organizations for services performed that relate to a study. In the event a Pre-funded Vendor requests indemnification withrespect to the services performed under such Pre-funded Vendor’s contract, MEDPACE shall notify SPONSOR and SPONSOR enter into anindemnification agreement directly with such Pre-funded Vendors. MEDPACE shall have no obligation with respect to the indemnity of aPre-funded Vendors. The Parties acknowledge and agree that any Pre-funded Vendors (including but not limited to investigators,institutions or site management organizations) paid with Pre-funded Expenses in connection with the performance of Services under thisAgreement or any Task Order shall not be considered the agent, employee or subcontractor of MEDPACE. G.Except as otherwise agreed by the Parties in writing, SPONSOR is and at all times remains, in all geographical regions where the Study isbeing performed, the “Sponsor” or “Legal Representative” of the Study pursuant to or applicable law. 2. PROJECT SCHEDULE A.Each Task Order shall contain project timelines, milestones and/or target dates for completion of a project or a portion thereof, and all suchschedules shall be reasonable for the Services to be provided. The Parties shall, at all times, use their reasonable best efforts to comply withand perform their obligations in accordance with each Task Order. B.If at any time either Party anticipates a delay in meeting the timelines for a given Task Order as set forth in its Project Schedule, either dueto changes to the Services requested by SPONSOR, or other causes beyond the control of such Party (such as FDA approval of acompetitor’s NDA for the same drug, which may adversely affect patient enrollment), then the anticipating Party shall promptly notify theother Party in writing, specifying the reason for the delay and the anticipated effect upon the timelines, milestones or other deliverables.3. CONTRACT AMENDMENTS Any change in the details of a Task Order or the assumptions upon which the Task Order is based may require changes in the ProjectBudget, Payment Schedule or Project Schedule. Every such change shall require a written amendment to the Task Order (a “ContractAmendment”). Each Contract Amendment shall detail the requested changes to the applicable task, responsibility, duty, budget, timelineor other matter. The Contract Amendment will become effective upon the execution of the Contract Amendment by both Parties, and ifapplicable, will specify the period of time within which MEDPACE must implement the changes. Both Parties agree to act in good faithand promptly when considering a Contract Amendment requested by the other party but neither party is obligated to execute a ContractAmendment. No Contract Amendment shall become effective unless and until it is signed by both Parties. Any such changes that result inadditional charges shall be reflected in the Contract Amendment to the affected Task Order, Project Budget or Payment Schedule. Page 3 Master Services Agreement Medpace, Inc. 4. PROJECT BUDGET, PAYMENT SCHEDULE, AND TERMS A.Service Fees: The SPONSOR agrees to pay MEDPACE for Services rendered pursuant to the Project Budget and Payment Schedules included ineach Task Order. B.Pass Through Costs: The SPONSOR agrees to reimburse MEDPACE for reasonable pass-through costs identified in the Task Order and incurred byMEDPACE in providing the Services in accordance with the relevant Task Order. All expenses billed to SPONSOR by MEDPACEmust be accompanied by appropriate documentary evidence, such as receipts or other documentation reasonably acceptable toSPONSOR. C.Pre - funded Expenses: The Parties will work to establish a process for payment of Pre-funded Expenses in the applicable TaskOrder which allows for timely payment of such funds to Pre-funded Vendors. D.Payment Terms: SPONSOR shall mail payments to MEDPACE within 30 days after receipt of a written invoice and required supportingdocumentation as applicable. An annual interest rate of 14% will be applied to outstanding invoices greater than 45 days. TheParties will work in good faith to establish a payment schedule in the applicable Task Order to ensure that MEDPACE is kept in acash neutral position and to avoid a negative cash flow at any time during the term of the applicable Task Order. E.Security: If at any time and from time to time during the term of the Agreement or any Task Order, (1) SPONSOR is more than 90 days late onany single invoice, or (2) 45 days late on three consecutive invoices, or (3) SPONSOR is unable to provide evidence of creditworthiness, MEDPACE shall have the right to require SPONSOR to provide security in such amount and form and at such time asMEDPACE deems necessary. SPONSOR shall provide such security within fifteen (15) business days of MEDPACE’s request. Asa public company, SPONSOR’s quarterly financial statements are available to the public, on-line at www.oramed.com. Page 4 Master Services Agreement Medpace, Inc.5. WARRANTIES AND REPRESENTATIONS: A.Acknowledgements: MEDPACE acknowledges that the Services to be provided hereunder are for the benefit of, and are subject to the direction ofSPONSOR. MEDPACE acknowledges that SPONSOR is the beneficiary under the terms of this Agreement and each Task Order, andthat SPONSOR is entitled to enforce the provisions thereof. B.Representations and Warranties of MEDPACE: i.MEDPACE represents and warrants that it is duly organized, validly existing and in good standing in its jurisdiction oforganization, and is in good standing and duly qualified to carrying on business including as contemplated by this Agreement. ii.MEDPACE represents and warrants that the execution, delivery and performance of this Agreement and each Task Order has been(and will be at the relevant time) validly authorized by all necessary corporate action and this Agreement and each Task Orderrepresents (and will represent) the valid binding agreement of MEDPACE enforceable in accordance with its terms. MEDPACErepresents and warrants that the execution, delivery and performance of this Agreement and each Task Order does not and will notviolate any organizational document governing MEDPACE, any agreement to which MEDPACE is a party, or any law or court orgovernmental order, holding or writ by which MEDPACE is bound. MEDPACE further represents and warrants that it shall, andundertakes to, render the Services requested by SPONSOR in accordance with high professional standards, consistent with GoodClinical Practices and with the standard of care customary in the contract research organization industry. iii.MEDPACE represents and warrants that the personnel assigned to perform services rendered under this Agreement shall bequalified and professionally capable of performing the Services, shall be adequate to effectively perform the Services on the agreedupon schedule and shall devote such time as is necessary to perform the Services on such agreed upon schedule. Upon request ofSPONSOR, MEDPACE will provide SPONSOR with the credentials of all study personnel. iv.MEDPACE further represents, warrants and undertakes that it shall perform the Services in compliance with all applicable laws andregulations in the jurisdiction(s) in which the Services are performed, including, without limitation, the US Food, Drug andCosmetic Act and the regulations promulgated pursuant thereto, and all future amendments thereto during the term. In addition,MEDPACE undertakes to ensure that any materials provided by SPONSOR for the purpose of the performance of the Servicespursuant to any Task Order shall be handled, transported, stored, used and disposed of in accordance with the laws and regulations. v.MEDPACE represents and warrants that there is no litigation, regulatory investigation or proceeding, administrative hearing or anyother similar proceeding pending or to the best of its knowledge threatened against MEDPACE which could adversely affectMEDPACE’s ability to perform the Services. Page 5 Master Services Agreement Medpace, Inc. C.Representations and Warranties of SPONSOR i.SPONSOR represents and warrants that it is a corporation with its principal office and place of business at Hi-Tech Park 2/5 GivatRam, PO Box 39098, Jerusalem, 91390, Israel, duly organized, validly existing and in good standing in its place of organization,and is in good standing in and duly qualified to do business. ii.SPONSOR represents and warrants that the execution, delivery and performance of this Agreement and each Task Order has beenand will be validly authorized by all corporate action and this Agreement and each Task Order represents and will represent thevalid binding agreement of SPONSOR enforceable in accordance with its terms. The execution, delivery and performance of thisAgreement and each Task Order does not and will not violate any organizational document governing SPONSOR, any agreementto which SPONSOR is a party, or any law or court or governmental order, holding or writ by which SPONSOR is bound. iii.SPONSOR represents and warrants that there is no litigation, regulatory investigation or proceeding, administrative hearing or anyother similar proceeding pending or to the best of its knowledge threatened against SPONSOR which could adversely affectSPONSOR’s ability to perform under this Agreement or any Task Order.6. TERMINATION A.SPONSOR may terminate this Agreement without cause immediately upon giving the other Party notice of such termination, provided suchtermination shall not in and of itself affect any then uncompleted Task Order. B.SPONSOR may terminate any Task Order without cause immediately upon giving MEDPACE notice of such termination. As soon aspracticable, after receipt of such notice, the Parties shall cooperate in good faith to agree on a plan to expeditiously conclude activities withrespect to such matter. MEDPACE shall transfer to SPONSOR all case report forms, study files, and other data and information in any andall formats available, including electronic format and computer files and programs, in MEDPACE’s possession. Page 6 Master Services Agreement Medpace, Inc. C.MEDPACE may terminate a Task Order only if SPONSOR has defaulted on its obligations thereunder and has not cured such default withinfifteen (15) days after receipt of written notice if the default is the failure to pay MEDPACE any amount due thereunder or within thirty (30)days after receipt of written notice in the event of any other default, provided, however, that where SPONSOR is making diligent, good faithefforts to cure such default but requires additional time to complete such cure, SPONSOR will notify MEDPACE in writing of its request foradditional time and the parties will negotiate in good faith an appropriate extension to such period, provided, further, that SPONSOR shallbe entitled to an extension of at least fifteen (15) days if the parties fail to reach agreement in respect of an appropriate extension. As soonas practicable, after receipt of such notice, the Parties shall cooperate in good faith to agree on a plan to expeditiously conclude activitieswith respect to such matter. MEDPACE shall transfer to SPONSOR all case report forms, study files, and other data and information in anyand all formats available, including electronic format and computer files and programs, in MEDPACE’s possession. D.In the event of any termination of a Task Order before completion, SPONSOR agrees to pay MEDPACE for all Services rendered pursuant tothe unfinished Task Order prior to such termination and any non-cancelable expenses incurred in connection with MEDPACE’sperformance of Services thereunder to the extent such expenses cannot be reasonably mitigated. As soon as reasonably practicablefollowing receipt of a termination notice, MEDPACE shall submit an itemized accounting of Services performed, expenses incurredpursuant to performance of the Services, non-cancelable expenses incurred by MEDPACE relating to any unfinished Task Order, andpayments received in order to determine a balance to be paid by either Party to the other. Such balance shall be paid within 30 days ofreceipt of such an itemized accounting by SPONSOR. E.The following sections shall survive any expiration of termination of this Agreement: 8 [Confidentiality], 9 [Rights in Property], 10 [PatentRights], 11 [Publicity], 14 [Indemnification], 15 [Limitation of Liability and Insurance], 16 [Inspections and Audit] and 18 [Non-Solicitation]. Page 7 Master Services Agreement Medpace, Inc. 7. COMMUNICATIONS Any notice required or permitted under this Agreement shall be in writing and shall be deemed properly received as follows (i) upon receipt,if delivered personally, (ii) 5 business days after delivery to the postal authorities by the party serving notice if mailed by prepaid, firstclass, certified mail, return receipt requested, (iii) 2 business days after delivery to the courier service by the party serving notice if sent byexpress courier service, (iv) by facsimile, one business day after transmission or dispatch, or (v) by e-mail, 24 hours after the e-mail was sent,unless the party sending the e-mail knows or ought reasonably to suspect that the e-mail was not delivered to the addressee's domainspecified in the e-mail address; in each case to the Party to be notified at the addresses and/or coordinates set forth below (or such otheraddress as shall be designated by written notice):If to MEDPACE:Medpace, Inc.5375 Medpace WayCincinnati, Ohio 45227Attn: August J. TroendleTelephone: (513) 579-9911 x2278Facsimile: 1.513.579.0444Email: j.wynne@medpace.comIf to SPONSOR:Oramed Pharmaceuticals, Inc.Hi-Tech Park 2/5 Givat RamPO Box 39098Jerusalem, 91390 Israel8. CONFIDENTIALITY A.SPONSOR, may provide confidential information to MEDPACE during the course of this Agreement. All information provided bySPONSOR or its clients, and any and all data collected and/or generated by MEDPACE during the course of performance of the Services isdeemed to be the confidential information of SPONSOR (“SPONSOR Confidential Information”). MEDPACE shall not discloseSPONSOR Confidential Information to any third party, or use SPONSOR Confidential Information for any purpose other than for the benefitof SPONSOR pursuant to the terms of this Agreement, without the prior written consent of SPONSOR. i.MEDPACE shall ensure by binding written agreement that its employees, agents, and independent contractors (approved in advanceand in writing by SPONSOR) who are involved in the provision of the Services (herein “MEDPACE Representatives”) shall complywith the provisions of Article 8 of this Agreement. MEDPACE shall disclose SPONSOR Confidential Information only to thoseMEDPACE Representatives who reasonably need to know SPONSOR Confidential Information to enable MEDPACE to perform itsobligations under this Agreement. MEDPACE shall remain responsible to SPONSOR for all acts and omissions of MEDPACERepresentatives with respect to their use of the SPONSOR Confidential Information. Page 8 Master Services Agreement Medpace, Inc. ii.MEDPACE shall exercise due care, but no less than a reasonable degree of care, to prevent the unauthorized disclosure and use ofSPONSOR Confidential Information associated with the