Oramed Pharmaceuticals Inc.
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549 FORM 10-K ☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended August 31, 2018 or ☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 000-50298 ORAMED PHARMACEUTICALS INC.(Exact Name of Registrant as Specified in its Charter) Delaware 98-0376008(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 142 W. 57th StreetNew York, New York 10019(Address of Principal Executive Offices) (Zip Code) 844-967-2633(Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Exchange Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.012 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 ☐ No ☒ 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 ☐ No ☒ 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 ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark 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. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, oran emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growthcompany” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying withany new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the voting and non-voting common equity held by non-affiliates as of the last business day of the registrant’s mostrecently completed second fiscal quarter was $74,402,451, based on a price of $7.25, being the last price at which the shares of the registrant’s common stockwere sold on The Nasdaq Capital Market prior to the end of the most recently completed 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: 17,378,359 shares ofcommon stock issued and outstanding as of November 26, 2018.  ORAMED PHARMACEUTICALS INC. FORM 10-K(FOR THE FISCAL YEAR ENDED AUGUST 31, 2018) TABLE OF CONTENTS PART I1 ITEM 1. BUSINESS.1 ITEM 1A. RISK FACTORS.14 ITEM IB. UNRESOLVED STAFF COMMENTS.23 ITEM 2. PROPERTIES.23 ITEM 3. LEGAL PROCEEDINGS.23 ITEM 4. MINE SAFETY DISCLOSURES.23PART II24 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASESOF EQUITY SECURITIES.24 ITEM 6. SELECTED FINANCIAL DATA.24 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.25 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.32 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.33 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.33 ITEM 9A. CONTROLS AND PROCEDURES.34 ITEM 9B. OTHER INFORMATION.34PART III35 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.35 ITEM 11. EXECUTIVE COMPENSATION.39 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS.49 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.52 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.53PART IV54 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.54 ITEM 16. FORM 10-K SUMMARY.58 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 ourwholly-owned Israeli subsidiary, Oramed Ltd., unless otherwise indicated. All dollar amounts refer to U.S. dollars unless otherwise indicated. On August 31, 2018, the exchange rate between the New Israeli Shekel, or NIS, and the dollar, as quoted by the Bank of Israel, was NIS 3.604 to$1.00. Unless indicated otherwise by the context, statements in this Annual Report on Form 10-K that provide the dollar equivalent of NIS amounts orprovide the NIS equivalent of dollar amounts are based on such exchange rate. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS The statements contained in this Annual Report on Form 10-K that are not historical facts are “forward-looking statements” within the meaning ofthe Private Securities Litigation Reform Act of 1995 and other federal securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “plannedexpenditures,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, butare not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this Annual Report on Form 10-K. Additionally,statements concerning future matters are forward-looking statements. We remind readers that forward-looking statements are merely predictions and thereforeinherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity,or our achievements, or industry results, to be materially different from any future results, performance, levels of activity, or our achievements, or industryresults, expressed or implied by such forward-looking statements. Such forward-looking statements appear in Item 1 - “Business” and Item 7 - “Management’sDiscussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Annual Report on Form 10-K and include, amongother statements, statements regarding the following: ●the expected development and potential benefits from our products in treating diabetes; ●the prospects of entering into additional license agreements, or other partnerships or forms of cooperation with other companies or medicalinstitutions; ●future milestones, conditions and royalties under the license agreement with Hefei Tianhui Incubator of Technologies Co., Ltd., or HTIT; ●our research and development plans, including pre-clinical and clinical trials plans and the timing of enrollment, obtaining results andconclusion of trials, including without limitation, our expectation that we will initiate two six-month Phase III clinical trials if our Phase IIbthree-month dose-ranging clinical trial is successful, and our expectation to file a New Drug Application thereafter; ●our belief that our technology has the potential to deliver medications and vaccines orally that today can only be delivered via injection; ●the competitive ability of our technology based product efficacy, safety, patient convenience, reliability, value and patent position; ●the potential market demand for our products; ●our expectation that in the upcoming year our research and development expenses will continue to be our major expenditure; ●our expectations regarding our short- and long-term capital requirements; ●our outlook for the coming months and future periods, including but not limited to our expectations regarding future revenue and expenses; and ●information with respect to any other plans and strategies for our business. Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, such statements canonly be based on facts and factors known by us at the time of such statements. Consequently, forward-looking statements are inherently subject to risks anduncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-lookingstatements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those discussed herein, includingthose risks described in Item 1A. “Risk Factors”, and expressed from time to time in our other filings with the Securities and Exchange Commission, or SEC.In addition, historic results of scientific research, clinical and preclinical trials do not guarantee that the conclusions of future research or trials would notsuggest different conclusions. Also, historic results referred to in this Annual Report on Form 10-K could be interpreted differently in light of additionalresearch, clinical and preclinical trials results. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of thedate of this Annual Report on Form 10-K. Except as required by law, we undertake no obligation to revise or update any forward-looking statements in orderto reflect any event 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 and factors thatmay affect our business, financial condition, results of operations and prospects. ii 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 an oralinsulin capsule to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules or pills for delivery of other polypeptides. Oral insulin: We are seeking to revolutionize the treatment of diabetes through our proprietary flagship product, an orally ingestible insulin capsule,or ORMD-0801. Our technology allows insulin to travel from the gastrointestinal tract via the portal vein to the bloodstream, revolutionizing the manner inwhich insulin is delivered. It enables its passage in a more physiological manner than current delivery methods of insulin. Our technology is a platform thathas the potential to deliver medications and vaccines orally that today can only be delivered via injection. In April 2018, we initiated a three-month dose-ranging Phase IIb clinical trial of ORMD-0801. This placebo controlled, randomized, 90 daytreatment clinical trial is being conducted on approximately 285 type 2 diabetic patients in multiple centers throughout the United States pursuant to anInvestigational New Drug application, or IND, with the U.S. Food and Drug Administration, or FDA. The primary endpoints of the trial are to assess the safetyand evaluate the effect of ORMD-0801 on HbA1c levels over a 90 day treatment period. Secondary endpoints of the trial include measurements of fastingplasma glucose, or FPG, post-prandial glucose, or PPG levels, during a mixed-meal tolerance test, or MMTT, and weight. We had a call with the FDA in August 2017 regarding ORMD-0801 after the completion of a Phase IIb clinical trial on 180 diabetic patients, whichindicated a statistically significant blood glucose lowering effect of ORMD-0801 versus placebo across several endpoints. During the call, the FDA advisedthat the regulatory pathway for the submission of ORMD-0801 would be a Biologics License Application, or BLA. If approved, the BLA pathway wouldgrant us 12 years of marketing exclusivity for ORMD-0801, from the approval date, and an additional six months of exclusivity may be granted to us if theproduct also receives approval for use in pediatric patients. The FDA confirmed that the approach to nonclinical toxicology, chemistry manufacturingcontrols and qualification of excipients would be driven by their published guidance documents. In June 2018, we initiated a glucose clamp study which will quantify insulin absorption in type 1 diabetic patients treated with ORMD-0801. Theglucose clamp is a method for quantifying insulin absorption in order to measure a patient’s insulin sensitivity and how well a patient metabolizes glucose.This exploratory, randomized, double-blind glucose clamp study is evaluating exposure-response profiles of type 1 diabetic patients treated with ORMD-0801. Six patients with HbA1c levels of 10% or below, aged 18-50, are enrolled in the study. In June 2018, we also initiated a food effect trial in the United States for ORMD-0801. This single-blind, five period, randomized, placebo-controlled crossover trial is evaluating the pharmacokinetics and pharmacodynamics of ORMD-0801 taken at different times in relation to meals in healthyvolunteers and patients with type 1 diabetes. Up to 48 patients will be enrolled, including up to 24 healthy volunteers and 24 patients with type 1 diabetes. In October 2018, we initiated an exploratory clinical study of ORMD-0801, in patients with nonalcoholic steatohepatitis, or NASH. The three-monthtreatment study, which was approved by the Israel’s Ministry of Health, will assess the effectiveness of ORMD-0801 in reducing liver fat content,inflammation and fibrosis in patients with NASH. Oral Glucagon-Like Peptide-1: Glucagon-Like Peptide-1, or GLP-1, is an incretin hormone, which is a type of gastrointestinal hormone thatstimulates the secretion of insulin from the pancreas. The incretin concept was hypothesized when it was noted that glucose ingested by mouth (oral)stimulated two to three times more insulin release than the same amount of glucose administered intravenously. In addition to stimulating insulin release,GLP-1 was found to suppress glucagon release (a hormone involved in the regulation of glucose) from the pancreas, slow gastric emptying to reduce the rateof absorption of nutrients into the blood stream and increase satiety. Other important beneficial attributes of GLP-1 are its effects of increasing the number ofbeta cells (cells that manufacture and release insulin) in the pancreas and, possibly, protection of the heart. In addition to our flagship product, the ORMD-0801 insulin capsule, we are using our technology for an orally ingestible GLP-1 capsule, or ORMD-0901. In September 2018, the FDA cleared our INDapplication for human trials of ORMD-0901. We expect to initiate in the first quarter of calendar year 2019 a Phase I pharmacokinetic, or PK, trial which willevaluate the safety and the pharmacokinetics of ORMD-0901 compared to placebo. This study will be conducted pursuant to the IND and will be followed bya large Phase II trial on type 2 diabetic patients which will be conducted in the United States under an IND. 1 Diabetes: Diabetes is a disease in which the body does not produce or properly use insulin. Insulin is a hormone that causes sugar to be absorbedinto cells, where the sugar is converted into energy needed for daily life. The cause of diabetes is attributed both to genetics (type 1 diabetes) and, most often,to environmental factors such as obesity and lack of exercise (type 2 diabetes). According to the International Diabetes Federation, or IDF, an estimated 425million adults worldwide suffered from diabetes in 2017 and the IDF projects this number will increase to 629 million by 2045. Also, according to the IDF, in2017, an estimated 4 million people died from diabetes. According to the American Diabetes Association, or ADA, in the United States there wereapproximately 30.3 million people with diabetes, or 9.4% of the United States population in 2015. 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 protecting thesetechnology developments on a worldwide basis. Management: We are led by a highly-experienced management team knowledgeable in the treatment of diabetes. Our Chief Scientific Officer,Miriam Kidron, PhD, is a world-recognized pharmacologist and a biochemist and the innovator primarily responsible for our oral insulin technologydevelopment and know-how. Scientific Advisory Board: Our management team has access to our internationally recognized Scientific Advisory Board whose members arethought-leaders in their respective areas. The Scientific Advisory Board is comprised of Dr. Roy Eldor, Professor Ele Ferrannini, Dr. Robert R. Henry,Professor Avram Hershko, Dr. Harold Jacob and Dr. Jane E. B. Reusch. Strategy Short Term Business Strategy We plan to conduct further research and development on the technology covered by the patent application “Methods and Composition for OralAdministration of Proteins,” which we acquired from Hadasit Medical Research Services and Development Ltd. in 2006, and which is granted in variousforeign jurisdictions, as well as the other patents we have filed in various foreign jurisdictions since then, as discussed below under “—Patents and Licenses”and below under “Item 1A. Risk Factors”. Through our research and development efforts, we have successfully developed an oral dosage form that will withstand the harsh environment of thestomach and intestines and will be effective in delivering active insulin or other proteins, such as exenatide, for the treatment of diabetes. The excipients thatare added to the proteins in the formulation process must not modify the proteins chemically or biologically, and the dosage form must be safe to ingest. Weplan to continue to conduct clinical trials to show the effectiveness of our technology. As noted above, in April 2018, we initiated a three-month dose-ranging Phase IIb clinical trial of ORMD-0801 and in August 2017, we had a callwith the FDA regarding ORMD-0801, during which the FDA advised that the regulatory pathway for the submission of ORMD-0801 would be a BLA. 2 In April 2016 we completed a smaller Phase IIb clinical trial on 180 type 2 adult diabetic patients. This double-blind, randomized, 28-day dosingclinical trial was designed to assess the safety and efficacy of ORMD-0801, and was conducted in 33 sites in the United States. The trial indicated astatistically significant lowering of blood glucose levels versus placebo across several endpoints, with no serious or severe adverse issues related to the drug.The trial successfully met all of its primary and most of its secondary and exploratory endpoints. The trial primarily evaluated the nighttime glucose loweringeffect and safety of ORMD-0801 compared to a placebo. The results of the mean nighttime glucose showed a significant difference in mean change from run-in versus placebo. ORMD-0801 oral insulin was safe and well-tolerated for the dosing regimen in this trial. The trial further evaluated the effect of ORMD-0801 on mean 24-hour glucose, fasting glucose, and daytime glucose and the results showed a statistically significant difference in mean change from run-inversus placebo. Two examples of the data gleaned from this study are shown below: * Indicates Statistically Significant Difference from Placebo (p-Value<0.05) No significant difference was shown in change in morning fasting serum insulin, C-Peptide, or triglycerides. Should our Phase IIb three-month dose-ranging clinical trial successfully meet its primary endpoints, we anticipate initiating two six-month Phase IIIclinical trials on both type 1 and type 2 diabetic patients, following which we expect to file a NDA with potential FDA approval by the second half ofcalendar year 2023. As noted above, in September 2018, the FDA cleared our IND application for human trials of our oral GLP-1 analog capsule ORMD-0901 and weexpect to initiate in the first quarter of calendar year 2019 a Phase I PK trial which will evaluate the safety and the pharmacokinetics of ORMD-0901compared to placebo. Clinical trials are planned in order to substantiate our results as well as for purposes of making future filings for drug approval. We also plan toconduct further research and development by deploying our proprietary drug delivery technology for the delivery of other polypeptides in addition toinsulin, and to develop other innovative pharmaceutical products. The table below gives an overview of our primary product pipeline (calendar quarters): Phase IPhase IIPhase IIITimelineORMD-0801oral insulinType 2 diabetesQ2 ’18: Phase IIb 90-day multi-center study initiated (projectedcompletion Q4 ’19)Q3 ’20: Phase III study projectedinitiation (projected completion Q3’22) Type 1 diabetes Q2 ’18: Clamp study initiated(projected completion Q1 ’19)Q2 ’18: Food effect study initiated(projected completion Q2 ’19)Q3 ’20: Phase III projectedinitiation (projected completion Q3’22) ORMD-0901oral GLP-1Type 2 diabetesQ1 ’19: Pharmacokinetics clinicalstudy projected initiation (projectedcompletion Q2 ’19)Q4 ’19: Phase II projected initiation(projected completion Q1 ’21) 3 Another component of our business strategy is to partner with other companies or medical institutions in order to further develop our technologyand commence pre-commercialization activities. On November 30, 2015, we, our Israeli subsidiary and HTIT entered into a Technology License Agreement,which was further amended, according to which we granted HTIT an exclusive commercialization license in the territory of the People’s Republic of China,Macau and Hong Kong, or the Territory, related to our oral insulin capsule, ORMD-0801. Pursuant to this license agreement, HTIT will conduct, at its ownexpense, certain pre-commercialization and regulatory activities with respect to our subsidiary’s technology related to the ORMD-0801 capsule, and willpay, upon the meeting of certain conditions, certain royalties and an aggregate of approximately $37.5 million (see “Out-Licensed Technology” below). Weplan to seek additional partnerships or forms of cooperation with other companies or medical institutions. While our strategy is to partner with an appropriateparty, no assurance can be given that we will in fact be able to reach an agreeable partnership with any third party. Under certain circumstances, we maydetermine to develop one or more of our oral dosage forms on our own, either world-wide or in select territories. 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/or other orallydigestible drugs. We anticipate such partner or partners would be responsible for, or substantially support, late stage clinical trials (Phase III) to increase thelikelihood of obtaining regulatory approvals and registrations in the appropriate markets in a timely manner. We further anticipate that such partner, orpartners, would also be responsible for sales, marketing and support of our oral insulin capsule in these markets. Such planned strategic partnership, orpartnerships, may provide a marketing and sales infrastructure for our products as well as financial and operational support for global clinical trials, postmarketing studies, label expansions and other regulatory requirements concerning future clinical development in the United States and elsewhere. Any futurestrategic partner, or partners, may also provide capital and expertise that would enable the partnership to develop new oral dosage forms for otherpolypeptides. While our strategy is to partner with an appropriate party, no assurance can be given that we will in fact be able to reach an agreeablepartnership with any third party. Under certain circumstances, we may determine to develop one or more of our oral dosage forms on 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 means ofobtaining additional technologies to complement and/or expand our current product portfolio. Our goal is to create a well-balanced product portfolio thatwill enhance and complement our existing drug portfolio. Product Development Research and Development Summary We devote the majority of our efforts to research and development, including clinical studies for our lead clinical product candidates, as describedbelow. 4 Oral Insulin During the fiscal year ended August 31, 2007, we conducted several clinical studies of our orally ingestible insulin that were intended to assess boththe safety/tolerability and absorption properties of our proprietary oral insulin. Based on the PK and pharmacologic outcomes of these trials, we decided tocontinue the development of our oral insulin product. During the fiscal year ended August 31, 2008, we successfully completed animal studies and non-FDA approved clinical trials using our oral insulincapsule, including a Phase Ib clinical trial in healthy human volunteers with the intent of dose optimization; a Phase IIa study to evaluate the safety andefficacy of our oral insulin capsule in type 2 diabetic volunteers at Hadassah Medical Center in Jerusalem; and a Phase IIa study to evaluate the safety andefficacy of our oral insulin capsule on type 1 diabetic volunteers. Our successful non-FDA clinical trials continued in the fiscal year ended August 31, 2009, with a Phase IIb study in South Africa to evaluate thesafety, tolerability and efficacy of our oral insulin capsule on type 2 diabetic volunteers. In September 2010, we reported the successful results of an exploratory clinical trial testing the effectiveness of our oral insulin capsule in type 1diabetes patients suffering from uncontrolled diabetes. Unstable or labile diabetes is characterized by recurrent, unpredictable and dramatic blood glucoseswings often linked with irregular hyperglycemia and sometimes serious hypoglycemia affecting type 1 diabetes patients. This successfully completedexploratory study was a proof of concept study for defining a novel indication for ORMD-0801. We believe the encouraging results justify further clinicaldevelopment of ORMD-0801 capsule application toward management of uncontrolled diabetes. In March 2011, we reported that we successfully completed a comprehensive toxicity study for our oral insulin capsule. The study was completedunder conditions prescribed by the FDA Good Laboratory Practices regulations. We originally filed an IND with the FDA in December 2012 for clearance to begin a Phase II clinical trial of our oral insulin capsule, ORMD-0801, inorder to evaluate the safety, tolerability and efficacy in type 2 diabetic volunteers. Because the identical formulation of ORMD-0801 had not yet beenstudied in humans at bedtime, in February 2013, the FDA noted concerns about mitigating potential risks of severe hypoglycemia and requested that weperform a sub-study in a controlled in-patient setting for a one-week period prior to beginning the larger multi-centered Phase II trial. As a result, we withdrewthe original IND and, in April 2013, we submitted a new IND for the Phase IIa study. We began FDA-approved clinical trials of ORMD-0801 in July 2013, with the Phase IIa study, which evaluated the pharmacodynamic effects ofORMD-0801 on mean nighttime glucose (determined using a continuous glucose monitor) on 30 volunteers with type 2 diabetes. The Phase IIa study met allprimary and secondary endpoints. The results showed that ORMD-0801 exhibited a sound safety profile, led to reduced mean daytime and nighttime glucosereadings and lowered fasting blood glucose concentrations, when compared to placebo. In addition, no serious adverse events occurred during this study, andthe only adverse events that occurred were not drug related. In February 2014, we submitted a protocol to the FDA to initiate a Phase IIa trial of our oral insulin capsule for type 1 diabetes volunteers. Theprotocol was submitted under our then-existing IND to include both type 1 and type 2 diabetes indications. In March 2014, we began a seven-day treatmentin a double-blind, randomized, placebo controlled, FDA-approved Phase IIa trial of ORMD-0801 on 25 volunteers with type 1 diabetes. The results showedthat ORMD-0801 oral insulin given before meals appeared to be safe and well-tolerated for the dosing regimen in this study. Although the study was notpowered to show statistical significance, there were internally consistent trends observed. Consistent with the timing of administration, the data showed adecrease in bolus insulin, a decrease in post-prandial glucose, a decrease in daytime glucose by continual glucose monitoring and an increase in post-prandial hypoglycemia in the active group, demonstrating the efficacy of ORMD-0801. In June 2015, we initiated a Phase IIb clinical trial on 180 type 2 adult diabetic patients, which was completed in April 2016. This double-blind,randomized, 28-day treatment period clinical trial was designed to assess the safety and efficacy of ORMD-0801 and was conducted in 33 sites in the UnitedStates. The trial indicated a statistically significant lowering of blood glucose levels versus placebo across several endpoints, with no serious or severeadverse issues related to the drug. The trial successfully met all of its primary and most of its secondary and exploratory endpoints for both safety andefficacy. 5 In October 2016, we initiated an additional Phase IIa, dose finding clinical trial which was completed in February 2017. This randomized, double-blind trial was conducted on 32 type 2 adult diabetic patients in order to better define the optimal dosing of ORMD-0801 moving forward. The results of thetrial indicated a positive safety profile and potentially meaningful efficacy of ORMD-0801, as the efficacy data suggest ORMD-0801 improves glucosecontrol. In March 2017, we initiated a six-month toxicology study to allow for the use of our oral insulin capsule for a longer period than previouslyperformed. We anticipate receiving the final report of this study in the first quarter of calendar year 2019. In August 2017, we had a call with the FDA regarding ORMD-0801. During the call, the FDA advised that the regulatory pathway for the submissionof ORMD-0801 would be a BLA. If approved, the BLA pathway would grant us 12 years of marketing exclusivity for ORMD-0801, from the approval date,and an additional six months of exclusivity may be granted if the product also receives approval for use in pediatric patients. The FDA confirmed that theapproach to nonclinical toxicology, chemistry manufacturing controls and qualification of excipients would be driven by their published guidancedocuments. In April 2018, we initiated a three-month dose-ranging Phase IIb clinical trial of ORMD-0801. This placebo controlled, randomized, 90 daytreatment clinical trial is being conducted on approximately 285 type 2 diabetic patients in multiple centers throughout the U.S. pursuant to an IND. Theprimary endpoints of the trial are to assess the safety and evaluate the effect of ORMD-0801 on HbA1c levels over a 90 day treatment period. Secondaryendpoints of the trial include measurements of FPG, PPG levels during a MMTT and weight. As noted above, in June 2018, we initiated a glucose clamp study which will quantify insulin absorption in type 1 diabetic patients treated withORMD-0801. As noted above, in June 2018, we also initiated a food effect trial in the United States for ORMD-0801. We utilize Clinical Research Organizations, or CROs, to conduct our clinical studies. Oral GLP-1 Analog During the fiscal year ended August 31, 2009, we completed pre-clinical trials of ORMD-0901, an analog for GLP-1, which suggested that the GLP-1analog (exenatide-4), when combined with our capsule technology, is absorbed through the gastrointestinal tract and retains its biological activity. In December 2009, we completed a non-FDA approved clinical trial in healthy, male volunteers conducted at Hadassah University Medical Centerin Jerusalem. This study evaluated the safety and efficacy of ORMD-0901. The results of the study indicated that ORMD-0901 was well tolerated by allsubjects and demonstrated physiological activity, as extrapolated from ensuing subject insulin levels when compared to those observed after treatment withplacebo. In January 2013, we began a clinical trial for our oral exenatide capsule on healthy volunteers and type 2 diabetic patients. Based on this study, wedecided to make slight adjustments in the manufacturing of these capsules and began pre-toxicology studies on the new capsules. In September 2013, we submitted a pre-IND package to the FDA for ORMD-0901. In August 2015, we began a non-FDA clinical trial outside of the United States for ORMD-0901 on type 2 diabetic patients. The trial was completedduring the second quarter of calendar year 2016 and indicated positive results as it showed ORMD-0901 to be safe and well tolerated and demonstratedencouraging efficacy data. We completed a three-month pre-clinical toxicology study in March 2017 and submitted the report relating to this study to the FDA with our IND. 6 In September 2018, the FDA cleared our IND application for human trials of ORMD-0901. We expect to initiate in the first quarter of calendar year2019 a Phase I PK trial which will evaluate the safety and the pharmacokinetics of ORMD-0901 compared to placebo. This fully-randomized, single-blind,placebo-controlled four-way crossover study will be conducted on up to 15 healthy patients pursuant to the IND and will be followed by a large Phase II trialon type 2 diabetic patients which will be conducted in the United States under an IND. Combination Therapy In June 2012, we presented an abstract, which reported the impact of ORMD-0801 delivered in combination with ORMD-0901. The work assessedthe safety and effectiveness of a combination of oral insulin and oral exenatide treatments delivered to pigs prior to food intake. The drug combinationresulted in significantly improved blood glucose regulation when compared to administration of each drug separately. In the near term, we are focusing our efforts on the development of our flagship products, oral insulin and oral exenatide. Once these two productshave progressed further in clinical trials, we intend to conduct additional studies with the oral combination therapy. Other products During the first quarter of calendar year 2017, we began developing a new drug candidate, a weight loss treatment in the form of an oral leptincapsule, and in April 2017, Israel’s Ministry of Health approved our commencement of a proof of concept single dose study for our oral leptin drug candidateto evaluate its pharmacokinetic and pharmacodynamics (glucagon reduction) in 10 type 1 adult diabetic patients. The study is projected to be initiated incalendar year 2019 and be completed during calendar year 2019. As noted above, in October 2018, we initiated an exploratory clinical study of our oral insulin capsule, ORMD-0801, in patients with NASH, and weexpect to complete the study in the first quarter of calendar year 2020. Raw Materials Our oral insulin capsule is currently manufactured by Swiss Caps AG. One of our oral capsule ingredients is being developed and produced by an Indian company. In July 2010, Oramed Ltd. entered into the Manufacturing and Supply Agreement, or MSA, with Sanofi-Aventis Deutschland GMBH, or Sanofi-Aventis. According to the MSA, Sanofi-Aventis will supply Oramed Ltd. with specified quantities of recombinant human insulin to be used for clinical trials. We purchase, pursuant to separate agreements with third parties, the raw materials required for the manufacturing of our oral capsule. We generallydepend upon a limited number of suppliers for the raw materials. Although alternative sources of supply for these materials are generally available, we couldincur significant costs and disruptions if we would need to change suppliers. The termination of our relationships with our suppliers or the failure of thesesuppliers to meet our requirements for raw materials on a timely and cost-effective basis could have a material adverse effect 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 States and othercommercially significant markets. We hold 25 patent applications currently pending, with respect to various compositions, methods of production and oraladministration of proteins and exenatide. Expiration dates for pending patents, if granted, will fall between 2026 and 2034. We hold 74 patents, 27 of which were issued during the fiscal year ended August 31, 2018, or fiscal 2018, including patents issued by the UnitedStates, Swiss, German, French, U.K., Italian, Netherlands, Swedish, Spanish, Australian, Israeli, Japanese, New Zealand, South African, Russian, Canadian,Hong Kong, Chinese, European and Indian patent offices that cover a part of our technology, which allows for the oral delivery of proteins; patents issued bythe Australian, Canadian, European, Austrian, Belgian, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norwegian, Spanish, Swedish,Swiss, U.K., Israeli, New Zealand, South African, Russian and Japanese patent offices that cover part of our technology for the oral delivery of exenatide; andpatents issued by the European, Austrian, Belgian, Denmark, French, German, Irish, Italian, Luxembourg, Monaco, Netherlands, Norway, Spanish, Swedish,Swiss, U.K. and Japanese patent offices for treating diabetes. 7 Consistent with our strategy to seek protection in key markets worldwide, we have been and will continue to pursue the patent applications andcorresponding foreign counterparts of such applications. We believe that our success will depend on our ability to obtain patent protection for ourintellectual 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 to require ouremployees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, our board of directors, or our Board, technicalreview board and other advisors, to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. Theseagreements provide that all confidential information developed or made known to the individual during the course of the individual’s relationship with us isto be kept confidential and not disclosed to third parties except in specific limited circumstances. We also require signed confidentiality or material transferagreements from any company that is to receive our confidential information. In the case of employees, consultants and contractors, the agreements providethat all inventions conceived by the individual while rendering services to us shall be assigned to us as the exclusive property of our Company. There can beno assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that wewould have adequate remedies for any breach, or that our trade secrets or unpatentable know-how will not otherwise become known or be independentlydeveloped by competitors. Out-Licensed Technology In June 2010, Oramed Ltd. entered into a joint venture agreement with D.N.A Biomedical Solutions Ltd., or D.N.A, for the establishment of EnteraBio LTD, or Entera. Under the terms of a license agreement that was entered into between Oramed Ltd. and Entera in August 2010, we out-licensed technology to Entera,on an exclusive basis, for the development of oral delivery drugs for certain indications to be agreed upon between the parties. The out-licensed technologydiffers from our main delivery technology that is used for oral insulin and GLP-1 analog and is subject to different patent applications. Entera’s initialdevelopment effort is for an oral formulation for the treatment of osteoporosis. In March 2011, we entered into a patent transfer agreement to replace theoriginal license agreement pursuant to which Oramed Ltd. assigned to Entera all of its right, title and interest in and to the patent application that it hadlicensed to Entera in August 2010. Under this agreement, Oramed Ltd. is entitled to receive from Entera royalties of 3% of Entera’s net revenues (as defined inthe agreement) and a license back of that patent application for use in respect of diabetes and influenza. In March 2011, we also consummated a transaction with D.N.A, whereby we sold to D.N.A 47% of Entera’s outstanding share capital on an undilutedbasis, retaining a 3% interest as of March 2011. In consideration for the shares sold to D.N.A, we received, among other payments, ordinary shares of D.N.A.The D.N.A ordinary shares are traded on the Tel Aviv Stock Exchange and its quoted price is subject to market fluctuations, and may, at times, have a pricebelow the value on the date we acquired such shares. In addition, the ordinary shares of D.N.A have historically experienced low trading volume; as a result,there is no guarantee that we will be able to resell the ordinary shares of D.N.A at the prevailing market prices. During the years ended August 31, 2018, 2017and 2016, we did not sell any of the D.N.A ordinary shares. As of August 31, 2018, we held approximately 6.9% of D.N.A’s outstanding ordinary shares. 8 As of August 31, 2018, Entera had not yet realized any revenues. In July 2018, Entera completed an initial public offering and became listed on TheNasdaq Capital Market, or Nasdaq. In August 2018, Entera announced that it completed the treatment of patients in the first part of the PK/pharmacodynamicstudy in hypoparathyroidism patients with its oral parathyroid hormone drug, EB612. On November 30, 2015, we, our Israeli subsidiary and HTIT entered into a Technology License Agreement, and on December 21, 2015, these partiesentered into an Amended and Restated Technology License Agreement that was further amended by the parties on June 3, 2016 and July 24, 2016, or theLicense Agreement. According to the License Agreement, we granted HTIT an exclusive commercialization license in the Territory, related to our oral insulincapsule, ORMD-0801, or the Product. Pursuant to the License Agreement, HTIT will conduct, at its own expense, certain pre-commercialization andregulatory activities with respect to our subsidiary’s technology and ORMD-0801 capsule, and will pay (i) royalties of 10% on net sales of the relatedcommercialized products to be sold by HTIT in the Territory, or Royalties, and (ii) an aggregate of $37.5 million, of which $3 million was payableimmediately, $8 million will be paid subject to our entry into certain agreements with certain third parties, and $26.5 million will be payable uponachievement of certain milestones and conditions. In the event that we will not meet certain conditions, the Royalties rate may be reduced to a minimum of8%. Following the final expiration of our patents covering the technology in the Territory in 2033, the Royalties rate may be reduced, under certaincircumstances, to 5%. The royalty payment obligation shall apply during the period of time beginning upon the first commercial sale of the Product in theTerritory, and ending upon the later of (i) the expiration of the last-to-expire licensed patents in the Territory; and (ii) 15 years after the first commercial saleof the Product in the Territory, or the Royalty Term. The License Agreement shall remain in effect until the expiration of the Royalty Term. The LicenseAgreement contains customary termination provisions. Through August 31, 2018, we received aggregate milestone payments of $17.5 million. We also entered into a separate securities purchase agreement with HTIT, or the SPA, pursuant to which HTIT invested $12 million in us inDecember 2015 (see – “Liquidity and capital resources” below). In connection with the License Agreement and the SPA, we received a non-refundablepayment of $500,000 as a no-shop fee. 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 drug portfolio, weneed to go through a different regulatory process in each country in which we apply for such approval. In some cases information gathered during theapproval process in one country can be used as supporting information for the approval process in another country. As a strategic decision, we decided to firstexplore 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 clinical testing priorto their marketing or introduction to the general public. Clinical testing, known as clinical trials or clinical studies, is either conducted internally by lifescience, pharmaceutical or biotechnology companies or is conducted on behalf of these companies by CROs. The process of conducting clinical studies is highly regulated by the FDA, as well as by other governmental and professional bodies. Below wedescribe the principal framework in which clinical studies are conducted, as well as describe a number of the parties involved in these studies. Protocols. Before commencing human clinical studies, the sponsor of a new drug or therapeutic product must submit an IND application to the FDA.The application contains, among other documents, what is known in the industry as a protocol. A protocol is the blueprint for each drug study. The protocolsets forth, among other things, the following:●Who must be recruited as qualified participants,●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. 