Services. In the event that MEDPACE learns of any such unauthorizeddisclosure and use, it shall immediately (a) notify SPONSOR thereof, and (b) take all necessary actions to ensure that such disclosureand use is terminated. B.MEDPACE may provide confidential information to SPONSOR during the course of this Agreement (“MEDPACE ConfidentialInformation”). MEDPACE Confidential Information shall include but is not limited to standard operating procedures, pricing, andfinancial information provided by MEDPACE or its Affiliates to SPONSOR during the course of performance of the Services, and any non-public information pertaining to MEDPACE’s business practices or other proprietary information. SPONSOR shall not disclose MEDPACEConfidential Information to any third party, or use MEDPACE Confidential Information for any purpose other than for those set forth underthis Agreement or a Task Order, without the prior written consent of MEDPACE. i.SPONSOR shall ensure by binding written agreement that its employees, agents, and approved independent contractors involved in theServices shall comply with the provisions of Article 8 of this Agreement. SPONSOR shall disclose MEDPACE ConfidentialInformation only to those of its employees, agents, and independent contractors who reasonably need to know MEDPACEConfidential Information. ii.SPONSOR shall exercise due care, but no less than a reasonable degree of care, to prevent the unauthorized disclosure and use ofconfidential information associated with the Services. C.This confidentiality and non-disclosure provision shall not apply to: i.Information which was known by the Party receiving such information (the “Receiving Party”) before the date hereof or which isindependently discovered, after the date hereof, without the aid, application or use of the confidential information, as evidenced bywritten records; ii.Information which is in the public domain on the date hereof or subsequently becomes publicly available through no fault or action ofthe Receiving Party; or iii.Information, which is disclosed to the Receiving Party by a third party, authorized to disclose it. D.If the Receiving Party is requested to disclose the Confidential Information of the other Party (the “Disclosing Party”) or the substance ofthis Agreement in connection with a legal or administrative proceeding or otherwise to comply with a requirement under applicable law,the Receiving Party will give the Disclosing Party prompt notice of such request so that the Disclosing Party may seek an appropriateprotective order or other remedy, or waive compliance with the relevant provisions of this Agreement. The Disclosing Party must notifythe Receiving Party within 10 days that it intends to take action in response to the request for disclosure. If the Disclosing Party seeks aprotective order or other remedy, the Receiving Party, at the Disclosing Party’s expense, will cooperate with and assist the Disclosing Partyin such efforts. Failure of the Disclosing Party to intervene shall not relieve the obligations to maintain confidentiality except in so far asthe Receiving Party must comply with the terms of such process compelling disclosure. E.Each Party acknowledges that any violation or threatened violation of the foregoing provisions may cause irreparable injury to the otherParty, entitling the other Party to seek injunctive relief in addition to all other legal remedies. Page 9 Master Services Agreement Medpace, Inc. 9. RIGHTS IN PROPERTY A.All materials, documents, data, laboratory samples, medical imaging data, software and information of every kind and description suppliedto MEDPACE by SPONSOR or any of SPONSOR’s clients, or prepared, developed, or generated by MEDPACE or the MEDPACERepresentatives pursuant to this Agreement (collectively, the “Results”), (except for the pre-existing MEDPACE procedural manuals,personal data, methods, procedures, and policies) are and shall be the sole and exclusive property of SPONSOR. Further, all Results, and allrights subsisting therein and related thereto, shall be and remain the exclusive property of SPONSOR. SPONSOR shall have the sole rightto make whatever use SPONSOR deems desirable of the Results. MEDPACE shall not, without the prior written consent of SPONSOR,publish, disseminate, or otherwise disclose to any third party any Results (except such disclosure as may be required by law, in which eventMEDPACE shall notify SPONSOR thereof in advance), or use any Results for any purpose other than the performance of thisAgreement. Any inventions or other intellectual property, including without limitation patent rights, trade secrets, protectable copyrightsand trademarks, that may evolve from the Results shall belong solely to SPONSOR, and MEDPACE agrees to assign its rights in all suchinventions and/or other intellectual property to SPONSOR consistent with the obligations set forth in Article 10 below. MEDPACE furtheragrees to perform such further acts and execute such further documents as may be reasonably necessary to carry out and give full effect tothe foregoing arrangements. B.SPONSOR acknowledges that all computer programs, software, applications, databases, proposals and other documentation generally usedby MEDPACE and not directly related to, derived from or developed solely for SPONSOR are the exclusive and confidential property ofMEDPACE or the third parties from whom MEDPACE has secured the right of use. SPONSOR agrees that any improvement, alteration orenhancement to MEDPACE systems, software, applications or processes which are developed or implemented during the course of anyServices performed hereunder, without the use of any SPONSOR data, information, materials or Confidential Information (or derivativesthereof) or Results, shall be the property of MEDPACE. Page 10 Master Services Agreement Medpace, Inc. 10. PATENT RIGHTS MEDPACE shall disclose promptly to SPONSOR any and all patentable and unpatentable inventions, discoveries and improvementsconceived or made by MEDPACE while providing Services to SPONSOR pursuant to the Agreement and any Task Order and constituting amodification, improvement, derivative or extension of use relating to SPONSOR’s proprietary rights, and agrees to assign all its interesttherein to SPONSOR or its nominee; whenever requested to do so by SPONSOR, MEDPACE shall execute any and all applications,assignments, or other instruments and give testimony which SPONSOR shall deem necessary to apply for and obtain a patent in the UnitedStates of America and/or other applicable jurisdiction or of any foreign country or to protect otherwise SPONSOR’s interests and shallcompensate MEDPACE for the time devoted to said activities at an hourly rate agreed to by SPONSOR and MEDPACE, and reimburseMEDPACE for expenses reasonably incurred in respect to such activities.11. PUBLICITY A.MEDPACE shall not make any public announcements, presentations, disclosures and/or publications concerning this Agreement or thesubject matter hereof without the prior written consent of SPONSOR, unless required by applicable law or government agency. B.SPONSOR may not use MEDPACE’s name, logo or trademark in any public communication, release, notice or other publication withoutthe express prior written consent of MEDPACE; provided, however, that SPONSOR may do so in order to comply with applicable laws,regulations and filing obligations of stock exchanges.12.RECORDS, SECURITY AND DISPOSITION OF STUDY FILES A.MEDPACE shall make available to SPONSOR relevant records, programs and data which is the subject of a Task Order in accordance withthe arrangements to be agreed in the relevant Task Order. B.SPONSOR shall have the right to monitor the operations of MEDPACE hereunder, and SPONSOR and or its designated representatives shallhave the right to visit any of the facilities, upon reasonable advance written notice, where MEDPACE is performing any of the Services andduring such visits to inspect the work being done and materials used, to observe the procedures being followed, and to examine the books,records and other data relevant to the Services. If any regulatory agency requests to inspect any books, records, data of MEDPACE relatingto the Services, MEDPACE shall immediately notify SPONSOR. Page 11 Master Services Agreement Medpace, Inc. C.MEDPACE shall use industry-standard commercially reasonable efforts, including, but not limited to, periodic backup of computer files (inaccordance with MEDPACE’s SOPs), to prevent the loss or alteration of SPONSOR’s study data, Confidential Information, documentation,and correspondence, including secure, off-site redundancy storage. MEDPACE shall in all respects comply with any Food and DrugAdministration regulations concerning the maintenance, creation and storage of records, including electronic records. D.MEDPACE shall transfer study materials, documents and correspondence to SPONSOR in accordance with the arrangements (which shallinclude frequency of such transfer) set out in the applicable Task Order. MEDPACE shall have the right to retain one copy of any studymaterials, documentation, and correspondence necessary solely to meet regulatory or MEDPACE’s own internal audit requirements, so longas it continues to maintain the confidentiality requirements of Article 8.13. SPONSOR OBLIGATIONS SPONSOR acknowledges that performance of the Services by MEDPACE will require the co-operative involvement of both Parties, andSPONSOR hereby agrees to provide such assistance as may be reasonably necessary to enable MEDPACE to perform the Services.14. INDEMNIFICATION A.SPONSOR shall indemnify, defend and hold harmless MEDPACE from and against any and all damages, losses, liabilities, costs orexpenses (collectively “Damages”), resulting or arising from any third-party claims, demands, assessments, actions, suits, investigations orproceedings (collectively “Claims”), relating to or arising from or in connection with this Agreement or the Services under any Task Order(including but not limited to any Damages arising from or in connection with any study, test, device, product or potential product to whichthis Agreement relates), to the extent such Claims or Damages have not resulted from MEDPACE’s negligence, willful misconduct, orbreach of any applicable law or material breach of this Agreement or any Task Order by MEDPACE. B.MEDPACE agrees to indemnify, defend and hold harmless SPONSOR from and against any and all Damages resulting or arising from third-party Claims relating to or arising from or in connection with the Services under any Task Order to the extent that such Claims or Damagesare determined to have resulted from the negligence, , or willful misconduct of MEDPACE or a breach of any applicable federal, state orlocal law or a material breach of this Agreement or any Task Order by MEDPACE. C.Any party providing indemnification under this Agreement shall have the right to control the defense and settlement of any Claims orDamages. The indemnified party shall have the right to obtain separate legal counsel at its own expense if it so chooses. The indemnifyingparty shall not unreasonably withhold consent for settlement and the indemnified party shall reasonably cooperate in the defense of anyClaims or Damages and provide prompt notice to the indemnifying party of any Claims or Damages for which indemnification is sought. Page 12 Master Services Agreement Medpace, Inc. 15. LIMITATION OF LIABILITY AND INSURANCE A. Notwithstanding the terms of Article 14 above in no event shall SPONSOR or MEDPACE be liable for any indirect, incidental,special, or consequential damages or lost profits arising out of the provision of services hereunder, even if the breaching party has beenadvised of the possibility of such damages. For clarity, other types of damages may be a possible remedy in any suit between the parties(including but not limited to punitive damages). B. Upon request, each Party shall provide a copy of a certificate evidencing its insurance coverage to the other Party.16. INSPECTIONS AND AUDITS A.SPONSOR shall have the right, upon at least ten (10) days’ prior written notice to MEDPACE, to examine the standard operatingprocedures, facilities, books, records, papers, files and documentation, including computer files, data bases and records, at MEDPACE’sfacilities and the facilities of clinical investigators contracted by MEDPACE to determine the adequacy of such records, to ensure theServices are being performed in accordance with the approved Task Orders and applicable regulations and/or to examine the financialrecords of MEDPACE as may be reasonably necessary to verify out-of-pocket expenses incurred during the performance of theServices. Such inspections and audits shall be conducted during normal business hours. B.MEDPACE shall provide reasonable assistance, including making available members of its staff and providing access to all requestedrecords, to facilitate such inspections and audits. C.MEDPACE shall take all reasonable steps required by SPONSOR to cure any deficiencies found in any audit, inspection or investigation. D.The obligations herein shall survive termination for a period of 7 years.17. DEBARMENT A.MEDPACE hereby represents, warrants, and certifies that neither it nor any of its officers, directors, owners, principals or employees hasbeen or will be at any relevant time hereunder debarred under Section 306 of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §335a(a)or (b), or similar local law. In the event that any such party becomes debarred, MEDPACE shall notify SPONSOR in writing immediately,and upon SPONSOR’s request, such individual shall cease to be involved in the provision of the Services. Page 13 Master Services Agreement Medpace, Inc. B.MEDPACE hereby represents, warrants, and certifies that it has not and shall not use in any capacity the services of any individual,corporation, partnership, or association which has been debarred under Section 306 of the Federal Food, Drug and Cosmetic Act, 21 U.S.C.