9 Institutional Review Board. An institutional review board is an independent committee of professionals and lay persons which reviews clinicalresearch studies involving human beings and is required to adhere to guidelines issued by the FDA. The institutional review board does not report to theFDA, but its records are audited by the FDA. Its members are not appointed by the FDA. All clinical studies must be approved by an institutional reviewboard. The institutional review board’s role is to protect the rights of the participants in the clinical studies. It approves the protocols to be used, theadvertisements which the company or CRO conducting the study proposes to use to recruit participants, and the form of consent which the participants willbe 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 I through Phase III testing.The names of the phases are derived from the regulations of the FDA. Generally, there are multiple studies conducted in each phase. Phase I. Phase I studies involve testing a drug or product on a limited number of healthy or patient participants, typically 24 to 100 people at a time.Phase I studies determine a product’s basic safety and how the product is absorbed by, and eliminated from, the body. This phase lasts an average of sixmonths to a year. Phase II. Phase II trials involve testing of no more than 300 participants at a time who may suffer from the targeted disease or condition. Phase IItesting typically lasts an average of one to two years. In Phase II, the drug is tested to determine its safety and effectiveness for treating a specific illness orcondition. Phase II testing also involves determining acceptable dosage levels of the drug. Phase II studies may be split into Phase IIa and Phase IIb sub-studies. Phase IIa studies may be conducted with patient volunteers and are exploratory (non-pivotal) studies, typically designed to evaluate clinical efficacyor biological activity. Phase IIb studies are conducted with patients defined to evaluate definite dose range and evaluate efficacy. If Phase II studies show thata new drug has an acceptable range of safety risks and probable effectiveness, a company will generally continue to review the substance in Phase III studies. Phase III. Phase III studies involve testing large numbers of participants, typically several hundred to several thousand persons. The purpose is toverify effectiveness and long-term safety on a large scale. These studies generally last two to three years. Phase III studies are conducted at multiple locationsor sites. Like the other phases, Phase III requires the site to keep detailed records of data collected and procedures performed. Biological License Application. The results of the clinical trials for a biological product are submitted to the FDA as part of a BLA. Following thecompletion of Phase III studies, assuming the sponsor of a potential product in the United States believes it has sufficient information to support the safetyand effectiveness of its product, the sponsor will generally submit a BLA to the FDA requesting that the product be approved for marketing. The applicationis a comprehensive, multi-volume filing that includes the results of all clinical studies, information about the drug’s composition, and the sponsor’s plans forproducing, packaging and labeling the product. The FDA’s review of an application can take a few months to many years, with the average review lasting 18months. Once approved, drugs and other products may be marketed in the United States, subject to any conditions imposed by the FDA. Approval of a BLAprovides 12 years of exclusivity in the U.S. market. Phase IV. The FDA may require that the sponsor conduct additional clinical trials following new drug approval. The purpose of these trials, knownas Phase IV studies, is to monitor long-term risks and benefits, study different dosage levels or evaluate safety and effectiveness. In recent years, the FDA hasincreased its reliance on these trials. Phase IV studies usually involve thousands of participants. Phase IV studies also may be initiated by the companysponsoring the new drug to gain broader market value for an approved drug. Similar to the U.S., a European sponsor of a biological product may submit a Marketing Approval Application to the EMA for the registration of theproduct. The approval process in Europe consists of several stages, which together are summed up to 210 days from the time of submission of the application(net, without periods in which the sponsor provides answers to questions raised by the agency) following which, a Marketing Approval may be granted.During the approval process, the sponsor’s manufacturing facilities will be audited in order to assess Good Manufacturing Practice compliance. The drug approval process is time-consuming, involves substantial expenditures of resources, and depends upon a number of factors, including theseverity of the illness in question, the availability of alternative treatments, and the risks and benefits demonstrated in the clinical trials. 10 Other Regulations Various federal, state and local laws, regulations, and recommendations relating to safe working conditions, laboratory practices, the experimentaluse of animals, the environment and the purchase, storage, movement, import, export, use, and disposal of hazardous or potentially hazardous substances,including radioactive compounds and infectious disease agents, used in connection with our research are applicable to our activities. They include, amongothers, the U.S. Atomic Energy Act, the Clean Air Act, the Clean Water Act, the Occupational Safety and Health Act, the National Environmental Policy Act,the Toxic Substances Control Act, and Resources Conservation and Recovery Act, national restrictions on technology transfer, import, export, and customsregulations, and other present and possible future local, state, or federal regulation. The compliance with these and other laws, regulations andrecommendations can be time-consuming and involve substantial costs. In addition, the extent of governmental regulation which might result from futurelegislation or administrative action cannot be accurately predicted and may have a material adverse effect on our business, financial condition, results ofoperations 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 regulatory approval for testing, manufacturing and marketing. Our competitors include majorpharmaceutical, medical products, chemical and specialized biotechnology companies, many of which have financial, technical and marketing resourcessignificantly greater than ours. In addition, many biotechnology companies have formed collaborations with large, established companies to supportresearch, development and commercialization of products that may be competitive with ours. Academic institutions, governmental agencies and other publicand private research organizations are also conducting research activities and seeking patent protection and may commercialize products on their own orthrough joint ventures. We are aware of certain other products manufactured or under development by competitors that are used for the treatment of thediseases and health conditions that we have targeted for product development. We can provide no assurance that developments by others will not render ourtechnology obsolete or noncompetitive, that we will be able to keep pace with new technological developments or that our technology will be able tosupplant established products and methodologies in the therapeutic areas that are targeted by us. The foregoing factors could have a material adverse effecton our business, prospects, financial condition and results of operations. These companies, as well as academic institutions, governmental agencies andprivate research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants. Competition within our sector is increasing, so we will encounter competition from existing firms that offer competitive solutions in diabetestreatment solutions. These competitive companies could develop products that are superior to, or have greater market acceptance, than the products beingdeveloped by us. We will have to compete against other biotechnology and pharmaceutical companies with greater market recognition and greater financial,marketing and other resources. 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 competitive advantagerelative to later entrants to the market. Accordingly, the relative speed with which we, or our potential corporate partners, can develop products, complete theclinical trials and approval processes and supply commercial quantities of the products to the market are expected to be important competitive factors. Ourcompetitive 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 secure adequate capital resources. We expect ourtechnology, if approved for sale, to compete primarily on the basis of product efficacy, safety, patient convenience, 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 following aretreatment options for type 1 and type 2 diabetic patients: ●Insulin injections, 11 ●Insulin pumps, or ●A combination of diet, exercise and oral medication which improve the body’s response to insulin or cause the body to produce more insulin. Several entities who are actively developing oral insulin capsules and/or alternatives to insulin are thought to be: Diabetology Ltd. (UK) andBiocon Limited (India). Scientific Advisory Board We maintain a Scientific Advisory Board consisting of internationally recognized scientists who advise us on scientific and technical aspects of ourbusiness. The Scientific Advisory Board meets periodically to review specific projects and to assess the value of new technologies and developments to us. Inaddition, individual members of the Scientific Advisory Board meet with us periodically to provide advice in their particular areas of expertise. TheScientific Advisory Board consists of the following members, information with respect to whom is set forth below: Dr. Roy Eldor, Professor Ele Ferrannini, Dr.Robert R. Henry, Professor Avram Hershko, Dr. Harold Jacob and Dr. Jane E. B. Reusch. Dr. Roy Eldor, MD, PhD, joined the Oramed Scientific Advisory Board in July 2016. He is an endocrinologist, internist and researcher with overtwenty years of clinical and scientific experience. He is currently Director of the Diabetes Unit at the Institute of Endocrinology, Metabolism & Hypertension,Tel-Aviv Sourasky Medical Center. Prior to that, Dr. Eldor served as Principal Scientist at Merck Research Laboratories, Clinical Research - Diabetes &Endocrinology, Rahway, New Jersey. He has previously served as a senior physician in internal medicine at the Diabetes Unit in Hadassah Hebrew UniversityHospital, Jerusalem, Israel; and the Diabetes Division at the University of Texas Health Science Center in San Antonio, Texas (under the guidance of Dr. R.A.DeFronzo). Dr. Eldor is a recognized expert, with over 35 peer reviewed papers and book chapters, and has been a guest speaker at numerous internationalforums. Professor Ele Ferrannini, MD, joined the Oramed Scientific Advisory Board in February 2007. He is a past President to the European Associationfor the Study of Diabetes, which supports scientists, physicians and students from all over the world who are interested in diabetes and related subjects inEurope, and performs functions similar to that of the ADA in the United States. Professor Ferrannini has worked with various institutions including theDepartment of Clinical & Experimental Medicine, University of Pisa School of Medicine, and CNR (National Research Council) Institute of ClinicalPhysiology, Pisa, Italy; and the Diabetes Division, Department of Medicine, University of Texas Health Science Center at San Antonio, Texas. He has alsohad extensive training in internal medicine and endocrinology, and has specialized in diabetes studies. Professor Ferrannini has received a Certificate of theEducational Council for Foreign Medical Graduates from the University of Bologna, and with cum laude honors completed a subspecialty in Diabetes andMetabolic Diseases at the University of Torino. He has published over 500 original papers and 50 book chapters and he is a “highly cited researcher,”according to the Institute for Scientific Information. Dr. Robert R. Henry, MD, joined the Oramed Scientific Advisory Board in February 2018 and is a leader in diabetes research. As a past President ofthe ADA and recipient of its Banting Medal for Scientific Achievement, among other international recognitions, his basic and clinical research funded by theNational Institutes of Health, or NIH, has resulted in more than 400 journal articles, chapters and books. Dr. Henry is currently Chief of the Section ofEndocrinology, Metabolism & Diabetes, Veterans Affairs Healthcare System in San Diego, California, Professor of Medicine at the University of California,San Diego and Chief of the Center for Metabolic Research in San Diego, California. In addition to studying the metabolic and cardiovascular effects ofhuman skeletal muscle and adipose tissue signaling and interactions, his current clinical research interests involve the study and development of newtherapies for type 1 and type 2 diabetes and obesity. 12 Professor Avram Hershko, MD, PhD, joined the Oramed Scientific Advisory Board in July 2008. He earned his MD degree (1965) and PhD degree(1969) from the Hebrew University-Hadassah Medical School of Jerusalem. Professor Hershko served as a physician in the Israel Defense Forces from 1965 to1967. After a post-doctoral fellowship with Gordon Tomkins at the University of San Francisco (1969-72), he joined the faculty of the Haifa Technionbecoming a professor in 1980. He is now Distinguished Professor in the Unit of Biochemistry in the B. Rappaport Faculty of Medicine of the Technion.Professor Hershko’s main research interests concern the mechanisms by which cellular proteins are degraded, a formerly neglected field of study. ProfessorHershko and his colleagues showed that cellular proteins are degraded by a highly selective proteolytic system. This system tags proteins for destruction bylinkage to a protein called ubiquitin, which had previously been identified in many tissues, but whose function was previously unknown. Subsequent workby Professor Hershko and many other laboratories has shown that the ubiquitin system has a vital role in controlling a wide range of cellular processes, suchas the regulation of cell division, signal transduction and DNA repair. Professor Hershko was awarded the Nobel Prize in Chemistry (2004) jointly with hisformer PhD student Aaron Ciechanover and their colleague Irwin Rose. His many honors include the Israel Prize for Biochemistry (1994), the Gairdner Award(1999), the Lasker Prize for Basic Medical Research (2000), the Wolf Prize for Medicine (2001) and the Louisa Gross Horwitz Award (2001). ProfessorHershko is a member of the Israel Academy of Sciences (2000) and a Foreign Associate of the U.S. Academy of Sciences (2003). Dr. Harold Jacob, MD, joined the Oramed Scientific Advisory Board in November 2016. Since 1998, Dr. Jacob has served as the president ofMedical Instrument Development 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. Since 2011, Dr. Jacob has also served as an attending physician at Hadassah University Medical Center, wherehe has served as the director of the gastrointestinal endoscopy unit since September 2013. Dr. Jacob has advised a spectrum of companies in the past and heserved as a consultant and then as the Director of Medical Affairs at Given Imaging Ltd., from 1997 to 2003, a company that developed the first swallowablewireless pill camera for inspection of the intestine. He has licensed patents to a number of companies including Kimberly-Clark Corporation. Since 2014, Dr.Jacob has served as the Chief Medical Officer and a director of NanoVibronix, Inc., a medical device company using surface acoustics to prevent catheteracquired infection as well as other applications, where he served as Chief Executive Officer from 2004 to 2014. He practiced clinical gastroenterology in NewYork and served as Chief of Gastroenterology at St. John’s Episcopal Hospital and South Nassau Communities Hospital from 1986 to 1995, and was aClinical Assistant Professor of Medicine at SUNY from 1983 to 1990. Dr. Jacob founded and served as Editor in Chief of Endoscopy Review and hasauthored numerous publications in the field of gastroenterology. Dr. Jane E. B. Reusch, MD, joined the Oramed Scientific Advisory Board in February 2018. She is a distinguished academic physician-scientist-diabetologist committed to understanding and treating the vascular complications of diabetes. She is currently Professor of Medicine and Associate Director,Center for Women’s Health, at the University of Colorado at Denver and Director of the Diabetes Care Team at the Veteran’s Administration Medical Centerin Denver, Colorado. Dr. Reusch has been awarded numerous NIH Research Project Grant (R01) and VA Merit grants for both basic and clinical research,leading to more than 100 peer-reviewed publications on diabetes and diabetic vascular complications. In a continuation of her life-long service to thediabetes community, Dr. Reusch is the current ADA President for Medicine and Science. Employees We have been successful in retaining experienced personnel involved in our research and development program. In addition, we believe we havesuccessfully recruited the clinical/regulatory, quality assurance and other personnel needed to advance through clinical studies or have engaged the servicesof experts in the field for these requirements. As of August 31, 2018, we have contracted with thirteen individuals for employment or consultingarrangements. Of our staff, five are senior management, four are engaged in research and development work, and the remaining four are involved inadministration work. Additional Information Additional information about us is contained on our Internet website at www.oramed.com. Information on our website is not incorporated byreference into this report. On our website, under “Investors”, “SEC Filings”, we make available free of charge our Annual Reports on Form 10-K, QuarterlyReports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities ExchangeAct of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, theSEC. Reports filed with the SEC are made available on its website at www.sec.gov. The following Corporate Governance documents are also posted on ourwebsite: Code of Ethics, Whistleblowing Policy and the Charters for each of the Audit Committee, Compensation Committee and Nominating Committee ofour Board.13 ITEM 1A. RISK FACTORS. An investment in our securities involves a high degree of risk. You should consider carefully the following information about these risks, togetherwith the other information contained in this Annual Report on Form 10-K before making an investment decision. Our business, prospects, financialcondition and results of operations may be materially and adversely affected as a result of any of the following risks. The value of our securities coulddecline as a result of any of these risks. You could lose all or part of your investment in our securities. Some of the statements in “Item 1A. Risk Factors”are forward-looking statements. The following risk factors are not the only risk factors facing our Company. Additional risks and uncertainties notpresently known to us or that we currently deem immaterial may also affect our business, prospects, financial condition and results of operations. Risks Related to Our Business We continue, and in the future expect, to incur losses. Successful completion of our development programs and our transition to normal operations are dependent upon obtaining necessary regulatoryapprovals from the FDA prior to selling our products within the United States, and foreign regulatory approvals must be obtained to sell our productsinternationally. There can be no assurance that we will receive regulatory approval of any of our product candidates, and a substantial amount of time maypass before we achieve a level of revenues adequate to support our operations. We also expect to incur substantial expenditures in connection with theregulatory approval process for each of our product candidates during their respective developmental periods. Obtaining marketing approval will be directlydependent on our ability to implement the necessary regulatory steps required to obtain marketing approval in the United States and in other countries. Wecannot 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 activities and thecorresponding level of expenditures for at least the next 12 months and beyond, although no assurance can be given that we will not need additional fundsprior to such time. If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12 months. 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 and we will require substantial additional financing at variousintervals in order to continue our research and development programs, including significant requirements for operating expenses including intellectualproperty protection and enforcement, for pursuit of regulatory approvals, and for commercialization of our products. We can provide no assurance thatadditional funding will be available on a timely basis, on terms acceptable to us, or at all. In the event that we are unable to obtain such financing, we will notbe able to fully develop and commercialize our technology. Our future capital requirements will 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, ●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 would otherwiseseek to develop ourselves and commercialize ourselves. In such event, our business, prospects, financial condition and results of operations may be adverselyaffected as we may be required to scale-back, eliminate, or delay development efforts or product introductions or enter into royalty, sales or other agreementswith third parties in order to commercialize our products. 14 We have a history of losses and can provide no assurance as to our future operating results. We do not have sufficient revenues from our research and development activities to fully support our operations. Consequently, we have incurrednet losses and negative cash flows since inception. We currently have only licensing revenues and no product revenues, and may not succeed in developingor commercializing any products which could generate product revenues. We do not expect to have any products on the market for several years. In addition,development of our product candidates requires a process of pre-clinical and clinical testing, during which our products could fail. We may not be able toenter into agreements with one or more companies experienced in the manufacturing and marketing of therapeutic drugs and, to the extent that we are unableto do so, we will not be able to market our product candidates. Eventual profitability will depend on our success in developing, manufacturing, andmarketing our product candidates. As of August 31, 2018, August 31, 2017 and August 31, 2016, we had working capital of $26,484,000, $15,132,000 and$27,609,000, respectively, and stockholders’ equity of $31,112,000, $19,238,000 and $26,190,000, respectively. During fiscal 2018 and the fiscal yearsended August 31, 2017, or fiscal 2017, and 2016, or fiscal 2016, we generated revenues of $2,449,000, $2,456,000 and $641,000, respectively. For the periodfrom our inception on April 12, 2002 through August 31, 2018, fiscal 2018, fiscal 2017 and fiscal 2016, we incurred net losses of $69,223,000, $12,727,000,$10,480,000 and $10,964,000, respectively. We may never achieve profitability and expect to incur net losses in the foreseeable future. See “Item 7.Management’s Discussion and Analysis of Financial Condition 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 donot know whether any of our current or future patent applications will result in the issuance of any patents. Even issued patents may be challenged,invalidated or circumvented. Patents may not provide a competitive advantage or afford protection against competitors with similar technology. Competitorsor potential competitors may have filed applications for, or may have received patents and may obtain additional and proprietary rights to compounds orprocesses used by or competitive with ours. In addition, laws of certain foreign countries do not protect intellectual property rights to the same extent as dothe laws of the United States. Patent litigation is becoming widespread in the biopharmaceutical and biotechnology industry and we cannot predict how this will affect our effortsto form strategic alliances, conduct clinical testing or manufacture and market any products under development. If challenged, our patents may not be heldvalid. We could also become involved in interference proceedings in connection with one or more of our patents or patent applications to determine priorityof invention. If we become involved in any litigation, interference or other administrative proceedings, we will likely incur substantial expenses and theefforts of our technical and management personnel will be significantly diverted. In addition, an adverse determination could subject us to significantliabilities or require us to seek licenses that may not be available on favorable terms, if at all. We may be restricted or prevented from manufacturing andselling our products in the event of an adverse determination in a judicial or administrative proceeding or if we fail to obtain necessary licenses. We may be unable to protect our intellectual property rights and we may be liable for infringing the intellectual property rights of others. Our ability to compete effectively will depend on our ability to maintain the proprietary nature of our technologies. We currently hold severalpending patent applications in the United States, Canada, Brazil, Europe, India, Hong Kong, Japan and China for our technologies covering oraladministration of insulin and other proteins and oral administration of exenatide and proteins and 74 patents issued by the United States, Australian,Canadian, Chinese, Israeli, Japanese, New Zealand, South African, Russian, European, Hong Kong, Swiss, German, Spanish, French, United Kingdom, Italian,Indian, Austrian, Belgian, Irish, Swedish, Denmark, Luxembourg, Monaco, Norway and Netherlands patent offices for our technologies covering oraladministration of insulin and other proteins, or for our technologies covering oral administration of exenatide, or for methods and compositions for treatingdiabetes. Further, we intend to rely on a combination of trade secrets and non-disclosure and other contractual agreements and technical measures to protectour rights in our technology. We intend to depend upon confidentiality agreements with our officers, directors, employees, consultants, and subcontractors,as well as collaborative partners, to maintain the proprietary nature of our technology. These measures may not afford us sufficient or complete protection,and others may independently develop technology similar to ours, otherwise avoid our confidentiality agreements, or produce patents that would materiallyand adversely affect our business, prospects, financial condition and results of operations. We believe that our technology is not subject to any infringementactions based upon the patents of any third parties; however, our technology may in the future be found to infringe upon the rights of others. Others mayassert infringement claims against us or against companies to which we have licensed our technology, and if we should be found to infringe upon theirpatents, or otherwise impermissibly utilize their intellectual property, our ability to continue to use our technology could be materially restricted orprohibited. If this event occurs, we may be required to obtain licenses from the holders of this intellectual property, enter into royalty agreements, or redesignour products so as not to utilize this intellectual property, each of which may prove to be uneconomical or otherwise impossible. Licenses or royaltyagreements required in 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,which could materially adversely affect our business, prospects, financial condition and results of operations. Further, we may need to indemnify companiesto which we licensed our technology in the event that such technology is found to infringe upon the rights of others. 15 Our commercial success will also depend significantly on our ability to operate without infringing the patents and other proprietary rights of thirdparties. Patent applications are, in many cases, maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patentliterature frequently occurs substantially later than the date on which the underlying discoveries were made and patent applications are filed. In the event ofinfringement or violation of another party’s patent, we may be prevented from pursuing product development or commercialization. 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 our oral insulin capsule is crucial for our success. At present, our principal product is the oral insulin capsule.Our oral insulin capsule is in a clinical development stage and faces a variety of risks and uncertainties. Principally, these risks 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 not efficacious ascompared to placebo, ●Future clinical trial results may be inconsistent with previous preliminary testing results and data from our earlier studies may be inconsistentwith clinical data, ●Even if our oral insulin capsule is shown to be safe and effective for its intended purposes, we may face significant or unforeseen difficulties inobtaining 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 significantly dependent uponour ability to obtain and maintain experienced and committed partners to assist us with obtaining clinical and regulatory approvals for, and themanufacturing, 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 noguarantee 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 our products,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 some otherreason, 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 into agreementswith Integrium LLC to assist us in designing, conducting and managing our various clinical trials in the United States. Any failure of Integrium LLC or anyother consultant to fulfill their obligations could result in significant additional costs as well as delays in designing, consulting and completing clinical trialson our products. 16 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 our clinicaltrials 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 sufficientnumber of patients for our clinical trials at one or more sites or begin or successfully complete clinical trials in a timely fashion, if at all. Furthermore, we, theFDA or foreign regulatory agencies may suspend clinical trials at any time if we or they believe the subjects participating in the trials are being exposed tounacceptable health risks or if we or they find deficiencies in the clinical trial process or conduct of the investigation. If clinical trials of any of the productcandidates fail, we will not be able to market the product candidate which is the subject of the failed clinical trials. The FDA and foreign regulatory agenciescould also require additional clinical trials, which would result in increased costs and significant development delays. Our failure to adequately demonstratethe safety and effectiveness of a pharmaceutical product candidate under development could delay or prevent regulatory approval of the product candidateand could have a material adverse effect on our business, prospects, financial condition and results of operations. 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 other countries. Wehave completed certain non-FDA clinical trials and pre-clinical trials for our products. In addition, we have completed a Phase IIb clinical trial in patientswith type 2 diabetes under an IND with the FDA and we have completed Phase IIa clinical trials of ORMD-0801 in patients with type 1 diabetes under an INDwith the FDA. However, success in pre-clinical testing and early clinical trials does not ensure that later clinical trials will be successful. For example, anumber of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials. 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 is anticipatedto take a number of years. Preclinical and clinical trials may reveal that one or more of our products are ineffective or unsafe, in which event furtherdevelopment of such products could be seriously delayed or terminated. Moreover, obtaining approval for certain products may require the testing on humansubjects of substances whose effects on humans are not fully understood or documented. Delays in obtaining necessary regulatory approvals of any proposedproduct and failure to receive such approvals would have an adverse effect on the product’s potential commercial success and on our business, prospects,financial condition and results of operations. In addition, it is possible that a product may be found to be ineffective or unsafe due to conditions or factswhich arise after development has been completed and regulatory approvals have been obtained. In this event we may be required to withdraw such productfrom 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 and GLP-1 capsules and do not currently have any long-termagreements in place for the supply of oral insulin or GLP-1 capsules. While we believe that there are numerous sources of supply available, if the third partysuppliers were to cease production or otherwise fail to supply us with quality raw materials in sufficient quantities on a timely basis and we were unable tocontract on acceptable terms for these services with alternative suppliers, our ability to produce our products and to conduct testing and clinical trials wouldbe materially adversely affected. Our future revenues from HTIT are dependent upon third party suppliers and Chinese regulatory approvals. Our future revenues from HTIT are dependent upon the achievement of certain milestones and conditions, and the success of HTIT to implement ourtechnology and to manufacture the oral insulin capsule. Our future revenues from HTIT are also dependent upon the ability of third parties to scale-up one ofour oral capsule ingredients and to scale-up the manufacturing process of our capsules. Our future revenues from royalties from HTIT are further dependentupon the granting of regulatory approvals in the Territory. Accordingly, if any of the foregoing does not occur, we may not be successful in receiving futurerevenues from HTIT and may not succeed with our business plans in China. 17 We are highly dependent upon our ability to enter into agreements with collaborative partners to develop, commercialize and market ourproducts. Our long-term strategy is to ultimately seek a strategic commercial partner, or partners, such as large pharmaceutical companies, with extensiveexperience in the development, commercialization and marketing of insulin applications and/or other orally digestible drugs. We anticipate such partner orpartners would be responsible for, or substantially support, late stage clinical trials (Phase III) and sales and marketing of our oral insulin capsule and otherproducts. Such planned strategic partnership, or partnerships, may provide a marketing and sales infrastructure for our products as well as financial andoperational support for global clinical trials, post marketing studies, label expansions and other regulatory requirements concerning future clinicaldevelopment 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 partnering with us.We currently lack the resources to manufacture any of our product candidates on a large scale and we have no sales, marketing or distribution capabilities. Inthe event we are not able to enter into a collaborative agreement with a partner, or partners, on commercially reasonable terms, or at all, we may be unable tocommercialize our products, which would have a material adverse effect upon our business, prospects, financial condition and results of operations. The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree of competition.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 of competition. As aresult, our products could become obsolete before we recoup any portion of our related research and development and commercialization expenses. Theseindustries are highly competitive, and this competition comes both from biotechnology firms and from major pharmaceutical and chemical companies. Manyof these companies have substantially greater financial, marketing and human resources than we do (including, in some cases, substantially greaterexperience in clinical testing, manufacturing and marketing of pharmaceutical products). We also experience competition in the development of our productsfrom universities and other research institutions and compete with others in acquiring technology from such universities and institutions. In addition, certainof our products may be subject to competition from products developed using 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. We will berequired to expand our operational and financial systems significantly and to expand, train and manage our work force in order to manage the expansion ofour operations. Our failure to fully integrate our new employees into our operations could have a material adverse effect on our business, prospects, financialcondition and results of operations. Our ability to attract and retain highly skilled personnel is critical to our operations and expansion. We face competitionfor these types of personnel from other technology companies and more established organizations, many of which have significantly larger operations andgreater financial, technical, human and other resources than we have. We may not be successful in attracting and retaining qualified personnel on a timelybasis, on competitive terms or at all. If we are not successful in attracting and retaining these personnel, our business, prospects, financial condition andresults of operations will be materially adversely affected. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations,” “Item 1. Business—Description of Business—Strategy” and “—Employees.” We depend upon our senior management and skilled personnel and their loss or unavailability could put us at a competitive disadvantage. 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 Scientific Officer. The loss or unavailability of the services of any of these individuals for any significantperiod of time could have a material adverse effect on our business, prospects, financial condition and results of operations. We do not maintain “key man”life insurance policies for any of our senior executives. In addition, recruiting and retaining qualified scientific personnel to perform future research anddevelopment work will be critical to our success. There is currently a shortage of employees with expertise in developing, manufacturing andcommercialization of products and related clinical and regulatory affairs, and this shortage is likely to continue. Competition for skilled personnel is intenseand turnover rates are high. Our ability to attract and retain qualified personnel may be limited. Our inability to attract and retain qualified skilled personnelwould have a material adverse effect on our business, prospects, financial condition and results of operations. 18 Healthcare policy changes, including pending legislation recently adopted and further proposals still pending to reform the U.S. healthcaresystem, 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 and third-party payors to keep these costs down. Certain proposals, if passed, would impose limitations on the prices we will be able to charge for the products that weare developing, or the amounts of reimbursement available for these products from governmental agencies or third-party payors. These limitations could inturn reduce the amount of revenues that we will be able to generate in the future from sales of our products and licenses of our technology. In 2010, the federal government enacted healthcare reform legislation that has significantly impacted the pharmaceutical industry. In addition torequiring most individuals to have health insurance and establishing new regulations on health plans, this legislation requires discounts under the Medicaredrug benefit program and increased rebates on drugs covered by Medicaid. In addition, the legislation imposes an annual fee, which has increased annually,on sales by branded pharmaceutical manufacturers. There can be no assurance that our business will not be materially adversely affected by these increasedrebates, fees and other provisions. In addition, these and other initiatives in the United States may continue the pressure on drug pricing, especially under theMedicare and Medicaid programs, and may also increase regulatory burdens and operating costs. The announcement or adoption of any such initiative couldhave an adverse effect on potential revenues from any product that we may successfully develop. An expansion in government’s role in the U.S. healthcareindustry may lower the future revenues for the products we are developing and adversely affect our future business, possibly materially. In September 2017, members of the U.S. Congress introduced legislation with the announced intention to repeal and replace major provisions of thePatient Protection and Affordable Care Act, or the ACA. In addition to those efforts, on October 12, 2017, President Trump signed an executive order thatmodified certain aspects of the ACA. Attempts to repeal or to repeal and replace the ACA will likely continue. In addition, various other healthcare reformproposals have also emerged at the federal and state level. We cannot predict what healthcare initiatives, if any, will be implemented at the federal or statelevel, or the effect any future legislation or regulation will have on us. Changes to tax laws could have a negative effect on us or our stockholders. At any time, the U.S. federal or state income tax laws, or the administrative interpretations of those laws, may be amended. Federal and state tax lawsare constantly under review by persons involved in the legislative process, the U.S. Internal Revenue Service, the U.S. Department of the Treasury and statetaxing authorities. Changes to the tax laws, regulations and administrative interpretations, which may have retroactive application, could adversely affect us. Tax reform legislation in December 2017 made substantial changes to the Internal Revenue Code of 1986, as amended, or the Code, particularly as itrelates to the taxation of both corporate income and international income. Among those changes are a significant permanent reduction in the generallyapplicable corporate income tax rate and the modification of tax policies, credits and deductions for businesses and individuals. This legislation also imposesadditional limitations on the deduction of net operating losses, which could negatively impact our ability to utilize our net operating losses to offset ourtaxable income in future taxable years. The effect of these and other changes made in this legislation is still uncertain in many respects, both in terms of theirdirect effect on the taxation of an investment in our securities and their indirect effect on the value of assets owned by us. Furthermore, many of theprovisions of the new law will require additional guidance in order to assess their effect. It is also possible that there will be technical corrections legislationproposed with respect to the tax reform legislation, the effect of which cannot be predicted and may be adverse to us or our stockholders. Our stockholders areencouraged to consult with their tax advisors about the potential effects that changes in law may have on them and their ownership of our securities. We are exposed to fluctuations in currency exchange rates. A considerable amount of our expenses are generated in dollars or in dollar-linked currencies, but a significant portion of our expenses such as someclinical studies and payroll costs are generated in other currencies such as NIS, Euro and British pounds. Most of the time, our non-dollar assets are not totallyoffset by non-dollar liabilities. Due to the foregoing and to the fact that our financial results are measured in dollars, our results could be adversely affected asa result of a strengthening or weakening of the dollar compared to these other currencies. During the fiscal years ended August 31, 2014, 2017 and 2018, thedollar depreciated in relation to the NIS, which raised the dollar cost of our Israeli based operations and adversely affected our financial results, while duringthe fiscal years ended August 31, 2015 and 2016, the dollar increased in relation to the NIS, which reduced the dollar cost of our Israeli based operationscosts. In addition, our results could also be adversely affected if we are unable to guard against currency fluctuations in the future. Although we may in thefuture decide to undertake foreign exchange hedging transactions to cover a portion of our foreign currency exchange exposure, we currently do not hedgeour exposure to foreign currency exchange risks. These transactions, however, may not adequately protect us from future currency fluctuations and, even ifthey do protect us, may involve operational or financing costs we would not otherwise incur. 