§335a(a) or (b), or similar local law. In the event MEDPACE becomes aware of or receives notice of the debarment of any individual,corporation, partnership, or association providing services to MEDPACE, which relate to the Services being provided under thisAgreement, MEDPACE shall notify SPONSOR in writing immediately, and upon SPONSOR’s request, such individual shall cease to beinvolved in the provision of the Services.18. NON-SOLICITATION Neither Party nor its Affiliates shall, during the term of this Agreement and for a period of twelve (12) months following its expiration ortermination, either directly or indirectly, hire any employee of the other Party with whom its comes into contact as a result of providing theServices, or recruit, solicit, or entice any such person to become employed by it or any Affiliate and shall not approach any such employeefor such purpose or encourage, authorize or approve the taking of such action by any other person. The Parties agree that any breach of thisprovision would cause irreparable harm and that in addition to any and all other available remedies injunctive relief, without the necessityof a bond or other security, shall be appropriate and available.19. ENTIRE AGREEMENT This Agreement, including the attachments hereto, contains the full understanding of the Parties with respect to the subject matter hereofand supersedes all existing agreements and all other oral, written or other communications between the Parties concerning the subjectmatter hereof. This Agreement shall not be amended, modified or supplemented in any way except in writing and signed by a dulyauthorized representative of SPONSOR and MEDPACE.20. GOVERNING LAW This Agreement and the performance hereof shall be governed, interpreted and construed in all respects by the internal laws of the State ofNew York. All disputes and claims arising under this Agreement or any Task Order shall be resolved exclusively in a court of applicablejurisdiction located in New York, New York, and each party consents to the venue of any such action; provided, however, that injunctiverelief may be sought in any court of competent jurisdiction. Page 14 Master Services Agreement Medpace, Inc. 21. NO WAIVER No waiver of any term, provision, or condition of this Agreement whether by conduct or otherwise in any one or more instances shall bedeemed to be or construed as a further or continuing waiver of any such term, provisions, or conditions, or of any other term, provision, orcondition of this Agreement. Any waiver must be in writing and signed by the party so waiving the term, provision, or condition.22. INDEPENDENT CONTRACTOR In fulfilling its obligations pursuant to this Agreement, each Party shall be acting as an independent contractor. Neither Party is grantedany right or authority to assume or to create any obligation or responsibility, expressed or implied, on behalf of or in the name of the otherParty.23. FORCE MAJEURE Neither Party shall be liable or deemed to be in default for any delay due to causes beyond the reasonable control of the Party, such as: war,acts or threats of terrorism, civil disorders, acts of God, or government action; provided, that the affected Party promptly notifies the other ofthe cause and its effects on the Services to be performed hereunder. Financial difficulty shall never be deemed a force majeure event.24. SEVERABILITY In the event any provision of this Agreement shall be determined to be void or unenforceable, the remaining provisions shall remain in fullforce and effect.25. ASSIGNMENT A.Except as set forth herein, neither Party shall assign this Agreement or any Task Order except with the express prior written consent of theother Party. B.Notwithstanding anything contained herein, a Party may assign this Agreement and/or any Task Order to an Affiliate, and SPONSOR mayassign this Agreement and/or any Task Order to a successor in interest to such Party or in the event of a merger or acquisition; in any suchevent, the Party so assigning shall notify the other Party in writing thereof.26. SUBCONTRACTING A.MEDPACE may subcontract any portion of the Services hereunder to an Affiliate without the prior written consent of SPONSOR providedMEDPACE remains liable for the performance of any such Affiliate, such subcontracting shall not derogate from MEDPACE’s obligationsunder this Agreement, and MEDPACE provides prompt written notice of such arrangement to MEDPACE. Page 15 Master Services Agreement Medpace, Inc. 27. CONFLICTS BETWEEN AGREEMENTS In the event that there is any conflict between the provisions of this Agreement and any duly executed Task Order, this Agreement shallcontrol unless the applicable provision in the Task Order clearly states that it shall take precedence over the related provision in thisAgreement.[SIGNATURE PAGE FOLLOWS] Page 16 Master Services Agreement Medpace, Inc.IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.MEDPACE, INC.Signature: /s/ John WynneBy: John WynneTitle: Executive DirectorBusiness Development Support ORAMED, LTD.Signature: /s/ Nadav KidronBy: Nadav KidronTitle: CEO Page 17 EXHIBIT AFORM OF TASK ORDERMEDPACE Task Order Number: ______________MEDPACE Project Number: ______________This Task Order, dated _______________, is between Medpace Inc. (“MEDPACE”), and Oramed, Ltd. (“SPONSOR”).RECITALS: WHEREAS, MEDPACE and SPONSOR have entered into that certain Master Services Agreement dated __________________ (the “Master ServicesAgreement”); and WHEREAS, pursuant to the Master Services Agreement, MEDPACE has agreed to perform certain Services in accordance with Task Orders from time to timeentered into by the Parties and SPONSOR and MEDPACE now desire to enter into such a Task Order; and WHEREAS, MEDPACE and SPONSOR desire that MEDPACE provide certain services with respect to ______ (the “Study”) for the study of the product________ (“Study Product”) as set out in the Protocol Number: ____________, which is incorporated herein by reference; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties hereby agree as follows: 1.Scope of Work. MEDPACE shall perform the services described in the Scope of Work, attached hereto as Appendix 1, in accordance with theProject Schedule, attached hereto as Appendix 2 and any other documents attached to and specifically referenced in this Task Order (“Services”). 2.Compensation. For performance of these Services, SPONSOR shall pay to MEDPACE an amount equal to the Project Budget set forth in Appendix3, which amount shall be payable pursuant to the Payment Schedule set forth in Appendix 4. The Project Budget is provided for cost analysispurposes. It is agreed that all fees are fixed prices unless the underlying assumptions (including, but not limited to, trial duration, number ofsites/patients, services provided) change and all such changes shall be documented in a Contract Amendment. After staff are assigned, costs areincurred based upon allocation of staff capacity. 3.Transfer of Obligations. Sponsor Obligations transferred to MEDPACE by SPONSOR (consistent with the regulations set forth in 21 C.F.R. Section312, Subpart D) are identified in Appendix 5. Page 18 4.MSA. The provisions of the Master Services Agreement are hereby expressly incorporated by reference into and made a part of this Task Order.IN WITNESS WHEREOF, the Parties have hereunto signed this Task Order effective as of the day and year first written above.MEDPACE, INC.Signature:__________________________By:________________________________Title: ______________________________ORAMED, LTD.Signature:__________________________By:________________________________(Print Name)Title: ______________________________ List of Appendices:Appendix 1: Scope of WorkAppendix 2: Project ScheduleAppendix 3: Project BudgetAppendix 4: Payment ScheduleAppendix 5: Transfer of Obligations Page 19Exhibit 10.22 **CONFIDENTIAL PORTIONS HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT AND HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGECOMMISSION (THE “COMMISSION”).** TASK ORDER MEDPACE Task Order Number: 1 MEDPACE Project Number: ORINS07 This Task Order, dated 27 September 2012, is between Medpace, Inc. (“MEDPACE”), and Oramed Ltd., (“SPONSOR”). RECITALS: WHEREAS, MEDPACE and SPONSOR have entered into that certain Master Services Agreement dated 27 September 2012 (the “Master ServicesAgreement”); and WHEREAS, pursuant to the Master Services Agreement, MEDPACE has agreed to perform certain Services in accordance with Task Orders fromtime to time entered into by the Parties and SPONSOR and MEDPACE now desire to enter into such a Task Order; and WHEREAS, MEDPACE and SPONSOR desire that MEDPACE provide certain services with respect to a protocol entitled, Randomized, Double-Blind, Placebo-Controlled Study to Assess the Safety and Pharmacodynamics of Multiple Oral Bedtime Doses of ORMD-0801 (Insulin Capsules) in AdultPatients with Type 2 Diabetes Mellitus who are Inadequately Controlled with Diet and Metformin (the “Study”) for the study of the product ORMD-0801 (“Study Product”) as set out in the Protocol Number: ORA-D-007, which is incorporated herein by reference; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties hereby agree as follows: 1.Scope of Work: MEDPACE shall perform the services described in the Scope of Work, attached hereto as Appendix 1, in accordance withthe Project Schedule, attached hereto as Appendix 2, and protocol version dated 14 August 2012. 2.Compensation: For performance of these Services, SPONSOR shall pay to MEDPACE an amount equal to the Project Budget set forth inAppendix 3, which amount shall be payable pursuant to the Payment Schedule set forth in Appendix 4. The Project Budget is provided forcost analysis purposes. It is agreed that all fees are fixed prices unless the underlying assumptions as written in Appendix # 1 SCOPE OFWORK, and Appendix #2, PROJECT SCHEDULE are changed, and all such changes shall be documented in a Contract Amendment. Afterstaff is assigned, costs are incurred based upon allocation of staff capacity.  3.Third Parties/Vendors: MEDPACE is responsible for coordinating with the vendors which will be selected and approved bySPONSOR. SPONSOR will review and comment on all Third Parties/Vendors contracts prior to MEDPACE’s execution of such contracts. 4.Transfer of Obligations: Sponsor Obligations transferred to MEDPACE by SPONSOR (consistent with the regulations set forth in 21 C.F.R.Section 312, Subpart D) are identified in Appendix 5. 5.MSA. The provisions of the Master Services Agreement are hereby expressly incorporated by reference into and made a part of this TaskOrder. IN WITNESS WHEREOF, the Parties have hereunto signed this Task Order effective as of the day and year first written above. MEDPACE, INC. Signature: /s/ John WynneBy: John WynneTitle: Executive DirectorBusiness Development Support Oramed Ltd. Signature: /s/ Nadav KidronBy: Nadav KidronTitle: CEO List of Appendices: Appendix 1: Scope of WorkAppendix 2: Project ScheduleAppendix 3: Project BudgetAppendix 4: Payment ScheduleAppendix 5: Transfer of Obligations Page 2 of 15 APPENDIX 1: SCOPE OF WORK Project Specifications ItemDescriptionNumber of investigators per country10 sites + 5 Back-up sites (United States)Number of screened patients294 patientsNumber of randomized patients147 patientsDuration of enrollment period (first patient in–last patient in)4 monthsDuration of screening/treatment/follow-up period~7.5 weeksDuration of Investigator Meeting1 meeting (12-hour duration); location TBDLocation and duration of Kickoff Meeting1 meeting at Medpace (8-hour duration)Teleconferences26 calls ( approx. 2 per month; one hour each)Number of qualification visits1 visitNumber of initiation visits10 visitsNumber of routine monitoring visits (RMV)40 visitsMonitoring frequencyOn average, every 5-6 weeks as neededNumber of close-out visitsAssumed part of final RMVNumber of serious adverse events (SAEs)8 SAEsTotal CRFs5880 CRFsCRFs per patient40 CRFsUnique CRFs18 CRFsAverage data points per CRF12 data pointsNumber of raw listings23 raw listingsNumber of unique TFLs25 unique TFLsNumber of version TFLs25 version TFLsStudy conducted in compliance with SOPs and PoliciesMedpace SOPs and Policies Page 3 of 15 Roles and Responsibilities 1.1PROJECT START-UP OramedMedpaceN/AItemDescriptionX Write protocol X Review protocolIncludes comment from Medpace teamX Submit protocol amendments X Develop ICF templateUsing Medpace templateX Review ICF template X ICF amendments1 amendment X ICF local customizationNegotiate changes with each site X CRF designDesign of CRFs and completion guidelinesXX Site identificationMedpace to identify qualified Investigators; Oramed toselect/approve sites; assumes 15 sites selected (10 mainsites + 5 back-up sites) X Investigator Meeting PlanningArrange meeting X Preparation of Investigator Meeting(s)Preparation and distribution of binders and meetingmaterials; includes presentation by Medpace associates X Investigator Meeting AttendeesCTM, Medical Expert, Project Coordinator, DataManager, Statistical Analyst, Safety Manager, IVRSManager and 3 CRAs; Assumes 1 day meetingXX Investigator Meeting Planner Contract Negotiationand Payment ManagementMedpace will negotiate the contract on behalf ofSponsor; Sponsor will sign the contract and makepayments to the meeting planner X Kickoff Meeting AttendeesCTM, Medical Expert, Project Coordinator, ProjectAssistant, Regulatory Submissions Manager, DataManager, Statistical Analyst, Safety Manager, SafetySpecialist and Lead CRA; Assumes 8 hrs. meeting atMedpace office X Submit essential documents to US central IRB13 sites using central IRB (9 main + 4 back-up sites) X Support sites to submit essential documents to USlocal IRB2 site using local IRB (1 main + 1 back-up sites) X Trial Master File set-up and maintenanceSet up and maintain file for all study sites according toMedpace SOPs 1.2CLINICAL OPERATIONS OramedMedpaceN/AItemDescription X Clinical trial managementProvide overall study management for 10 sites X Project websiteMedpace to develop secure, project-specific websitecontaining relevant information and tools X Newsletters6 monthly electronic newsletters X Ongoing essential document collectionOngoing collection and maintenance of site-specificdocuments X Tracking of study medication shipmentsAssumes 2 shipments per site for 10 sites X Supply, packaging, and labeling of study medicationAssumes Medpace will contract and manage packaging,labeling and drug depot vendor X Storage and distribution ofStudy medicationAssumes Medpace will contract and manage vendor toperform packaging, labeling and drug depot servicesXX Destruction of study medicationAssumes Medpace will contract and manage drug depotvendor who will destroy drug upon Sponsor approval X Study medication accountability proceduresFollow Medpace SOPs and approved by Sponsor X Site contract negotiationNegotiate site contract and budget for 15 sites X Investigator payments managementMake 2 quarterly payments per site for 10 sitesXX External vendors contract negotiation and managementAssumes Medpace will contract and manage drug depotvendor; Medpace will coordinate the purchase anddistribution of CGM devices and study supplies uponsponsor approval X Central lab selectionPlease reference MRL budget X Central lab contract negotiation and management MRL X Central IRB payment managementAssumes 1 central IRB and 2 quarterly payments Page 4 of 15 1.3CLINICAL MONITORING OramedMedpaceN/AItemDescription X Clinical Research Associates (CRAs)3 CRAs X Qualification visits1 visit, 4 hrs. on-site; Cost of $2,347 shall be charged foreach additional visit X Monitoring planOngoing updatesIncludes monthly meetings X Site initiation visits10 visits, 4 hrs. on-site; Cost of $2,347 shall be chargedfor each additional visit X Routine monitoring visits (RMVs)40 visits X Frequency of RMVsOn average, every 5-6 weeks, as needed X Estimated on-site time16 hours X Close-out visitsAssumed combined with final RMV X In-house monitoring coordinationMedpace CRA contact sites to discuss project-specificissues; records maintained in ClinTrak Page 5 of 15 1.4CLINICAL SAFETY OramedMedpaceN/AItemDescription X Medical monitoringMedical Expert on-call 24/7 during recruitment andtreatment periods for 10 sites X Develop Safety Monitoring PlanIncludes one final version and one revision. Assumesutilization of Medpace SOPs X SAE reportingAll SAEs will be reported by sites to Medpace. Includesone initial and two follow-up reports per case; Assumes 8SAEs; Cost of $1,339 shall be charged for each additionalunit X Development of safety databaseARGUS will be used; Medpace to hold database X Enter SAEs into safety database8 SAEs X Medical monitor review of SAE reportsIncludes assessment of expectedness and companycausality X Receive, query, and follow-up on reported SAEs X Generate SAE narrativesNarratives written Clinical Study Report ready. Assumesfinal approval by Medpace Medical Monitor prior todistribution to sponsor. X Generate expedited SAE reports safety reportAssumes 1 expedited report, if additional events occur, aunit cost of $1,636 per report shall be charged.XX Distribute expedited SAE reports to FDAOramed to review and approve prior to submission X Distribute expedited SAE reports to central IRBCompile and submit documents X Preparation of safety notification lettersSponsor to review and approve prior to submission X Distribute safety notification letter for this protocol tosites10 sites X Prepare periodic reports for regulatory authorities XX Prepare Annual Safety ReportMedpace to prepare safety line listings to be included inIND Annual Report; Oramed will be responsible for INDAnnual Report filing XDistribute periodic reports to regulatoryauthorities/ECs XDistribute Annual Safety Report to regulatoryauthorities/ECsAssumes Oramed will be responsible for IND AnnualReport X Ongoing reconciliation between clinical and safetydatabaseA final reconciliation is completed prior to database lock X Ongoing clinical trial AE data review including signaldetection and trend analysisRequired per FDA guidance X Write narratives for withdrawals due to AE and/orabnormal lab values for inclusion in clinical studyreportAssumes 1 withdrawal due to AE. If additional eventsoccur, a unit cost of $915 shall be charged. 