19 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 common stockwhen you want or at prices you find attractive. The price of our common stock is currently listed on Nasdaq and on the Tel Aviv Stock Exchange and constantly changes. In recent years, the stockmarket in general has experienced extreme price and volume fluctuations. We expect that the market price of our common stock will continue to fluctuate.These fluctuations 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. Future sales of common stock or the issuance of securities senior to our common stock or convertible into, or exchangeable or exercisable for,our common stock could materially adversely affect the trading price of our common stock, and our ability to raise funds in new equity offerings. Future sales of substantial amounts of our common stock or other equity-related securities in the public market or privately, or the perception thatsuch sales could occur, could adversely affect prevailing trading prices of our common stock and could impair our ability to raise capital through futureofferings of equity or other equity-related securities. We anticipate that we will need to raise capital through offerings of equity 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 ofcommon 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. Our management will have significant flexibility in using the net proceeds of any offering of securities. We intend generally to use the net proceeds from any offerings of our securities for expenses related to our clinical trials, research and productdevelopment activities, and for general corporate purposes, including general working capital purposes. Our management will have significant flexibility inapplying the net proceeds of any such offering. The actual amounts and timing of expenditures will vary significantly depending on a number of factors,including the amount of cash used in our operations and our research and development efforts. Management’s failure to use these funds effectively wouldhave an adverse effect on the value of our common stock and could make it more difficult and costly to raise funds in the future. 20 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, or theperception 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 at a price thatwe deem appropriate. As of November 26, 2018, we had outstanding 17,378,359 shares of common stock, a large majority of which are freely tradable. Givingeffect to the exercise in full of all of our outstanding warrants, options and restricted stock units, or RSUs, including those currently unexercisable orunvested, we would have outstanding 21,814,795 shares of common stock. Our issuance of warrants, options and RSUs 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, RSUs and convertible notes at, above or below the current market price. As ofNovember 26, 2018, we had outstanding warrants and options exercisable for 4,271,800 shares of common stock at a weighted average exercise price of$7.26. We also had outstanding RSUs exercisable for 164,636 shares of common stock at a total exercise price of $900. In addition to the dilutive effect of alarge number of shares of common stock and a low exercise price for the warrants and options, there is a potential that a large number of underlying shares ofcommon stock may be sold in the open market at any given time, which could place downward pressure on the trading of our common stock. Delaware law could discourage a change in control, or an acquisition of us by a third party, even if the acquisition would be favorable to 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 by others toobtain control of our Company, even when these attempts may be in the best interests of stockholders. Delaware law imposes conditions on certain businesscombination transactions with “interested stockholders.” These provisions and others that could be adopted in the future could deter unsolicited takeovers ordelay or prevent changes in our control or management, including transactions in which stockholders might otherwise receive a premium for their shares ofcommon stock over then current market prices. These provisions may also limit the ability of stockholders to approve transactions that they may deem to bein their best interests. Because we will not pay cash dividends, investors may have to sell shares of our common stock 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 to retainfuture earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements which we may enter into with institutionallenders or otherwise may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretion of our Board and will bedependent upon our financial condition, results of operations, capital requirements and any other factors that our Board decides is relevant. Because certain of our stockholders control a significant number of shares of our common stock, they may have effective control over actionsrequiring stockholder approval. As of November 26, 2018, our directors, executive officers and principal affiliated stockholders beneficially own approximately 23.6% of ouroutstanding shares of common stock, excluding shares issuable upon the exercise of options, warrants and RSUs. As a result, these stockholders, should theyact together, may have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and anymerger, consolidation or sale of all or substantially all of our assets. In addition, these stockholders, should they act together, may have the ability to controlour management and affairs. 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. 21 Risks Related to Conducting Business in Israel We are affected by the political, economic and military risks of having operations in Israel. We have operations in the State of Israel, and we are directly affected by political, economic and security conditions in that country. Since theestablishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its Arab neighbors and a state of hostility,varying in degree and intensity, has led to security and economic problems for Israel. In addition, acts of terrorism, armed conflicts or political instability inthe region could negatively affect local business conditions and harm our results of operations. We cannot predict the effect on the region of any diplomaticinitiatives or political developments involving Israel or the Palestinians or other countries and territories in the Middle East. Recent political events,including political uprisings, social unrest and regime change, in various countries in the Middle East and North Africa have weakened the stability of thosecountries and territories, which could result in extremists coming to power. In addition, Iran has threatened to attack Israel and is widely believed to bedeveloping nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza and Hezbollah inLebanon. This situation has escalated in the past and 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 tradebetween Israel and its current 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, all suchresidents are subject to being called to active duty at any time under emergency circumstances. Some of our officers, directors and employees currently areobligated to perform annual military reserve duty. We can provide no assurance that such requirements will not have a material adverse effect on ourbusiness, prospects, financial condition and results of operations in the future, particularly if emergency circumstances occur. Because we received grants from the Israel Innovation Authority of the Israeli Ministry of Economy & Industry we are subject to ongoingrestrictions. We received royalty-bearing grants from the Israel Innovation Authority of the Israeli Ministry of Economy & Industry, or IIA, for research anddevelopment programs that meet specified criteria. We did not recognize any grants in fiscals 2018, 2017 and 2016. We do not expect to receive furthergrants from the IIA in the future. The terms of the IIA grants limit our ability to transfer know-how developed under an approved research and developmentprogram outside of Israel, regardless of whether the royalties were fully paid. It may be difficult to enforce a U.S. judgment against us or our officers and directors and to assert U.S. securities laws claims in Israel. Almost all of our directors and officers are nationals and/or residents of countries other than the United States. As a result, service of process upon us,our Israeli subsidiary and our directors and officers, may be difficult to obtain within the United States. Furthermore, because the majority of our assets andinvestments, and most of our directors and officers are located outside the United States, it may be difficult for investors to enforce within the United Statesany judgments obtained against us or any such officers or directors. Additionally, it may be difficult to assert U.S. securities law claims in original actionsinstituted in Israel. 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 inwhich to bring such 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 suchclaim. 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 costly process.Certain matters of procedure will also be governed by Israeli law. Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courtsmay enforce a U.S. judgment in a civil matter, including a judgment based upon the civil liability provisions of the U.S. securities laws, as well as a monetaryor compensatory judgment in a non-civil matter, provided that the following key conditions are met:●subject to limited exceptions, the judgment is final and non-appealable;22 ●the judgment was given by a court competent under the laws of the state in which the court is located and is otherwise enforceable in such state;●the judgment was rendered by a court competent under the rules of private international law applicable in Israel;●the laws of the state in which the judgment was given provides for the enforcement of judgments of Israeli courts;●adequate service of process has been effected and the defendant has had a reasonable opportunity to present its arguments and evidence;●the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel;●the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and●an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court. If any of these conditions are not met, Israeli courts will likely not enforce the applicable U.S. judgment. ITEM 1B. UNRESOLVED STAFF COMMENTS. Not applicable. ITEM 2. PROPERTIES. Our principal executive offices are located at 142 W. 57th Street New York, New York. The current lease term is for 12 months starting September 1,2018 and can be terminated at any time upon one month’s notice. The aggregate annual base rent for this space is currently $14,000. Our Israeli subsidiary’s principal executive offices are located in Givat-Ram, Jerusalem, Israel. The current lease term is scheduled to end onSeptember 30, 2021. The aggregate annual base rent for this space is currently $37,000, linked to the increase in the Israeli consumer price index. As securityfor our obligations under the lease agreement, we provided a bank guarantee in an amount equal to three monthly lease payments, valid until December 31,2021. We believe that our existing facilities are suitable and adequate to meet our current business requirements. In the event that we should requireadditional or alternative facilities, we believe that such facilities can be obtained on short notice at competitive rates. 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 legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 23 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES. Market Price for our Common Stock Our common stock is traded on Nasdaq and on the Tel Aviv Stock Exchange, in each case under the symbol “ORMP.” Holders As of November 26, 2018, there were 17,378,359 shares of our common stock issued and outstanding held of record by approximately 40 registeredstockholders. We believe that a significant number of stockholders hold their shares of our common stock in brokerage accounts and registered in the name ofstock depositories and are therefore not included in the number of stockholders of record. Unregistered Sales of Equity Securities and Use of Proceeds On August 1, 2018, we issued 2,500 shares of our common stock, valued at $13,250, in the aggregate, to Corporate Profile, LLC, or CorporateProfile, in payment of a portion of the consulting fee for investor relations services owed to Corporate Profile pursuant to a Letter Agreement, dated April 8,2018, between us and Corporate Profile. On July 26, 2018, we issued 4,180 shares of our common stock, valued at $25,000, in the aggregate, to Acorn Management Partners, L.L.C., orAcorn, in payment of a portion of the consulting fee for investor relations services owed to Acorn pursuant to a Consulting Agreement, dated July 15, 2018,between us and Acorn. These issuances and sales were exempt under Section 4(a)(2) of the Securities Act of 1933, as amended. ITEM 6. SELECTED FINANCIAL DATA. The selected data presented below under the captions “Statements of Comprehensive Loss Data” and “Balance Sheet Data” for, and as of the end of,each of the fiscal years in the five-year period ended August 31, 2018, are derived from, and should be read in conjunction with, our audited consolidatedfinancial statements. The selected information contained in this table should also be read in conjunction with “Management’s Discussion and Analysis of FinancialCondition and Results of Operations” and the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form10-K. The selected consolidated statements of comprehensive loss data for fiscals 2018, 2017 and 2016 and the selected consolidated balance sheet data as ofAugust 31, 2018 and 2017, are derived from the audited consolidated financial statements included elsewhere in this Annual Report. The statement ofoperations data for the years ended August 31, 2015 and 2014 and the balance sheet data as of August 31, 2016, 2015 and 2014 are derived from auditedfinancial statements not included in this Annual Report. The historical results presented below are not necessarily indicative of future results. 2018 2017 2016 2015 2014 (in thousands of dollars except share and per share data) Statements of Comprehensive Loss: Revenues $2,449 $2,456 $641 $- $- Cost of revenues (income) (86) 187 490 - - Research and development expenses 11,979 10,281 7,709 4,781 3,277 General and administrative expenses 4,083 2,759 2,452 2,602 2,629 Financial income 903 792 474 168 225 Financial expenses 103 101 93 18 11 Loss before taxes on income 12,727 10,080 9,629 7,233 5,692 Taxes on income (Tax benefit) - 400 1,335 (1) 4 Net loss for the year $12,727 $10,480 $10,964 $7,232 $5,696 Loss per common share – basic and diluted $0.86 $0.79 $0.87 $0.67 $0.62 Weighted average common shares outstanding 14,882,356 13,309,372 12,624,356 10,820,465 9,244,059 24 As of August 31, 2018 2017 2016 2015 2014 in thousands of dollars except share and per share data Balance Sheet Data: Cash, cash equivalents, short-term deposits, restricted cash andmarketable securities $30,463 $20,138 $31,032 $17,245 $21,306 Other current assets 574 159 198 127 472 Long-term deposits and other assets 13,575 16,262 11,070 8,042 24 Long-term marketable securities 2,785 2,151 530 940 - Total assets 47,397 38,712 42,830 26,354 21,802 Current liabilities 4,553 5,165 3,621 1,489 973 Long-term liabilities 11,732 14,309 13,019 37 36 Stockholders’ equity 31,112 19,238 26,190 24,828 20,793 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidatedfinancial statements and the related notes included elsewhere herein and in our consolidated financial statements. In addition to our consolidated financial statements, the following discussion contains forward-looking statements that reflect our plans, estimatesand beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to thesedifferences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Cautionary Statement Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.” Overview of Operations We are a pharmaceutical company currently engaged in the research and development of innovative pharmaceutical solutions, including an orallyingestible insulin capsule to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules or pills for delivery of otherpolypeptides. Oral Insulin: We are seeking to revolutionize the treatment of diabetes through our proprietary flagship product, ORMD-0801, an orally ingestibleinsulin capsule. We initiated a three-month dose-ranging Phase IIb clinical trial on approximately 285 type 2 diabetic patients in multiple centers throughoutthe United States pursuant to an IND to assess the safety and evaluate the effect of ORMD-0801 on HbA1c levels over a 90 day treatment period. We alsoinitiated a glucose clamp study to quantify insulin absorption in type 1 diabetic patients treated with ORMD-0801. In addition we initiated a food effect trialto evaluate the pharmacokinetics and pharmacodynamics of ORMD-0801 taken at different times in relation to meals in healthy volunteers and patients withtype 1 diabetes. We completed a Phase IIb clinical trial in patients with type 2 diabetes under an IND, following which we conducted a Phase IIa, dose findingclinical trial to better define the optimal dosing of ORMD-0801 moving forward. We also completed Phase IIa clinical trials in patients with both type 1 andtype 2 diabetes. During a call with the FDA regarding ORMD-0801, we were advised that the regulatory pathway for submission of ORMD-0801 would be aBLA. 25 GLP-1 Analog: Our second pipeline product, ORMD-0901, is an orally ingestible exenatide (GLP-1 analog) capsule, which aids in the balance ofblood-sugar levels and decreases appetite. In September 2018, the FDA cleared our IND application for human trials of ORMD-0901. We expect to initiate inthe first quarter of calendar year 2019 a Phase I PK trial to evaluate the safety and the pharmacokinetics of ORMD-0901 compared to placebo. Combination of Oral Insulin and GLP-1 Analog: Our third pipeline product is a combination of our two primary products, oral insulin and oralexenatide. In the near term, we are focusing our efforts on the development of the Company’s flagship products, oral insulin and oral exenatide. Once thesetwo products have progressed further in clinical trials, we intend on running further studies with the oral combination therapy. Other products: We initiated an exploratory clinical study of ORMD-0801 in patients with NASH to assess the effectiveness of ORMD-0801 inreducing liver fat content, inflammation and fibrosis in patients with NASH. In addition, we have begun developing a new drug candidate, a weight losstreatment in the form of an oral leptin capsule, and plan to initiate in calendar year 2019 a proof of concept study for our oral leptin drug candidate. Results of Operations Critical accounting policies Our significant accounting policies are more fully described in the notes to our accompanying consolidated financial statements. We believe thatthe 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 weprepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of our consolidated financial statements requires us tomake estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date ofthe consolidated financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate suchestimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances,the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.Actual results may differ from these estimates under different assumptions or conditions. Valuation of options and warrants: We grant options to purchase shares of our common stock to employees and consultants and issue warrants inconnection with some of our financings and to certain other consultants. We account for share-based payments to employees and directors in accordance with the guidance that requires awards classified as equity awards tobe accounted for using the grant-date fair value method. The fair value of share-based payment transactions is based on the Black Scholes option-pricingmodel or Monte Carlo model when appropriate, and is recognized as an expense over the requisite service period. We elected to recognize compensation cost for awards to employees and directors that have a graded vesting schedule using the accelerated methodbased on the multiple-option award approach. When stock options are granted as consideration for services provided by consultants and other non-employees, the transaction is accounted forbased on the fair value of the consideration received or the fair value of the stock options issued, whichever is more reliably measurable. The fair value of theoptions granted is measured on each reporting date, and the gains (losses) are recorded to earnings over the related service period using the straight-linemethod. Revenue recognition: Revenue is recognized when delivery has occurred, evidence of an arrangement exists, title and risks and rewards for theproducts are transferred to the customer and collection is reasonably assured. 26 Given our continuing involvement through the expected product submission (June 2023), revenue from the License Agreement is recognized overthe periods from which the Company is entitled to the respective payments (including milestones), and through the expected product submission date. Comparison of Fiscal 2018 to Fiscal 2017 and Fiscal 2017 to Fiscal 2016 The following table summarizes certain statements of operations data for us for the twelve month periods ended August 31, 2018, 2017 and 2016: Year ended August 31, Operating Data: 2018 2017 2016 (dollar amounts in thousands) Revenues $2,449 $2,456 $641 Cost of revenues (income) (86) 187 490 Research and development expenses 11,979 10,281 7,709 General and administrative expenses 4,083 2,759 2,452 Financial income, net 800 691 381 Loss before taxes on income 12,727 10,080 9,629 Taxes on income - 400 1,335 Net loss for the year 12,727 10,480 10,964 Loss per common share – basic and diluted $0.86 $0.79 $0.87 Weighted average common shares outstanding 14,882,356 13,309,372 12,624,356 Revenues Revenues consist of proceeds related to the License Agreement that are recognized over the period from which the Company is entitled to therespective payments and through June 2023. Revenues for fiscal 2018 totaled $2,449,000, consistent with $2,456,000 for fiscal 2017. Revenues for fiscal 2017 increased by 283% to $2,456,000 from $641,000 for fiscal 2016. The increase is attributed to milestone payments receivedduring fiscal 2016 in connection with the License Agreement which are recognized through the expected product submission date using a time-based modelapproach. Cost of revenues (income) Cost of revenues consists of royalties related to the License Agreement that will be paid over the term of the License Agreement in accordance withrevenue recognition accounting and the Law for the Encouragement of Industrial Research, Development and Technological Innovation, 1984, as amended,including any regulations or tracks promulgated thereunder, or the R&D Law. Cost of revenues for fiscal 2018 decreased to income of $86,000 compared to cost of $187,000 for fiscal 2017. The decrease is attributed to adecrease in the royalties we are obligated to pay to the IIA from 3.5% to 3% due to the amendment of the applicable regulations, as well as due to noadditional milestone payments having been received during fiscal 2018. Cost of revenues for fiscal 2017 decreased by 62% to $187,000 from $490,000 for fiscal 2016. The decrease reflects a decrease in the milestonepayments received during the year. Research and development expenses Research and development expenses include costs directly attributable to the conduct of research and development programs, including the cost ofsalaries, employee benefits, costs of materials, supplies, the cost of services provided by outside contractors, including services related to our clinical trials,clinical trial expenses, the full cost of manufacturing drugs for use in research and preclinical development. All costs associated with research anddevelopment are expensed as incurred. 27 Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. Weoutsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-partyservice 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 are performed primarilyby CROs. CROs typically perform most of the start-up activities for our trials, including document preparation, site identification, 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 ofmaterials, cost of manufacturing of the oral insulin and exenatide capsules, payments for patient recruitment and treatment, as well as salaries and relatedexpenses of research and development staff. From August 2009 to March 2014, Oramed Ltd. was awarded five government grants amounting to a total net amount of NIS 8 million(approximately $2,194,000) from the IIA. We used the funds to support further research and development and clinical studies of our oral insulin capsule andoral GLP-1 analog during the period from February 2009 to December 2014. The five grants are subject to repayment according to the terms determined bythe IIA and applicable law. See “—Government grants” below. Research and development expenses for fiscal 2018 increased by 16.5% to $11,979,000 from $10,281,000 for fiscal 2017. The increase is mainlyattributed to expenses related to our Phase IIb three-month dose-ranging clinical trial, our clamp study and our oral leptin development and is partially offsetby a decrease in expenses related to toxicology studies and scale-up process development and production of our oral capsule ingredients. During fiscal 2018,stock-based compensation costs totaled $575,000, as compared to $1,134,000 during fiscal 2017. The decrease is mainly attributable to the progress inamortization of awards granted in prior periods and is partially offset by an increase due to awards granted to employees and a consultant during fiscals 2018and 2017. Research and development expenses for fiscal 2017 increased by 33% to $10,281,000 from $7,709,000 for fiscal 2016. The increase is mainlyattributed to expenses related to process development and production of our capsules and the required ingredients, progress in toxicology studies andincrease in stock-based compensation costs, partially offset by a decrease in clinical trials due to completion of our previous Phase IIb clinical trial. Duringfiscal 2017, stock-based compensation costs totaled $1,134,000, as compared to $304,000 during fiscal 2016. Government grants The Government of Israel encourages research and development projects through the IIA, pursuant to the R&D Law. Under the R&D Law, a researchand development plan that meets specified criteria is generally eligible for a grant of up to 50% of certain approved research and development expenditures.Each plan must be approved by the IIA. In fiscals 2018, 2017 and 2016, we did not recognize any research and development grants. As of August 31, 2018, we incurred a liability to payroyalties to the IIA of $390,000. Under the terms of the grants we received from the IIA, we are obligated to pay royalties of 3% on all revenues derived from the sale of the productsdeveloped pursuant to the funded plans, including revenues from licensed ancillary services. Royalties are generally payable up to a maximum amountequaling 100% of the grants received (dollar linked) with the addition of interest at an annual rate based on the LIBOR rate. 28 The R&D Law generally requires that a product developed under a program be manufactured in Israel. However, when applying for a grant, theapplicant may declare that part of the manufacturing will be performed outside of Israel or by non-Israeli residents and if the IIA is convinced that performingsome of the manufacturing abroad is essential for the execution of the program, it may still approve the grant. This declaration will be a significant factor inthe determination of the IIA as to whether to approve a program and the amount and other terms of the benefits to be granted. If a company wants to increasethe volume of manufacturing outside of Israel after the grant has been approved, it may transfer up to 10% of the company’s approved Israeli manufacturingvolume, measured on an aggregate basis, outside of Israel after first notifying the IIA thereof (provided that the IIA does not object to such transfer within 30days). In addition, upon the approval of the IIA, a portion greater than 10% of the manufacturing volume may be performed outside of Israel. In any case oftransfer of manufacturing out of Israel, the grant recipient is required to pay royalties at an increased rate, which may be substantial, and the aggregaterepayment amount is increased up to 120%, 150% or 300% of the grant, depending on the portion of the total manufacturing volume that is performedoutside of Israel. The approval we received from the IIA for the License Agreement was subject to payment of increased royalties and an increased ceiling, allin accordance with the provisions of the R&D Law. The R&D Law further permits the IIA, among other things, to approve the transfer of manufacturing rightsoutside of Israel in exchange for the import of different manufacturing into Israel as a substitute, in lieu of the increased royalties. The R&D Law also provides that know-how developed under an approved research and development program may not be transferred or licensed tothird parties in Israel without the approval of the research committee. Such approval is not required for the sale or export of any products resulting from suchresearch or development. The R&D Law further provides that the know-how developed under an approved research and development program may not betransferred or licensed to any third parties outside Israel absent IIA approval which may be granted in certain circumstances as follows: (a) the grant recipientpays to the IIA a portion of the sale or license price paid in consideration for the purchase or license of such IIA-funded know-how or the price paid inconsideration for the sale of the grant recipient itself, as the case may be, in accordance with certain formulas included in the R&D Law; (b) the grantrecipient receives know-how from a third party in exchange for its IIA-funded know-how; or (c) such transfer of IIA-funded know-how is made in the contextof IIA approved research and development cooperation projects or consortia. The R&D Law imposes reporting requirements with respect to certain changes in the ownership of a grant recipient. The R&D Law requires the grantrecipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the recipient that results in a non-Israeli entity becoming an interested party in the recipient, and requires the new non-Israeli interested party to undertake to the IIA to comply with the R&DLaw. In addition, the rules of the IIA may require the provision of additional information or representations in respect of certain such events. For this purpose,“control” is defined as the ability to direct the activities of a company other than any ability arising solely from serving as an officer or director of thecompany. A person is presumed to have control if such person holds 50% or more of the means of control of a company. “Means of control” refers to votingrights or the right to appoint directors or the chief executive officer. An “interested party” of a company includes a holder of 5% or more of its outstandingshare capital or voting rights, its chief executive officer and directors, someone who has the right to appoint its chief executive officer or at least one director,and a company with respect to which any of the foregoing interested parties holds 25% or more of the outstanding share capital or voting rights or has theright to appoint 25% or more of the directors. Failure to meet the R&D Law’s requirements may subject us to mandatory repayment of grants received by us (together with interest and penalties),as well as expose us to criminal proceedings. In addition, the Israeli government may from time to time audit sales of products which it claims incorporatetechnology funded through IIA programs which may lead to additional royalties being payable on additional products. 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 werecommitted 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 grants received by theCompany (Israeli CPI linked) in the total aggregate amount of $65,000. As of August 31, 2018, we had no liability to the Bio-Jerusalem fund, as all royaltieswere paid. General and administrative expenses General and administrative expenses include the salaries and related expenses of our management, consulting costs, legal and professional fees,travel expenses, business development costs, insurance expenses and other general costs. 29 General and administrative expenses increased by 48% from $2,759,000 for fiscal 2017 to $4,083,000 for fiscal 2018. The increase in costs incurredrelated to general and administrative activities during fiscal 2018, is mainly attributable to an increase in stock-based compensation costs and expensesrelated to the relocation of our Chief Executive Officer to New York, where the Company leases an office and has its principal executive office. During fiscal2018, as part of our general and administrative expenses, we incurred $972,000 related to stock-based compensation costs, as compared to $440,000 duringfiscal 2017. The increase is mainly attributable to awards granted to employees and directors during fiscals 2018 and 2017. General and administrative expenses increased by 12.5% from $2,452,000 for fiscal 2016 to $2,759,000 for fiscal 2017. The increase in costsincurred related to general and administrative activities during fiscal 2017, reflects an increase in stock-based compensation costs and salaries and consultingexpenses. During fiscal 2017, as part of our general and administrative expenses, we incurred $440,000 related to stock-based compensation costs, ascompared to $329,000 during fiscal 2016. Financial income, net Net financial income was $800,000 for fiscal 2018 as compared to net financial income of $691,000 for fiscal 2017. The increase is mainlyattributable to an increase in income from bank deposits and held to maturity bonds as a result of an increase in interest rates. Net financial income was $691,000 for fiscal 2017 as compared to net financial income of $381,000 for fiscal 2016. The increase is mainly due to anincrease in income from bank deposits and held to maturity bonds as a result of the proceeds related to the License Agreement and due to an increase in yieldrates on investments. Taxes on income No taxes on income were recognized for fiscal 2018 as compared to $400,000 for fiscal 2017. The decrease is due to the absence of withholdingtaxes during the more recent period as compared to the prior period, as withholding taxes were recorded during fiscal 2017 in connection with the receipt of amilestone payment pursuant to the License Agreement. We had taxes on income of $400,000 for fiscal 2017 as compared to $1,335,000 for fiscal 2016. The decrease is due to a decrease in withholdingtaxes during fiscal 2017 as compared to fiscal 2016, attributable to the decrease in milestone payments received in connection with the License Agreement. Other comprehensive income Unrealized gain on available for sale securities for fiscal 2018 of $301,000 resulted from an increase attributable to the measurement of our Enteraordinary shares at fair value from the date they began trading on Nasdaq instead of measurement at cost method in prior periods, partially offset by a decreasein fair value of our D.N.A ordinary shares. Unrealized gain on available for sale securities for fiscal 2017 of $295,000 resulted from the increase in fair value of our D.N.A ordinary shares. Liquidity and Capital Resources From our inception through August 31, 2018, we have incurred losses in an aggregate amount of $69,223,000. During that period we have financedour operations through several private placements of our common stock, as well as public offerings of our common stock, raising a total of $77,736,000, netof transaction costs. During that period we also received cash consideration of $5,877,000 from the exercise of warrants and options. We will seek to obtainadditional financing through similar sources in the future as needed. As of August 31, 2018, we had $4,996,000 of available cash, $34,417,000 of short termand long term deposits and $7,377,000 of marketable securities. Management continues to evaluate various financing alternatives for funding future research and development activities and general andadministrative expenses through fundraising in the public or private equity markets. Although there is no assurance that we will be successful with thoseinitiatives, management believes that it will be able to secure the necessary financing as a result of future third party investments. Based on our current cashresources and commitments, we believe we will be able to maintain our current planned development activities and the corresponding level of expendituresfor at least the next 12 months and beyond. 30 As of August 31, 2018, our total current assets were $31,037,000 and our total current liabilities were $4,553,000. On August 31, 2018, we had aworking capital surplus of $26,484,000 and an accumulated loss of $69,223,000. As of August 31, 2017, our total current assets were $20,297,000 and ourtotal current liabilities were $5,165,000. On August 31, 2017, we had a working capital surplus of $15,132,000 and an accumulated loss of $56,496,000. Theincrease in working capital surplus from August 31, 2017 to August 31, 2018 was primarily due to the proceeds from a registered direct offering, or theOffering, completed in July 2018. During fiscal 2018, cash and cash equivalents increased to $4,996,000 from $3,969,000 as of August 31, 2017, which is due to the reasons describedbelow. Operating activities used cash of $14,657,000 in fiscal 2018 compared to $5,831,000 used in fiscal 2017. Cash used in operating activities in fiscal2018 primarily consisted of net loss resulting from research and development and general and administrative expenses and changes in deferred revenues,while cash used by operating activities in fiscal 2017 primarily consisted of net loss resulting from research and development and general and administrativeexpenses, partially offset by changes in stock-based compensation expenses and deferred revenues. Investing activities used cash of $7,004,000 in fiscal 2018, as compared to $4,302,000 provided in fiscal 2017. Cash used in investing activities infiscal 2018 consisted primarily of the purchase of bank deposits and marketable securities, partially offset by the sale of short-term deposits and maturity ofmarketable securities, while cash provided by investing activities in fiscal 2017 consisted primarily of the proceeds from sale of short-term deposits andmaturity of marketable securities, partially offset by the purchase of bank deposits and marketable securities. Financing activities provided cash of $22,654,000 in fiscal 2018 and $1,586,000 in fiscal 2017. Cash provided by financing activities during bothperiods consisted of proceeds from our issuance of common stock and warrants and proceeds from exercise of warrants and options. Our primary financingactivities in fiscal 2018 and fiscal 2017 were as follows:●On July 2, 2018, we entered into a Securities Purchase Agreement with each of three investors, or the Purchasers, pursuant to which we agreed tosell, in the Offering, an aggregate of 2,892,000 units, or the Units, each Unit consisting of one share of our common stock and a warrant topurchase one share of common stock at an exercise price of $7.25 per share, or the Warrants, to the Purchasers for an offering price of $6.25 perUnit. The Warrants will be exercisable commencing six months following their issuance for a period of three and one-half years from the date ofissuance. The closing of the sale of the Units occurred on July 6, 2018. The net proceeds to us from the Offering, after deducting the placementagent’s fees and expenses and our Offering expenses were approximately $16,484,000.●On July 2, 2018, we entered into a letter agreement with H.C. Wainwright & Co., LLC, or HCW, pursuant to which HCW agreed to serve asexclusive placement agent in any offering by us occurring between July 2, 2018 and August 1, 2018. For its services in the Offering, HCWreceived a fee equal to 7% of the gross proceeds raised in the Offering and a management fee of 1% of the gross proceeds raised in the Offering,up to $50,000 for non-accountable expenses as well as warrants to purchase up to 115,680 shares of our common stock, exercisable for a periodof three and one-half years from the date of issuance and with an exercise price of $7.8125 per share. Upon the exercise of the Warrants, HCWwill receive a fee equal to 7% of the gross proceeds raised as a result of such exercise.●During fiscal 2018, 138,071 warrants were exercised for cash and resulted in the issuance of 138,071 shares of common stock and 50,750options were exercised for cash and resulted in the issuance of 50,750 shares of common stock. The cash consideration received for the exerciseof warrants was $790,000 and the cash consideration received for the exercise of options was $207,000. During fiscal 2017, 248,882 warrantswere exercised for cash and resulted in the issuance of 248,882 shares of common stock and 63,900 options were exercised for cash and resultedin the issuance of 63,900 shares of common stock. The cash consideration received for the exercise of warrants was $1,242,000 and the cashconsideration received for the exercise of options was $319,000. During fiscal 2018 and fiscal 2017, we issued a total of 24,180 shares ofcommon stock to third party vendors for services rendered. The aggregate value of those shares was approximately $170,000.31 ●In November 2017 and February, May, July and August 2018, we issued a total of 14,180 shares of our common stock, valued approximately$99,000, in the aggregate, to certain service providers as remuneration for services rendered.●On November 30, 2015, we entered into the SPA with HTIT, pursuant to which HTIT agreed to buy and we agreed to sell 1,155,367 shares of ourcommon stock at a price of approximately $10.39 per share, for the aggregate amount of $12 million. The transaction closed on December 28,2015.