1.5IVR/IWR SYSTEM OramedMedpaceN/AItemDescription X Randomization/Drug Supply ManagementProvide study-specific system for randomization, patientvisit tracking, and customized reports, drug management(via web or phone 24/7), including maintenance andHelp Desk. Assumes English language only. Page 6 of 15 1.6DATA MANAGEMENT OramedMedpaceN/AItemDescription X Develop data management (DM) documentsDM documents include:- Database specifications;- Guidelines for the tracking of CRFs and data queries;- Guidelines for entry of the CRF data; and- Database edit check specifications X Database developmentEDC system, ClinTrak EDC X Database validationMedpace SOPs X EDC Help DeskMedpace provide support via phone/email X DM coordination and status reportingMedpace coordination includes:- CRF tracking- Data cleaning/editing- Query trackingMedpace monthly DM status reports provided via securewebsite include:- CRF status by site- Patient status by site- Query status by site X Query tracking/resolution X Coding of AE/concomitant medications/medicalhistoriesAssumed that Sponsor holds a valid agreement with theMaintenance and Support Services Organization (MSSO)for the MedDRA dictionary and Uppsala MonitoringCentre (UMC) for the WHODrug dictionary X Number of AE codes5 AE codes per patient X Number of concomitant medications5 concomitant medications per patient XNumber of medical histories/conditions X Number of external data sourcesAssumes MRL X Data transfers from external data sources2 quarterly transfers from MRL X Data transfers to Sponsor2 transfers (1 test, 1 final) X Deliver dataCDISC SDTM X Database documentMedpace submission-ready 1.7STATISTICAL ANALYSIS OramedMedpaceN/AItemDescription X Develop Statistical Analysis Plan (SAP)Medpace format and template; Medpace to prepare theSAP to be included in the IND filing. The SAP will berevised (if needed) and finalized prior to the DatabaseLock. X Programming, validation, and generation of Tables,Figures, Listings (TFLs)23 raw listings25 unique TFLs25 version TFLs2 derived datasets X Results review meetingOne meeting via teleconference after delivery of analysisresults Page 7 of 15 1.8MEDICAL WRITING OramedMedpaceN/AItemDescription X Study report shell (SRS)SRS incorporates protocol-related and statisticalmethodology information and in-text table shells in theresults sectionsX SRS review X Pre-final study report (PFSR)PFSR is a complete version of the report, includingresults, but without the appendicesX PFSR review X Final study report (FSR)FSR is a complete version of the report includingappendices. X Publishing FSRFSR file is converted to an Adobe PDF file and publishedby setting applicable document attributes. X Bookmarking/hyperlinking FSRApply internal and external navigation viabookmarking/hyper linking from the FSR to anycorresponding appendices Page 8 of 15 APPENDIX 2: PROJECT SCHEDULE TaskDateMedpace Begins Work*SEP-2012Final ProtocolSEP-2012Statistical Analysis Plan (Final Draft for IND Filing)**15-NOV-2012First Patient, First Visit31-JAN-2013Last Patient, First Visit02-JUN-2013Last Patient, Last Visit25-JUL-2013Final Database Lock+ 6 weeksFinal Tables, Figures, and Listings available+4 weeksDelivery of Final Clinical Study Report+ 8 weeksMedpace Ends WorkNOV-2013 * Assumes Medpace receives final protocol and Investigator Brochure (IB) at start date. ** SAP date (Nov. 15, 2012) will depend on the Task Order signing and Final Protocol date. Medpace requires 6 weeks from these dates (whichever is later)to provide the SAP. Page 9 of 15 APPENDIX 3: PROJECT BUDGET Medpace FeesFee DetailsUnit Desc# UnitUnit CostFeeStart-up Services Review ProtocolProtocol1**THECONFIDENTIALPORTION HASBEEN SOOMITTEDPURSUANT TO AREQUEST FORCONFIDENTIALTREATMENTAND HAS BEENFILEDSEPARATELYWITH THECOMMISSION.** CRF Review/DevelopmentCRF Book1 Investigator MeetingMeeting1 Kick-Off MeetingMeeting1 Project Specific TrainingStudy1 Vendor Contract NegotiationVendor1 Investigator ContractNegotiationSite1 Site Identification/SelectionSite15 Investigator File Set-upStudy1 Initial Essential Document Collection TotalSite15 Meetings Conference Calls TotalCall26 Interactive Voice Response IVRS DevelopmentSystem (IVRS)System1 IVRS Maintenance and Help DeskMonths5.8 IVRS System Utilization andHosting TotalMonths5.8 Project Management Project ManagementMonths5.8 Vendor ManagementMonths5.8 NewslettersEdition6 Ongoing Essential DocumentCollection and ReviewMonths5.8 ICF AmendmentAmendments1 Vendor Payment AdministrationPayment6 Investigator GrantsManagement TotalSite Payments20 Clinical Safety Medical MonitoringMonths5.8 Safety Plan DevelopmentPlan1 SAE ReportingEvents8 Processing Expedited SAEReportsEvents1 Other Narrative Preparation TotalEvents1 Clinical Monitoring Monitoring Plan Development and Ongoing MaintenanceMonths5.8 Pre-Study VisitsVisits1 Study Initiation VisitsVisits10 Site ManagementSite Month58.1 Routine Monitoring VisitsTotalVisits40 Page 10 of 15 Medpace FeesFee DetailsUnit Desc# UnitUnitCostFeeData Management Data Management ManualStudy1**THECONFIDENTIALPORTION HASBEEN SOOMITTEDPURSUANT TO AREQUEST FORCONFIDENTIALTREATMENT ANDHAS BEEN FILEDSEPARATELYWITH THECOMMISSION.**Database DevelopmentDatabase1Database Conversion (CDISC)Database1EDC User Acceptance TestingUAT1Data Entry and CleaningCRF Book5880EDC Help DeskSite Months58.1DM Coordination and Status ReportsMonths5.8 EDC System Utilization and Hosting TotalMonths5.8 Biostatistics Analysis PlanRan1Analysis Programming andGenerationAnalysis1Raw Data ListingsRaw Listings23Unique TLFsUnique TFL25Version TLFsTotalVersion TFL25 Medical Writing Clinical Study Report TotalStudy Report1 Total Direct Fees $1,267,246.18 Fee DetailsUnit Desc# UnitUnitCostFeePre-Funded Expenses Investigator PaymentsRandomized Patients147**THECONFIDENTIALPORTION HASBEEN SOOMITTEDPURSUANT TO AREQUEST FORCONFIDENTIALTREATMENT ANDHAS BEEN FILEDSEPARATELYWITH THECOMMISSION.** Drug Packaging, labeling and DepotFeesStudy1 Central Laboratory Fees (MRL)Study1 Study Specific Supplies (CGM &Supplies)Study1 CGM Data Management Software(SweetSpot)System1Total Pre-Funded Expenses: $1,686,001.56Pass-Through Costs Monitoring Tray elVisit51**THECONFIDENTIALPORTION HASBEEN SOOMITTEDPURSUANT TO AREQUEST FORCONFIDENTIALTREATMENT ANDHAS BEEN FILEDSEPARATELYWITH THECOMMISSION.** Central IRB FeesStudy1 Telecommunication FeesCalls26 Misc. Printing/Copying/ShippingSites10 Meeting ExpenseStudy1Total Pass Through Costs: $80,201.00Sponsor Directly Paid Vendor Investigator Meeting PlannerFeeMeetings1**THECONFIDENTIALPORTION HASBEEN SOOMITTEDPURSUANT TO AREQUEST FORCONFIDENTIALTREATMENT ANDHAS BEEN FILEDSEPARATELYWITH THECOMMISSION.**Total Sponsor Directly PaidVendor Fee $83,450.00 Page 11 of 15 APPENDIX 4: PAYMENT SCHEDULE Payment Schedule Payment ScheduleProject Ph II Study of ORMD-0801 in Patients w/ T2DM Total Direct Fees: $ 1,267,246Sponsor: Oramed Pharmaceuticals, Ltd.PaymentNumberMilestonesApproximateDateAmount toPayPercentage1Task Order SignedSep-12$ 63,3625.0%2Kick-Off Meeting11/5/2012$ 139,39711.0%3Investigator Meeting1/3/2013$ 76,0356.0%4First Patient Screened1/31/2013$ 190,08715.0%525% Patients Enrolled3/16/2013$ 190,08715.0%650% Patients Enrolled4/18/2013$ 190,08715.0%7Last Patient Screened6/2/2013$ 164,74213.0%8Last Patient Complete7/25/2013$ 126,72510.0%9Submission of Clinical Study Report to Sponsor for Final Approval11/30/2013$ 126,72510.0% Total Payments: $ 1,267,246100% **THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HASBEEN FILED SEPARATELY WITH THE COMMISSION.** of the total Pre-funded Expenses and $8,020 (10%) of total Pass-through Costs will beinvoiced and due upon completion of the Kick-Off Meeting. Medpace will invoice Sponsor as needed for actual Pre-funded Expenses incurred. Sponsorshall pay such invoice within twenty (20 days) of receipt. If sufficient funds are not received from Sponsor, payments to Pre-funded Vendors may bedelayed. Medpace shall apply the initial **THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.** Pre-funded amount paid upon completion of the Kick-OffMeeting, against the last invoice of actual-Pre-funded Expenses, and reconcile the balance. Pass-through Costs will be billed to Sponsor on a monthlybasis or as incurred. Page 12 of 15 Payment Information and General Conditions Pass-through Costs and Pre-funded Expenses Any sums quoted with respect to pass-through costs and pre-funded expenses are provisional, pending discussion with third parties and are not necessarilyexhaustive. While Medpace will endeavor to negotiate favorable rates for pass-through costs and pre-funded expenses, final costs may be dependent uponfactors that are outside the control of Medpace. Payments made to third parties are not subject to mark-up charges. Pass-through costs may include, but are not limited to, project-specific printing, shipping, copying and binding costs, telecommunication and data costs,travel costs, including subsistence and accommodation costs in compliance with the Medpace travel policy, literature search and article retrieval costs,translation costs, central IRB fees, EC/regulatory fees, and pharmacy fees. Costs associated with, project-specific printing, copying and binding are asdetailed in the table below. ItemCost*Descriptionb/w print, 20-24 lb.0.15total sheets, includes all impressions, sizes, or cutscolor print, 20-24 lb.0.20total sheets, includes all impressions, sizes, or cutsb/w print, 28-60 lb.0.20total sheets, includes all impressions, sizes, or cutscolor print, 28-60 lb.0.25total sheets, includes all impressions, sizes, or cutsb/w waterproof1.05total sheets, includes all impressions, sizes, or cutscolor waterproof1.10total sheets, includes all impressions, sizes, or cutstabs 5-bank3.00 laminating pouches0.95+Plus cost of color or b/w printcard/cover stock0.30color onlyfolder0.502-pocket, usually includes labelbinder 1"8.00includes front cover and spinebinder 1.5"10.00includes front cover and spinebinder 3"15.00includes front cover and spineplastic coil binding 1/4"0.75 plastic coil binding 3/8"1.10 plastic coil binding 1/2"1.50 plastic coil binding 1"3.00 CDs0.28per CDCD labels0.18per label *Currency is Euros for Europe, Israel, and South Africa; US dollars for remaining regions. Costs are subject to change based on fluctuations in supplier prices. Page 13 of 15 Medpace will pass-through mobile communication and data charges up to $25 per travel day. This will include a standard daily rate and other internetcharges (e.g. hotel, airline) ItemCostDescriptionMobile communication and data standard daily rate$10/8€*cost per day while CRA is travelingOther internet charges by use (receipt required)Up to $15 *Currency is Euros for Europe, Israel, and South Africa; US dollars for remaining regions Pre-funded Expenses Pre-funded expenses may include, but are not limited to, Investigator Meeting planner fees, Investigator fees, drug packaging and labeling, EDC vendor fees,and laboratory fees. Investigator fees are an estimate generated on Medpace’s initial feasibility and prior experience in this therapeutic area. Theinvestigator fee amount is subject to changes of +/- 20% of the total amount after completion of a full feasibility and final site selection. The laboratory feeamount is subject to change after finalization of the laboratory services agreement. Additional Costs This is a fixed-price Task Order for direct fees, based upon the project specifications and assumptions detailed herein. The project budget and the unit costsupon which it was generated is provided for cost analysis purposes. All direct fees are fixed costs unless the underlying assumptions change, including but not limited to, protocol, trial duration, number of investigative sites,number of patients, and services provided by Medpace. All such changes shall be documented in a contract amendment. After staff are assigned, costs areincurred based upon allocation of staff capacity. Inflation The fees stipulated in the fee estimate include inflation for the duration of the study as specified in this Task Order. Any significant shift in timelines willrequire a revision to the fees. Currency The currency of the Task Order is Unites States Dollars (USD). Applicable Taxes All direct fees, pass-through costs, and pre-funded expenses are quoted excluding any applicable taxes, which include but are not limited to Value AddedTax (VAT), Harmonized Sales Tax (HST), Goods and Services Tax (GST), which may be payable to Medpace by Sponsor. Page 14 of 15 Appendix 5: Transfer of Obligations CONFIDENTIAL Directions: Complete a form for each clinical study where Sponsor obligations have been transferred in accordance with 21 CFR Part 312, Subpart D(Responsibilities of Sponsors). Forward the completed form to Sponsor’s Regulatory Affairs Department for submission to the applicable regulatory agencies. Drug:ORMD-0801Study ID: ORINS07Study Title:Randomized, Double-Blind, Placebo-Controlled Study to Assess the Safety and Pharmacodynamics of Multiple Oral Bedtime Dosesof ORMD-0801 (Insulin Capsules) in Adult Patients with Type 2 Diabetes Mellitus who are Inadequately Controlled with Diet andMetforminCRO Name:Medpace, Inc.CRO Address:5375 Medpace Way, Cincinnati, OH 45227Obligations Transferred to Medpace: R the Appropriate Box(es). o All obligations in 21 CFR 312, Subpart D (Responsibilities of Sponsors) have been transferred to Medpace. x The following obligations have been transferred to Medpace:Sec. 312.32: IND Safety Reportsx Promptly review safety information.o Notify all participating investigators in awritten IND safety report of any AE associatedwith the drug that is both serious andunexpected.o Notify the FDA in a written IND safety reportof any AE associated with the drug that is bothserious and unexpected.Sec. 312.53: Selecting investigators and monitorsx(a) Select qualified investigatorso(b) Control investigational drug shipmentx(c) Obtain information from investigatorsx (1) Signed Form FDA-1572x (2) CV or other qualification statementx (3) Clinical protocol outlinex (4) Financial disclosure information(d) Select qualified monitorsSec. 312.54: Emergency researcho (a) Monitor the progress of all studiesinvolving an exception from informedconsent.o (b) Monitor such studies to identify when anIRB determines that it can’t approve theresearch.Sec. 312.55: Informing investigatorsx (a) Provide sites with the current Inv.Brochure.x (b) Inform investigators of new observationson the drug, particularly with respect to AEsand safe use.Sec. 312.56: Review of ongoing investigationso (a) Monitor the progress of all IND studies.x (b) Secure compliance from noncompliantinvestigators or discontinue drug shipmentsand end the investigator’s participation in thestudy.x (c)Review and evaluate the safety andefficacy results as it is obtained from the investigator.x (d) Discontinue use of the investigationaldrug if it is determined to present anunreasonable and significant risk to subjects,notify all IRBs and investigators, and assurethe return or alternate disposition of the drugfrom the investigators. Sec. 312.57: Record keeping and record retentionx (a) Maintain adequate records showing investigational drug receipt, shipment, or other disposition.o (b) Maintain complete and accurate records showing any financial interests of the investigator subjectto 21 CFR 54.o (c) Retain the records and reports required by the regulations for 2 years after the marketingapplication is approved, or if not approved, until 2 years after investigational drug shipment isdiscontinued and FDA has been notified.o (d) Retain reserve samples of any test article and reference standard identified and used inbioequivalence or bioavailability studies.Sec. 312.58: Inspection of sponsor’s records and reportsx (a) Permit FDA personnel to have access to and copy and verify any records and reports related to theclinical investigation.o (b) Permit DEA personnel to have access to and copy records related to the shipment, delivery, receiptand disposition of any investigational controlled substance. Assure adequate storage precautions aretaken for investigational new drug substances listed in any schedule of the Controlled SubstancesAct.Sec. 312.59: Disposition of unused supply of investigational drugo Assure the return (or alternate disposition) of all unused supplies of the investigational drug fromeach discontinued/terminated investigator; maintain written records of any disposition of theinvestigational drug.(a) Othero Please describe any other applicable transfers below: Page 15 of 15Exhibit 10.23 Executed VersionSECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this "Agreement") is dated as of October 30, 2012, among Oramed Pharmaceuticals Inc., a Delawarecorporation (the "Company"), and D.N.A Biomedical Solutions Ltd., an Israeli company (referred to herein as "D.N.A" or an "Investor"). WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to the Securities Act of 1933, as amended (the “SecuritiesAct”) and Regulation S promulgated thereunder, the Company desires to issue and sell to the Investor, and the Investor, desires to purchase from theCompany certain securities of the Company, and the Investor desires to issue and sell to the Company, and the Company, desires to purchase from theInvestor certain securities of the Investor, all as more fully described in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration thereceipt and adequacy of which are hereby acknowledged, the Company and the Investor agree as follows: ARTICLE I.DEFINITIONS 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall havethe meanings indicated in this Section 1.1: "Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is undercommon control with a Person, as such terms are used in and construed under Rule 144. “Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1. "Closing Date" means the Trading Day when all of the conditions precedent to (A) the Investor's obligations to issue the Option to theCompany and (B) the Company’s obligations to deliver the Oramed Shares have been satisfied or waived. "Common Stock" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which suchcommon stock may hereafter be reclassified or changed into. "D.N.A Ordinary Shares" means the ordinary shares of D.N.A, no par value, and any other class of securities into which such ordinaryshares may hereafter be reclassified or changed into.  “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. “Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction. "Oramed Shares" means the 2,390,057 shares of Common Stock issued or issuable to the Investor pursuant to this Agreement. "Option" means the option to purchase 21,637,611 D.N.A Ordinary Shares in the form attached hereto as Exhibit A. "Option Shares" means the D.N.A Ordinary Shares issuable upon exercise of the Option. "Person" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liabilitycompany, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. "Rule 144" means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, orany similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule. "SEC" means the U.S. Securities and Exchange Commission. "Securities" means the Oramed Shares, the Option and the Option Shares. "Short Sales" means, without limitation, all "short sales" as defined in Rule 200 of Regulation SHO promulgated under the Exchange Act. "Trading Day" means any day other than Friday, Saturday, Sunday or other day on which commercial banks in The City of New York orIsrael are authorized or required by law to remain closed. "Transaction Documents" means this Agreement, the Option and any other documents or agreements executed in connection with thetransactions contemplated hereunder. ARTICLE II.PURCHASE AND SALE 2.1 Closing. On the Closing Date, subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to theInvestor, and the Investor, shall purchase from the Company, the Oramed Shares set forth opposite the Investor’s name on Schedule 1. Upon satisfaction of theconditions set forth in Sections 2.2 and 2.3, the Closing shall occur at such location as the parties shall mutually agree. 2 2.2 Deliveries. (a) On the date hereof, the Company and the Investor shall deliver or cause to be delivered to the other, this Agreement, together with allexhibits and schedules attached thereto, duly executed by an authorized representative. (b) On the Closing Date, the Company shall deliver to the Investor irrevocable instructions to its transfer agent authorizing the transferagent to issue to the Investor a certificate evidencing the Oramed Shares, and to register such shares in the name of the Investor. (c) On the Closing Date, the Investor shall deliver or cause to be delivered to the Company: (i) the Option, in full payment for the Oramed Shares, and (ii) A copy of the application of DNA for the approval of the TASE Board of Directors to list the Option Shares. 2.3 Closing Conditions. (a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions having been met: (i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of theInvestor contained herein; (ii) all obligations, covenants and agreements of the Investor contained herein required to be performed at or prior to theClosing Date shall have been performed; and (iii) the delivery by the Investor of the items set forth in Section 2.2(c) of this Agreement. (b) The respective obligations of the Investor hereunder in connection with the Closing is subject to the following conditions havingbeen met: (i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of theCompany contained herein; (ii) all obligations, covenants and agreements of the Company contained herein required to be performed at or prior to theClosing Date shall have been performed; 3 (iii) the delivery by the Company of the items set forth in Section 2.2(b) of this Agreement; (iv) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the SEC or theNational Association of Securities Dealers over-the-counter electronic bulletin board (the “OTCBB”). ARTICLE III.REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor as follows on the datehereof and as of the Closing Date: (a) Organization, Good Standing and Qualification of the Company. The Company is a corporation duly organized, validly existing andin good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to own and operate its properties andto carry on its business as now being conducted and as proposed to be conducted. The Company is duly qualified to do business as a foreign corporation andis in good standing in each jurisdiction in which failure to so qualify would materially and adversely affect the business, properties, operations, prospects orcondition, financial or otherwise, of the Company. The resolutions adopted by the directors of the Company on October 29, 2012 authorizing thetransactions contemplated by the Transaction Documents have not been amended or modified in any way, have not been rescinded and are in full force andeffect on the date hereof. (b) Corporate Authority; Enforceability. The Company has full right, power and authority to issue and sell the Oramed Shares as hereincontemplated and the Company has full power and authority to enter into and perform its obligations under the Transaction Documents. The execution anddelivery of the Transaction Documents and the consummation of the transactions contemplated herein and therein have been duly authorized and approvedby all requisite corporate action, and each of the Transaction Documents are a valid and legally binding obligation of the Company. (c) Conflicts. Neither the authorization, execution and delivery of the Transaction Documents nor the consummation of the transactionsherein and therein contemplated, will (i) conflict with or result in a breach of any of the terms of the Company’s Certificate of Incorporation or By-Laws, (ii)violate any judgment, order, injunction, decree or award of any court or governmental body, having jurisdiction over the Company, against or binding on theCompany or to which its property is subject, (iii) violate any material law or regulation of any jurisdiction which is applicable to the Company, (iv) violate,conflict with or result in the breach or termination of, or constitute a default under, the terms of any material agreement to which the Company is a party,except for such violations or defaults which do not materially and adversely affect the business, assets, operations, prospects or condition, financial orotherwise of the Company, or (v) violate or conflict with the rules and regulations of the OTCBB applicable to the Company. 4 (d) Capitalization. The authorized capital of the Company as of the date hereof consists of 200,000,000 shares of Common Stock, ofwhich there were (i) 80,548,989 issued and outstanding as of the date hereof as fully paid and non-assessable shares; (ii) options and/or warrants to purchase15,118,310 shares of Common Stock; and (iii) employee and directors options to purchase 7,824,000 shares of Common Stock. As of the date hereof, theCompany has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise ofemployee stock options under the Company’s stock option plans and the issuance of shares of Common Stock to employees pursuant to the Company’semployee stock purchase plan outstanding as of the date of the most recently filed periodic report under the Exchange Act. All of the outstanding shares ofcapital stock of the Company are validly issued, fully paid and nonassessable. No further approval or authorization of any stockholder or the Board ofDirectors of the Company is required for the issuance and sale of the Oramed Shares. The issuance of the Oramed Shares pursuant to the provisions of thisAgreement will not violate any preemptive rights or rights of first refusal granted by the Company that will not be validly waived or complied with, and willbe free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the Investor through no action of theCompany. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which theCompany is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. (e) Litigation. There are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or otheragency or regulatory authority now pending, or, to the best knowledge of the Company, threatened against the Company which, if adversely determined,could materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Company. There is no action, suitor proceeding by the Company currently pending or that the Company currently intends to initiate. (f) Compliance with Laws. The Company is not in violation of any statute, law, rule or regulation, or in default with respect to anyjudgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, except for such violations or defaults which donot materially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Company. (g) Governmental Consents. Subject to the accuracy of the representations and warranties of the Investor set forth herein, no registrationor filing with, or consent or approval of or other action by, any Federal, state or other government agency under laws and regulations thereof as now in effectis or will be necessary for the valid execution, delivery and performance by the Company of the Transaction Documents, and the issuance, sale and deliveryof the Oramed Shares, other than the the filings required by state securities law. 5 (h) Regulatory Matters. The clinical, pre-clinical and other trials, studies and tests conducted by or on behalf of or sponsored by theCompany relating to its pharmaceutical product candidates were and, if still pending, are being conducted in all material respects in accordance with medicaland scientific protocols and research procedures that the Company reasonably believes are appropriate. The descriptions of the results of such trials, studiesand tests as set forth in the SEC Documents (as defined in Section 3(i) of this Agreement), provided to the Investor are accurate in all material respects andfairly present the data derived from such trials, studies and tests. All clinical trials conducted by the Company have been in compliance in all materialrespects with applicable laws and regulations. The Company has not received any warning letters or written correspondence from the FDA and/or any othergovernmental entity or agency requiring the termination, suspension or modification of any clinical, pre-clinical and other trials, studies or tests that arematerial to the Company. None of the clinical trials that the Company is currently conducting or sponsoring is subject to any temporary or permanentclinical hold by the FDA or any other governmental entity or agency, and the Company has no reason to believe that such clinical trials will be subject toany such action. (i) SEC Documents; Financial Statements. For the past twelve (12) months, the Company has filed all reports, schedules, forms,statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing filedprior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by referencetherein being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Investor or their respective representatives true, correct andcomplete copies of each of the SEC Documents not available on the Electronic Data Gathering, Analysis, and Retrieval system of the SEC that have beenrequested by Investor. As of their respective dates, the SEC Documents complied as to form in all material respects with the requirements of the ExchangeAct and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time theywere filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in orderto make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financialstatements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and thepublished rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared inaccordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwiseindicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or maybe condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results ofits operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). The Companyhas no liabilities or obligations required to be disclosed in the SEC Documents that are not so disclosed in the SEC Documents, other than those incurred inthe ordinary course of the Company’s business. 