●On April 2, 2015, we entered into an At The Market Issuance Sales Agreement and on April 5, 2017 into an amendment to such agreement, orthe Sales Agreement, pursuant to which we may, from time to time and at our option, issue and sell shares of our common stock having anaggregate offering price of up to $25,000,000, through a sales agent, subject to certain terms and conditions. Any shares sold will be soldpursuant to our effective shelf registration statement on Form S-3 including a prospectus dated February 2, 2017, as supplemented by aprospectus supplement dated April 5, 2017. We will pay the sales agent a commission of 3.0% of the gross proceeds of the sale of any sharessold through the sales agent. As of August 31, 2018, 576,834 shares were sold under the Sales Agreement for aggregate net proceeds of$5,198,000.Contractual Obligations The following table summarizes our significant contractual obligations and commercial commitments at August 31, 2018, and the effects suchobligations are expected to have on our liquidity and cash flows in future periods (in thousands): Contractual Obligations Total Less than 1year 1-3 years 3-5 years Over 5 years Clinical research study obligations $8,044 $8,044 $- $- $- Purchase and technology transfer obligations 5,742 5,742 - - - Operating lease obligations 120 44 73 3 - Royalty payment obligations 390 77 132 181 - Accrued severance pay, net 20 - - - 20 Total $14,316 $13,907 $205 $184 $20 Off-Balance Sheet Arrangements As of August 31, 2018, we had no off balance sheet arrangements that have had or that we expect would be reasonably likely to have a futurematerial effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures orcapital resources. Planned Expenditures We invest heavily in research and development, and we expect that in the upcoming years our research and development expenses, net, willcontinue to be our major operating expense. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are exposed to a variety of risks, including changes in interest rates, foreign currency exchange rates, changes in the value of our marketablesecurities and inflation. As of August 31, 2018, we had $5 million in cash and cash equivalents, $34.4 million in short and long term bank deposits and $7.4 million inmarketable securities. 32 We aim to preserve our financial assets, maintain adequate liquidity and maximize return while minimizing exposure to market risks. Such policyfurther provides that we should hold most of our current assets in bank deposits. As of today, the currency of our financial assets is mainly in U.S. dollars. Marketable securities We own 10,208,144 common shares of D.N.A and 117,000 ordinary shares of Entera, which are presented in our financial statements as marketablesecurities. Marketable securities are presented at fair value and their realization is subject to certain limitations if sold through the market, and we aretherefore exposed to market risk. There is no assurance that at the time of sale of the marketable securities the price per share will be the same or higher, northat we will be able to sell all of the securities at once given the volume of securities we hold. Entera shares are traded on Nasdaq in U.S. dollars, while D.N.Ashares are traded on the Tel Aviv Stock Exchange and the D.N.A shares’ price is denominated in NIS. We are also exposed to changes in the market price ofthe Entera and D.N.A shares, as well as to exchange rates fluctuations in the NIS currency compared to the U.S. dollar with respect to the D.N.A shares. Interest Rate Risk We invest a major portion of our cash surplus in bank deposits in banks in Israel. Since the bank deposits typically carry fixed interest rates,financial income over the holding period is not sensitive to changes in interest rates, but only the fair value of these instruments. However, our interest gainsfrom future deposits may decline in the future as a result of changes in the financial markets. In any event, given the historic low levels of the interest rate, weestimate that a further decline in the interest rate we are receiving will not result in a material adverse effect to our business. Foreign Currency Exchange Risk and Inflation A significant portion of our expenditures, including salaries, clinical research expenses, consultants’ fees and office expenses relate to our operationsin Israel. The cost of those Israeli operations, as expressed in U.S. dollars, is influenced by the extent to which any increase in the rate of inflation in Israel isnot offset (or is offset on a lagging basis) by a devaluation of the NIS in relation to the U.S. dollar. If the U.S. dollar declines in value in relation to the NIS, itwill become more expensive for us to fund our operations in Israel. In addition, as of August 31, 2018, we own net balances in NIS of approximately$789,000. Assuming a 10% appreciation of the NIS against the U.S. dollar, we would experience exchange rate gain of approximately $72,000, whileassuming a 10% devaluation of the NIS against the U.S. dollar, we would experience an exchange rate loss of approximately $88,000. The exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows: Year Ended August 31, 2018 2017 2016 Average rate for period 3.544 3.697 3.864 Rate at period-end 3.604 3.596 3.786 We do not use any currency hedging transactions of options or forwards to decrease the risk of financial exposure from fluctuations in the exchangerate of the U.S. dollar against the NIS. 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. 33 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 disclosure controls andprocedures as of August 31, 2018. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controlsand procedures are effective. 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 and maintainingadequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. The Company’sinternal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting andthe preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes policies andprocedures that:●pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;●provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance withGAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and●provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of assets that couldhave a material effect on our financial statements. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, weevaluated the effectiveness of our internal control over financial reporting as of August 31, 2018 based on the current framework for Internal Control-Integrated Framework (2013) set forth by The Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of August 31,2018 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, 2018 that have materiallyaffected, or are reasonable likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Not applicable. 34 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. Name Age Position Nadav Kidron 44 President, Chief Executive Officer and Director Miriam Kidron 78 Chief Scientific Officer and Director Hilla Eisenberg 34 Chief Financial Officer, Treasurer and Secretary Mark Hasleton 46 VP Business Development Aviad Friedman 47 Director Xiaopeng Li 34 Director Kevin Rakin 58 Director Leonard Sank 53 Director David Slager 46 Director Dr. Miriam Kidron is Mr. Nadav Kidron’s mother. There are no other directors or officers of the Company who are related by blood or marriage. 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 executiveofficers who are not also directors, indicating the principal occupation during that period, and the name and principal business of the organization in whichsuch occupation and employment were carried out. Mr. Nadav Kidron was appointed President, Chief Executive Officer and a director in March 2006. He is also a director of Israel AdvancedTechnology Industries organization, and until 2016 was a director of Entera Bio Ltd. In 2009, he was a fellow at the Merage Foundation for U.S.-Israel TradePrograms for executives in the life sciences field. From 2003 to 2006, he was the managing director of the Institute of Advanced Jewish Studies at Bar IlanUniversity. From 2001 to 2003, he was a legal intern at Wine, Mishaiker & Ernstoff Law Offices in Jerusalem, Israel. Mr. Kidron holds an LL.B. and anInternational MBA 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 in capitalmarkets, as well as his knowledge and familiarity with corporate management. Dr. Miriam Kidron was appointed Chief Scientific Officer and a director in March 2006. Dr. Kidron is a pharmacologist and a biochemist with aPh.D. in biochemistry. From 1990 to 2007, Dr. Kidron was a senior researcher in the Diabetes Unit at Hadassah University Hospital in Jerusalem, Israel.During 2003 and 2004, Dr. Kidron served as a consultant to Emisphere Technologies Inc., a company that specializes in developing broad-based proprietarydrug delivery platforms. Dr. Kidron was formerly a visiting professor at the Medical School at the University of Toronto (Canada), and is a member of theAmerican, European and Israeli Diabetes Associations. Dr. Kidron is a recipient of the Bern Schlanger Award. 35 We believe that Dr. Kidron’s qualifications to serve on our Board include her expertise in the Company’s technology, as it is based on her research,as well as her experience and relevant education in the fields of pharmacology and diabetes. Ms. Hilla Eisenberg was appointed Chief Financial Officer, Treasurer and Secretary effective August 2017. Prior to her appointment, Ms.Eisenberg served as the Company’s Finance Manager from March 2016 until July 2017. Before joining the Company, Ms. Eisenberg provided audit andother accounting services at a certified public accounting firm in Israel. Prior to that, Ms. Eisenberg served as an auditor at PricewaterhouseCoopers in Israel,including a short secondment to PricewaterhouseCoopers in New York. Ms. Eisenberg holds a bachelor’s degree in accounting and economics from Tel-AvivUniversity and is a certified public accountant in Israel. Dr. Mark Hasleton was appointed VP Business Development effective November 15, 2018. Prior to his appointment, Dr. Hasleton, served in severalleadership and pharmaceutical development roles. From 2010 to 2018, he served in Business Development and later as Senior Director of Portfolio - GlobalNew Therapeutic Entities at Teva Pharmaceutical Industries Ltd. Prior to joining Teva, from 2007 to 2010, Dr. Hasleton was at Bristol Myers Squibb Co., inthe UK and then in the European business as EMEA Business Operations Manager - Field Medical. Dr. Hasleton holds a PhD in molecular biology and cancerresearch from the Imperial College London, UK, a MRes in molecular biology from the University of Manchester, UK and an MBA from Tanaka BusinessSchool, Imperial College London, UK. Mr. Aviad Friedman became a director in August 2016. Mr. Friedman is an international businessman. Since 2007, he has been Chief ExecutiveOfficer of Most Properties 1998 Ltd. and the Chairman of the Israel Association of Community Centers since 2013. Mr. Friedman was the first DirectorGeneral of Israel’s Ministry of Diaspora Affairs and served as personal advisor to Prime Minister Ariel Sharon from 1996 to 1999. Mr. Friedman served asChief Operating Officer of one of Israel’s premier newspapers, Ma’ariv from 2003 to 2007, and has more than 15 years of experience serving on boards ofpublic and private companies including Maayan Ventures, Capital Point and Rosetta Green Ltd. Mr. Friedman additionally served as an investor andconsultant at Rhythmia Medical Inc. from 2007, and was actively involved in the sale of the company to Boston Scientific in 2012. Mr. Friedman holds abachelor’s degree and master’s degree with honors in Public Administration from Bar-Ilan University. We believe that Mr. Friedman’s qualifications to serve on our Board include his experience in serving as a director of public and private companiesas well as his knowledge and familiarity with corporate finance. Ms. Xiaopeng Li became a director in January 2016. Ms. Li currently serves on the board of directors in the Chairman’s Office in Hefei TianmaiBiotechnology Development Co. Ltd, or HTBT, where she has served as the head of financing and investment activities since 2013. Ms. Li also has served asChief Financial Officer of HTIT, an affiliated company of HTBT, since 2016. Prior to that, she was a senior auditor in the Shanghai Branch of Ernst & YoungHua Ming LLP, where she served for four years. Ms. Li holds a bachelor’s degree from the College of Economics, Anhui University, a Master of Accountingdegree from Monash University, Australia, and a Master of Management degree from Central Queensland University, Australia. Ms. Li has also been amember of the Association of Chartered Certified Accountants since 2017. We believe that Ms. Li’s qualifications to serve on our Board include her experience and relevant education in the fields of finance, economics,capital markets and management, as well as her familiarity with the Eastern market. Mr. Kevin Rakin became a director in August 2016 and Chairman of the Board in July 2017. Mr. Rakin is a co-founder and partner at HighCapePartners, a growth equity life sciences fund where he has served since 2013. From June 2011 to November 2012, Mr. Rakin was the President of RegenerativeMedicine at Shire plc, or Shire, a leading specialty biopharmaceutical company. Prior to joining Shire, Mr. Rakin served as the Chairman and ChiefExecutive Officer of Advanced BioHealing, Inc. from 2007 until its acquisition by Shire for $750 million in June 2011. Mr. Rakin currently serves on theboard of Histogenics Corporation and a number of private companies. Mr. Rakin holds an MBA from Columbia University and received his graduate andundergraduate degrees in Commerce from the University of Cape Town, South Africa. We believe that Mr. Rakin’s qualifications to serve on our Board include his extensive experience as an executive in the biotechnology industry, aswell as his service in positions in various companies as a chief executive officer, chief financial officer and president and his involvement in public andprivate financings and mergers and acquisitions in the biotechnology industry. 36 Mr. Leonard Sank became a director in October 2007. Mr. Sank is a South African entrepreneur and businessman, whose interests lie inentrepreneurial endeavors and initiatives, with over 20 years’ experience of playing significant leadership roles in developing businesses. For the pastseventeen years, Mr. Sank has served on the boards of a few businesses and local non-profit charity organizations 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, as well as hisexperience serving as a director of many entities. Mr. David Slager became a director in August 2016. Mr. Slager is the founder and Chairman of Regals Capital Management LP, or RegalsManagement, and the Portfolio Manager of the fund. Prior to founding Regals Management in 2012, Mr. Slager was the Chairman and the Portfolio Managerof Attara Capital. Prior to Attara Capital in 2009, Mr. Slager was the Vice Chairman of Atticus Capital LP, a global investment management firm he joined in1998. Mr. Slager’s previous professional experience also includes having been in the Proprietary Equity Arbitrage Group at Goldman, Sachs & Co. in Londonand a financial analyst at Goldman, Sachs & Co. in New York and London. Mr. Slager holds a master’s degree in Legal Philosophy (Jurisprudence) fromOxford University. We believe that Mr. Slager’s qualifications to serve on our Board include his years of experience in the capital markets as well as his managementskills, his knowledge and familiarity with corporate finance and his familiarity with the Company given his history as a leading stockholder in the Company. 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 or until his or her earlier resignation or removal. The Boardmay also appoint additional directors. A director so chosen or appointed will hold office until the next annual meeting of stockholders and until his or hersuccessor is duly elected and qualified or until his or her earlier resignation or removal. The Board has determined that Leonard Sank, David Slager, KevinRakin, Aviad Friedman and Xiaopeng Li are independent as defined under the rules promulgated by the Nasdaq. Other than Mr. Slager and Ms. Li, none ofthe independent directors has any relationship with us besides serving on our Board. In connection with a private placement of our common stock in 2013,we have entered into a letter agreement with Mr. Slager pursuant to which we agreed not to issue stock options with an exercise price below $6.00 per shareand not to grant more than 125,000 stock options in any calendar year without the consent of certain stockholders. Ms. Li is the chief financial officer ofHTIT, a stockholder holding more than 5% of our common stock and was initially appointed to serve on our Board pursuant to the terms of the SPA datedNovember 30, 2015, but does not otherwise have any relationship with us. The Board considered these relationships and determined that they would notinterfere with Mr. Slager’s or Ms. Li’s exercise of independent judgment in carrying out the responsibilities of a director. 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, among other things: character andintegrity; ability to review critically, evaluate, question and discuss information provided, to exercise effective business judgment and to interact effectivelywith the other directors; and willingness and ability to commit the time necessary to perform the duties of a director. Board Meeting Attendance During fiscal 2018, our Board held 7 meetings and took actions by written consent on one occasion. Ms. Xiaopeng Li attended fewer than 75% ofthe aggregate of: (i) the total number of meetings of the Board (during the period for which such director served as a director); and (ii) the total number ofmeetings held by all committees of the Board on which such director served (during the period for which such director served on such committees). Boardmembers are encouraged to attend our annual meetings of stockholders. 37 Committees Audit Committee and Audit Committee Financial Expert The members of our Audit Committee are Aviad Friedman, David Slager and Kevin Rakin. Our Board has determined that Aviad Friedman 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” asdefined by the rules of the SEC and the Nasdaq rules and regulations. The Audit Committee operates under a written charter that is posted on the “Investors”section of our website, www.oramed.com. The primary responsibilities of our Audit Committee include: ●Overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company; ●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 or to thegeneral 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, Kevin Rakin and Aviad Friedman. The Board has determined that all of themembers of the Compensation Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The CompensationCommittee operates under a written charter that is posted on the “Investors” section of our website, www.oramed.com. The primary responsibilities of ourCompensation Committee include: ●Reviewing, negotiating and approving, or recommending for approval by our Board the salaries and incentive compensation of our executiveofficers; ●Administering our equity based plans and making recommendations to our Board with respect to our incentive-compensation plans and equity-based plans; and ●Making recommendations to our Board with respect to director compensation. Nominating Committee The members of our Nominating Committee are Leonard Sank and Aviad Friedman. The Board has determined that all of the members of theNominating Committee are “independent” as defined by the rules of the SEC and Nasdaq rules and regulations. The Nominating Committee operates under awritten charter that is posted on the “Investors” section of our website, www.oramed.com. The primary responsibilities of our Nominating Committee include: ●Overseeing the composition and size of the Board, developing qualification criteria for Board members and actively seeking, interviewing andscreening individuals qualified to become Board members for recommendation to the Board; ●Recommending the composition of the Board for each annual meeting of stockholders; and ●Reviewing periodically with the Chairman of the Board and the Chief Executive Officer the succession plans relating to positions held bydirectors, and making recommendations to the Board with respect to the selection and development of individuals to occupy those positions. 38 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 2018, we believe that during fiscal 2018, ourexecutive officers, directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filingrequirements. 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 and BusinessConduct is located at our website at www.oramed.com. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver from, aprovision of the Code of Ethics that applies to our Chief Executive Officer, or CEO, Chief Financial Officer or controller, or persons performing similarfunctions and that relates to the Code of Ethics by posting such information on our website, www.oramed.com. ITEM 11. EXECUTIVE COMPENSATION. Compensation Discussion and Analysis This section explains the policies and decisions that shape our executive compensation program, including its specific objectives and elements, as itrelates to our “named executive officers,” or NEOs. Our NEOs for fiscal 2018 are those three individuals listed in the “Summary Compensation Table” below.The Compensation Committee believes that our executive compensation is appropriately designed to incentivize our named executive officers to work forour long-term prosperity, is reasonable in comparison with the levels of compensation provided by comparable companies and reflects a reasonable cost. Webelieve our named executive officers are critical to the achievement of our corporate goals, through which we can drive stockholder value. The Compensation Committee of our Board is comprised solely of independent directors as defined by Nasdaq and non-employee directors asdefined by Rule 16b-3 under the Exchange Act. The Compensation Committee has the authority and responsibility to review and approve the compensationof our CEO and other executive officers. Other information concerning the structure, roles and responsibilities of our Compensation Committee is set forth in“Board Meetings and Committees—Compensation Committee” section. Our executive compensation program and our NEOs’ compensation packages are designed around the following objectives: ·attract, hire, and retain talented and experienced executives; ·motivate, reward and retain executives whose knowledge, skills and performance are critical to our success; ·ensure fairness among the executive management team via recognizing the contributions of each executive to our success; ·focus executive behavior on achievement of our corporate objectives and strategy; and ·align the interests of management and stockholders by providing management with longer-term incentives through equity ownership. The Compensation Committee reviews the allocation of compensation components regularly to ensure alignment with strategic and operating goals,competitive market practices and legislative changes. The Compensation Committee does not apply a specific formula to determine the allocation betweencash and non-cash forms of compensation. Certain compensation components, such as base salaries, benefits and perquisites, are intended primarily to attract,hire, and retain well-qualified executives. Other compensation elements, such as long-term incentive opportunities, are designed to motivate and rewardperformance. Long-term incentives are intended to reward NEOs for our long-term performance and executing our business strategy, and to strongly alignNEOs’ interests with those of stockholders. 39 With respect to equity compensation, the Compensation Committee makes awards to executives under our Second Amended and Restated 2008Stock Incentive Plan, or 2008 Plan. Executive compensation is paid or granted based on such matters as the Compensation Committee deems appropriate,including our financial and operating performance and the alignment of the interests of the executive officers and our stockholders. Elements of Compensation Our executive officer compensation program is comprised of: (i) base salary or monthly compensation; (ii) discretionary bonus; (iii) long-termequity incentive compensation in the form of stock option and RSU grants; and (iv) benefits and perquisites. In establishing overall executive compensation levels and making specific compensation decisions for our NEOs in fiscal 2018, the CompensationCommittee considered a number of criteria, including the executive’s position, scope of responsibilities, prior base salary and annual incentive awards andexpected contribution. Generally, our Compensation Committee reviews and, as appropriate, approves compensation arrangements for the NEOs from time to time but notless than once each year. The Compensation Committee also takes into consideration the CEO’s recommendations for executive compensation of the otherNEOs. The CEO generally presents these recommendations at the time of our Compensation Committee’s review of executive compensation arrangements. Base Salary The Compensation Committee performs a review of base salaries and monthly compensation for our NEOs from time to time as appropriate. Indetermining salaries, the Compensation Committee members also take into consideration the scope of the NEOs’ responsibilities and independent third partymarket data, such as compensation surveys to industry, individual experience and performance and contribution to our clinical, regulatory, commercial andoperational performance. None of the factors above has a dominant weight in determining the compensation of our named executive officers, and ourCompensation Committee considers the factors as a whole when considering such compensation. In addition, our Compensation Committee usescomparative data regarding compensation paid by peer companies in order to obtain a general understanding of current trends in compensation practices andranges of amounts being awarded by other public companies, and not as part of an analysis or a formula. In fiscal 2017, for example, the Compensation Committee received consulting services from Aon Consulting, Inc., or Aon, through its Radfordsubdivision (part of Aon Hewitt), or Radford, with regard to management and Board compensation. The Compensation Committee engaged the consultantsolely to collect and analyze data regarding management and Board compensation at other companies comparable to the Company. The consultant collecteddata regarding U.S. and Israeli practices, reviewed executive compensation against a market composite of peer proxy data and Radford survey data,determined the U.S. to Israeli discount and applied the discount to position specific U.S. data to arrive at Israeli market data. We believe that a competitive base salary and monthly compensation is a necessary element of any compensation program that is designed to attractand retain talented and experienced executives. We also believe that attractive base salaries can motivate and reward executives for their overall performance.Base salary and monthly compensation are established in part based on the individual experience, skills and expected contributions to our performance, aswell as such executive’s performance during the prior year. Generally, we believe that executives’ base salaries should be targeted near the median of therange of salaries for executives in similar positions with similar responsibilities, experience and performance at comparable companies. Compensationadjustments are made occasionally based on changes in an executive’s level of responsibility, company progress or on changed local and specific executiveemployment market conditions. 40 In fiscal 2018, our Compensation Committee increased the base salary of one of our NEOs by fifteen percent, as it deemed this to be a reasonable ratebased on, among other factors, such NEO’s increased responsibilities, and in fiscal 2017, our Compensation Committee increased the base salaries of ourNEOs by ten to thirty three percent based on the report from Aon, as it determined salaries were not in line with market. Performance Based Bonus Our NEOs are eligible to receive discretionary annual bonuses based upon performance. The amount of annual bonus to our NEOs is based onvarious factors, including, among others, the achievement of scientific and business goals and our financial and operational performance. The CompensationCommittee takes into account the overall performance of the individuals, as well as the overall performance of the Company over the period being reviewedand the recommendation of management. For any given year, the compensation objectives vary, but relate generally to strategic factors such as developmentsin our clinical path, the execution of a license agreement for the commercialization of product candidates, the establishment of key strategic collaborations,the build-up of our pipeline and financial factors such as capital raising. Bonuses are awarded generally based on corporate performance, with adjustmentsmade within a range for individual performance, at the discretion of the Compensation Committee. The Compensation Committee determines, on adiscretionary basis, the size of the entire bonus pool and the amount of the actual award to each NEO. The overall payment is also based on historiccompensation of the NEOs. We believe that annual bonuses payable based on the achievement of short-term corporate goals incentivize our NEOs to create stockholder valueand attain short-term performance objectives. Long-Term Equity Incentive Compensation Long-term incentive compensation allows the NEOs to share in any appreciation in the value of our common stock. The Compensation Committeebelieves that stock participation aligns executive officers’ interests with those of our stockholders. Equity incentive awards are generally made at thecommencement of employment and following a significant change in job responsibilities, or to meet other special retention or performance objectives. Theamounts of the awards are designed to reward past performance and create incentives to meet long-term objectives. Awards are made at a level expected to becompetitive within the biotechnology industry, as well as with Israeli-based companies. Awards are made on a discretionary basis and not pursuant to specificcriteria set out in advance. In determining the amount of each grant, the Compensation Committee also takes into account the number of shares held by theexecutive prior to the grant. The vesting schedule for NEOs was based on monthly installments for periods of no longer than three years through thebeginning of fiscal 2017; however, following consultation with Aon during fiscal 2017, the vesting schedule for NEOs was changed to generally provide forannual installments for new grants, though the Compensation Committee also utilizes quarterly vesting from time to time. As part of its fiscal 2017engagement described above, Aon provided consulting services to the Compensation Committee in fiscal 2018 in connection with grants of stock options toour executive officers. Aon reviewed annual long-term incentive grants at peer companies, as well as such grants made by companies in the broader market,based on a blend of Black-Scholes valuations and grants as a percentage of the applicable company’s capitalization. Aon provided recommendations atvarious percentiles as well as for both the U.S. and Israeli local markets for the Compensation Committee’s consideration. Aon used both a U.S. and an Israelipeer group. The U.S. peer group consisted of the following companies: Actinium Pharmaceuticals Inc., Athersys Inc., Capricor Therapeutics Inc., CaraTherapeutics Inc., Catabasis Pharmaceuticals Inc., Cymabay Therapeutics Inc., Eiger BioPharmaceuticals Inc., Eleven Biotherapeutics Inc., Endocyte Inc.,Genocea Biosciences Inc., GlycoMimetics Inc., GTx Inc., Kura Oncology Inc., Ocera Therapeutics Inc., Stemline Therapeutics Inc., Tracon PharmaceuticalsInc. and vTv Therapeutics Inc. The Israeli peer group consisted of the following companies: Alcobra Ltd. (now Arcturus Therapeutics Ltd.), BioLine Rx Ltd.,Can-Fite BioPharma Ltd., Foamix Pharmaceuticals Ltd., Galmed Pharmaceuticals Ltd., Intec Pharma Ltd., Kamada Ltd., MediWound Ltd., PluristemTherapeutics Inc., Protalix BioTherapeutics Inc., RedHill Biopharma Ltd. and Vascular Biogenics Ltd. Following such consultation, we granted stock optionsthat vest over a period of four years to certain of our executive officers. The Compensation Committee believes that time-based vesting encourages recipientsto build stockholder value over a long period of time. RSU awards provide our NEOs with the right to purchase shares of our common stock at a par value of $0.012, subject to continued employmentwith our company. In prior years the Compensation Committee chose to grant RSU awards and not options because RSU awards, once vested, always have animmediate financial value to the holder thereof, unlike options where the exercise price might be above the current market price of the shares and thereforenot have any intrinsic value to the holder thereof. In addition, because vested RSU awards always have financial value, as opposed to options, we were ableto limit the number of securities issued to our NEOs and other employees, directors and consultants. RSUs generally vest over a period of no longer than twoyears. In June 2017, following consultation with Aon, the Compensation Committee chose to grant options instead of RSUs and in addition granted to theCEO options with a market condition of our share price reaching a certain target, in order to further strengthen the alignment of our NEOs’ interests with thoseof our stockholders, as part of our efforts to increase the Company’s market value. No RSUs were granted in fiscal 2018. 41 Benefits and Perquisites Generally, benefits available to NEOs are available to all employees on similar terms and include welfare benefits, paid time-off, life and disabilityinsurance and other customary or mandatory social benefits in Israel. We provide our NEOs with a phone and a company car, which are customary benefits inIsrael to managers and officers. We do not believe that the benefits and perquisites described above deviate materially from the customary practice for compensation of executiveofficers by other companies similar in size and stage of development in Israel. These benefits represent a relatively small portion of the executive officers’total compensation. In fiscal 2018, the Company retained ORI - Organizational Resources International Ltd., or ORI, to prepare a cost analysis on the difference betweenthe cost of living in Israel and New York. Based on the relocation cost analysis prepared by ORI, the Company pays for certain direct costs, related taxes andexpenses incurred in connection with the relocation of our CEO to New York. During fiscal 2018, such relocation expenses totaled approximately $430,000,and included mainly payments intended to reflect the difference in the cost of living between Israel and the United States, relocation expenses,accommodation allowances, education allowances, health insurance and related taxes. Say-on-Pay Vote Our stockholders approved, on an advisory basis, our executive compensation program at our 2018 annual meeting of stockholders held on August28, 2018. We did not seek or receive any specific feedback from our stockholders concerning our executive compensation program during the past fiscalyear. The Compensation Committee did not specifically rely on the results of the prior vote in making any compensation-related decisions during fiscal2018. REPORT OF THE COMPENSATION COMMITTEE The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) ofRegulation S-K with our management and, based on such review and discussions, the Compensation Committee recommended to our Board that theCompensation Discussion and Analysis be included in this Annual Report on Form 10-K and in our proxy statement relating to our next annual meeting ofstockholders. Compensation Committee Members: Aviad FriedmanKevin RakinLeonard Sank 42 SUMMARY COMPENSATION TABLE The following table sets forth the compensation earned by our NEOs for fiscals 2018, 2017 and 2016. Name and PrincipalPosition Year(1) Salary($)(2) Bonus($)(2)(3) StockAwards($)(4) OptionAwards($)(5) All OtherCompensation($)(2)(6) Total($) Nadav Kidron 2018 436,310 148,795 - 522,569 442,326 1,550,000 President and CEO and 2017 399,804 123,000 - 585,150 45,579 1,153,533 director (7) 2016 273,086 195,729 - - 17,366 486,181 Miriam Kidron 2018 273,595 46,614 - 253,204 13,643 587,056 Chief Scientific Officer 2017 254,765 50,000 581,932 359,224 12,775 1,258,696 and director (8) 2016 203,378 136,583 - - 13,191 353,152 Joshua Hexter 2018 161,002 26,895 - 269,196 50,505 507,598 COO and VP Business 2017 148,499 33,000 463,400 - 46,408 691,307 Development (9) 2016 132,306 86,974 - - 42,014 261,294 (1)The information is provided for each fiscal year, which begins on September 1 and ends on August 31. (2)Amounts paid for Salary, Bonus and All Other Compensation were originally denominated in NIS and were translated into U.S. Dollars at the then currentexchange rate for each payment. (3)Bonuses were granted at the discretion of the Compensation Committee. (4)For RSU awards, the amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718. The assumptions used to determine the fairvalue of the RSU awards are set forth in Note 8 to our audited consolidated financial statements included in this Annual Report on Form 10-K. Our NEOswill not realize the value of these awards in cash unless and until the awards vest and the underlying shares are issued and subsequently sold. (5)The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards. The assumptions used to determinethe fair value of the option awards are set forth in Note 8 to our audited consolidated financial statements included in this Annual Report on Form 10-K.Our NEOs will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold. (6)See “All Other Compensation Table” below. (7)Mr. Kidron receives certain compensation from Oramed Ltd. through KNRY, Ltd., an Israeli entity owned by Dr. Miriam Kidron, or KNRY. See “—Employment and Consulting Agreements” below. (8)Dr. Kidron receives compensation from Oramed Ltd. through KNRY. See “—Employment and Consulting Agreements” below. (9)Mr. Hexter resigned from his positions with us, effective November 15, 2018. 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*($) EducationFund*($) RelocationExpenses**($) Total($) Nadav Kidron 2018 12,596 -- -- 429,730 442,326 2017 28,098 -- -- 17,481 45,579 2016 17,366 -- -- -- 17,366 Miriam Kidron 2018 13,643 -- -- -- 13,643 2017 12,775 -- -- -- 12,775 2016 13,191 -- -- -- 13,191 Joshua Hexter 2018 13,909 24,623 11,973 -- 50,505 2017 12,910 22,513 10,985 -- 46,408 2016 12,660 19,585 9,769 -- 42,014 *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. An educationfund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes. **Relocation expenses represents additional compensation in fiscal 2018 and fiscal 2017, for the period during which Mr. Kidron was in the United States.These expenses mainly include relocation expenses, supplemental living expenses, accommodation allowances, education allowances, health insuranceand related costs. 43 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, on July 1, 2008,Oramed Ltd. entered into a consulting agreement with KNRY whereby Dr. Miriam Kidron, through KNRY, provides services as Chief Scientific Officer ofboth the Company and Oramed Ltd., or the Miriam Kidron Consulting Agreement. We refer to the Miriam Kidron Consulting Agreement and Nadav KidronConsulting Agreement collectively as the Consulting Agreements. The Consulting Agreements are both terminable by either party upon 140 days prior written notice. The Consulting Agreements, as amended,provide that KNRY will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreements and that NadavKidron receives a monthly consulting fee of NIS 127,570 and Miriam Kidron receives a monthly consulting fee of NIS 80,454. Pursuant to the ConsultingAgreements, KNRY, Nadav Kidron and Miriam Kidron each agree that during the term of the Consulting Agreements and for a 12 month period thereafter,none of them will compete with Oramed Ltd. nor solicit employees of Oramed Ltd. We, through Oramed Ltd., had an employment agreement with Joshua Hexter as of April 14, 2013, pursuant to which Mr. Hexter was appointed asChief Operating Officer and VP Business Development of the Company and Oramed Ltd. In accordance with the employment agreement, as amended, Mr.Hexter’s gross monthly salary was NIS 51,625. In addition, Mr. Hexter was provided with a cellular phone and a company car pursuant to the terms of hisagreement. Effective November 15, 2018, Mr. Hexter resigned as our COO and VP Business Development. We, through Oramed Ltd., have entered into an employment agreement with Mark Hasleton as of November 6, 2018, pursuant to which Dr. Hasletonwas appointed as VP Business Development of the Company and Oramed Ltd., effective November 15, 2018. In accordance with the employment agreement,Dr. Hasleton’s current gross monthly salary is NIS 38,000. In addition, Dr. Hasleton is provided with a cellular phone and a company car pursuant to the termsof his agreement. We, through Oramed Ltd., have entered into an employment agreement with Hilla Eisenberg as of July 20, 2017, pursuant to which Ms. Eisenbergwas appointed as Chief Financial Officer, Treasurer and Secretary of the Company and Oramed Ltd., effective August 1, 2017. In accordance with theemployment agreement, as amended, Ms. Eisenberg’s current gross monthly salary is NIS 35,700. In addition, Ms. Eisenberg is provided with a cellular phoneand travel reimbursement pursuant to the terms of her agreement. We have entered into indemnification agreements with our directors and officers pursuant to which we agreed to indemnify each director and officerfor any liability he or she may incur by reason of the fact that he or she serves as our director or officer, to the maximum extent permitted by law. Potential Payments upon Termination or Change-in-Control We have no plans or arrangements in respect of remuneration received or that may be received by our named executive officers to compensate suchofficers in the event of termination of employment (as a result of resignation, retirement, change-in- control) or a change of responsibilities following achange-in-control. Pension, Retirement or Similar Benefit Plans We have no arrangements or plans under which we provide pension, retirement or similar benefits for directors or executive officers. Our directorsand executive officers may receive stock options, RSUs or restricted shares at the discretion of our Compensation Committee in the future. 44 GRANTS OF PLAN-BASED AWARDS The following table shows grants of plan-based equity awards made to our NEOs during fiscal 2018: Name Grant Date OptionsAwards:Number ofSecuritiesUnderlyingOptions(#) Grant DateFair Value ofStock Awards($) Nadav Kidron(1) 1/31/2018 97,000 522,569 Miriam Kidron(2) 1/31/2018 47,000 253,204 Joshua Hexter(3) 4/8/2018 30,000 137,933 Joshua Hexter(3) 5/3/2018 30,000 131,262 (1)These options were granted under our 2008 Plan and vest in 4 equal installments of 24,250 on each of January 1, 2019, January 1, 2020, January 1, 2021and January 1, 2022. (2)These options were granted under our 2008 Plan and vest in 4 equal installments of 11,750 on each of January 1, 2019, January 1, 2020, January 1, 2021and January 1, 2022. (3)These options were granted under our 2008 Plan and vest in 16 equal installments of 1,875 on the last day of each quarter commencing June 30, 2018. 45 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth information concerning stock options and stock awards held by the NEOs as of August 31, 2018. Option Awards Stock Awards Name Number ofSecuritiesUnderlyingUnexercisedOptions (#)Exercisable Number ofSecuritiesUnderlyingUnexercisedOptions (#)Unexercisable OptionExercisePrice($) OptionExpirationDate Number of sharesthat have notvested (#) Market value ofshares that havenot vested ($) Nadav Kidron 72,000(1) - 5.88 4/20/20 72,000(2) - 4.08 8/8/22 47,134(3) - 12.45 4/9/24 49,000(4) 98,000(4) 7.77 6/30/27 97,000(5) 0(8)(9) 0 Miriam Kidron 72,000(1) - 5.88 4/20/20 72,000(2) - 4.08 8/8/22 47,134(3) - 12.45 4/9/24 23,333(6) 46,666(6) 7.77 6/30/27 47,000(7) 0(10) 0 Joshua Hexter 100,800(11) - 7.88 4/14/23 1,875(12) 28,125(12) 7.05 4/8/28 1,875(13) 28,125(13) 6.70 5/3/28 0(14) 0 (1)On April 21, 2010, 72,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $5.88 per share;9,000 of such options vested immediately on the date of grant and the remainder vested in twenty-one equal monthly installments, commencing on May31, 2010. The options have an expiration date of April 20, 2020. (2)On August 8, 2012, 72,000 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $4.08 per share;21,000 of such options vested immediately on the date of grant and the remainder vested in seventeen equal monthly installments, commencing onAugust 31, 2012. The options have an expiration date of August 8, 2022. (3)On April 9, 2014, 47,134 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $12.45 per share;15,710 of such options vested on April 30, 2014 and the remainder vested in eight equal monthly installments, commencing on May 31, 2014. Theoptions have an expiration date of April 9, 2024. (4)On June 30, 2017, 147,000 options were granted to Nadav Kidron under the 2008 Plan at an exercise price of $7.77 per share; 49,000 of such optionsvested on December 31, 2017 and the remainder vest in two equal installments of 49,000 on each of December 31, 2018 and December 31, 2019, subjectto the Company share price reaching the target of $9.5 and $12.5 per share, respectively. The options expire on June 30, 2027. 46 (5)On January 31, 2018, 97,000 options were granted to Nadav Kidron under the 2008 Plan at an exercise price of $8.14 per share; Such options vest in 4equal installments of 24,250 on each of January 1, 2019, January 1, 2020, January 1, 2021 and January 1, 2022. The options expire on January 31, 2028. (6)On June 30, 2017, 69,000 options were granted to Miriam Kidron under the 2008 Plan at an exercise price of $7.77 per share; 23,000 of such optionsvested on December 31, 2017 and the remainder vest in two equal installments of 23,333 on each of December 31, 2018 and December 31, 2019. Theoptions have an expiration date of June 30, 2027. (7)On January 31, 2018, 47,000 options were granted to Miriam Kidron under the 2008 Plan at an exercise price of $8.14 per share; Such options vest in 4equal installments of 11,750 on each of January 1, 2019, January 1, 2020, January 1, 2021 and January 1, 2022. The options expire on January 31, 2028. (8)On November 13, 2014, 9,788 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Nadav Kidron. The RSUsvested in two equal installments, each of 4,894 shares, on November 30 and December 31, 2014. The shares of common stock underlying the RSUs willbe issued upon request of the grantee. (9)On February 23, 2015, 79,848 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Nadav Kidron. The RSUsvested in 23 installments consisting of one installment of 6,654 shares on February 28, 2015 and 22 equal monthly installments of 3,327 shares each,commencing March 31, 2015. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (10)On June 30, 2017, 75,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Miriam Kidron. The RSUsvested immediately, have an exercise price of $0.012 per share of common stock and expire on June 30, 2027. (11)On April 14, 2013, 100,800 options were granted to Joshua Hexter under the 2008 Plan at an exercise price of $7.88 per share; the options vested in 35consecutive equal installments during a 3-year period commencing on May 31, 2013, and two installments of 1,400 each, that were vested on April 30,2013 and April 14, 2016, and expire on April 14, 2023. (12)On April 8, 2018, 30,000 options were granted to Joshua Hexter under the 2008 Plan at an exercise price of $7.05 per share; 3,750 of the options vestedin two installments of 1,875 on each of June 30, 2018 and September 30, 2018 and expire on April 8, 2028. The remainder of the options were forfeitedby the grantee as of November 15, 2018. (13)On May 3, 2018, 30,000 options were granted to Joshua Hexter under the 2008 Plan at an exercise price of $6.70 per share; 3,750 of the options vested intwo installments of 1,875 on each of June 30, 2018 and September 30, 2018 and expire on May 3, 2028. The remainder of the options were forfeited bythe grantee as of November 15, 2018. (14)On November 1, 2016, 70,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Joshua Hexter. The RSUsvested in 19 installments, consisting of one installment of 9,000 shares on November 1, 2016, 18 equal monthly installments of 1,500 shares each,commencing November 30, 2016, and 17,000 shares on each of April 30, 2017 and 2018. 47 OPTIONS EXERCISED AND STOCK VESTED The following table sets forth information with respect to the NEOs concerning the vesting of RSUs during fiscal 2018. No options were exercisedby the NEOs in fiscal 2018. Stock AwardsName Number ofSharesAcquired onVesting (#) ValueRealized onVesting ($) Joshua Hexter 29,000 214,710 Compensation Committee Interlocks and Insider Participation During fiscal 2018, Mr. Aviad Friedman, Mr. Kevin Rakin and Mr. Leonard Sank served as the members of our Compensation Committee. None ofthe members of our Compensation Committee is, or has been, an officer or employee of ours. During the last year, none of our NEOs served as: (1) a member of the compensation committee (or other committee of the Board performingequivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on thecompensation committee; (2) a director of another entity, one of whose executive officers served on the compensation committee; or (3) a member of thecompensation committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entireboard of directors) of another entity, one of whose executive officers served as a director on our Board. DIRECTOR COMPENSATION The following table provides information regarding compensation earned by, awarded or paid to each person for serving as a director who is not anexecutive officer during fiscal 2018: Name of Director FeesEarned orPaid inCash($) Stock Awards(2)($) Option Awards(3)($) All OtherCompensation($) Total($) Nadav Kidron (1) - - - - - Miriam Kidron (1) - - - - - Leonard Sank 20,000 - - - 20,000 Xiaopeng Li 20,000 - - - 20,000 Aviad Friedman 20,000 - - - 20,000 Kevin Rakin 20,000 - - - 20,000 David Slager 20,000 - - - 20,000 (1)Please refer to the Summary Compensation Table for executive compensation with respect to the named individual. (2)As of August 31, 2018, our non-employee directors then in office held options to purchase shares of our common stock as follows: Name of Director AggregateNumberof SharesUnderlyingStockAwards Leonard Sank 74,867 David Slager 22,470 Aviad Friedman 20,857 Kevin Rakin 62,470 Xiaopeng Li 29,026 (3)The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards. The assumptions used to determinethe fair value of the option awards are set forth in Note 8 to our audited consolidated financial statements included in this Annual Report on Form 10-K.Our directors will not realize the value of these awards in cash unless and until these awards are exercised and the underlying shares subsequently sold. 48 Our directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance atmeetings of our Board. Each independent director is entitled to receive as remuneration for his or her service as a member of the Board a sum equal to$20,000 per annum, to be paid quarterly after the close of each quarter. Our executive officers did not receive additional compensation for service asdirectors. The Board may award special remuneration to any director undertaking any special services on behalf of us other than services ordinarily requiredof a director. Other than as described above, we have no present formal plan for compensating our directors for their service in their capacity as directors. Otherthan indicated above, no director received and/or accrued any compensation for his services as a director, including committee participation and/or specialassignments during fiscal 2018. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Stock Option Plans Our Board adopted the 2008 Plan in order to attract and retain quality personnel. The 2008 Plan provides for the grant of stock options, restrictedstock, RSUs, and stock appreciation rights, collectively referred to as “awards.” Stock options granted under the 2008 Plan may be either incentive stockoptions under the provisions of Section 422 of the Code, or non-qualified stock options. Under the 2008 Plan, as amended, 2,400,000 shares were reserved forthe grant of awards, which may be issued at the discretion of our Board from time to time. The 2008 Plan permits awards to be based on performance-basedcriteria that will allow us to maximize its ability to pay deductible compensation for U.S. federal income tax purposes. As of August 31, 2018, options withrespect to 2,089,848 shares have been granted, of which 35,074 have been forfeited, 169,974 have been exercised and 620,680 have expired. As of August31, 2018, 525,824 RSUs have been granted, of which 164,636 have vested and the shares of common stock underlying those RSUs will be issued uponrequest of the grantee and 33,248 have been forfeited. Other than in the case of certain options, the shares underlying an award granted under the 2008 Planmay become available for future grant under the 2008 Plan if the award is forfeited, canceled or expired. The following table sets forth additional information with respect to our equity compensation plans (consisting solely of the 2008 Plan) as of August31, 2018: Plan category Number ofsecurities tobe issueduponexercise ofoutstandingoptions, RSUsand rights(a) Weight-averageexerciseprice ofoutstandingoptions, RSUs and rights(b) Number ofsecuritiesremainingavailable forfutureissuanceunder equitycompensationplans(excludingsecuritiesreflected incolumn (a))(c) Equity compensation plans approved by security holders 948,420 $5.70 473,330 Equity compensation plans not approved by security holders -- -- -- Total 948,420 $5.70 473,330 49 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 November 26, 2018 by: (1) eachperson who is known by us to own beneficially more than 5% of our common stock; (2) each director; (3) each of our NEOs listed above under “SummaryCompensation Table”; and (4) all of our directors and current executive officers as a group. On such date, we had 17,378,359 shares of common stockoutstanding. As used in the table below and elsewhere in this form, the term “beneficial ownership” with respect to a security consists of sole or shared votingpower, including the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose or direct the disposition, withrespect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to acquire such power(s) during thenext 60 days following November 26, 2018. Inclusion of shares in the table does not, however, constitute an admission that the named stockholder is a director indirect beneficial owner of those shares. Unless otherwise indicated, (1) each person or entity named in the table has sole voting power and investmentpower (or shares that power with that person’s spouse) with respect to all shares of common stock listed as owned by that person or entity and (2) the addressof each of the individuals named below is: c/o Oramed Pharmaceuticals Inc., 142 W. 57th Street, New York, New York 10019. Name and Address of Beneficial Owner Number ofShares Percentageof SharesBeneficiallyOwned Regals Fund LP 152 West 57th Street, 9th Floor New York, NY 10019 1,316,328(1) 7.6%HTIT No. 199 Fanhua Road Economic and Technological Development Zone Heifei, Anhui Province, P.R. China, Zip Code: 230601 1,155,367(2) 6.6%Altium Growth Fund, LP 551 Fifth Ave, 19th Floor New York, NY 10176 972,000(3) 5.6%Nadav Kidron #+ 2,584,310(4) 14.6%Miriam Kidron #+ 324,550(5) 1.8%Joshua Hexter + 178,300(6) 1.0%Aviad Friedman # 37,457(7) * Xiaopeng Li # 229,785(8) 1.3%Kevin Rakin # 51,940(9) * Leonard Sank # 580,452(10) 3.3%David Slager # 1,333,207(11) 7.7%All current executive officers and directors, as a group (nine persons) 4,956,435(12) 27.2% 50 *Less than 1%#Director+NEO (1)Regals Management is the investment manager of Regals Fund LP, the owner of record of these shares of common stock. Mr. David Slager is themanaging member of the general partner of Regals Management. All investment decisions are made by Mr. Slager, and thus the power to vote or directthe 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. Slagerthrough Regals Management. (2)Based solely on a Schedule 13D filed by HTIT on January 6, 2016. On November 30, 2015, we entered into a securities purchase agreement with HTITpursuant to which, among other things, Nadav Kidron will serve as proxy and attorney in fact of HTIT, with full power of substitution, to cast on behalfof HTIT all votes that HTIT is entitled to cast with respect to 1,155,367 shares of common stock, or the Purchased Shares, at any and all meetings of ourstockholders, to consent or dissent to any action taken without a meeting and to vote all the Purchased Shares held by HTIT in any manner Mr. Kidrondeems appropriate except for matters related to our activities in the People’s Republic of China, on which Mr. Kidron will consult with HTIT beforetaking any action as proxy. (3)Includes 972,000 shares of Common Stock owned by Altium Growth Fund, LP, or Altium Growth. Altium Capital Management, LP, or Altium Capital, isthe investment adviser of Altium Growth, and Altium Growth GP, LLC, or Altium GP, is the general partner of Altium Growth. The foregoing is basedsolely on a Schedule 13G filed jointly by Altium Growth, Altium Capital and Altium GP on July 13, 2018. (4)Includes 264,384 shares of common stock issuable upon the exercise of outstanding stock options and 89,636 shares of Common Stock underlyingvested RSUs that are issuable upon request. Also includes 1,155,367 shares of common stock held by HTIT, as further described in footnote (2) above,and 206,350 shares of common stock held by Xiaopeng Li, as further discussed in footnote (8) below. (5)Includes 249,550 shares of common stock issuable upon the exercise of outstanding stock options and 75,000 shares of Common Stock underlyingvested RSUs that are issuable upon request. (6)Includes 108,300 shares of common stock issuable upon the exercise of outstanding stock options. (7)Includes 15,266 shares of common stock issuable upon the exercise of outstanding stock options and 12,191 shares of common stock owned by Shikma,of which Mr. Friedman is the sole owner and chief executive officer. All investment decisions are made by Mr. Friedman, and thus the power to vote ordirect 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.Friedman through Shikma. (8)Includes 23,435 shares of common stock issuable upon the exercise of outstanding stock options. The voting of these shares is subject to a revocableproxy granted to Nadav Kidron. On November 21, 2016, following her first purchase of such shares, Ms. Li appointed Nadav Kidron as proxy andattorney in fact of Ms. Li, with full power of substitution, to cast on behalf of Ms. Li all votes that Ms. Li is entitled to cast with respect to the sharespurchased at any and all meeting of the stockholders of the Company, to consent or dissent to any action taken without a meeting and to vote all theshares held by Ms. Li in any manner Mr. Kidron deems appropriate except for matters related to the Company’s activities in the Territory and whenobvious that specific votes violate Ms. Li’s rights and interests, on which Mr. Kidron and Ms. Li will consult with each other in advance of the vote, andsubsequently Mr. Kidron will vote according to Ms. Li’s instructions. The proxy will also apply to shares of the Company purchased by Ms. Li throughopen market transactions. Ms. Li may revoke the proxy in writing at any time. (9)Includes 36,879 shares of common stock issuable upon the exercise of outstanding stock options. (10)Includes: (a) 294,162 shares of common stock held by Mr. Sank; (b) 78,125 shares of common stock held by Mr. Sank’s wife; (c) 69,276 shares ofcommon stock issuable to Mr. Sank upon the exercise of outstanding stock options; and (d) 138,889 shares of common stock owned by a companywholly owned by a trust of which Mr. Sank is a trustee. Mr. Sank disclaims beneficial ownership of the securities referenced in (b) and (d) above. (11)See footnote (1) above. Also Includes 16,879 shares of common stock issuable upon the exercise of outstanding stock options. (12)Includes 695,753 shares of common stock issuable upon the exercise of options beneficially owned by the referenced persons and 164,636 shares ofCommon Stock underlying vested RSUs that are issuable upon request. 51 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. During fiscal 2018 and 2017, except for compensation arrangements described elsewhere herein, we did not participate in any transaction, and weare not currently participating in any proposed transaction, or series of transactions, in which the amount involved exceeded the lesser of $120,000 or onepercent 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 our directors, officers, fivepercent beneficial security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct 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 from unaffiliatedthird parties. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believethat all of the transactions described below met this policy standard at the time they occurred. All related person transactions are approved by our Board. On November 30, 2015, we, our Israeli subsidiary and HTIT entered into a Technology License Agreement, which was further amended, according towhich we granted HTIT an exclusive commercialization license in the Territory related to our oral insulin capsule, ORMD-0801. Pursuant to this licenseagreement, HTIT will conduct certain pre-commercialization and regulatory activities with respect to our subsidiary’s technology related to the ORMD-0801capsule, and will pay certain royalties and an aggregate of approximately $37.5 million. On November 30, 2015, we also entered into a securities purchaseagreement with HTIT, pursuant to which, among other things, Mr. Kidron will serve as proxy and attorney in fact of HTIT, with full power of substitution, tocast on behalf of HTIT all votes that HTIT is entitled to cast with respect to the Purchased Shares at any and all meetings of our stockholders to consent ordissent to any action taken without a meeting and to vote all the Purchased Shares held by HTIT in any manner Mr. Kidron deems appropriate except formatters related to our activities in the People’s Republic of China, on which Mr. Kidron will consult with HTIT before taking any action as proxy. On November 21, 2016, Ms. Li appointed Nadav Kidron as proxy and attorney in fact of Ms. Li, with full power of substitution, to cast on behalf ofMs. Li all votes that Ms. Li is entitled to cast with respect to the shares she holds at any and all meeting of the stockholders of the Company, to consent ordissent to any action taken without a meeting and to vote all the shares held by Ms. Li in any manner Mr. Kidron deems appropriate except for matters relatedto the Company’s activities in the Territory and when obvious that specific votes violate Ms. Li’s rights and interests, on which Mr. Kidron and Ms. Li willconsult with each other in advance of the vote, and subsequently Mr. Kidron will vote according to Ms. Li’s instructions. The proxy will also apply to sharesof the Company purchased by Ms. Li through open market transactions. Ms. Li may revoke the proxy in writing at any time. The Board has determined that Leonard Sank, David Slager, Kevin Rakin, Aviad Friedman and Xiaopeng Li are independent as defined under therules promulgated by Nasdaq. 52 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The aggregate fees billed by Kesselman & Kesselman, independent registered public accounting firm, and member firm of PricewaterhouseCoopersInternational Limited, for services rendered to us during fiscals 2018 and 2017: 2018 2017 Audit Fees(1) $111,000 $109,000 Audit-Related Fees - - Tax Fees(2) 9,000 4,000 All Other Fees - - Total Fees $120,000 $113,000 (1)Amount represents fees paid for professional services for the audit of our consolidated annual financial statements, review of our interim condensedconsolidated financial statements included in quarterly reports and services that are normally provided by our independent registered public accountingfirm in connection with statutory and regulatory filings or engagements. (2)Represents fees paid for tax consulting services. SEC rules require that before the independent registered public accounting firm are engaged by us to render any auditing or permitted non-auditrelated service, the engagement be: (1) pre-approved by our Audit Committee; or (2) entered into pursuant to pre-approval policies and proceduresestablished by the Audit Committee, provided the policies and procedures are detailed as to the particular service, the Audit Committee is informed of eachservice, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management. The Audit Committee pre-approves all services provided by our independent registered public accounting firm. All of the above services and feeswere reviewed and approved by the Audit Committee before the services were rendered. 53 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a)Index to Financial Statements The following consolidated financial statements are filed as part of this Annual Report on Form 10-K: Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1CONSOLIDATED FINANCIAL STATEMENTS: Balance sheets F-2Statements of comprehensive loss F-3Statements of changes in stockholders’ equity F-4Statements of cash flows F-5Notes to financial statements F-6 - F-30 ____________________________________________________________________________________ 54 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Oramed Pharmaceuticals Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Oramed Pharmaceuticals Inc. and its subsidiary as of August 31, 2018 and 2017, and therelated consolidated statements of comprehensive loss, changes in stockholders’ equity and cash flows for each of the three years in the period ended August31, 2018, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financialstatements present fairly, in all material respects, the financial position of the Company as of August 31, 2018 and 2017, and the results of their operationsand their cash flows for each of the three years in the period ended August 31, 2018 in conformity with accounting principles generally accepted in theUnited States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’sconsolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error orfraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits weare required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness ofthe Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresin the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Kesselman & Kesselman Kesselman & KesselmanCertified Public Accountants (Isr.)A member firm of PricewaterhouseCoopers International Limited Tel Aviv, IsraelNovember 27, 2018 We have served as the Company’s auditor since 2008. Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,P.O Box 50005 Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il F-1 ORAMED PHARMACEUTICALS INC.CONSOLIDATED BALANCE SHEETSU.S. Dollars in thousands (except share and per share data) August 31, 2018 2017 ASSETS CURRENT ASSETS: Cash and cash equivalents $4,996 $3,969 Short-term deposits (note 2) 20,875 13,293 Marketable securities (note 3) 4,592 2,860 Restricted cash - 16 Prepaid expenses and other current assets 574 159 Total current assets 31,037 20,297 LONG-TERM ASSETS: Long-term deposits and investment (note 4) 13,542 16,232 Marketable securities (note 3) 2,785 2,151 Amounts funded in respect of employee rights upon retirement 16 14 Property and equipment, net 17 18 Total long-term assets 16,360 18,415 Total assets $47,397 $38,712 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses (note 5) $2,058 $2,716 Deferred revenues 2,449 2,449 Payable to related parties (note 11c) 46 - Total current liabilities 4,553 5,165 LONG-TERM LIABILITIES: Deferred revenues 11,388 13,837 Employee rights upon retirement 20 18 Provision for uncertain tax position (note 10f) 11 11 Other liabilities 313 443 Total long-term liabilities 11,732 14,309 COMMITMENTS (note 6) STOCKHOLDERS’ EQUITY: Common stock, $ 0.012 par value (30,000,000 authorized shares as of August 31, 2018 and 2017; 17,369,875 and13,668,530 shares issued and outstanding as of August 31, 2018 and 2017, respectively) 207 163 Additional paid-in capital 99,426 75,170 Accumulated other comprehensive income 702 401 Accumulated deficit (69,223) (56,496)Total stockholders’ equity 31,112 19,238 Total liabilities and stockholders’ equity $47,397 $38,712 The accompanying notes are an integral part of the financial statements. F-2 ORAMED PHARMACEUTICALS INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSSU.S. Dollars in thousands (except share and per share data) Year ended August 31, 2018 2017 2016 REVENUES $2,449 $2,456 $641 COST OF REVENUES (INCOME) (note 6o) (86) 187 490 RESEARCH AND DEVELOPMENT EXPENSES 11,979 10,281 7,709 GENERAL AND ADMINISTRATIVE EXPENSES 4,083 2,759 2,452 OPERATING LOSS 13,527 10,771 10,010 FINANCIAL INCOME (note 9a) 903 792 474 FINANCIAL EXPENSES (note 9b) 103 101 93 LOSS BEFORE TAXES ON INCOME 12,727 10,080 9,629 TAXES ON INCOME (note 10d) - 400 1,335 NET LOSS FOR THE YEAR $12,727 $10,480 $10,964 UNREALIZED LOSS (INCOME) ON AVAILABLE FOR SALE SECURITIES (301) (295) 452 TOTAL OTHER COMPREHENSIVE LOSS (INCOME) (301) (295) 452 TOTAL COMPREHENSIVE LOSS FOR THE PERIOD $12,426 $10,185 $11,416 LOSS PER SHARE OF COMMON STOCK: BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK $0.86 $0.79 $0.87 WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED INCOMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK 14,882,356 13,309,372 12,624,356 The accompanying notes are an integral part of the financial statements. F-3 ORAMED PHARMACEUTICALS INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYU.S. Dollars in thousands (except share data) Common Stock Additionalpaid-in Accumulatedothercomprehensive Accumulated Totalstockholders’ Shares $ capital income deficit equity In thousands BALANCE AS OF AUGUST 31, 2015 11,563 $138 $59,184 $558 $(35,052) $24,828 ISSUANCE OF COMMON STOCK, NET 1,155 14 10,580 - - 10,594 SHARES ISSUED FOR SERVICES 14 * 101 - - 101 EXERCISE OF WARRANTS ANDOPTIONS 350 4 1,445 - - 1,449 STOCK-BASED COMPENSATION 101 1 633 - - 634 OTHER COMPREHENSIVE LOSS - - - (452) - (452)NET LOSS - - - - (10,964) (10,964)BALANCE AS OF AUGUST 31, 2016 13,183 157 71,943 106 (46,016) 26,190 ISSUANCE OF COMMON STOCK, NET 3 * 25 - - 25 SHARES ISSUED FOR SERVICES 10 * 72 - - 72 EXERCISE OF WARRANTS ANDOPTIONS 313 4 1,557 - - 1,561 STOCK-BASED COMPENSATION 159 2 1,573 - - 1,575 OTHER COMPREHENSIVE INCOME - - - 295 - 295 NET LOSS - - - - (10,480) (10,480)BALANCE AS OF AUGUST 31, 2017 13,668 163 75,170 401 (56,496) 19,238 ISSUANCE OF COMMON STOCK ANDWARRANTS, NET 3,466 42 21,615 - - 21,657 SHARES ISSUED FOR SERVICES 14 * 99 - - 99 EXERCISE OF WARRANTS ANDOPTIONS 189 2 995 - - 997 STOCK-BASED COMPENSATION 32 * 1,547 - - 1,547 OTHER COMPREHENSIVE INCOME - - - 301 - 301 NET LOSS - - - - (12,727) (12,727)BALANCE AS OF AUGUST 31, 2018 17,369 $207 $99,426 $702 $(69,223) $31,112 *Represents an amount of less than $1. The accompanying notes are an integral part of the financial statements. F-4 ORAMED PHARMACEUTICALS INC.CONSOLIDATED STATEMENTS OF CASH FLOWSU.S. Dollars in thousands Year ended August 31, 2018 2017 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(12,727) $(10,480) $(10,964)Adjustments required to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 6 5 4 Exchange differences and interest on deposits and held to maturity bonds 22 124 (163)Stock-based compensation 1,547 1,575 634 Shares issued for services 99 72 101 Changes in operating assets and liabilities: Prepaid expenses and other current assets (415) 39 (71)Accounts payable, accrued expenses and related parties (612) 1,257 470 Deferred revenue (2,449) 1,520 14,266 Liability for employee rights upon retirement 2 4 3 Provision for uncertain tax position - - (15)Other liabilities (130) 53 390 Total net cash provided by (used in) operating activities (14,657) (5,831) 4,655 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (5) (7) (9)Purchase of short-term deposits (7,101) (3,557) (7,010)Purchase of long-term deposits (15,040) (17,230) (22,274)Purchase of held to maturity securities (4,429) (3,869) (1,775)Proceeds from sale of short-term deposits 17,316 26,551 14,160 Proceeds from maturity of held to maturity securities 2,257 2,417 900 Funds in respect of employee rights upon retirement (2) (3) (2)Total net cash provided by (used in) investing activities (7,004) 4,302 (16,010) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock and warrants, net of issuance costs 21,657 25 10,594 Proceeds from exercise of warrants and options 997 1,561 1,449 Total net cash provided by financing activities 22,654 1,586 12,043 EFFECT OF EXCHANGE RATE CHANGES ON CASH 34 5 6 INCREASE IN CASH AND CASH EQUIVALENTS 1,027 62 694 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,969 3,907 3,213 CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,996 $3,969 $3,907 SUPPLEMENTARY DISCLOSURE ON CASH FLOWS - Interest received $826 $833 $256 The accompanying notes are an integral part of the financial statements. F-5 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSU.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: a.General 1)Incorporation and operations Oramed Pharmaceuticals Inc. (collectively with its subsidiary, the “Company”, unless the context indicates otherwise) was incorporated onApril 12, 2002, under the laws of the State of Nevada. From incorporation until March 3, 2006, the Company was an exploration stagecompany engaged in the acquisition and exploration of mineral properties. On February 17, 2006, the Company entered into an agreementwith Hadasit Medical Services and Development Ltd. to acquire the provisional patent related to orally ingestible insulin capsule to beused for the treatment of individuals with diabetes. On May 14, 2007, the Company incorporated a wholly-owned subsidiary in Israel, Oramed Ltd. (the “Subsidiary”), which is engaged inresearch and development. On March 11, 2011, the Company was reincorporated from the State of Nevada to the State of Delaware. On November 30, 2015, the Company entered into a Technology License Agreement with Hefei Tianhui Incubation of Technologies Co.Ltd. (“HTIT”) and on December 21, 2015, the parties entered into an Amended and Restated Technology License Agreement that wasfurther amended by the parties on June 3, 2016 and July 24, 2016 (the “License Agreement”). According to the License Agreement, theCompany granted HTIT an exclusive commercialization license in the territory of the People’s Republic of China, Macau and Hong Kong(the “Territory”), related to the Company’s oral insulin capsule, ORMD-0801 (the “Product”). Pursuant to the License Agreement, HTIT willconduct, at its own expense, certain pre-commercialization and regulatory activities with respect to the Subsidiary’s technology andORMD-0801 capsule, and will pay to the Subsidiary (i) royalties of 10% on net sales of the related commercialized products to be sold byHTIT in the Territory (“Royalties”), and (ii) an aggregate of $37,500, of which $3,000 was payable immediately, $8,000 will be paidsubject to the Company entering into certain agreements with certain third parties, and $26,500 will be paid upon achievement of certainmilestones and conditions. In the event that the Company does not meet certain conditions, the Royalties rate may be reduced to aminimum of 8%. Following the final expiration of the Company’s patents covering the technology in the Territory in 2033, the Royaltiesrate may be reduced, under certain circumstances, to 5%. The royalty payment obligation shall apply during the period of time beginning upon the first commercial sale of the Product in theTerritory, and ending upon the later of (i) the expiration of the last-to-expire licensed patents in the Territory; and (ii) 15 years after the firstcommercial sale of the Product in the Territory (the “Royalty Term”). The License Agreement shall remain in effect until the expiration of the Royalty Term. The License Agreement contains customarytermination provisions. Among others, the Company’s involvement through the product submission date will include consultancy for the pre-commercializationactivities in the Territory, as well as advisory services to HTIT on an ongoing basis. F-6 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): The initial payment of $3,000 was received in January 2016. Following the achievement of certain milestones, the second and thirdpayments of $6,500 and $4,000, respectively, were received in July 2016 and the fourth milestone payment of $4,000 was received inOctober 2016. In addition, on November 30, 2015, the Company entered into a Stock Purchase Agreement with HTIT (the “SPA”). According to the SPA,the Company issued 1,155,367 shares of common stock to HTIT for $12,000. The transaction closed on December 28, 2015. The License Agreement and the SPA were considered a single arrangement with multiple deliverables. The Company allocated the totalconsideration of $49,500 between the License Agreement and the SPA according to their fair value, as follows: $10,617 was allocated tothe issuance of common stock (less issuance expenses of $23), based on the quoted price of the Company’s shares on the closing date of theSPA on December 28, 2015, and $38,883 was allocated to the License Agreement. Given the Company’s continuing involvement throughthe expected product submission (June 2023), amounts received relating to the License Agreement are recognized over the period fromwhich the Company is entitled to the respective payment, and the expected product submission date using a time-based model approachover the periods that the fees are earned. In July 2015, according to the letter of intent signed between the parties or their affiliates, HTIT’s affiliate paid the Subsidiary a non-refundable amount of $500 as a no-shop fee. The no-shop fee was deferred and the related revenue is recognized over the estimated term ofthe License Agreement. Amounts that were allocated to the License Agreement as of August 31, 2018 aggregated $19,383, all of which were received through thebalance sheet date. Through August 31, 2018, the Company recognized revenue in the amount of $5,546, and deferred the remainingamount of $13,837. The following table sets forth the transactions in deferred revenues balances for the years ended August 31, 2018 and 2017: August 31, 2018 2017 Deferred revenue at the beginning of period $16,286 $14,766 Amounts received - 4,000 Amounts the Company was entitled to - (24) Revenue recognized (2,449) (2,456) Deferred revenue at the end of period 13,837 16,286 Less – current deferred revenue portion (2,449) (2,449) Non-current deferred revenue portion $11,388 $13,837 2)Development and liquidity risks The Company is engaged in research and development in the biotechnology field for 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 fordelivery of other polypeptides, and has not generated significant revenues from its operations. Based on our current cash resources andcommitments, we believe we will be able to maintain our current planned development activities and the corresponding level ofexpenditures for at least the next 12 months and beyond, although no assurance can be given that we will not need additional funds prior tosuch time. If there are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12months. F-7 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): Successful completion of the Company’s development programs and its transition to normal operations is dependent upon obtainingnecessary regulatory approvals from the U.S. Food and Drug Administration prior to selling its products within the United States, obtainingforeign regulatory approvals to sell its products internationally, or entering into licensing agreements with third parties. There can be noassurance that the Company will receive regulatory approval of any of its product candidates, and a substantial amount of time may passbefore the Company achieves a level of revenues adequate to support its operations, if at all. The Company also expects to incur substantialexpenditures in connection with the regulatory approval process for each of its product candidates during their respective developmentalperiods. Obtaining marketing approval will be directly dependent on the Company’s ability to implement the necessary regulatory stepsrequired to obtain marketing approval in the United States and in other countries. The Company cannot predict the outcome of theseactivities. b.Basis of presentation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ofAmerica (“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-based compensation andto the expected product submission date for revenue recognition purposes. d.Functional currency The currency of the primary economic environment in which the operations of the Company and its Subsidiary are conducted is the U.S. dollar(“$” or “dollar”). Therefore, the functional currency of the Company and its Subsidiary 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 ratesat transaction dates or average rates and (2) for other items (derived from non-monetary balance sheet items such as depreciation) - historicalexchange rates. The resulting transaction gains or losses are carried to financial income or expenses, as appropriate. e.Principles of consolidation The consolidated financial statements include the accounts of the Company and its Subsidiary. All inter-company transactions and balanceshave been eliminated in consolidation. F-8 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): f.Cash equivalents The Company considers all short-term, highly liquid investments, which include short-term deposits with original maturities of three months orless from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash, to be cashequivalents. g.Fair value measurement: The Company measures fair value and discloses fair value measurements for financial assets. Fair value is based on the price that would bereceived to sell an asset in an orderly transaction between market participants at the measurement date. In order to increase consistency andcomparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputsused 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 other than quoted prices included within Level 1 that are observable for the asset or liability,either directly or indirectly. Level 3:Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3inputs. As of August 31, 2018, the assets measured at fair value are comprised of available for sale equity securities (Level 1). The fair value of held tomaturity bonds as presented in note 3 was based on a Level 1 measurement. As of August 31, 2018, the carrying amounts of cash equivalents, short-term deposits and accounts payable approximate their fair values due tothe short-term maturities of these instruments. As of August 31, 2018, the carrying amounts of long-term deposits approximate their fair values due to the stated interest rates whichapproximate market rates. The amounts funded in respect of employee rights are stated at cash surrender value which approximates its fair value. There were no Level 3 items for the years ended August 31, 2018, 2017 and 2016. F-9 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): h.Marketable securities 1)Available-for-sale securities Available-for-sale equity securities are reported at fair value, with unrealized gains and losses, net of related tax recorded as a separatecomponent of accumulated other comprehensive income (loss) in equity until realized. Unrealized losses that are considered to be other-than-temporary are charged to statement of operations as an impairment charge and are included in the consolidated statement of operationsunder impairment of available-for-sale securities. The Company considers available evidence in evaluating potential impairments of itsinvestments, including the duration and extent to which fair value is less than cost, and the Company’s ability and intent to hold theinvestment. Realized gains and losses on sales of the securities are included in the consolidated statement of operations as financial incomeor expenses. Cost of the securities sold and amount reclassified out of accumulated other comprehensive income into financial income aredetermined by specific identification. 