6 (j) Sarbanes-Oxley; Internal Accounting Controls. Each SEC Document containing financial statements that has been filed with orsubmitted to the SEC was accompanied by the certifications required to be filed or submitted by the Company’s chief executive officer and chief financialofficer pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); at the time of filing or submission of each such certification, suchcertification was true and accurate and complied with the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder; such certificationscontain no qualifications or exceptions to the matters certified therein and have not been modified or withdrawn; and neither the Company nor any of itsofficers has received notice from any governmental entity questioning or challenging the accuracy, completeness, form or manner of filing or submission ofsuch certification; (k) Absence of Changes. The Common Stock is quoted for trading on the OTCBB. No order ceasing, halting or suspending trading inthe Common Stock nor prohibiting the sale of the Common Stock has been issued to and is outstanding against the Company or its directors, officers orpromoters, and, to the best of the Company’s knowledge, no investigations or proceedings for such purposes are pending or threatened. The Company hasnot taken any action which would be reasonably expected to result in the delisting or suspension of quotation of the Common Stock on or from the OTCBBand the Company has complied in all material respects with the rules and regulations of eligibility on the OTCBB. The Company has not taken any steps toseek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiateinvoluntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead any creditor or creditors to do so. Based on thefinancial condition of the Company as of the date hereof, after giving effect to the receipt by the Company of the proceeds from the transactionscontemplated hereby, the Company reasonably believes that (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to bepaid on or in respect of the Company’s existing debts and other liabilities as they mature; (ii) the Company’s assets do not constitute unreasonably smallcapital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capitalrequirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow ofthe Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of thecash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend toincur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of itsdebt). The SEC Documents set forth as of the dates thereof all outstanding secured and unsecured Company Indebtedness, or for which the Company or anysubsidiary has commitments. For the purposes of this Agreement, “Company Indebtedness” shall mean with respect to the Company and any subsidiary (a)any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties,endorsements and other contingent obligations in respect of Company Indebtedness of others, whether or not the same are or should be reflected in theCompany’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactionsin the ordinary course of business; and (c) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP.Neither the Company nor any subsidiary is in default with respect to any Company Indebtedness. 7 (l) Patents and Trademarks. The Company has rights to use all patents, patent applications, trademarks, trademark applications, servicemarks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use inconnection with its business as described in the SEC Documents and which the failure to so have would have a material adverse effect on the results ofoperations, assets, business, prospects, or condition, financial or otherwise, of the Company (collectively, the “Company Intellectual Property Rights”). TheCompany has not received any notice (written or otherwise) that the Company Intellectual Property Rights used by the Company violate or infringe upon therights of any other person or entity. To the knowledge of the Company, all such Company Intellectual Property Rights are enforceable and there is noexisting infringement by another person or entity of any of the Company Intellectual Property Rights. The Company has taken reasonable security measuresto protect the secrecy, confidentiality and value of all of its Company Intellectual Property Rights. (m) Offering. Assuming the accuracy of the representations and warranties of the Investor contained in Section 3.2 of this Agreement, theoffer, issue, and sale of the Oramed Shares are exempt from the registration and prospectus delivery requirements of the Securities Act and the registration orqualification requirements of all applicable state securities laws. Neither the Company nor any authorized agent acting on its behalf will knowingly take anyaction hereafter that would cause the loss of such exemptions. (n) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Affiliates, nor any person acting on its or theirbehalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) in connection withthe offer or sale of the Oramed Shares. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’commissions (other than for persons engaged by any Investor or its investment advisor) relating to or arising out of the issuance of the Oramed Shares. 8 (o) No Integrated Offering. Neither the Company nor any person acting on its behalf has, directly or indirectly, made any offers or salesof any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Oramed Shares under theSecurities Act or cause this offering of the Oramed Shares to be integrated with prior offerings by the Company for purposes of the Securities Act or anyapplicable shareholder approval provisions, including, without limitation, under the rules and regulations of the OTCBB or any other exchange or automatedquotation system on which any of the securities of the Company are listed or designated. (p) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of anyof the Oramed Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Oramed Shares, or (iii) paid or agreed topay to any person any compensation for soliciting another to purchase any other securities of the Company. (q) But for the representations actually made in this Agreement, the Company represents that it is aware that the Option Shares areallocated "AS IS" without any further representations by the Investor and/or its directors and/or its shareholders. (r) The Company represents that it is capable of evaluating the merits and risks of the transactions contemplated hereunder, and that itshall solely bear all such economic risks. (s) The Company recognizes that its investment in DNA involves a high degree of risk, and has required knowledge and experience infinancial and business matters as to be capable of evaluating the merits and risks of its investment and has the ability to bear the economic risks of itsinvestment and the potential loss of its entire investment. (t) The Company further warrants that it has considered and shall solely bear the tax implications which apply to it in connection of theexecution of its investment and that the Investor has not presented it with any representation in accordance with such tax implications. (u) The Company is, and will be, acquiring the Option and the Option Shares as principal for its own account for investment purposesonly and not with a view to or for distributing or reselling such Option and the Option Shares or any part thereof, without prejudice, however, to theCompany's right, to sell or otherwise dispose of all or any part of such Option and the Option Shares in compliance with applicable securities laws. TheCompany hereby acknowledges that the Option Shares are subject to a resale restriction pursuant to applicable Israeli law and regulations. (v) The Company's wholly owned Israeli subsidiary, currently holds 8,404,667 D.N.A Ordinary Shares. The Company is aware of theInvestor's obligation to file an immediate report with the Israel Securities Authority (the "ISA") regarding this Agreement. The Company is aware of theobligations under Israeli law of an “interested party” to promptly report to the Investor any changes in its ownership of D.N.A Ordinary Shares. 9 (w) Disclosure. All disclosure provided to the Investor with regard to the representations and warranties contained in this Section 3.1regarding the Company, its business and the transactions contemplated hereby, furnished in writing by the Company is true and correct in all materialrespects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,in the light of the circumstances under which they were made, together with the disclosure in the SEC Documents, not misleading. (x) Investor Reliance. The Company expressly acknowledges and agrees that the Investor is relying upon the Company’srepresentations contained in this Agreement. 3.2 Representations and Warranties of the Investor. The Investor, hereby represents and warrants to the Company as follows: (a) Organization, Validity and Qualification of the Investor. The Investor is a company duly organized and validly existing under thelaws of the State of Israel. . The Investor has all requisite corporate power and authority to own and operate its properties and to carry on its business as nowbeing conducted and as proposed to be conducted. The Investor is duly qualified to do business as a foreign corporation and is in good standing in eachjurisdiction in which failure to so qualify would materially and adversely affect the business, properties, operations, prospects or condition, financial orotherwise, of the Investor. The resolutions adopted by the directors of the Investor on September 9, 2012 authorizing the transactions contemplated by theTransaction Documents have not been amended or modified in any way, have not been rescinded and are in full force and effect on the date hereof. (b) Corporate Authority; Enforceability. The Investor has full right, power and authority to issue the Option and the Option Shares asherein contemplated and the Investor has full power and authority to enter into and perform its obligations under the Transaction Documents. The executionand delivery of the Transaction Documents and the consummation of the transactions contemplated herein and therein have been duly authorized andapproved by all requisite corporate action, and each of the Transaction Documents are a valid and legally binding obligation of the Investor. TheTransaction Documents have been duly executed by the Investor and, when delivered in accordance with the terms thereof, will constitute the valid andbinding obligation of the Investor enforceable against them in accordance with its terms, subject to laws of general application relating to bankruptcy,insolvency and the relief of debtors. Subject to the resale restrictions under the relevant securities laws, the Options and the Option Shares, when issued bythe Investor, will be duly and validly issued, fully paid and nonassessable, and free and clear of all liens. 10 (c) Conflicts. Neither the authorization, execution and delivery of the Transaction Documents nor the consummation of the transactionsherein and therein contemplated, will (i) conflict with or result in a breach of any of the terms of the Investor’s Memorandum of Association or Articles ofAssociation, (ii) violate any judgment, order, injunction, decree or award of any court or governmental body, having jurisdiction over the Investor, against orbinding on the Investor or to which its property is subject, (iii) violate any material law or regulation of any jurisdiction which is applicable to the Investor,(iv) violate, conflict with or result in the breach or termination of, or constitute a default under, the terms of any material agreement to which the Investor is aparty, except for such violations or defaults which do not materially and adversely affect the business, assets, operations, prospects or condition, financial orotherwise of the Investor, or (v) violate or conflict with the rules and regulations of the Tel Aviv Stock Exchange (the "TASE"). (d) Capitalization. The authorized capital of the Investor as of the date hereof consists of 1,000,000,000 ordinary shares, of which therewere a total of (i) 186,112,740 ordinary shares issued and outstanding as of the date hereof as fully paid and nonassessable shares; (ii) options (includingemployee stock options) and/or warrants to purchase 16,111,810 ordinary shares; and (iii) 4,154,868 Series B bonds convertible into 692,478 ordinaryshares. All of the outstanding shares of share capital of the Investor are validly issued, fully paid and nonassessable. The issuance of the Option and theOption Shares pursuant to the provisions of the Transaction Documents will not violate any preemptive rights or rights of first refusal granted by the Investorthat will not be validly waived or complied with, and will be free of any liens or encumbrances. Other than a verbal understanding between Mr. ZeevBronfeld and Mr. Meni Mor, each a controlling shareholder of the Investor, to act in concert with respect to the ordinary shares of the Investor held by each ofthem, there are no shareholders agreements, voting agreements or other similar agreements with respect to the Investor’s share capital to which the Investor isa party or, to the knowledge of the Investor, between or among any of the Investor's shareholders, including the Company. No further approval orauthorization of any stockholder or the Board of Directors of the Investor is required for the issuance and sale of the Option or the Option Shares. (e) Litigation. There are no actions, suits or proceedings at law or in equity or by or before any governmental instrumentality or otheragency or regulatory authority now pending, or, to the best knowledge of the Investor, threatened against the Investor which, if adversely determined, couldmaterially and adversely affect the business, assets, operations, prospects or condition, financial or otherwise, of the Investor. There is no action, suit orproceeding by the Investor currently pending or that the Investor currently intends to initiate. (f) Compliance with Laws. Except as set forth in the letter attached hereto as Exhibit B, the Investor is not in violation of any statute,law, rule or regulation, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency orinstrumentality, except for such violations or defaults which do not materially and adversely affect the business, assets, operations, prospects or condition,financial or otherwise, of the Investor. 