2)Held to maturity securities All debt securities are classified as held-to-maturity because the Company has the positive intent and ability to hold the securities tomaturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts tomaturity. On a continuous basis, management assesses whether there are any indicators that the value of the Company’s marketablesecurities may be impaired, which includes reviewing the underlying cause of any decline in value and the estimated recovery period, aswell as the severity and duration of the decline. In the Company’s evaluation, the Company considers its ability and intent to hold theseinvestments for a reasonable period of time sufficient for the Company to recover its cost basis. A marketable security is impaired if the fairvalue of the security is less than the carrying value of the security and such difference is deemed to be other-than temporary. To the extentimpairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the estimated fair value of thesecurity. i.Concentration of credit risks Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, short and long-term deposits andmarketable securities which are deposited in major financial institutions. The Company is of the opinion that the credit risk in respect of thesebalances is remote. As of the date of issuing these financial statements, all amounts due from HTIT have been received, as described in note 1 above. F-10 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): j.Income taxes 1.Deferred taxes Deferred 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 the taxrates expected to be in effect when those differences reverse. A valuation allowance in respect of deferred tax assets is provided if, basedupon 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. See note 10. Regarding the Subsidiary, the recognition is prohibited for deferred tax liabilities or assets that arise from differences between the financialreporting and tax bases of assets and liabilities that are measured from the local currency into dollars using historical exchange rates, andthat result from changes in exchange rates or indexing for tax purposes. Consequently, the abovementioned differences were not reflectedin 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 will besustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized uponultimate settlement. Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from thebalance sheet date. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income taxexpenses. k.Revenue recognition Revenue is recognized when delivery has occurred, evidence of an arrangement exists, title and risks and rewards for the products are transferredto the customer and collection is reasonably assured. Given the Company’s continuing involvement through the expected product submission(June 2023), revenue from the License Agreement is recognized over the periods from which the Company is entitled to the respectivepayments, and through the expected product submission date. l.Cost of revenues Cost of revenues consists of royalties related to the License Agreement with HTIT. The royalties are recognized when proceeds related to theLicense Agreement are received. m.Research and development Research and development expenses include costs directly attributable to the conduct of research and development programs, including thecost of salaries, employee benefits, the cost of supplies, the cost of services provided by outside contractors, including services related to theCompany’s clinical trials, clinical trial expenses and the full cost of manufacturing drug for use in research and preclinical development. Allcosts associated with research and development are expensed as incurred. F-11 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors.The Company outsources a substantial portion of its clinical trial activities, utilizing external entities such as Contract Research Organizations,independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical studies. Foreach clinical trial that the Company conducts, clinical trial costs are expensed immediately. n.Stock-based compensation Equity awards granted to employees are accounted for using the grant date fair value method. The grant date fair value is determined as follows:for stock options and restricted stock units (“RSUs”) with an exercise price using the Black Scholes pricing model, for stock options with marketconditions using a Monte Carlo model and for RSUs with service conditions based on the grant date share price. The fair value of share basedpayment awards is recognized as an expense over the requisite service period. The expected term is the length of time until the expected dates ofexercising the award and is estimated using the simplified method due to insufficient specific historical information of employees’ exercisebehavior, unless the award includes a market condition, in which case the contractual term is used. The volatility is based on a historicalvolatility, by statistical analysis of the weekly share price for past periods. The Company elected to recognize compensation cost for awardsgranted to employees that have a graded vesting schedule using the accelerated method based on the multiple-option award approach. Forawards with only market conditions, compensation expense is not reversed if the market conditions are not satisfied. When stock options are granted as consideration for services provided by consultants and other non-employees, the transaction is accounted forbased on the fair value of the consideration received or the fair value of the stock options issued, whichever is more reliably measurable. The fairvalue of the options granted to consultants and other non-employees is measured on a final basis at the end of the related service period usingthe Black Scholes pricing model and is recognized over the related service period using the straight-line method. The Company elects to account for forfeitures as they occur. o.Loss per common share Basic and diluted net loss per common share are computed by dividing the net loss for the period by the weighted average number of shares ofcommon stock outstanding for each period. Outstanding stock options, warrants and RSUs have been excluded from the calculation of thediluted loss per share because all such securities are anti-dilutive for all periods presented. The weighted average number of stock options,warrants and RSUs excluded from the calculation of diluted net loss was 1,873,098, 1,827,719 and 2,676,573 for the years ended August 31,2018, 2017 and 2016, respectively. F-12 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): p.Newly issued and recently adopted Accounting Pronouncements 1)In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 “Revenue fromContracts with Customers (Topic 606)” (“Topic 606”) that will supersede most current revenue recognition guidance, including industry-specific guidance. Under the new standard, a good or service is transferred to the customer when (or as) the customer obtains control of thegood or service, which differs from the risk and rewards approach under current guidance. The guidance provides a five-step analysis oftransactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs,consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized beforecontingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timingand uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The guidance is effective in annual reportingperiods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company will implementthe guidance for its annual period ending on August 31, 2019 and interim periods within such annual periods. Under Topic 606, milestonesare considered variable consideration and are to be recognized on a cumulative basis when it is probable that a significant reversal in theamount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequentlyresolved, generally once the milestone is achieved. The Company will adopt the standard using the modified retrospective method and willadjust its accumulated deficit and deferred revenue as of the adoption date, by approximately $700 due to the effect of variableconsideration, as explained above. 2)In January 2016, the FASB issued guidance on recognition and measurement of financial assets and financial liabilities (ASU No. 2016-01)that will supersede most current guidance. Changes to the U.S. GAAP model primarily affect the accounting for equity investments,financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, theFASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealizedlosses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, andfinancial liabilities, is largely unchanged. The classification and measurement guidance became effective as of September 1, 2018. TheCompany does not expect the implications of this guidance to have a material impact on its consolidated financial statements. 3)In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which supersedes the existing guidance for leaseaccounting, “Leases (Topic 840)”. ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accountinglargely unchanged. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018 and interim periodswithin those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for allleases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company iscurrently evaluating the impact of this new standard on its consolidated financial statements. 4)In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326)” (“ASU 2016-13”). ASU 2016-13 requiresthat financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is avaluation account that is deducted from the amortized cost basis. The income statement reflects the measurement of credit losses for newlyrecognized financial assets, as well as the expected credit losses during the period. The measurement of expected credit losses is based uponhistorical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a directwrite-down to the security. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods withinthose fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods withinthose fiscal years. The Company is currently evaluating the impact of the guidance on its consolidated financial statements. 5)In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting”(“ASU 2017-09”), which gives direction on which changes to the terms or conditions of share-based payment awards require an entity toapply modification accounting in Accounting Standard Codification (“ASC”) Topic 718. In general, entities will apply the modificationaccounting guidance if the value, vesting conditions or classification of the award changes. ASU 2017-09 is effective for fiscal yearsbeginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption inan interim period. The Company does not expect the implementation of this new pronouncement to have a material impact on itsconsolidated financial statements. 6)In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” that expands the scope of ASC Topic 718 to include share-based payment transactions for acquiring goodsand services from nonemployees. An entity should apply the requirements of ASC Topic 718 to nonemployee awards except for certainexemptions specified in the amendment. The guidance is effective for fiscal years beginning after December 15, 2018, including interimreporting periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. TheCompany is currently evaluating the impact of the guidance on its consolidated financial statements. F-13 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 2 - SHORT-TERM DEPOSITS: Composition: August 31, 2018 2017 Annualinterest rate Amount Annualinterest rate Amount Dollar deposits 2.06-3.01% $20,875 1.84-5.95% $13,293 NOTE 3 - MARKETABLE SECURITIES: a.Composition: The Company’s marketable securities include investments in equity securities of D.N.A Biomedical Solutions Ltd (“D.N.A”), Entera BioLtd. (“Entera”) and in held to maturity bonds. Composition: August 31, 2018 2017 Short-term: D.N.A (see b below) $666 $996 Entera (see c below) 632 - Held to maturity bonds (see d below) 3,294 1,864 $4,592 $2,860 Long-term: Held to maturity bonds (see d below) $2,785 $2,151 $2,785 $2,151 b.D.N.A The D.N.A ordinary shares are traded on the Tel Aviv Stock Exchange. The fair value of those securities is measured at the quoted prices ofthe securities on the measurement date. During the years ended August 31, 2018, 2017 and 2016, the Company did not sell any of the D.N.A ordinary shares. As of August 31,2018, the Company owns approximately 6.9% of D.N.A’s outstanding ordinary shares. The cost of the securities as of August 31, 2018, 2017 and 2016 is $595. c.Entera Entera ordinary shares have been traded on Nasdaq since June 28, 2018. The Company measures the investment at fair value from suchdate, since it has a readily determinable fair value (prior to such date the investment was accounted for as a cost method investment(amounting to $1)). F-14 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 3 - MARKETABLE SECURITIES (continued): d.Held to maturity bonds The amortized cost and estimated fair value of held-to-maturity securities at August 31, 2018, are as follows: August 31, 2018 Amortizedcost Grossunrealizedlosses Estimatedfair value Short-term: Commercial bonds $3,259 $(17) $3,242 Accrued interest 35 - 35 Long-term 2,785 (17) 2,768 $6,079 $(34) $6,045 As of August 31, 2018, the contractual maturities of debt securities classified as held-to-maturity are as follows: after one year through twoyears, $2,785 and the yield to maturity rates vary between 1.45% to 3.13%. The amortized cost and estimated fair value of held-to-maturity securities at August 31, 2017, are as follows: August 31, 2017 Amortizedcost Grossunrealizedlosses Estimatedfair value Short-term: Commercial bonds $1,823 $(1) $1,822 Accrued interest 41 - 41 Long-term 2,151 - 2,151 $4,015 $(1) $4,014 As of August 31, 2017, the contractual maturities of debt securities classified as held-to-maturity are as follows: after one year through twoyears, $2,151 and the yield to maturity rates vary between 1.30% to 1.87%. Held to maturity securities which will mature during the 12 months from the balance sheet date are included in short-term marketablesecurities. Held to maturity securities with maturity dates of more than one year are considered long-term marketable securities. F-15 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 4 - LONG-TERM DEPOSITS AND INVESTMENT: Composition: August 31, 2018 2017 Bank deposits (see (1) below) $13,541 $16,230 Lease car deposits 1 1 Investment (see note 3(c)) - 1 $13,542 $16,232 (1)Represents U.S. dollar bank deposits which carry fixed annual interest rates between 2.41% to 3.44%, with maturities of more than oneyear from the balance sheet date. The latest maturity date is during the year ending August 31, 2020. NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Composition: August 31, 2018 2017 Accounts payable $1,135 $571 Payroll and related accruals 80 97 Institutions 29 228 Accrued liabilities 814 1,593 Other - 227 $2,058 $2,716 NOTE 6 - COMMITMENTS: a.In March 2011, the Subsidiary sold shares of its investee company, Entera, to D.N.A, retaining 117,000 ordinary shares after a stock splitwhich was performed by Entera in July 2018. In consideration for the shares sold to D.N.A, the Company received, among other payments,ordinary shares of D.N.A (see also note 3). As part of this agreement, the Subsidiary entered into a patent transfer agreement according to which the Subsidiary assigned to Entera allof its right, title and interest in and to the patent application that it has licensed to Entera since August 2010. Under this agreement, theSubsidiary is entitled to receive from Entera royalties of 3% of Entera’s net revenues (as defined in the agreement) and a license back of thatpatent application for use in respect of diabetes and influenza. As of August 31, 2018, Entera had not yet realized any revenues and had notpaid any royalties to the Subsidiary. In addition, as part of a consulting agreement with a third party, dated February 15, 2011, the Subsidiary is obliged to pay this third partyroyalties of 8% of the net royalties received in respect of the patent that was sold to Entera in March 2011. F-16 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 6 - COMMITMENTS (continued): b.On January 3, 2017, the Subsidiary entered into a lease agreement for its office facilities in Israel. The lease agreement is for a period of 60months commencing October 1, 2016. The annual lease payment was New Israeli Shekel (“NIS”) 119,000 ($33) from October 2016 through September 2018 and NIS 132,000($37) from October 2018 through September 2021, and is linked to the increase in the Israeli consumer price index (“CPI”) (as of August 31,2018, the future lease payments until the expiration of the lease agreement will be $113, based on the exchange rate as of August 31, 2018). As security for its obligation under this lease agreement, the Company provided a bank guarantee in an amount equal to three monthlylease payments. The lease expenses for the years ended August 31, 2018, 2017 and 2016 were $32, $32 and $23, respectively. c.On March 3, 2016, the Subsidiary entered into an agreement with a vendor for process development and production of its capsules and onNovember 24, 2016, April 3, 2017 and July 10, 2017 into amendments to such agreement in an amount of up to Swiss Franc (“CHF”)1,000,000 ($1,035), CHF 665,000 ($675) of which was recognized in research and development expenses through August 31, 2018. d.On May 11, 2016, the Subsidiary entered into a Master Service Agreement with a vendor to retain its services for a pre-clinical toxicologytrial for an oral GLP-1 analog capsule for type 2 diabetes patients. As consideration for its services, the Subsidiary will pay the vendor atotal amount of $1,283 during the term of the engagement and based on achievement of certain milestones, of which $1,275 was recognizedin research and development expenses through August 31, 2018. e.On June 13, 2016, the Subsidiary entered into a four-year service agreement with a third party and on December 19, 2016, this agreementand all of the third party rights and obligations thereunder were assigned to another third party. This agreement is required by the LicenseAgreement as described in note 1 and will support the Company’s research and development. The Subsidiary is obligated to pay the thirdparty a total amount of up to €2,360,000 ($2,730), of which €1,569,215 ($1,806) was recognized in research and development expensesthrough August 31, 2018. f.On July 24, 2016, the Subsidiary entered into a General Technical Agreement with a vendor, for the scale-up process development andproduction of one of its oral capsule ingredients in the amount of $4,300 that will be paid over the term of the engagement and based on theachievement of certain development milestones, $4,087 of which was recognized in research and development expenses through August31, 2018. This agreement is part of the requirements of the License Agreement as described in note 1. g.On February 21, 2017, the Subsidiary entered into an agreement with a vendor to retain its services for a pre-clinical toxicology trial for anoral insulin capsule for type 2 and type 1 diabetes patients. As consideration for its services, the Subsidiary will pay the vendor a total of upto $952 during the term of the engagement and based on achievement of certain milestones, of which $857 was recognized in research anddevelopment expenses through August 31, 2018. h.On May 3, 2017, the Company entered into a consulting agreement with a third party advisor for a period of one year, pursuant to whichsuch advisor provided investor relations services and received a monthly cash fee and 10,000 shares of the Company’s common stock thatwere issued in four equal quarterly installments commencing August 1, 2017. As of August 31, 2018, the Company had issued to suchadvisor 10,000 shares. The fair value of the shares at the grant date was $81. F-17 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 6 - COMMITMENTS (continued): On April 8, 2018, the Company entered into a consulting agreement with the same third party advisor for a period of one year, pursuant towhich such advisor will provide investor relations services and will be entitled to receive a monthly cash fee and 10,000 shares of theCompany’s common stock that will be issued in four equal quarterly installments commencing August 1, 2018. As of August 31, 2018, theCompany had issued to such advisor 2,500 shares. The fair value of the shares at the grant date was $13. i.On June 5, 2017, the Subsidiary entered into a clinical research agreement with a vendor, for the conduct of its clamp clinical trial for anoral insulin capsule for type 1 diabetes patients. As consideration for its services, the Subsidiary will pay the vendor a total amount of $958during the term of the engagement and based on achievement of certain milestones, $446 of which was recognized in research anddevelopment expenses through August 31, 2018. j.On December 18, 2017, the Subsidiary entered into an agreement with a vendor for the process development and production of one of itsoral capsule ingredients in the amount of $2,905 that will be paid over the term of the engagement and based on the achievement of certaindevelopment milestones, $846 of which was recognized in research and development expenses through August 31, 2018. k.On February 14, 2018, the Subsidiary entered into a Clinical Research Organization Services Agreement with a third party, effective as ofNovember 1, 2017, to retain it as a clinical research organization (“CRO”) for the Subsidiary’s three-month dose-ranging clinical trial for itsoral insulin capsule for type 2 diabetes patients. As consideration for its services, the Subsidiary will pay the CRO a total amount of $7,030during the term of the engagement and based on achievement of certain milestones, $2,229 of which was recognized in research anddevelopment expenses through August 31, 2018. l.On May 21, 2018, the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a CRO for the Subsidiary’s foodeffect clinical trial for its oral insulin capsule. As consideration for its services, the Subsidiary will pay the CRO a total amount of $1,166during the term of the engagement and based on achievement of certain milestones, $532 of which was recognized in research anddevelopment expenses through August 31, 2018. m.On July 4, 2018, the Subsidiary entered into an agreement with a vendor to retain its services for a pre-clinical six months toxicology trialfor its oral insulin capsule. As consideration for its services, the Subsidiary will pay the vendor a total of up to $971 during the term of theengagement and based on achievement of certain milestones, of which $189 was recognized in research and development expenses throughAugust 31, 2018. n.On July 15, 2018, the Company entered into a consulting agreement with a third party advisor for a period of one year, pursuant to whichsuch advisor will provide investor relations services and will be entitled to receive a monthly cash fee and shares of the Company’scommon stock that will be issued in four quarterly installments in an amount equal to $25 per quarter, pursuant to and in accordance withthe terms of the agreement, commencing July 15, 2018. As of August 31, 2018, the Company had issued to such advisor 4,180 shares. F-18 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 6 - COMMITMENTS (continued): o.Grants from the Israel Innovation Authority (“IIA”) Under the terms of the Company’s funding from the IIA, royalties of 3% are payable on sales of products developed from a project sofunded, up to a maximum amount equaling 100%-150% of the grants received (dollar linked) with the addition of interest at an annual ratebased on LIBOR. Following an amendment to applicable regulations that was published by the IIA, the royalties rate that the Company is obligated to pay tothe IIA was reduced from 3.5% to 3%, and the difference in the amount of $86 was recognized as a reduction in cost of revenue in fiscal2018. At the time the grants were received, successful development of the related projects was not assured. The total amount that was receivedthrough August 31, 2018 was $2,194. As of August 31, 2018, the royalty expenses which are related to the funded project were recognized in cost of revenues in prior periods. For the years ended August 31, 2018, 2017 and 2016, no grants from the IIA were recognized. NOTE 7 - STOCKHOLDERS’ EQUITY: The following are the significant capital stock transactions that took place during the years ended August 31, 2018, 2017 and 2016: a.On April 2, 2015, the Company entered into an At The Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley FBR, Inc.,as successor to FBR Capital Markets & Co. (“FBR”), as amended, pursuant to which the Company may, from time to time and at its option,issue and sell shares of its common stock having an aggregate offering price of up to $25,000 through FBR as its sales agent, subject tocertain terms and conditions. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3including a prospectus dated February 2, 2017, as supplemented by a prospectus supplement dated April 5, 2017. The Company will payFBR a commission of 3.0% of the gross proceeds of the sale of any shares sold through FBR. Through August 31, 2018, 576,834 shareswere sold under the Sales Agreement for aggregate net proceeds of $5,198. During fiscal 2018, the Company issued 573,864 shares underthe Sales Agreement for aggregate net proceeds of $5,173. b.On December 28, 2015, the Company completed a private placement of 1,155,367 shares of the Company’s common stock to HTIT. Seealso note 1. c.On July 2, 2018, the Company entered into a Securities Purchase Agreement with each of three investors (the “Purchasers”), pursuant towhich the Company agreed to sell, in a registered direct offering (the “Offering”) an aggregate of 2,892,000 units (the “Units”), each Unitconsisting of one share of the Company’s common stock, par value $0.012 per share, and a warrant to purchase one share of common stockat an exercise price of $7.25 per share (the “Warrants”), to the Purchasers for an offering price of $6.25 per Unit. The Warrants will beexercisable commencing six months following their issuance for a period of three and one-half years from the date of issuance. Foraccounting purposes, the warrants were classified as equity considering the warrant conditions. The closing of the sale of the Units occurredon July 6, 2018. The net proceeds to the Company from the Offering, after deducting the placement agent’s fees and expenses and theCompany’s Offering expenses were approximately $16,484. F-19 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 7 - STOCKHOLDERS’ EQUITY (continued): On July 2, 2018, the Company entered into a letter agreement with H.C. Wainwright & Co., LLC (“HCW”), pursuant to which HCW agreedto serve as exclusive placement agent for the Company in any offering of the Company occurring between July 2, 2018 and August 1,2018. For its services in the Offering, HCW received a fee equal to 7% of the gross proceeds raised in the Offering and a management fee of1% of the gross proceeds raised in the Offering, up to $50,000 for non-accountable expenses as well as warrants to purchase up to 115,680shares of common stock of the Company, exercisable commencing six months following their issuance for a period of three and one-halfyears from the date of issuance and with an exercise price of $7.8125 per share. The Company recognized the fair value of the warrants as ashare based payment which was included as part of the offering costs. Upon the exercise of the Warrants, HCW will receive a fee equal to7% of the gross proceeds raised as a result of such exercise. d.As of August 31, 2018, the Company had outstanding warrants exercisable commencing January 6, 2019 for 3,007,680 shares of commonstock at exercise prices ranging from $7.25 to $7.8125 per share and expiring on January 6, 2022. The following table presents the warrant activity for the years ended August 31, 2018, 2017 and 2016: Year ended August 31, 2018 2017 2016 Warrants Weighted-AverageExercise Price Warrants Weighted-AverageExercisePrice Warrants Weighted-AverageExercisePrice Warrants outstanding at beginning of year 166,642 $6.46 615,338 $5.92 981,940 $5.29 Issued 3,007,680 $7.27 - $- - $- Exercised (138,071) $5.73 (248,882) $4.99 (331,054) $4.04 Expired (28,571) $10.00 (199,814) $6.82 (35,548) $6.00 Warrants outstanding at end of year 3,007,680 $7.27 166,642 $6.46 615,338 $5.92 Warrants exercisable at end of year - $- 166,642 $6.46 615,338 $5.92 F-20 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION: As of August 31, 2018, the Company has one stock option plan, the Second Amended and Restated 2008 Stock Incentive Plan, under which, theCompany had reserved a pool of 2,400,000 shares of the Company’s common stock which may be issued at the discretion of the Company’sBoard of Directors from time to time. Under this Plan, each option is exercisable into one share of common stock of the Company. The optionsmay be exercised after vesting and in accordance with vesting schedules which will be determined by the Board of Directors for each grant. Themaximum term of the options is 10 years. The following are the significant stock options transactions with employees, board members and non-employees made during the years endedAugust 31, 2018, 2017 and 2016: a.On November 19, 2015, options to purchase an aggregate of 22,000 of the Company’s shares of common stock were granted to twoconsultants at an exercise price of $7.36 per share (equivalent to the traded market price on the date of grant) and expiration date ofNovember 19, 2025. 10,000 of the options vested in one installment on December 1, 2015, and the remaining 12,000 options vested intwelve equal quarterly installments, commencing January 1, 2016. On August 3, 2016, the consulting agreement with one of these consultants, to whom 12,000 options were granted, was terminated. As aresult, only 3,000 options were vested, and the remaining 9,000 unvested options were forfeited. In addition, the expiration date of the3,000 vested options was updated to November 3, 2016 (3 months following the termination date of the agreement). b.On November 1, 2016, the Company granted a total of 70,000 RSUs representing a right to receive 70,000 shares of the Company’scommon stock to an employee of the Subsidiary. The RSUs vested in 19 installments, consisting of one installment of 9,000 shares onNovember 1, 2016, 18 equal monthly installments of 1,500 shares each, commencing November 30, 2016 and 17,000 shares on each ofApril 30, 2017 and 2018. The total fair value of these RSUs on the date of grant was $463, using the quoted closing market share price of$6.62 on the Nasdaq Capital Market on the date of grant. c.On February 9, 2017, options to purchase an aggregate of 27,731 shares of the Company were granted to four members of the Company’sBoard of Directors as follows: (a) 16,337 options at an exercise price of $1 per share (lower than the traded market price of $6.23 on the dateof grant). The fair value of these options on the date of grant was $90, using the Black Scholes option-pricing model and was based on thefollowing assumptions: stock price of $6.23; dividend yield of 0% for all years; expected volatility of 77.29%; risk-free interest rates of1.88%; and expected term of 5 years; (b) 11,394 options at an exercise price of $6.23 per share (equivalent to the traded market price on thedate of grant). The fair value of these options on the date of grant was $45, using the Black Scholes option-pricing model and was based onthe following assumptions: stock price of $6.23; dividend yield of 0% for all years; expected volatility of 77.29%; risk-free interest rates of1.88%; and expected term of 5 years. All the options vested immediately and expire on February 9, 2027. d.On March 20, 2017, options to purchase an aggregate of 37,152 of the Company’s shares of common stock were granted to a consultant atan exercise price of $6.00 per share (higher than the traded market price of $5.96 on the date of grant). The options expire on March 20,2027. The options vest in 24 consecutive equal monthly installments of 1,548 shares of common stock each, commencing March 31, 2017.The fair value of these options on the date of grant was $177. F-21 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): On July 30, 2018, the vesting schedule of the options was amended and restated, effective July 1, 2018, as follows: the 12,384 of theoptions that remain unvested will vest in 24 consecutive equal monthly installments of 516 shares each, commencing July 31, 2018. Theamendment did not have any impact on the Company’s financial statements. e.On June 30, 2017, the Company granted options to purchase shares of the Company and RSUs as follows: (1)To the Chief Executive Officer, options to purchase an aggregate of 147,000 shares of the Company, at an exercise price of $7.77 pershare (equivalent to the traded market price on the date of grant). 49,000 of such options vested on December 31, 2017, as theCompany share price reached the target of $8.00 per share, and the remainder will vest in two equal annual installments of 49,000, oneach of December 31, 2018 and 2019, subject to the Company share price reaching the target of $9.50 per share and $12.50 per share,respectively. These options expire on June 30, 2027. The fair value of the options at the date of grant was $585 using the Monte Carlomodel, which utilizes multiple input variables to estimate the probability that market conditions will be achieved, and was based onthe following assumptions: dividend yield of 0% for all years; expected volatility of 75.00%; risk-free interest rates of 2.34%; andexpected term of 10 years. (2)To the Chief Scientific Officer: (a) 75,000 RSUs representing a right to receive shares of the Company’s common stock which vestedimmediately, have an exercise price of $0.012 per share of common stock and expire on June 30, 2027. The total fair value of theseRSUs on the date of grant was $582, using the quoted closing market share price of $7.77 on Nasdaq on the date of grant. The shares ofcommon stock underlying the RSUs will be issued upon request of the grantee. As of August 31, 2018, none of these RSUs wereexercised; and (b) options to purchase an aggregate of 69,999 shares of the Company, at an exercise price of $7.77 per share(equivalent to the traded market price on the date of grant). 23,333 of such options vested on December 31, 2017 and the remainderwill vest in two equal annual installments of 23,333, on each of December 31, 2018 and 2019. These options expire on June 30, 2027.The fair value of all these options on the date of grant was $359, using the Black Scholes option-pricing model and was based on thefollowing assumptions: stock price of $7.77; dividend yield of 0% for all years; expected volatility of 74.77%; risk-free interest rates of1.89%; and expected term of 6 years. (3)To four members of the Company’s Board of Directors, options to purchase an aggregate of 67,092 shares of the Company (16,773options to each director), at an exercise price of $7.77 per share (equivalent to the traded market price on the date of grant). 22,364 ofsuch options (5,591 options for each director) vested on December 31, 2017 and the remainder will vest in two equal annualinstallments, on each of December 31, 2018 and 2019. These options expire on June 30, 2027. The fair value of all these options on thedate of grant was $344, using the Black Scholes option-pricing model and was based on the following assumptions: stock price of$7.77; dividend yield of 0% for all years; expected volatility of 74.77%; risk-free interest rates of 1.89%; and expected term of 6 years. F-22 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): (4)To a member of the Company’s Board of Directors, options to purchase an aggregate of 56,773 shares of the Company at an exerciseprice of $7.77 per share (equivalent to the traded market price on the date of grant). 15,591 of such options vested on December 31,2017 and the remainder will vest in three annual installments, 15,591 of which will vest on each of December 31, 2018 and 2019, and10,000 of which will vest on December 31, 2020. These options expire on June 30, 2027. The fair value of these options on the date ofgrant was $294, using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $7.77;dividend yield of 0% for all years; expected volatility of 74.15%; risk-free interest rates of 2.14%; and expected term of 6.18 years. (5)To employees of the Subsidiary, options to purchase an aggregate of 38,901 shares of the Company, at an exercise price of $7.77 pershare (equivalent to the traded market price on the date of grant). 4,912 of such options vested on December 31, 2017, 22,777 of suchoptions were forfeited through August 31, 2018, 1,388 options expired through August 31, 2018 and the remainder will vest in twoequal annual installments, on each of December 31, 2018 and 2019. These options expire on June 30, 2027. The fair value of all theseoptions on the date of grant was $200, using the Black Scholes option-pricing model and was based on the following assumptions:stock price of $7.77; dividend yield of 0% for all years; expected volatility of 74.77%; risk-free interest rates of 1.89%; and expectedterm of 6 years. f.On July 19, 2017, options to purchase an aggregate of 20,001 shares of the Company were granted to an employee of the Subsidiary at anexercise price of $8.57 per share (equivalent to the traded market price on the date of grant). 6,667 of such options vested on December 31,2017 and the remainder will vest in two equal annual installments, on each of December 31, 2018 and 2019. These options expire on July19, 2027. The fair value of these options on the date of grant was $113, using the Black Scholes option-pricing model and was based on thefollowing assumptions: stock price of $8.57; dividend yield of 0% for all years; expected volatility of 74.65%; risk-free interest rates of1.83%; and expected term of 6 years. g.On January 31, 2018, the Company granted options to purchase an aggregate of 159,000 shares of the Company at an exercise price of$8.14 per share (equivalent to the traded market price on the date of grant) as follows: 97,000 to the CEO; 47,000 to the CSO; and 15,000 toan employee of the Subsidiary. The options will vest in four equal annual installments, on each of January 1, 2019, 2020, 2021 and 2022.These options expire on January 31, 2028. The fair value of all these options on the date of grant was $857, using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $8.14; dividend yield of 0% for all years; expected volatility of71.96%; risk-free interest rates of 2.66%; and expected term of 6.25 years. h.On each of April 8, 2018 and May 3, 2018, the Company granted options to purchase 30,000 shares of the Company to an employee of theSubsidiary at exercise prices of $7.05 and $6.70 per share, respectively (equivalent to the traded market price on the date of grant). Theoptions vest in sixteen consecutive equal installments on the last day of each quarter commencing June 30, 2018. 30,000 options expire onApril 8, 2028 and 30,000 options expire on May 3, 2028. The fair value of all these options on the date of grant was $269, using the BlackScholes option-pricing model and was based on the following assumptions: (a) for the options granted on April 8, 2018: stock price of$7.05; dividend yield of 0% for all years; expected volatility of 71.54%; risk-free interest rates of 2.70%; and expected term of 6.07 years;and (b) for the options granted on May 3, 2018: stock price of $6.70; dividend yield of 0% for all years; expected volatility of 71.62%;risk-free interest rates of 2.90%; and expected term of 6.02 years.F-23 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): i.Options to employees, directors and non-employees The fair value of each option grant is estimated on the date of grant using the Black Scholes option-pricing model or Monte Carlo modelwith the following range of assumptions: For options granted in the year ended August 31, 2018 2017 2016 Expected option life (years) 6.02-6.25 5.00-10.00 10.00 Expected stock price volatility (%) 71.54-71.96 74.15-77.29 80.46 Risk free interest rate (%) 2.66-2.90 1.83-2.47 2.24 Expected dividend yield (%) 0.0 0.0 0.0 A summary of the status of the stock options granted to employees and directors as of August 31, 2018, 2017 and 2016, and changes duringthe years ended on those dates, is presented below: Year ended August 31, 2018 2017 2016 Numberofoptions Weightedaverageexerciseprice Numberofoptions Weightedaverageexerciseprice Numberofoptions Weightedaverageexerciseprice $ $ $ Options outstanding at beginning of year 1,208,549 6.94 904,234 6.75 904,234 6.75 Changes during the year: Granted 219,000 7.79 427,497 7.51 - - Forfeited (22,777) 7.77 - - - - Expired (145,388) 6.49 (59,282) 10.27 Exercised (50,750) 4.08 (63,900) 5 - - Options outstanding at end of year 1,208,634 7.25 1,208,549 6.94 904,234 6.75 Options exercisable at end of year 739,650 808,783 904,234 Weighted average fair value of optionsgranted during the year $5.14 $4.75 $- Expenses recognized in respect of stock options granted to employees and directors, for the years ended August 31, 2018, 2017 and 2016were $1,350, $451 and $14, respectively. The total intrinsic value of employees’ options exercised during the years ended August 31, 2018 and 2017 was $248 and $85,respectively. None of the options were exercised by employees during the year ended August 31, 2016. F-24 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): The following table presents summary information concerning the options granted to employees and directors outstanding as of August 31,2018: Exerciseprices Numberoutstanding WeightedAverageRemainingContractualLife Weightedaverageexerciseprice $ Years $ 1.00 to 5.88 391,921 2.72 4.83 6.23 to 7.88 527,794 8.11 7.66 8.14 to 12.45 288,919 7.94 9.81 1,208,634 6.32 7.25 739,650 of options granted to employees and directors that were outstanding as of August 31, 2018, were also exercisable as of August 31,2018. As of August 31, 2018, there were $1,241 of unrecognized compensation costs related to non-vested options previously granted toemployees and directors. The unrecognized compensation costs are expected to be recognized over a weighted average period of 2.7 years. A summary of the status of the stock options granted to non-employees outstanding as of August 31, 2018, 2017 and 2016, and changesduring the years ended on those dates, is presented below: Year ended August 31, 2018 2017 2016 Numberofoptions Weightedaverageexerciseprice Numberofoptions Weightedaverageexerciseprice Numberofoptions Weightedaverageexerciseprice $ $ $ Options outstanding at beginning of year 55,486 6.71 29,668 8.35 40,286 7.29 Changes during the year: Granted - - 37,152 6.00 22,000 7.36 Exercised - - - - (18,718) 6.00 Forfeited - - - - (9,000) 7.36 Expired - - (11,334) 8.65 (4,900) 6.00 Options outstanding at end of year 55,486 6.71 55,486 6.71 29,668 8.35 Options exercisable at end of year 44,134 6.90 27,622 7.43 29,668 8.35 The Company recorded stock-based compensation of $111, $59 and $102 during the years ended August 31, 2018, 2017 and 2016,respectively, related to non-employees’ awards. None of the options were exercised by non-employees during the years ended August 31, 2018 and 2017. The total intrinsic value of non-employees’ options exercised during the year ended August 31, 2016 was $37. F-25 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): The following table presents summary information concerning the options granted to non-employees outstanding as of August 31, 2018: Range ofexerciseprices Numberoutstanding WeightedAverageRemainingContractualLife WeightedAverageExercisePrice $ Years $ 6.00 37,152 8.56 6.00 7.36 10,000 7.22 7.36 9.12 8,334 0.36 9.12 55,486 7.09 6.71 44,134 options granted to non-employees that were outstanding as of August 31, 2018, were also exercisable as of August 31, 2018. As of August 31, 2018, there were $32 of unrecognized compensation costs related to non-vested non-employee options. The unrecognizedcompensation costs are expected to be recognized over a weighted average period of 0.5 years. j.Restricted stock units The following table summarizes the activities for unvested RSUs granted to employees and directors for the years ended August 31, 2018,2017 and 2016: Year ended August 31, 2018 2017 2016 Number of RSUs Unvested at the beginning of period 198,276 201,669 313,216 Granted - 178,120 1,000 Vested and issued (32,480) (159,353) (101,459) Forfeited - (22,160) (11,088) Outstanding at the end of the period 165,796 198,276 201,669 Vested and unissued 164,636 164,636 152,656 The Company recorded compensation costs related to RSUs of $86, $1,064 and $518, during the years ended August 31, 2018, 2017 and2016, respectively, related to RSU awards. As of August 31, 2018, there was $1 unrecognized compensation costs related to RSUs, to be recorded over the next 4 months. F-26 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 9 - FINANCIAL INCOME AND EXPENSES a.Financial income Year ended August 31, 2018 2017 2016 Income from interest on deposits $741 $657 $378 Exchange rate differences - 7 - Income from interest on corporate bonds 162 128 96 $903 $792 $474 b.Financial expenses Year ended August 31, 2018 2017 2016 Exchange rate differences $30 $17 $17 Bank commissions 6 6 11 Other 67 78 65 $103 $101 $93 NOTE 10 - TAXES ON INCOME: Taxes on income included in the consolidated statements of operations represent current taxes due to taxable income of the Company andits Subsidiary. a.Corporate taxation in the U.S. The applicable corporate tax rate for the Company is 21% following the U.S. Tax Cuts and Jobs Act (the “TCJA”), excluding state tax andlocal tax. On December 22, 2017, the TCJA was signed into law, which among other changes reduced the federal corporate income tax ratefrom 35% to 21%, effective January 1, 2018. As of August 31, 2018, the Company has an accumulated tax loss carryforward of approximately $12,053 (as of August 31, 2017,approximately $10,119). Under U.S. tax laws, subject to certain limitations, carryforward tax losses expire 20 years after the year in whichincurred. In the case of the Company, subject to potential limitations in accordance with the relevant law, the net loss carryforward willexpire in the years 2025 through 2037. b.Corporate taxation in Israel: The Subsidiary is taxed in accordance with Israeli tax laws. The corporate tax rates applicable to 2018, 2017 and 2016 are 23%, 24% and25%, respectively. As of August 31, 2018, the Subsidiary has an accumulated tax loss carryforward of approximately $34,695 (as of August 31, 2017,approximately $26,881). Under the Israeli tax laws, carryforward tax losses have no expiration date. F-27 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 10 - TAXES ON INCOME (continued): c.Deferred income taxes: August 31, 2018 2017 2016 In respect of: Net operating loss carryforward $10,451 $9,253 $9,219 Research and development expenses 2,431 2,046 - Less - valuation allowance (12,882) (11,299) (9,219) Net deferred tax assets $- $- $- Deferred taxes are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and aremeasured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. 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 taxable incomeis uncertain, the Company recorded a full valuation allowance. The reduction of the tax rate and TCJA had no impact on the net deferred taxes of the Company. d.Loss before taxes on income and income taxes included in the income statements of operations: Year ended August 31, 2018 2017 2016 Loss before taxes on income: U.S. $1,934 $1,115 $959 Outside U.S. 10,793 8,965 8,670 $12,727 $10,080 $9,629 Taxes on income (tax benefit): Current: U.S. - - (15) Outside U.S. - 400 1,350 $- $400 $1,335 Taxes on income of $400 in the year ended August 31, 2017 resulted from withholding tax deducted from HTIT milestones payments,which were received during the year ended August 31, 2017, according to the License Agreement. As of August 31, 2017, the Company didnot expect to reach taxable income in the 5 years following the balance sheet date, and therefore recognized this amount as taxes onincome. F-28 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 10 - TAXES ON INCOME (continued): e.Reconciliation of the statutory tax benefit to effective tax expense Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies inthe United States, and the actual tax expense: Year ended August 31, 2018 2017 2016 Loss before income taxes as reported in the consolidated statement of comprehensiveloss $(12,727) $(10,080) $(9,629) Statutory tax benefit (2,673) (3,528) (3,370) Increase in income taxes resulting from: Change in the balance of the valuation allowance for deferred tax 1,583 2,080 2,563 Disallowable deductions 112 327 167 Influence of different tax rate applicable to the Subsidiary and changes in tax ratesfrom previous years 978 1,121 640 Withholding tax, see note 10d above - 400 1,350 Uncertain tax position - - (15) Taxes on income for the reported year $- $400 $1,335 f.Uncertainty in Income Taxes ASC Topic 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 affect theestimate 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. The following table summarizes the activity of the Company unrecognized tax benefits: Year ended August 31, 2018 2017 2016 Balance at Beginning of Year $11 $11 26 Decrease in uncertain tax positions for the current year - - (15) Balance at End of Year $11 $11 $11 The Company does not expect unrecognized tax expenses to change significantly over the next 12 months. The Company is subject to U.S. Federal income tax examinations for the tax years of 2014 through 2018. The Subsidiary is subject to Israeli income tax examinations for the tax years of 2013 through 2018. F-29 ORAMED PHARMACEUTICALS INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)U.S. Dollars in thousands (except share and per share data) NOTE 10 - TAXES ON INCOME (continued): g.Valuation Allowance Rollforward Year ended August 31, Balance atbeginning ofperiod Additions Balance atend of period Allowance in respect of carryforward tax losses: Year ended August 31, 2018 $11,299 $1,583 $12,882 Year ended August 31, 2017 9,219 2,080 11,299 Year ended August 31, 2016 $6,656 $2,563 $9,219 NOTE 11 - RELATED PARTIES - TRANSACTIONS: a.During each of the fiscal years of 2018, 2017 and 2016, the Company paid to directors $100, $100 and $92, respectively, as directors’ fees. b.On July 1, 2008, the Subsidiary entered into two consulting agreements with KNRY Ltd. (“KNRY”), an Israeli company owned by the CSO,whereby the CEO and the CSO, through KNRY, provide services to the Company (the “Consulting Agreements”). The ConsultingAgreements are both terminable by either party upon 140 days, prior written notice. The Consulting Agreements, as amended, provide thatKNRY will be reimbursed for reasonable expenses incurred in connection with performance of the Consulting Agreements and that themonthly consulting fee paid to the CEO and the CSO is NIS 127,570 ($35) and NIS 80,454 ($22), respectively. In addition to the Consulting Agreements, based on a relocation cost analysis prepared by consulting company ORI - OrganizationalResources International Ltd., the Company pays for certain direct costs, related taxes and expenses incurred in connection with therelocation of the CEO to New York. During fiscal 2018, such relocation expenses totaled $430. c.Balances with related parties: August 31, 2018 2017 Accounts payable and accrued expenses - KNRY $46 $- d.Expenses to related parties: Year ended August 31, 2018 2017 2016 KNRY $828 $868 $839 F-30 All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions,or are inapplicable, and therefore have been omitted. (b)Exhibits 3.1Composite Copy of Certificate of Incorporation, as amended as of January 22, 2013, corrected February 8, 2013, further amended July 25, 2014and corrected September 5, 2017 (incorporated by reference from our annual report on Form 10-K filed November 29, 2017). 3.2Amended and Restated By-laws (incorporated by reference from our current report on Form 8-K filed February 1, 2013, File No. 000-50298). 4.1Specimen Common Stock Certificate (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013, File No.000-50298). 4.2Form of Common Stock Purchase Warrant (incorporated by reference from our current report on Form 8-K filed July 5, 2018). 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 July 2, 2008, File No. 000-50298). 10.2+Amendment, dated July 13, 2013, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for theservices of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.3+Amendment, dated November 13, 2014, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008,for the services of Nadav Kidron and Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.4+Amendment, dated July 21, 2015, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, forthe services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2015). 10.5+Amendment, dated June 27, 2016, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, forthe services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.6+Amendment, dated November 28, 2016, to Consulting Agreements 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 quarterly report on Form 10-Q filed January 11, 2017). 10.7+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 July 2, 2008, File No. 000-50298). 10.8+Amendment, dated July 13, 2013, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for theservices of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.9+Amendment, dated July 21, 2015, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, forthe services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2015). 10.10+Amendment, dated June 27, 2016, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, forthe services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 55 10.11+Amendment, dated June 30, 2017, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, forthe services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 29, 2017). 10.12+Oramed Pharmaceuticals Inc. Second Amended and Restated 2008 Stock Incentive Plan (incorporated by reference from our definitive proxystatement on Schedule 14A filed August 4, 2016). 10.13+Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement (incorporated by reference from our annual report on Form 10-K filedNovember 14, 2014). 10.14+Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement between the Company and the CSO or CEO (incorporated byreference from our annual report on Form 10-K filed November 29, 2017). 10.15+Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our current report on Form 8-K filedJuly 2, 2008, File No. 000-50298). 10.16+Amended and Restated Employment Agreement, dated July 20, 2017, by and between Oramed Ltd. and Hilla Eisenberg (incorporated byreference from our current report on Form 8-K filed July 21, 2017). 10.17+*Amendment to Amended and Restated Employment Agreement, dated October 29, 2018, by and between Oramed Ltd. and Hilla Eisenberg. 10.18+*Employment Agreement, dated November 6, 2018, by and between Oramed Ltd. and Mark Hasleton. 10.19+Clinical Trial Agreement, dated September 11, 2011, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., MiriamKidron and Daniel Schurr (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012, File No. 000-50298). 10.20+Clinical Trial Agreement, dated July 8, 2009, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., Miriam Kidronand Itamar Raz (incorporated by reference from our current report on Form 8-K filed July 9, 2009, File No. 000-50298). 10.21Agreement, 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, File No. 000-50298). 10.22Manufacturing and Clinical Supply Agreement, dated July 5, 2010, between Oramed Ltd. and Sanofi-Aventis Deutschland GMBH (incorporatedby reference from our current report on Form 8-K filed July 14, 2010, File No. 000-50298). 10.23Patent 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 25, 2011, File No. 333-173058). 10.24+*Representative Form of Indemnification Agreements between Oramed Pharmaceuticals Inc. and each of our directors and officers. 10.25+Letter Agreement, dated as of February 5, 2013, between Oramed Pharmaceuticals Inc. and Regals Capital LP (incorporated by reference from ourannual report on Form 10-K filed November 25, 2016). 10.26+Employment Agreement, dated April 14, 2013, between Oramed Ltd. and Joshua Hexter (incorporated by reference from our current report onForm 8-K filed April 16, 2013). 56 10.27+Amendment to Employment Agreement, dated July 21, 2015, between Oramed Ltd. and Joshua Hexter (incorporated by reference from ourannual report on Form 10-K filed November 25, 2015). 10.28+Amendment to Employment Agreement, dated June 27, 2016, between Oramed Ltd. and Joshua Hexter (incorporated by reference from ourannual report on Form 10-K filed November 25, 2016). 10.29+Amendment to Employment Agreement, dated April 15, 2018, between Oramed Ltd. and Joshua Hexter (incorporated by reference from ourquarterly report on Form 10-Q filed July 12, 2018). 10.30Securities Purchase Agreement, dated November 30, 2015, between Oramed Pharmaceuticals, Inc. and Hefei Tianhui Incubator of TechnologiesCo., Ltd. (incorporated by reference from Schedule 13D/A filed by Nadav Kidron on December 29, 2015). 10.31Amended and Restated Technology License Agreement, dated December 21, 2015, between Hefei Tianhui Incubator of Technologies Co., Ltd.,Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been granted for portions of this document. Incorporated by referencefrom our quarterly report on Form 10-Q filed January 13, 2016). 10.32Amendment to the Amended and Restated Technology License Agreement, dated June 3, 2016, between Hefei Tianhui Incubator ofTechnologies Co., Ltd., Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been requested for portions of this document.The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission)(incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.33Amendment to the Amended and Restated Technology License Agreement, dated July 24, 2016, between Hefei Tianhui Incubator ofTechnologies Co., Ltd., Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been requested for portions of this document.The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission)(incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.34Service Agreement, dated as of June 3, 2016, between Oramed Ltd. and XERTECS GmbH (Confidential treatment has been granted for portionsof this document. The confidential portions have been omitted and filed separately, on a confidential basis, with the Securities and ExchangeCommission) (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.35General Technical Agreement between Oramed Ltd. and Premas Biotech Pvt. Ltd., dated July 24, 2016 (Confidential treatment has been grantedfor portions of this document. The confidential portions have been omitted and filed separately, on a confidential basis, with the Securities andExchange Commission) (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.36At-the-Market Issuance Sales Agreement, dated April 2, 2015, by and between Oramed Pharmaceuticals Inc. and MLV & Co. LLC. (incorporatedby referenced from our quarterly report on Form 10-Q filed April 3, 2015). 10.37Amendment No. 1 to At-The-Market Issuance Sales Agreement, dated April 5, 2017, among FBR Capital Markets & Co., MLV & Co. LLC andOramed Pharmaceuticals Inc. (incorporated by reference from our quarterly report on Form 10-Q filed April 5, 2017). 10.38Clinical Research Organization Services Agreement, dated February 14, 2018 and effective as of November 1, 2017, between Oramed Ltd. andIntegrium, LLC (Confidential treatment has been granted for portions of this document. The confidential portions have been omitted and filedseparately, on a confidential basis, with the Securities and Exchange Commission.) (incorporated by reference from our quarterly report on Form10-Q filed April 9, 2018). 10.39Form of Securities Purchase Agreement, dated as of July 2, 2018, between the Company and each Purchaser (incorporated by reference from theCompany’s Current Report on Form 8-K filed July 5, 2018). 57 21.1Subsidiary (incorporated by reference from our annual report on Form 10-K filed November 27, 2013, File No. 000-50298). 23.1*Consent of Kesselman & Kesselman, 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, 2018, formatted in XBRL(eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii)Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to ConsolidatedFinancial Statements, tagged as blocks of text and in detail. *Filed herewith.**Furnished herewith.+Management contract or compensation plan. ITEM 16.FORM 10-K SUMMARY. None. 58 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 to be signed onits behalf by the undersigned, thereunto duly authorized. ORAMED PHARMACEUTICALS INC. /s/ NADAV KIDRON Nadav Kidron, President and Chief Executive Officer Date: November 27, 2018 59 Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. /s/ NADAV KIDRON November 27, 2018 Nadav Kidron, President and Chief Executive Officer and Director (principal executive officer) /s/ HILLA EISENBERG November 27, 2018 Hilla Eisenberg, Chief Financial Officer (principal financial and accounting officer) /s/ AVIAD FRIEDMAN November 27, 2018 Aviad Friedman, Director /s/ MIRIAM KIDRON November 27, 2018 Miriam Kidron, Director /s/ XIAOPENG LI November 27, 2018 Xiaopeng Li, Director /s/ KEVIN RAKIN November 27, 2018 Kevin Rakin, Director /s/ LEONARD SANK November 27, 2018 Leonard Sank, Director /s/ DAVID SLAGER November 27, 2018 David Slager, Director 60Exhibit 10.17 First Amendment to Amended and Restated Employment Agreement This First Amendment to Amended and Restated Employment Agreement (this “First Amendment”) is entered into as of this 29th day of October 2018 and iseffective as of May 1, 2018, by and between Hilla Eisenberg, an individual residing in Haifa, Israel (the “Executive”), and ORAMED Ltd., a companyincorporated under the laws of the State of Israel, with an address at Hi-Tech Park 2/4 Givat Ram, Jerusalem, Israel 91390 (the “Company”). WHEREAS, the Company and the Executive entered into an Amended and Restated Employment Agreement, dated as of July 20, 2017 (the“Original Agreement”); and WHEREAS, Company and the Executive desire to amend the terms and conditions of the Original Agreement to increase the Executive’s salary. NOW, THEREFORE, the Company and the Executive agree as follows: 1. In Section 2.1(a) - Salary of the Original Agreement, the following paragraph is hereby added: As of May 1, 2018, the Executive shall be entitled to a gross monthly salary of NIS 35,700 (the “Salary”). 2. Except for the changes and/or additions stated herein, all the other terms of the Original Agreement shall remain valid and bind the parties without anychange. In the case of a contradiction between the provisions of this First Amendment and the provisions of the Original Agreement, the provisions of thisFirst Amendment shall prevail. Without limiting the generality of the foregoing, the term “Agreement” as used in the Original Agreement shall be deemed tobe the Original Agreement as amended by this First Amendment. IN WITNESS WHEREOF, the parties have executed this First Amendment to Amended and Restated Employment Agreement as of October 29,2018. Oramed Ltd. /s/ Nadav Kidron Nadav Kidron, CEO /s/ Hilla Eisenberg Hilla EisenbergExhibit 10.18 Employment Agreement This Employment Agreement is entered into as of this 6 day of November 2018, by and between Mark Hasleton, an individual residing in Ra’anana, Israel(the “Executive”), and ORAMED Ltd., a company incorporated under the laws of the State of Israel, with an address at Hi-Tech Park 2/4 Givat Ram,Jerusalem, Israel 91390 (the “Company”). WHEREAS, the Company has agreed to engage the Executive to serve in the role of VP Business Development of the Company and ORAMEDPHARMACEUTICALS INC. (the “Parent”); and WHEREAS, Company and the Executive wish to formally record the terms and conditions upon which the Executive will be employed by theCompany, and each of the Company and the Executive have agreed to the terms and conditions set forth in this Agreement, as evidenced by their executionhereof. NOW, THEREFORE, the Company and the Executive agree as follows: 1.ENGAGEMENT 1.1Engagement of Executive. Subject to earlier termination of the Agreement as hereinafter provided, the Company hereby agrees to employ theExecutive in accordance with the terms and provisions hereof. 1.2Term. Unless terminated earlier in accordance with the provisions hereof, the term of employment under this Agreement shall commence onNovember 7, 2018 (the “Effective Date”) and shall continue until terminated by either party as provided herein (the “Term”). 1.3Service. the Executive shall serve in the role of VP Business Development of the Company and ORAMED PHARMACEUTICALS INC. (the“Parent”) (a)Scope of service – from the Effective Date, the Executive shall perform his work on the basis of a full time position. The Executive shallbe entitled to conduct his work at a location outside the offices of the Company for one day each week, which will be coordinated withthe Company in advance. (b)The Executive agrees to faithfully, honestly and diligently serve the Company and to devote Executive’s attention and best efforts tofurther the business and interests of the Company during the period of this Agreement. The Executive agrees and undertakes to informthe Company’s Chief Executive Officer (the “CEO”) immediately after becoming aware of any matter that may in any way raise aconflict of interest between the Executive and the Company. For the avoidance of doubt, nothing in this Section 1.3 shall degrade fromthe Executive’s obligation to continue observing all of his undertakings under this Agreement in their entirety, including, withoutlimitation, his obligations of confidentiality and non-disclosure.  (c)The Company acknowledges that the Executive has previously been, and intends to continue to be, involved in a non-competingpharmaceutical venture in a limited capacity. the Executive will ensure that any involvement in such venture shall not impact hisobligations to the Company hereunder, and shall be conducted outside of business hours, provided that he shall be entitled to engage inactivities relating to such venture for no more than 10 business hours a month. For the avoidance of doubt, any Developments related tosuch venture made or developed by the Executive (which are not related to the business of the Company) will be property of theExecutive and/or such venture, and the Company will not have any ownership or other rights therein 1.4Duties. The Executive’s services hereunder shall be provided on the basis of the following terms and conditions: (a)reporting to the CEO and the Company’s and Parent’s Board of Directors (the “Board”), the Executive shall serve as the VP BusinessDevelopment of the Company and Parent; (b)effective November 15, 2018, the Executive shall be responsible for the everyday operations in all aspects of the company, including:patent portfolio, production and supply, clinical trial, contracts and negotiations with different vendors, managing and overseeing theoffice, being part of the strategic and executive strategic planning and executing it, and being part of the PR and IR implementation, allsubject to any applicable law and to instructions provided by the CEO and/or the Board from time to time; (c)the Executive shall faithfully, honestly and diligently serve the Company and the Parent and cooperate with the Company and theParent and utilize his professional skill and care to ensure that all services rendered hereunder are to the satisfaction of the Company andthe Parent, acting reasonably, and the Executive shall provide any other services not specifically mentioned herein, but which by reasonof the Executive’s capability the Executive knows or ought to know to be necessary to ensure that the best interests of the Company andthe Parent are maintained; (d)the Executive shall assume, obey, implement and execute such duties, directions, responsibilities, procedures, policies and lawful ordersas may be determined or given from time to time by the Board, and/or CEO; and (e)the Executive shall report the results of his duties hereunder to the CEO and/or the Board as it may request from time to time. - 2 - 2.COMPENSATION 2.1Salary. For services rendered by the Executive during the Term, the Executive shall be paid a monthly salary, as follows: (a)the Executive shall be entitled to a gross monthly amount of NIS 38,000 (the “Salary”). (b)The Executive’s assignment is included among the positions of management or those requiring a special degree of personal trust, andthe Company is not able to supervise the number of working hours of the Executive; therefore the provisions of the Israeli Hours ofWork and Rest Law - 1951, will not apply to the Executive and he will not be entitled to any additional remuneration whatsoever for hiswork with the exception of that specifically set out in this Agreement. (c)Executive’s Salary and other benefits shall be annually reviewed by the Board based on his and the Company’s performance, all at theBoard’s sole and absolute discretion. 2.2Company Vehicle. The Executive shall be entitled to the use of a Class 2 vehicle, as shall be determined by the Company (the “Car”). TheCompany shall incur all reasonable expenses associated with use of the Car, including fuel expenses, however excluding personal traffic fines,payments to the tax authorities resulting from the use of the Car (“Shovi Shimush”) and the like, and the Executive hereby authorizes theCompany to deduct any such amount from any amount owing to him thereby, including from the Salary. The use of the Car shall be inaccordance with the provisions of the Company’s car internal procedures, as may be amended from time to time by the Company and theExecutive hereby authorizes the Company to deduct any amount needs to be deducted according to such internal procedures from any amountowing to him thereby, including from the Salary. The Executive shall bear any tax payments resulting from the aforesaid, to the extentapplicable. The Car will be returned to the Company by the Executive immediately upon termination of Executive’s employment by theCompany, for any reason whatsoever. Should the Executive choose not to use a car as described in this section 2.2, he will be entitled to agross monthly amount of NIS 4,200 (instead of statutory travel expenses from home to the office and back). 2.3Expenses. The Executive will be reimbursed by the Company for pre-approved business expenses incurred by the Executive in connectionwith his duties, and in accordance with Company’s policy. 2.4Vacation; Recreation Pay. The Executive shall be entitled to 18 vacation days per year. The Executive shall be entitled to accrue a maximumof 24 vacation days (the “Maximum”). Any days accrued beyond the Maximum shall be erased. In addition, Executive shall be entitled tosick leave and recreation pay according to applicable law. - 3 - 2.5Additional Benefits. The Executive shall be entitled to the use of a Company paid mobile phone for business purposes, according to theCompany’s policies and instructions, as amended from time to time. In addition, the Executive shall be entitled to the use of a Companyowned laptop computer, according to the Company’s policies and instructions, as amended from time to time. The Executive shall bear anytax payments resulting from the aforesaid, to the extent applicable. 2.6Deductions. The Executive acknowledges that all payments by the Company in respect of the services provided by the Executive shall besubject to the deduction of any amount which the Company as an employer is required to deduct or withhold from the Salary or otherpayments to an executive in accordance with statutory requirements (including, without limitation, income tax, employee contributions andunemployment insurance contributions). 2.7Bonus. The Executive shall be entitled to an annual cash bonus at the discretion of the Compensation Committee of the Board of Directors ofthe Company. 3.SOCIAL INSURANCE AND BENEFITS 3.1The Executive shall be entitled to a pension arrangement, a Managers’ Insurance Policy (the “Policy”) and/or Pension Fund (the “PensionFund”) as follows: The Company shall contribute 8.33% of the Salary for severance compensation (the “Severance Contribution”). In addition, the Company shall contribute 6.5% of the Salary for pension compensation (Tagmulim) towards Policy/Pension Fund. In the event that the Executive chooses Policy arrangement, the pension compensation (Tagmulim) shall include the Company’s payment forpurchase of disability insurance coverage sufficient to secure 75% of the Salary; provided that the Company’s contributions solely for pensioncompensation (Tagmulim) shall be not less than 5% and subject to the consent of the insurance company to insure the Executive. For theavoidance of any doubt, in the event that the cost to the Company shall be more than the required contributions rates towards pensioncompensation (6.5% as described above) due to the cost of the disability insurance, the total cost of the Company’s contributions to pensioncompensation and disability insurance collectively shall not exceed 7.5% of the Salary. The Company shall deduct from the Salary the Executive’s contributions for pension compensation (Tagmulim) in an amount of 6% of theSalary towards Policy/Pension Fund. - 4 - Any tax liability in connection with pension arrangement shall be borne solely by the Executive. The Executive agrees and acknowledges that the Company’s Severance Contribution in accordance with the foregoing, shall be in lieu of100% of the severance payment to which the Executive (or his beneficiaries) shall be entitled with respect to the Salary and the contributionswere made and for the period in which they were made, pursuant to Section 14 of the Severance Pay Law, 1963 (the “Severance Law”) inaccordance with the instructions of “The General Approval Regarding Employers’ Payments to Pension Fund and Insurance Fund Instead ofSeverance Pay” (the “General Approval”, a copy of which is attached hereto as Annex A), as amended from time to time in case theExecutive chooses a Policy and in the event that the Executive chooses Pension Fund arrangement in accordance with Sections 7-9 to theExtension Order General Insurance Pension In The Israeli Market. The Company hereby waives any of its rights to refund monies from the payments it transfers to the Policy/Pension Fund in accordance withthis Section, unless the Executive’s right to severance pay is denied by virtue of a court order, under Sections 16 or 17 of the Severance Law,and in the same amount which was denied, or the Executive withdraws monies from the Policy and/or the Pension Fund not due to a GrantingEvent. The term “Granting Event” shall mean - death, disability or retirement at the age of sixty or more. 3.2Keren Hishtalmut. The Company shall make monthly contributions on the Executive’s behalf to a recognized advanced study fund (the“Fund” (“Keren Hishtalmut”)) in an amount equal to 7.5% of the Salary. In addition, the Company shall deduct 2.5% from the Salary andtransfer those monies to the Study Fund; such contributions shall be subject to the maximum amount stated in Section 3(e) of the Income TaxOrdinance 1961 (the “Income Tax Ordinance”). For the avoidance of any doubt, said contributions shall not exceed the tax-exempt ceilingset by the applicable law for tax purposes. 3.3Effect of Termination. Upon termination of this Agreement by either party, other than in circumstances constituting Cause (as defined below),the Company shall assign and transfer to the Executive, after Executive has met all of Executive’s obligations hereunder in connection withsuch termination of employment, the ownership in the Keren Hishtalmut Fund. Notwithstanding the above, in the event that this Agreement isterminated in circumstances constituting Cause, the Company, in its absolute discretion, may retain its payments to such funds and release tothe Executive only those sums contributed by Executive to such funds. 3.4Liability Insurance Indemnification. The Company shall provide the Executive (including his heirs, executors and administrators) withcoverage under a standard directors’ and officers’ liability insurance policy at the Company’s expense. - 5 - 4.CONFIDENTIALITY 4.1Maintenance of Confidential Information. The Executive acknowledges that in the course of employment hereunder the Executive will, eitherdirectly or indirectly, have access to and be entrusted with information (whether oral, written or by inspection) relating to the Company and itsparent company, or its associates or customers (the “Confidential Information”). For the purposes of this Agreement, “ConfidentialInformation” includes, without limitation, any and all Developments (as defined herein), trade secrets, inventions, innovations, techniques,processes, formulas, drawings, designs, products, systems, creations, improvements, documentation, data, specifications, technical reports,customer lists, supplier lists, distributor lists, distribution channels and methods, retailer lists, reseller lists, employee information, financialinformation, sales or marketing plans, competitive analysis reports and any other thing or information whatsoever, whether copyrightable oruncopyrightable or patentable or unpatentable. The Executive acknowledges that the Confidential Information constitutes a proprietary right,which the Company is entitled to protect. Accordingly the Executive covenants and agrees that during the Term and thereafter until such timeas all the Confidential Information becomes publicly known and made generally available through no action or inaction of the Executive, theExecutive will keep in strict confidence the Confidential Information and shall not, without prior written consent of the Company, disclose,use or otherwise disseminate the Confidential Information, directly or indirectly, to any third party. 4.2Exceptions. The general prohibition contained in Section 4.1 against the unauthorized disclosure, use or dissemination of the ConfidentialInformation shall not apply in respect of any Confidential Information that: (a)is available to the public generally in the form disclosed; (b)becomes part of the public domain through no fault of the Executive; (c)is already in the lawful possession of the Executive at the time of receipt of the Confidential Information, as can be proven by writtendocumentation; or (d)is compelled by applicable law to be disclosed, provided that the Executive gives the Company prompt written notice of suchrequirement prior to such disclosure and provides assistance in obtaining an order protecting the Confidential Information from publicdisclosure. - 6 - 4.3Developments. Any information, technology, technical data or any other thing or documentation whatsoever which the Executive, either byhimself or in conjunction with any third party, has conceived, made, developed, acquired or acquired knowledge of during the Executive’semployment with the Company or in connection therewith or which the Executive, either by himself or in conjunction with any third party,shall conceive, make, develop, acquire or acquire knowledge of (collectively the “Developments”) during the Term or in connection with theExecutive’s employment with the Company shall automatically form part of the Confidential Information, and shall become and remain thesole and exclusive property of the Company. Accordingly, the Executive does hereby irrevocably, exclusively and absolutely assign, transferand convey to the Company in perpetuity all worldwide right, title and interest in and to any and all Developments and other rights ofwhatsoever nature and kind in or arising from or pertaining to all such Developments created or produced by the Executive during the courseof performing this Agreement or in connection therewith, including, without limitation, the right to effect any registration in the world toprotect the foregoing rights. The Company shall have the sole, absolute and unlimited right throughout the world, therefore, to protect theDevelopments by patent, copyright, industrial design, trademark or otherwise and to make, have made, use, reconstruct, repair, modify,reproduce, publish, distribute and sell the Developments, in whole or in part, or combine the Developments with any other matter, or not usethe Developments at all, as the Company sees fit. 4.4Protection of Developments. The Executive does hereby agree that, both before and after the termination of this Agreement, the Executiveshall perform such further acts and execute and deliver such further instruments, writings, documents and assurances (including, withoutlimitation, specific assignments and other documentation which may be required anywhere in the world to register evidence of ownership ofthe rights assigned pursuant hereto) as the Company shall reasonably require in order to give full effect to the true intent and purpose of theassignment made under Section ​4.3 hereof. 4.5Fiduciary Obligation. The Executive declares that the Executive’s relationship to the Company is that of fiduciary, and the Executive agreesto act towards the Company and otherwise behave as a fiduciary of the Company. 4.6Remedies. The parties to this Agreement recognize that any violation or threatened violation by the Executive of any of the provisionscontained in this Article ​4 may result in immediate and irreparable damage to the Company and that the Company could not adequately becompensated for such damage by monetary award alone. Accordingly, the Executive agrees that in the event of any such violation orthreatened violation, the Company shall, in addition to any other remedies available to the Company at law or in equity, be entitled as amatter of right to apply to such relief by way of restraining order, temporary or permanent injunction and to such other relief as any court ofcompetent jurisdiction may deem just and proper. 4.7Reasonable Restrictions. The Executive agrees that all restrictions in this Article ​4 are reasonable and valid, and all defenses to the strictenforcement thereof by the Company are hereby waived by the Executive. - 7 - 5.NON-COMPETITION 5.1Non Competition. Executive agrees and undertakes that he will not, so long as he is employed by the Company and for a period of 12 monthsfollowing termination of his employment for whatever reason, directly or indirectly, as owner, partner, joint venture, stockholder, employee,broker, agent, principal, corporate officer, director, licensor or in any other capacity whatever engage in, become financially interested in, beemployed by, or have any connection with any business or venture that competes with the Company’s business, including any businesswhich, when this Agreement terminates, the Company contemplates in good faith to be materially engaged in within six (6) months thereafter,provided that the Company has taken demonstrable actions to promote such engagement or that the Company’s Board of Directors hasadopted a resolution authorizing such actions prior to the date of termination; provided, however, that Executive may own securities of anycorporation which is engaged in such business and is publicly owned and traded but in an amount not to exceed at any one time one percent(1%) of any class of stock or securities of such company, so long as he has no active role in the publicly owned and traded company asdirector, employee, consultant or otherwise. 5.2No Solicitation. Executive agrees and undertakes that during the period of his employment and for a period of 12 months followingtermination for any reason whatsoever, he will not, directly or indirectly, including personally or in any business in which he is an officer,director or shareholder, for any purpose or in any place, employ any person (as an employee or consultant) employed by the Company at suchtime or during the preceding twelve months, unless such person has been terminated by the Company, provided however, that such personwho is terminated by the Company may be employed by Executive as described above only after the expiration of twelve months after theeffective date of such termination. 6.TERMINATION 6.1Termination For Cause or Disability. This Agreement may be terminated at any time by the Company without notice, for Cause or in the eventof the Disability of Executive. For the purposes of this Agreement, “Cause” also means that the Executive shall have: (a)committed an intentional act of fraud, embezzlement or theft in connection with the Executive’s duties or in the course of theExecutive’s employment with the Company; (b)intentionally and wrongfully damaged property of the Company, or any of its respective affiliates, associates or customers; - 8 - (c)intentionally or wrongfully disclosed any of the Confidential Information; (d)made material personal benefit at the expense of the Company without the prior written consent of the management of the Company; (e)accepted shares or options or any other gifts or benefits from a vendor without the prior written consent of the management of theCompany; (f)fundamentally breached any of the Executive’s material covenants contained in this Agreement; or (g)willfully and persistently, without reasonable justification, failed or refused to follow the lawful and proper directives of the Companyspecifying in reasonable detail the alleged failure or refusal and after a reasonable opportunity for the Executive to cure the allegedfailure or refusal. For the purposes of this Agreement, an act or omission on the part of the Executive shall not be deemed “intentional,” if it was due to an errorin judgment or negligence, but shall be deemed “intentional” if done by the Executive not in good faith and without reasonable belief that theact or omission was in the best interests of the Company, or its respective affiliates, associates or customers. For the purposes of this Agreement, “Disability” shall mean any physical or mental illness or injury as a result of which Executive remainsabsent from work for a period of six (6) successive months, or an aggregate of six (6) months in any twelve (12) month period. Disability shalloccur upon the end of such six-month period. 6.2Termination Without Cause. Either the Executive or the Company may terminate the Executive’s employment without Cause, for any reasonwhatsoever, with 30 days prior written notice within the first 12 months of the Executive’s engagement, and 60 days, prior written noticethereafter. 