11 (g) Filings, Consents and Approvals. Except for the requisite approval of the TASE, no registration or filing with, or consent or approvalof or other action by, any government agency under laws and regulations thereof as now in effect is or will be necessary for the valid execution, delivery andperformance by the Investor of the Transaction Documents, and the issuance, sale and delivery of the Option and the Option Shares. The ISA has the right tocomment on private placements in Israel. All reports delivered by the Investor in accordance with applicable TASE and ISA regulations were true and correctand did not contain any misleading information as such term is defined in the Israeli Securities Law, 5728-1968. (h) Intentionally Left Blank. (i) SEC Documents; Financial Statements. Except as set forth in the letter attached hereto as Exhibit B, for the past twelve (12) months,the Investor has filed all reports, schedules, forms, statements and other documents required to be filed by it with the ISA pursuant to the reportingrequirements of applicable law (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes andschedules thereto and documents incorporated by reference therein being hereinafter referred to as the “ISA Documents”). The Investor has delivered to theCompany or their respective representatives true, correct and complete copies of each of the ISA Documents not available on MAGNA that have beenrequested by the Company. As of their respective dates, the ISA Documents complied as to form in all material respects with the requirements of applicablelaw, and none of the ISA Documents, at the time they were filed with the ISA, contained any untrue statement of a material fact or omitted to state a materialfact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, notmisleading. Except as set forth in the letter attached hereto as Exhibit F, as of their respective dates, the financial statements of the Investor included in theISA Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the ISA withrespect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with GAAP, consistently applied, during theperiods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements,to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of theInvestor as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, tonormal year-end audit adjustments). The Investor has no liabilities or obligations required to be disclosed in the ISA Documents that are not so disclosed inthe ISA Documents, other than those incurred in the ordinary course of the Investor’s business. 12 (j) Absence of Changes. The ordinary shares of the Investor are listed on the TASE. No order ceasing, halting or suspending trading inthe ordinary shares or prohibiting the sale of the ordinary shares has been issued to and is outstanding against the Investor or its directors, officers orpromoters, and, to the best of the Investor’s knowledge, no investigations or proceedings for such purposes are pending or threatened. The Investor has not,received notice (written or oral) from the TASE to the effect that the Investor is not in compliance with the listing or maintenance requirements of theTASE. The Investor is not, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing andmaintenance requirements. The Investor has not taken any action which would be reasonably expected to result in the delisting or suspension of quotation ofthe ordinary shares on or from the TASE and the Investor has complied in all material respects with the rules and regulations of eligibility on the TASE. TheInvestor has not taken any steps to seek protection pursuant to any bankruptcy law nor does the Investor have any knowledge or reason to believe that itscreditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead any creditor or creditors todo so. The Investor does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash tobe payable on or in respect of its debt). The ISA Documents set forth as of the dates thereof all outstanding secured and unsecured Investor Indebtedness ofthe Investor or any subsidiary, or for which the Investor or any subsidiary has commitments. For the purposes of this Agreement, “Investor Indebtedness”shall mean with respect to the Investor and any subsidiary (a) any liabilities for borrowed money or amounts owed (other than trade accounts payableincurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Investor Indebtedness of others,whether or not the same are or should be reflected in the Investor’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiableinstruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments due underleases required to be capitalized in accordance with GAAP. Neither the Investor nor any subsidiary is in default with respect to any Investor Indebtedness. (k) Patents and Trademarks. The Investor has rights to use all patents, patent applications, trademarks, trademark applications, servicemarks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use inconnection with its business as described in the ISA Documents and which the failure to so have would have a material adverse effect on the results ofoperations, assets, business, prospects, or condition, financial or otherwise, of the Investor (collectively, the “InvestorIntellectual Property Rights”). TheInvestor has not received any notice (written or otherwise) that the Investor Intellectual Property Rights used by the Investor violate or infringe upon therights of any other person or entity. To the knowledge of the Investor, all such Investor Intellectual Property Rights are enforceable and there is no existinginfringement by another person or entity of any of the Investor Intellectual Property Rights. The Investor has taken reasonable security measures to protectthe secrecy, confidentiality and value of all of its Investor Intellectual Property Rights. 13 (l) Offering. The offer, issue, and sale of the Option and the Option Shares contemplated hereby are exempt from the prospectusrequirements of under the Israeli Securities Law, 5728-1968. Neither the Investor nor any authorized agent acting on its behalf will knowingly take anyaction hereafter that would cause the loss of such exemptions. The Investor has not offered or sold its ordinary shares or related derivative securities to morethan 35 investors (excluding qualified institutional investors) during the past 12 months. (m) No General Solicitation; Placement Agent’s Fees. Neither the Investor, nor any of its Affiliates, nor any person acting on its or theirbehalf, has engaged in any form of general solicitation or general advertising in connection with the offer or sale of the Option or the Option Shares. TheInvestor shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engagedby any Investor or its investment advisor) relating to or arising out of the issuance of the Option and the Option Shares. (n) Authorization; Enforcement. The Investor represents and warrants that it is an entity duly organized, validly existing and in goodstanding under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummatethe transactions contemplated by the applicable this Agreement and otherwise to carry out its obligations hereunder. This Agreement has been duly executedby the Investor, and when delivered by the Investor in accordance with terms hereof, will constitute the valid and legally binding obligation of the Investor,enforceable against it in accordance with its terms. (o) Investment Intent. The Investor is acquiring the Oramed Shares as principal for its own account for investment purposes only and notwith a view to or for distributing or reselling such Oramed Shares or any part thereof, without prejudice, however, to the Investor's right at all times to sell orotherwise dispose of all or any part of such Oramed Shares in compliance with applicable securities laws and this Agreement. The Investor is acquiring theOramed Shares hereunder in the ordinary course of its business. The Investor does not have any agreement or understanding, directly or indirectly, with anyPerson to distribute any of the Oramed Shares. (p) Investor Status. At the time the Investor was offered the Oramed Shares, it was, and at the date hereof it is, an "accredited investor" asdefined in Rule 501(a) under the Securities Act and a non-"U.S. person" within the meaning of Rule 902(k) promulgated under the Securities Act (and theInvestor is not purchasing for the account or benefit of a U.S. Person). At the time of the offer and sale of the Oramed Shares, the Investor was not located inthe United States. The Investor is not required to be registered as a broker-dealer under Section 15 of the Securities Exchange Act of 1934, as amended. (q) General Solicitation. The Investor is not purchasing the Oramed Shares as a result of any advertisement, article, notice or othercommunication regarding the Oramed Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at anyseminar or any other general solicitation or general advertisement. 14 (r) Access to Information. The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemednecessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Oramed Shares and themerits and risks of investing in the Oramed Shares; (ii) access to information about the Company and its financial condition, results of operations, business,properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information thatthe Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to theinvestment. The Investor understands that a purchase of the Oramed Shares is a speculative investment involving a high degree of risk. The Investor is awarethat there is no guarantee that the Investor will realize any gain from this investment, and that the Investor could lose the total amount of this investment. TheInvestor acknowledges that it has received no representations or warranties from the Company or its employees or agents in making this investment decisionother than as set forth in this Agreement. (s) Independent Investment Decision. The Investor has independently evaluated the merits of its decision to purchase Oramed Sharespursuant to this Agreement, such decision has been independently made by the Investor and the Investor confirms that it has only relied on the advice of itsown business and/or legal counsel and not on the advice of any other Investor’s business and/or legal counsel in making such decision. (t) Short Sales. The Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding withthe Investor, executed any Short Sales in the securities of the Company since the date that the Investor was first contacted regarding an investment in theCompany. (u) Limitations on Transfers. The Investor acknowledges that the Oramed Shares must be held indefinitely unless subsequently registeredunder the Securities Act or unless an exemption from such registration is available. The Investor is aware of the provisions of Rule 144 promulgated underthe Securities Act which permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, which mayinclude, among other things, the existence of a public market for the securities, the availability of certain current public information about the Company, theresale occurring not less than six months after a party has purchased and paid for the security to be sold, the sale being effected through a “broker’stransaction” or in transactions directly with a “market maker” and the number of securities being sold during any three month period not exceeding specifiedlimitations. (v) But for the representations actually made in this Agreement, the Investor represents that it is aware that the Oramed Shares areallocated "AS IS" without any further representations by the Company and/or its directors and/or its shareholders. 15 (w) Disclosure. All disclosure provided to the Company with regard to the representations and warranties contained in this Section 3.2regarding the Investor, its business and the transactions contemplated hereby, furnished in writing by the Investor is true and correct in all material respectsand does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in thelight of the circumstances under which they were made, together with the disclosure in the ISA Documents, not misleading. (x) Company Reliance. The Investor expressly acknowledges and agrees that the Company is relying upon the Investor’s representationscontained in this Agreement. ARTICLE IV.MISCELLANEOUS 4.1 Certificates; Resales. (a) The Oramed Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Oramed Sharesother than pursuant to an effective registration statement or Rule 144(b)(1) to the Company or to an Affiliate of an Investor, the Company may require thetransferor thereof to provide to the Company an opinion of counsel selected by the transferor, reasonably acceptable to the Company, the form and substanceof which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred OramedShares under the Securities Act. (b) Certificates evidencing the Oramed Shares will contain the following legend, until such time as they are not required: THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THESECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLDEXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINIONOF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TOTHE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BYSUCH SECURITIES. 16 (c) Certificates evidencing the Oramed Shares shall not contain any legend (including the legend set forth in Section 5.1(b) of this Agreement), (i)following a sale of such securities pursuant to an effective registration statement, or (ii) following any sale of such Shares pursuant to Rule 144 (assuming thetransferor was not an Affiliate of the Company), or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicialinterpretations and pronouncements issued by the staff of the SEC). The Company may not make any notation on its records or give instructions to anytransfer agent of the Company that enlarge the restrictions on transfer set forth in this Section 5.1(c) except in the case of an Investor or its permittedtransferee becoming an Affiliate. Certificates for Oramed Shares subject to legend removal hereunder shall be transmitted by the transfer agent of theCompany to the Investor by crediting the account of the Investor’s prime broker with the Depository Trust Company System. (d) The Option Shares are subject to a resale restriction pursuant to applicable Israeli law and regulations. 