6.3The Notice Period. (a)During the period following the notice of termination (the “Notice Period”), Executive shall cooperate with the Company and use hisbest efforts to assist the integration into the Company’s organization of the person or persons who will assume Executive’sresponsibilities. Nevertheless, the Company shall have the right not to take advantage of the full Notice Period. In the event of such termination, theCompany shall pay the Executive his Salary [and all other benefits] as detailed in this Agreement for the remainder of the Notice Period. - 9 - It is hereby expressly stated that the Company reserves the right to terminate the Executive’s employment at any time during the NoticePeriod, regardless of whether notice of termination of employment was delivered by the Company or whether such notice was deliveredby the Executive. In the latter case such termination shall not constitute a dismissal of the Executive by the Company. (b)Notwithstanding the foregoing, the Company may terminate the Executive’s employment without the delivery of prior written notice, inthe event of termination under circumstances which deprive the Executive of severance pay under Israeli law, and/or a breach of trust. (c)In the event that the Executive terminates his employment with the Company, for any reason, without the delivery of a written notice inaccordance with Section 6.2 above, or without the completion of the Notice Period or any part thereof, the Company will be entitled todeduct from any debt which it may owe the Executive an amount equal to the salary that would have been paid to the Executive duringthe Notice Period, had he worked. 6.4Limitation of Damages. It is agreed that in the event of termination of employment, neither the Company, nor the Executive shall be entitledto any notice, or payment in excess of that specified in this Article ​6. 6.5Return of Materials. Within three days of any termination of employment hereunder, or upon any request by the Company at any time, theExecutive will return or cause to be returned any and all Confidential Information and other assets of the Company (including all originalsand copies thereof), which “assets” include, without limitation, hardware, software, keys, security cards and backup tapes that were provided tothe Executive either for the purpose of performing the employment services hereunder or for any other reason. The Executive acknowledgesthat the Confidential Information and the assets are proprietary to the Company, and the Executive agrees to return them to the Company inthe same condition as the Executive received such Confidential Information and assets. 6.6Effect of Termination. Articles ​4 and ​5 hereto and hereto shall remain in full force and effect after termination of this Agreement, for any reasonwhatsoever. - 10 - 7.MUTUAL REPRESENTATIONS 7.1Executive represents and warrants to the Company that the execution and delivery of this Agreement and the fulfillment of the terms hereof (i)will not constitute a default under or conflict with any agreement or other instrument to which he is a party or by which he is bound, and (ii)do not require the consent of any person or entity. 7.2The Company represents and warrants to Executive that this Agreement has been duly authorized, executed and delivered by the Companyand that the fulfillment of the terms hereof (i) will not constitute a default under or conflict with any agreement of other instrument to which itis a party or by which it is bound, and (ii) do not require the consent of any person of entity. 7.3Each party hereto warrants and represents to the other that this Agreement constitutes the valid and binding obligation of such partyenforceable against such party in accordance with its terms subject to applicable bankruptcy, insolvency, moratorium and similar lawsaffecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless if enforcement is sought inproceeding in equity or at law). 8.NOTICES 8.1Notices. All notices required or allowed to be given under this Agreement shall be made either personally by delivery to or by facsimiletransmission to the address as hereinafter set forth or to such other address as may be designated from time to time by such party in writing: (a)in the case of the Company, to: Oramed Ltd.2/4 High Tech ParkPO Box 39098Givat Ram, JerusalemIsrael 91390Fax: 972 2 5660004 (b)and in the case of the Executive, to the Executive’s last residence address known to the Company. 8.2Change of Address. Any party may, from time to time, change its address for service hereunder by written notice to the other party in themanner aforesaid. - 11 - 9.GENERAL 9.1Entire Agreement. As of from the date hereof, any and all previous agreements, written or oral between the parties hereto or on their behalfrelating to the employment of the Executive by the Company are null and void. The parties hereto agree that they have expressed herein theirentire understanding and agreement concerning the subject matter of this Agreement and it is expressly agreed that no implied covenant,condition, term or reservation or prior representation or warranty shall be read into this Agreement relating to or concerning the subject matterhereof or any matter or operation provided for herein. 9.2Personal Agreement. The provisions of this Agreement are in lieu of the provisions of any collective bargaining agreement, and therefore, nocollective bargaining agreement shall apply with respect to the relationship between the parties hereto (subject to the applicable provisions oflaw). 9.3Further Assurances. Each party hereto will promptly and duly execute and deliver to the other party such further documents and assurancesand take such further action as such other party may from time to time reasonably request in order to more effectively carry out the intent andpurpose of this Agreement and to establish and protect the rights and remedies created or intended to be created hereby. 9.4Waiver. No provision hereof shall be deemed waived and no breach excused, unless such waiver or consent excusing the breach is made inwriting and signed by the party to be charged with such waiver or consent. A waiver by a party of any provision of this Agreement shall not beconstrued as a waiver of a further breach of the same provision. 9.5Amendments in Writing. No amendment, modification or rescission of this Agreement shall be effective unless set forth in writing and signedby the parties hereto. 9.6Assignment. Except as herein expressly provided, the respective rights and obligations of the Executive and the Company under thisAgreement shall not be assignable by either party without the written consent of the other party and shall, subject to the foregoing, enure tothe benefit of and be binding upon the Executive and the Company and their permitted successors or assigns. Nothing herein expressed orimplied is intended to confer on any person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason ofthis Agreement. 9.7Severability. In the event that any provision contained in this Agreement shall be declared invalid, illegal or unenforceable by a court or otherlawful authority of competent jurisdiction, such provision shall be deemed not to affect or impair the validity or enforceability of any otherprovision of this Agreement, which shall continue to have full force and effect. - 12 - 9.8Headings. The headings in this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretationof this Agreement. 9.9Number and Gender. Wherever the singular or masculine or neuter is used in this Agreement, the same shall be construed as meaning the pluralor feminine or a body politic or corporate and vice versa where the context so requires. 9.10Governing Law. This Agreement shall be exclusively construed and interpreted in accordance with the laws of the state of Israel applicabletherein, and each of the parties hereto expressly agrees to the jurisdiction of the courts of the state of Israel. The sole and exclusive place ofjurisdiction in any matter arising out of or in connection with this Agreement shall be the applicable Tel-Aviv court. 9.11Enurement. This Agreement is intended to bind and enure to the benefit of the Company, its successors and assigns, and the Executive and thepersonal legal representatives of the Executive. This Agreement constitutes due notification in accordance with the Notice to Employee Law (Employment Terms), 2002 and the regulations promulgatedthereunder. - 13 - IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. Oramed Ltd. /s/ Nadav Kidron /s/ Mark HasletonNadav Kidron, CEO Mark Hasleton, Executive - 14 - Exhibit A (English Translation) General Confirmation Regarding Employers’ Payments to Pension Funds and Insurance Funds Instead of Severance Pay By my power under section 14 of the Severance Pay Law, 5723-1963 (hereinafter - the Law), I hereby confirm that payments made by an employer from thedate of publication of this confirmation, for an employee’s comprehensive pension, to a provident fund for pension which is not an insurance fund, as definedin the Income Tax Regulations (Rules for Approval and Management of Provident Funds), 5724-1964 (hereinafter - pension fund), or for an executiveinsurance policy that includes the possibility of a pension or a combination of payments for a pension plan and for a non-pension plan in an insurance fundas stated (hereinafter - insurance fund), including payments which the employer made by a combination of payments to a pension fund and to an insurancefund, whether the insurance fund includes a pension plan or not (hereinafter - employer payments), will replace the severance pay to which the employee isentitled for the salary on which said payments were made and the period for which they were made (hereinafter - exempt salary), if the following conditionsare satisfied: (1)Employer payments - (A)To a pension fund - are not less than 14 1/3% of the exempt salary, or 12% of the exempt salary if the employer makes additional paymentson behalf of his employee for severance pay supplementation to a provident fund for pension or to an insurance fund at the rate of 2 1.3% ofthe exempt salary. If an employer does not pay beyond the 12% an additional 2 1/3% as stated, then his payments will come instead of only72% of the employee’s severance pay. (B)To an insurance fund – are not less than one of the following: (1)13 1/3% of the exempt salary, if the employer makes additional payments on behalf of the employee to assure his monthly incomein case of work disability, in a plan approved by the Capital Market, Insurance and Savings Commissioner in the Finance Ministry,at the lower of the rate required to assure 75% of the exempt salary or 2 1/2% of the exempt salary (hereinafter - work disabilitypayment). (2)11% of the exempt salary, if the employer makes an additional work disability payment, and in such case the employer paymentswill come instead of only 72% of the employee’s severance pay. If in addition to the above the employer pays 2 1/3% of theexempt salary for severance pay supplementation to a provident fund for pension or to an insurance fund in the name of theemployee, the employer payments will come instead of 100% of the employee’s severance pay. (2)A written agreement was made between the employer and the employee no later than three months after the commencement of the employerpayments that includes - (A)The agreement of the employee to the arrangement pursuant to this confirmation, which details the employer payments as well as thepension fund or the insurance fund, as the case may be. Said agreement must include the text of this confirmation. (B)The employer’s prior waiver of any right he could have to reimbursement of any amount of his payments, unless the employee’s right toseverance pay is denied by judgment under sections 16 or 17 of the Law, and to the extent it is so denied, and in case the employeewithdrew monies from the pension fund or the insurance fund other than for an entitling event. In this regard, entitling event means death,disability or retirement at the age of 60 or over. (3)This confirmation does not derogate from the employee’s right to severance pay under the Law, a collective agreement, an extension order or anemployment contract, for any salary above the exempt salary. /s/ Nadav Kidron /s/ Mark HasletonThe Company The Employee Exhibit 10.24 INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of August 30, 2016 between Oramed PharmaceuticalsInc., a Delaware corporation (the “Company”), and Kevin Rakin (“Indemnitee”). WHEREAS, highly competent persons have become more reluctant to serve corporations as directors or officers unless they are provided withadequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service toand activities on behalf of the corporation; WHEREAS, the By-laws and/or the Certificate of Incorporation of the Company require indemnification of the officers and directors of theCompany. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”). The By-lawsand/or Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and therebycontemplate that contracts may be entered into between the Company and members of the Board of Directors of the Company (the “Board”) officers andother persons with respect to indemnification; WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of theCompany’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future; WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses onbehalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern thatthey will not be so indemnified; WHEREAS, this Agreement is a supplement to and in furtherance of the By-laws and/or Certificate of Incorporation of the Company and anyresolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as an officer and director from and after the date hereof, the parties heretoagree as follows: 1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law,as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof: (a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights ofindemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, aparty to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a),Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually andreasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted in good faithand in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminalProceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful.  (b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in thisSection 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or inthe right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paidin settlement actually and reasonably incurred by the Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee actedin good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company; provided, however, ifapplicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to whichIndemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shalldetermine that such indemnification may be made. (c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of thisAgreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, heshall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses, judgments, penalties, finesand amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful insuch Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Companyshall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolvedclaim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal,with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. 2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of thisAgreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paidin settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to orparticipant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of thenegligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreementshall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to thepresumptions, set forth in Sections 5 and 6 hereof) to be unlawful. 2 3. Contribution. (a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available in respect of any threatened, pending orcompleted Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shallpay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such paymentand the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlementof any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for afull and final release of all claims asserted against Indemnitee. (b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason,Indemnitee shall elect or be required by law to pay all or any portion of any judgment or settlement in any threatened, pending or completed Proceeding inwhich the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses,judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefitsreceived by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would beif joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such Proceeding arose;provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted byreference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable withIndemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events thatresulted in such Expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to beconsidered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable withIndemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among otherthings, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary orsecondary and the degree to which their conduct is active or passive. (c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may bebrought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee. (d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable toIndemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether forjudgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to anindemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in orderto reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding;and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/ortransaction(s). 3 4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, byreason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shallbe indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. 5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred byor on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by theCompany of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition ofsuch Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded oraccompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined by a final judicialdetermination (as to which all rights of appeal therefrom have been exhausted or lapsed) that Indemnitee is not entitled to be indemnified against suchExpenses. Any advances and undertakings to repay pursuant to this Section 4 shall be unsecured and interest free. 6. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure forIndemnitee rights of indemnity that are as favorable as may be permitted under the DGCL and public policy of the State of Delaware. Accordingly, the partiesagree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification underthis Agreement: (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including thereinor therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to whatextent Indemnitee is entitled to indemnification, provided that Indemnitee shall not be required to provide any documentation or information which isprivileged or otherwise protected from disclosure. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advisethe Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to theCompany, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to theextent that, such failure actually and materially prejudices the interests of the Company. (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 5(a) hereof, a determinationwith respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election ofIndemnitee, in his sole discretion: (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by a majority vote of a committeeof disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, (3) if there are no disinteresteddirectors or if a Change of Control shall have occurred after the date hereof, by Independent Counsel in a written opinion to the Board, a copy of which shallbe delivered to the Indemnitee, or (4) by a simple majority of the stockholders of the Company voting on the matter. For purposes hereof, disinteresteddirectors are those members of the Board who are not parties to the Proceeding in respect of which indemnification is sought by Indemnitee. 4 “Change of Control” shall mean the occurrence of any of the following: (a) any “person,” as such term is currently used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the“1934 Act”) (a “person”), becomes a “beneficial owner” (as such term is currently used in Rule 13d-3 promulgated underthe 1934 Act (a “Beneficial Owner”) of 30% or more of the Voting Stock (as defined below) of the Company; (b) the Board of Directors of the Company adopts any plan of liquidation providing for the distribution of all orsubstantially all of the Company’s assets; (c) all or substantially all of the assets or business of the Company are disposed of in any one or more transactionspursuant to a sale, merger, consolidation or other transaction (unless the shareholders of the Company immediately priorto such sale, merger, consolidation or other transaction beneficially own, directly or indirectly, in substantially the sameproportion as they owned the Voting Stock of the Company, more than fifty percent (50%) of the Voting Stock or otherownership interests of the entity or entities, if any, that succeed to the business of the Company); (d) the Company combines with another company and is the surviving corporation but, immediately after thecombination, the shareholders of the Company immediately prior to the combination hold, directly or indirectly, fiftypercent (50%) or less of the Voting Stock of the combined company; or (e) Continuing Directors cease to constitute at least a majority of the Board of Directors of the Company. “Voting Stock” of any entity shall mean the issued and outstanding share capital or other securities of any class or classeshaving general voting power under ordinary circumstances, in the absence of contingencies, to elect the members of theboard of directors (or members of a similar managerial body if such entity has no board of directors) of such entity. 5 “Continuing Director” means a director who either was a director of the Company on the Commencement Date or whobecame a director of the Company subsequent thereto and whose election, or nomination for election by the Company’sshareholders, was approved by a majority of the Continuing Directors then on the Board of Directors of the Company. (c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 5(b) hereof,the Independent Counsel shall be selected as provided in this Section 5(c). The Independent Counsel shall be selected by the Board. Indemnitee may, within10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, thatsuch objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” asdefined in this Agreement, and the objection shall set forth with reasonable particularity the factual basis of such assertion. Absent a proper and timelyobjection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected maynot serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20days after submission by Indemnitee of a written request for indemnification pursuant to Section 5(a) hereof, no Independent Counsel shall have beenselected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competentjurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Company’s selection of Independent Counsel and/or for theappointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect towhom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 5(b) hereof. The Company shall pay any andall reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 5(b) hereof,and the Company shall pay all reasonable fees and expenses (including those incurred by Indemnitee) incident to the procedures of this Section 5(c),regardless of the manner in which such Independent Counsel was selected or appointed. (d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity makingsuch determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shallhave the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors orIndependent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper inthe circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors orIndependent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption thatIndemnitee has not met the applicable standard of conduct. 6 (e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of theEnterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course oftheir duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independentcertified public accountant or by an appraiser or other expert selected by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of anydirector, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under thisAgreement. Whether or not the foregoing provisions of this Section 5(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times actedin good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding,that Indemnitee had reasonable cause to believe that his conduct was unlawful. Anyone seeking to overcome this presumption shall have the burden of proofand the burden of persuasion by clear and convincing evidence. (f) If the person, persons or entity empowered or selected under Section 5 to determine whether Indemnitee is entitled toindemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determinationof entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement byIndemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with therequest for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extendedfor a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement toindemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further,that the foregoing provisions of this Section 5(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholderspursuant to Section 5(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board orthe Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to beheld within sixty (60) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15)days after such receipt for the purpose of making such determination, such meeting is held for such purpose within forty (40) days after having been so calledand such determination is made thereat. (g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’sentitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or informationwhich is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to suchdetermination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making adetermination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys’ fees anddisbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemniteeharmless therefrom. 7 (h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits aparty to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in anymanner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of moneyor other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcomethis presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. (i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, orupon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right ofIndemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or notopposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conductwas unlawful. 7. Remedies of Indemnitee. (a) In the event that (i) a determination is made pursuant to Section 5 of this Agreement that Indemnitee is not entitled toindemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 4 of this Agreement, (iii) no determination ofentitlement to indemnification is made pursuant to Section 5(b) of this Agreement within 30 days after receipt by the Company of the request forindemnification (subject to extension, as provided in Section 5(f)), (iv) payment of indemnification is not made pursuant to this Agreement within ten (10)days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination hasbeen made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 5 of this Agreement,Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, ofIndemnitee’s entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the dateon which Indemnitee first has the right to commence such proceeding pursuant to this Section 6(a). The Company shall not oppose Indemnitee’s right to seekany such adjudication. (b) In the event that a determination shall have been made pursuant to Section 5(b) of this Agreement that Indemnitee is notentitled to indemnification, any judicial proceeding commenced pursuant to this Section 6 shall be conducted in all respects as a de novo trial on the merits,and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 5(b). (c) If a determination shall have been made pursuant to Section 5(b) of this Agreement that Indemnitee is entitled toindemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 6, absent (i) amisstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s misstatement not materially misleading inconnection with the application for indemnification, or (ii) a prohibition of such indemnification under applicable law. 8 (d) In the event that Indemnitee, pursuant to this Section 6, seeks a judicial adjudication of his rights under, or to recover damagesfor breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall payon his behalf, in advance within ten (10) days after the receipt by the Company of a statement from Indemnitee requesting such payment, any and allexpenses (of the types described in the definition of Expenses in this Agreement) actually and reasonably incurred by him in such judicial adjudication,regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery. (e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 6 that theprocedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by allthe provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten(10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which areincurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under thisAgreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately isdetermined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be. (f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under thisAgreement shall be required to be made prior to the final disposition of the Proceeding. 8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation. (a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to whichIndemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote of stockholders, aresolution of directors of the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrictany right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment,alteration or repeal. To the extent that a change in the DGCL, whether by statute or judicial decision, permits greater indemnification than would be affordedcurrently under the Certificate of Incorporation, By-laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by thisAgreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, andevery other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or inequity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment ofany other right or remedy. 9 (b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers,employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise thatsuch person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to themaximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt ofa notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt noticeof the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereaftertake all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding inaccordance with the terms of such policies. (c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of therights of recovery of Indemnitee (other than against the Outside Indemnitors), who shall execute all papers required and take all action necessary to securesuch rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. (d) The Company hereby acknowledges that the Indemnitee may have other sources of indemnification or insurance, whethercurrently in force or established in the future (collectively, the “Outside Indemnitors”). The Company hereby agrees: (i) that it is the indemnitor of first resort(i.e., its obligations to the Indemnitee are primary and any obligation of the Outside Indemnitors to advance expenses or to provide indemnification for thesame expenses or liabilities incurred by the Indemnitee are secondary); (ii) that it shall be required to advance the full amount of Expenses incurred by theIndemnitee and shall be liable in full for all indemnifiable amounts to the extent legally permitted and as required by the Company’s Certificate ofIncorporation and Bylaws or any agreement between the Company and the Indemnitee, without regard to any rights the Indemnitee may have against theOutside Indemnitors and (iii) that it irrevocably waives, relinquishes and releases the Outside Indemnitors from any and all claims against the OutsideIndemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or paymentby the Outside Indemnitors on behalf of the Indemnitee with respect to any claim for which the Indemnitee have sought indemnification from the Companyshall affect the foregoing and the Outside Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or paymentto all of the rights of recovery of the Indemnitee against the Company. The Company and the Indemnitee agree that the Outside Indemnitors are express thirdparty beneficiaries of the terms hereof. (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request ofthe Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterpriseshall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership,joint venture, trust, employee benefit plan or other enterprise. 10 9. Exception to Right of Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under thisAgreement to make any indemnity in connection with any claim made against Indemnitee: (a) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Companywithin the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or (b) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or anypart of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorizedthe Proceeding (or any part of any Proceeding) prior to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant to thepowers vested in the Company under applicable law or (iii) such Proceeding is brought by Indemnitee to assert, interpret or enforce his rights under thisAgreement. 10. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemniteeis an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation,partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceedingcommenced under Section 6 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability orexpense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of andbe enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation orotherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. 11. Security. To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to timeprovide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any suchsecurity, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee. 12. Enforcement. (a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on ithereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon thisAgreement in serving as an officer or director of the Company. (b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof andsupersedes all prior agreements, and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof. (c) The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting theIndemnitee’s rights to receive advancement of expenses under this Agreement. 13. Definitions. For purposes of this Agreement: (a) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of theCompany or any subsidiary thereof or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person isor was serving at the express written request of the Company. 11 (b) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of whichindemnification is sought by Indemnitee and who is not subject to any other relationship that may reasonably prejudice such director’s determination as tothe Indemnitee’s entitlement to indemnification hereunder. (c) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan orother enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary. (d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees,travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of thetypes customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing tobe a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expensesincurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result ofthe actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to anycost bond, supersede as bond, or other appeal bond or its equivalent. (e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law andneither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (otherthan with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any otherparty to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall notinclude any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either theCompany or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of theIndependent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of orrelating to this Agreement or its engagement pursuant hereto. 12 (f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism,investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company orotherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of hisor his Corporate Status, by reason of any action taken by him or of any inaction on his part while acting in his Corporate Status; in each case whether or nothe is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement;including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 6 of this Agreement toenforce his rights under this Agreement. 14. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any otherprovision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extentpermitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent withthe aforementioned intent, to the extent necessary to resolve such conflict. 15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executedin writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any otherprovisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving anysummons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject toindemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemniteeunder this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company. 17. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemedeffectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal businesshours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, returnreceipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with writtenverification of receipt. All communications shall be sent to Indemnitee at the address set forth below Indemnitee signature hereto, and to the Company, at itsprincipal executive offices to the attention of the President, or to such other address as may have been furnished to Indemnitee by the Company or to theCompany by Indemnitee, as the case may be. 13 18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or morecounterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitutepart of this Agreement or to affect the construction thereof. 20. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties with respect to the subject matterof this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict oflaws rules. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection withthis Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in theUnited States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of anyaction or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding inthe Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has beenbrought in an improper or inconvenient forum. SIGNATURE PAGE TO FOLLOW 14 IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first abovewritten. COMPANY ORAMED PHARMACEUTICALS INC. By:/s/ Nadav Kidron Name:Nadav Kidron Title:Chief Executive Officer INDEMNITEE /s/ Kevin Rakin Name:Kevin Rakin Address: 36 Church Lane, Westport, CT 06880, USA 15 Schedule to Exhibit 10.24 The following executive officers and directors are each party to an Indemnification Agreement or Amended and Restated Indemnification Agreement with theCompany, each of which is substantially identical in all material respects to the representative Indemnification Agreement filed herewith and is dated as ofthe respective date listed below. Name of Signatory DateNadav Kidron March 26, 2017President, Chief Executive Officer and Director Miriam Kidron March 26, 2017Chief Medical and Technology Officer and Director Hilla Eisenberg July 20, 2017Chief Financial Officer Joshua Hexter March 26, 2017Chief Operating Officer and VP Business Development Mark Hasleton November 15, 2018VP Business Development Aviad Friedman March 26, 2017Director Xiaopeng Li March 26, 2017Director Leonard Sank January 26, 2017Director David Slager January 19, 2017Director 16Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-215525 and 333-190497) and Form S-8 (Nos. 333-213835, 333-199120, 333-190222 and 333-163919) of Oramed Pharmaceuticals Inc. of our report dated November 27, 2018 relating to the financialstatements, which appears in this Form 10-K. Tel-Aviv, Israel/s/ Kesselman & KesselmanNovember 27, 2018Certified Public Accountants (lsr.) A member firm of PricewaterhouseCoopers InternationalLimited Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,P.O Box 50005 Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il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 makethe statements 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 materialrespects the financial 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 (asdefined in Exchange 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 the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in 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 mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially 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 financialreporting, to the 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 arereasonably likely 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 internalcontrol over financial reporting. Date: November 27, 2018By:/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, Hilla Eisenberg, 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 makethe statements 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 materialrespects the financial 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 (asdefined in Exchange 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 the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in 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 mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially 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 financialreporting, to the 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 arereasonably likely 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 internalcontrol over financial reporting. Date: November 27, 2018By:/s/ Hilla Eisenberg Hilla Eisenberg 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, 2018, asfiled with the Securities and Exchange Commission on the date hereof, or the Report, I, Nadav Kidron, President and Chief Executive Officer 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 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: November 27, 2018/s/ Nadav Kidron Nadav KidronPresident 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, 2018, as filedwith the Securities and Exchange Commission on the date hereof, or the Report, I, Hilla Eisenberg, Chief Financial Officer of the Company, certify, pursuantto 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 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: November 27, 2018/s/ Hilla Eisenberg Hilla EisenbergChief Financial Officer 

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