4.2 Indemnification. (a) The Investor acknowledges that he, she or it understands the meaning and legal consequences of the representations and warrantiesthat are contained herein and hereby agrees, severally and not jointly, to indemnify, save and hold harmless the Company and its directors, officers,employees and counsel, from and against any and all claims or actions arising out of a breach of any representation, warranty or acknowledgment of theInvestor contained in this Agreement. Such indemnification shall be deemed to include not only the specific liabilities or obligations with respect to whichsuch indemnity is provided, but also all reasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liabilityor obligation shall have been reduced to judgment. In addition, the Investor’s representations, warranties and indemnification contained herein shall survivethe Investor’s purchase of the Oramed Shares hereunder for a period of one year following the date hereof. (b) The Company acknowledges it understands the meaning and legal consequences of the representations and warranties that arecontained herein and hereby agrees to indemnify, save and hold harmless the Investor and its directors, officers, employees and counsel, from and against anyand all claims or actions arising out of a breach of any representation, warranty or acknowledgment of the Company contained in this Agreement. Suchindemnification shall be deemed to include not only the specific liabilities or obligations with respect to which such indemnity is provided, but also allreasonable costs, expenses, counsel fees and expenses of settlement relating thereto, whether or not any such liability or obligation shall have been reducedto judgment. In addition, the Company’s representations, warranties and indemnification contained herein shall survive the purchase of the Oramed Shareshereunder for a period of one year following the date hereof. 17 4.3 Abstention from Trading. From the date hereof until the Closing Date, (i) the Investor will not engage in any financial market transactions(whether long, short or other hedging transactions) with respect to the Company’s Common Stock or with respect to the Investor's ordinary shares, and (ii) theCompany will not, and the Company shall cause its directors and officers and each of its and their respective Affiliates to not, engage in any financial markettransactions (whether long, short or other hedging transactions) with respect to the Company’s Common Stock or with respect to the Investor's ordinaryshares. 4.4 Entire Agreement; Amendment. The parties have not made any representations or warranties with respect to the subject matter hereof notset forth herein. This Agreement, together with the Option and any other instruments executed simultaneously herewith, constitute the entire agreementbetween the parties with respect to the subject matter hereof. All understandings and agreements heretofore between the parties with respect to the subjectmatter hereof are merged in this Agreement and any such instruments, which alone fully and completely expresses their agreement. This Agreement may notbe changed, modified, extended, terminated or discharged orally, but only by an agreement in writing, which is signed by all of the parties to this Agreement. 4.5 Notices. Any notice required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will beeffective on (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Agreement prior to5:30 p.m. (in the time zone of the recipient of such notice) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice orcommunication is delivered via facsimile at the facsimile number set forth in this Agreement on a day that is not a Trading Day or later than 5:30 p.m. (in thetime zone of the recipient of such notice) on any Trading Day, (iii) the 2nd Trading Day following the date of mailing, if sent by U.S. nationally recognizedovernight courier service, including Express Mail, for United States deliveries or (iii) five (5) Trading Days after deposit in the United States mail byregistered or certified mail for United States deliveries. All notices not delivered personally or by facsimile will be sent with postage and other chargesprepaid and properly addressed to the party to be notified at the address set forth below such party’s signature of this Agreement or at such other address assuch party may designate by ten (10) days advance written notice to the other parties hereto. The address for such notices and communications shall be asfollows: 18 If to the Company:Oramed Pharmaceuticals Inc. Hi-Tech Park 2/5 Givat-Ram PO Box 39098 Jerusalem 91390 Israel Attn: Nadav Kidron Facsimile: +972-2-566-0004With a copy to:Goldfarb Seligman & Co., Law OfficesElectra Tower, 98 Yigal Alon StreetTel Aviv 67891, IsraelAttn: Adam M. Klein, Adv.Facsimile: +972-3-608-9855 If to an Investor:To the address set forth under the Investor's name on the signature pages hereof. 4.6 Delays or Omissions. Except as otherwise specifically provided for hereunder, no party shall be deemed to have waived any of his or her orits rights hereunder or under any other agreement, instrument or document signed by any of them with respect to the subject matter hereof unless such waiveris in writing and signed by the party waiving said right. Except as otherwise specifically provided for hereunder, no delay or omission by any party inexercising any right with respect to the subject matter hereof shall operate as a waiver of such right or of any such other right. A waiver on any one occasionwith respect to the subject matter hereof shall not be construed as a bar to, or waiver of, any right or remedy on any future occasion. All rights and remedieswith respect to the subject matter hereof, whether evidenced hereby or by any other agreement, instrument or document, will be cumulative, and may beexercised separately or concurrently. 4.7 Severability. If any provision of this Agreement is held to be unenforceable under applicable law, then such provision shall be excludedfrom this Agreement, and the balance of this Agreement shall be interpreted as if such provision was so excluded and shall be enforceable in accordance withits terms. 4.8 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be bindingupon, the successors, assigns, heirs, executors and administrators of the parties hereto. 4.9 Counterparts; Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, andall of which together shall constitute one instrument. Signatures transmitted by facsimile or scanned and transmitted by electronic mail shall be consideredvalid and binding signatures. 19 4.10 Survival of Warranties. The representations, warranties, covenants and agreements of the Company and the Investor contained in or madepursuant to this Agreement shall survive the execution and delivery of this Agreement and shall in no way be affected by any investigation made by anInvestor or the Company. 4.11 Further Action. The parties agree to execute any and all such other and further instruments and documents, and to take any and all suchfurther actions reasonably required to effectuate this Agreement and the intent and purposes hereof. 4.12 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit oraffect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutualintent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and nopresumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement. 4.13 Publicity. Each of the parties hereto shall coordinate with each other all publicity relating to the transactions contemplated by thisAgreement, and shall not issue any press release, immediate report or other filing with the ISA relating to this Agreement or the transactions contemplated bythis Agreement without first obtaining the prior consent of the other or its representative, except that neither party shall be precluded from making suchfilings or giving such notices as may be required by law or the rules of any stock exchange. Each of the parties hereto shall cooperate and shall use theirreasonable efforts to agree on the form and substance of the report to be filed by the Investor with the ISA relating to the transactions contemplated by thisAgreement. 4.14 TASE Listing. For so long the Option is outstanding or the Company holds any of the D.N.A Ordinary Shares, the Investor shall use its bestefforts to maintain its listing on the TASE and shall comply with all reporting requirements under applicable law. 4.15 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permittedassigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 4.16 Governing Law; Venue and Waiver of Jury Trial. This Agreement is to be construed in accordance with and governed bythe internal laws of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction tothe rights and duties of the parties. The Company and the Investor agree that any suit, action, or proceeding arising out of or relating to this Agreement shallbe brought to any court of competent jurisdiction sitting in Wilmington, Delaware and that the parties shall submit to the jurisdiction of such court. Theparties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action orproceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANYSUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 4.14 shall for any reason be held invalid or unenforceable, it is thespecific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable. 20 4.17 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company orthe Investor, as applicable, shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitutiontherefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company or the Investor, as applicable, of such loss,theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shallalso pay any reasonable third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencingany Securities is requested due to a mutilation thereof, the Company or the Investor, as applicable, may require delivery of such mutilated certificate orinstrument as a condition precedent to any issuance of a replacement. [SIGNATURE PAGES FOLLOW] 21 IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS SECURITIES PURCHASE AGREEMENT TO BE DULY EXECUTED BY THEIRRESPECTIVE AUTHORIZED SIGNATORIES AS OF THE DATE FIRST INDICATED ABOVE. ORAMED PHARMACEUTICALS INC. By: Name:Nadav Kidron Title:Chief Executive Officer [REMAINDER OF PAGE INTENTIONALLY LEFT BLANKSIGNATURE PAGES FOR INVESTORS FOLLOW] 22 IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorizedsignatories as of the date first indicated above. Name of Investor: D.N.A Biomedical Solutions Ltd.Signature of Authorized Signatory of Investor: /s/ Zeev Bronfeld /s/ Meni Mor Name of Authorized Signatory: Zeev Bronfeld and Meni MorTitle of Authorized Signatory: Director and DirectorEmail Address of Investor:____________________________Social Security or Taxpayer Identification Number _______________________________Address for Notice of Investor:Shimon Hatarasi 43, Tel Aviv 62492, IsraelFacsimile: [_______________]Address for Delivery of Securities for Investor (if not same as above):________________________________________________________________________________________________________________________________________________________________________________ 23 SCHEDULE 1 Investor Number of Shares D.N.A Biomedical Solutions Ltd. 2,390,057 24Exhibit 21.1SUBSIDIARYOramed Ltd. - Incorporated in the State of Israel Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-163919) of Oramed Pharmaceuticals Inc. of ourreport dated December 11, 2012 relating to the financial statements which appears in this Form 10-K. /s/ Kesselman & Kesselman,Kesselman & KesselmanCertified Public Accountants (lsr.) A member firm of PricewaterhouseCoopers International LimitedTel Aviv, IsraelDecember 11, 2012 Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 68125, Israel, P.O Box 50oo5 Tel-Aviv 61500 Telephone: +972 -3- 7954555,Fax:+972 -3- 7954556, www.pwc.com/ilKesselman & Kesselman is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entityExhibit 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference of our report dated December 10, 2007 relating to the inception through August 31, 2007 auditedfinancial statements of Oramed Pharmaceuticals, Inc. which appears in this Annual Report on Form 10-K for that period in the Registration Statement onForm S-8 no. (333-164288). /s/ MaloneBailey, LLP MaloneBailey, LLPwww.malone-bailey.comHouston, Texas December 11, 2012 EXHIBIT 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) AND 15d-14(a)UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED I, Nadav Kidron, certify that: 1. I have reviewed this Annual Report on Form 10-K of Oramed Pharmaceuticals Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant 's internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controlover financial reporting. Date: December 11, 2012By: /s/ Nadav Kidron Nadav Kidron President and Chief Executive Officer EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) AND 15d-14(a)UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED I, Yifat Zommer, certify that: 1. I have reviewed this Annual Report on Form 10-K of Oramed Pharmaceuticals Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recentfiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonablylikely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controlover financial reporting. Date: December 11, 2012By: /s/ Yifat Zommer Yifat Zommer Chief Financial Officer EXHIBIT 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICERPURSUANT TO 18 U.S.C. SECTION 1350 In connection with the annual report of Oramed Pharmaceuticals Inc., or the Company, on Form 10-K for the period ended August 31, 2012, as filedwith the Securities and Exchange Commission on the date hereof, or the Report, I, Nadav Kidron, President, Chief Executive Officer and a Director of theCompany, certify, pursuant to 18 U.S.C. Section 1350, that to my knowledge: 1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and 2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: December 11, 2012/s/ Nadav Kidron Nadav Kidron, President and Chief Executive OfficerEXHIBIT 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICERPURSUANT TO 18 U.S.C. SECTION 1350 In connection with the annual report of Oramed Pharmaceuticals Inc., or the Company, on Form 10-K for the period ended August 31, 2012, as filedwith the Securities and Exchange Commission on the date hereof, or the Report, I, Yifat Zommer, Chief Financial Officer of the Company, certify, pursuant to18 U.S.C. Section 1350, that to my knowledge: 1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and 2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: December 11, 2012/s/ Yifat Zommer Yifat Zommer, Chief Financial Officer

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