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Item 9A. Controls and Procedures

2020-11-24 compared with 2019-11-27 · 1652 added, 1909 removed, 543 unchanged (87% of the section changed)

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 and procedures as of August 31, 2019.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and

procedures are effective.

Management’s Annual Report on Internal Control over Financial

Our management, under the supervision of our

Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control

over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act.

The Company’s

internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Internal control

over financial reporting includes policies and procedures that:

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions;

● provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements

in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management

and directors;

● provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of

assets that could have a material effect on our financial statements.

Under the supervision and with the participation

of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal

control over financial reporting as of August 31, 2019 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, 2019 at a reasonable assurance

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, 2019 that have materially affected, or are reasonable

likely to materially affect, our internal control over financial reporting.

Controls and Procedures

management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls

and procedures as of August 31, 2020.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded

that our disclosure controls and procedures are effective.

Management’s

Annual Report on Internal Control over Financial Reporting

management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing

and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated

under the Exchange Act.

The Company’s internal control over financial reporting is defined as a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

purposes in accordance with GAAP.

Internal control over financial reporting includes policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect

our transactions and asset dispositions;

reasonable assurance that transactions are recorded as necessary to permit the preparation

of our financial statements in accordance with GAAP, and that our receipts and expenditures

are being made only in accordance with authorizations of our management and directors;

reasonable assurance regarding the prevention or timely detection of unauthorized acquisition,

use or disposition of assets that could have a material effect on our financial statements.

the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,

we evaluated the effectiveness of our internal control over financial reporting as of August 31, 2020 based on the current framework

for Internal Control-Integrated Framework (2013) set forth by The Committee of Sponsoring Organizations of the Treadway Commission.

on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective

as of August 31, 2020 at a reasonable assurance level.

in Internal Control over Financial Reporting

were no changes in our internal control over financial reporting that occurred during the quarter ended August 31, 2020 that have

materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Set forth below is certain information with

respect to the individuals who are our directors and executive officers.

forth below is certain information with respect to the individuals who are our directors and executive officers.

President, Chief Executive Officer and Director

6 unchanged sentences

Aviad Friedman

Chairman, Director

Miriam Kidron is Mr.

Nadav Kidron’s

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 executive officers who are not also directors,

indicating the principal occupation during that period, and the name and principal business of the organization in which such occupation

and employment were carried out.

Nadav Kidron was appointed

President, Chief Executive Officer and a director in March 2006.

He is also a director of Israel Advanced

Technology 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 Trade Programs 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 Ilan University.

From 2001 to 2003, he was a legal intern at Wine, Mishaiker &

Ernstoff Law Offices in Jerusalem, Israel.

Nadav Kidron’s mother.

There are no other directors or officers of the Company who are related by blood

following is a brief account of the education and business experience during at least the past five years of each director and

our executive officers who are not also directors, indicating the principal occupation during that period, and the name and principal

business of the organization in which such occupation and employment were carried out.

Nadav Kidron was appointed President, Chief Executive Officer and a director in March 2006.

He is also a director of Israel Advanced Technology 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 Trade Programs for executives in the life sciences field.

2003 to 2006, he was the managing director of the Institute of Advanced Jewish Studies at Bar Ilan University.

From 2001 to 2003,

he was a legal intern at Wine, Mishaiker & Ernstoff Law Offices in Jerusalem, Israel.

Kidron holds an LL.B.

and an International 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 capital markets, as well as his

knowledge and familiarity with corporate management.

Miriam Kidron was

appointed Chief Scientific Officer and a director in March 2006.

Kidron is a pharmacologist and

a biochemist with a Ph.D.

and an International

MBA from Bar Ilan University, Israel, and is a member of the Israel Bar Association.

believe that Mr.

Kidron’s qualifications to serve on our Board include his familiarity with the Company as its founder,

his experience in capital markets, as well as his knowledge and familiarity with corporate management.

Miriam Kidron was appointed Chief Scientific Officer and a director in March 2006.

is a pharmacologist and a biochemist with a Ph.D.

in biochemistry.

From 1990 to 2007, Dr.

Kidron was a senior researcher in the Diabetes Unit at Hadassah

University Hospital in Jerusalem, Israel.

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 proprietary drug delivery platforms.

Kidron was formerly a visiting professor

at the Medical School at the University of Toronto (Canada), and is a member of the American, European and Israeli Diabetes Associations.

Kidron served as a consultant to

Emisphere Technologies Inc., a company that specializes in developing broad-based proprietary drug delivery platforms.

was formerly a visiting professor at the Medical School at the University of Toronto (Canada), and is a member of the American,

European and Israeli Diabetes Associations.

Kidron is a recipient of the Bern Schlanger Award.

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.

Avraham Gabay was appointed

Chief Financial Officer, Treasurer and Secretary effective June 2019.

Prior to his appointment, from March 2015 until

May 2019, Mr.

Gabay served as a corporate controller at Orcam Technologies Ltd., a company which develops, manufactures and sells

a wearable assistive technology device for people who are blind, visually impaired or have reading or other disabilities.

2014 to 2015, Mr.

Gabay provided economic services in the advisory department of KPMG Israel, a certified public accounting firm.

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.

Avraham Gabay was appointed Chief Financial Officer, Treasurer and Secretary effective June 2019.

to his appointment, from 2015 until 2019, Mr.

Gabay served as a corporate controller at Orcam Technologies Ltd., a company which

develops, manufactures and sells a wearable assistive technology device for people who are blind, visually impaired or have reading

or other disabilities.

From 2014 to 2015, Mr.

Gabay provided economic services in the advisory department of KPMG Israel, a certified

public accounting firm.

From 2013 until 2014, Mr.

Gabay worked in the tax department of the law firm, Gornitzky & Co.

Gabay holds a bachelor’s

degree in law and accounting from Tel-Aviv University and is a certified public accountant in Israel and a member of the Israeli

Bar Association.

Joshua Hexter was appointed

Chief Operating & Business Officer , effective September 2019.

Prior to his appointment, Mr.

Hexter served as

Chief Business Officer at BrainsWay Ltd.

Gabay holds a bachelor’s degree in law and accounting from Tel-Aviv University and is a certified public accountant in Israel

and a member of the Israeli Bar Association.

Joshua Hexter was appointed Chief Operating & Business Officer , effective September 2019.

appointment, Mr.

Hexter served as Chief Business Officer at BrainsWay Ltd.

(Nasdaq/TASE:

BWAY) from 2018 to 2019, a commercial stage medical device company focused

on the development and sale of non-invasive neuromodulation products.

BWAY) from 2018 to 2019, commercial stage

medical device company focused on the development and sale of non-invasive neuromodulation products.

From 2013 to 2018, Mr.

Hexter served as Chief Operating Officer

and VP Business Development of the Company and from 2007 to 2013, Mr.

Hexter was a Director or Executive Director of BioLineRx

served as Chief Operating Officer and VP Business Development of the Company and from 2007 to 2013, Mr.

Hexter was a Director

or Executive Director of BioLineRx Ltd.

(Nasdaq/TASE:

BLRX), a biopharmaceutical development company dedicated to identifying, in-licensing and developing innovative

therapeutic candidates.

BLRX), a biopharmaceutical development company dedicated to identifying,

in-licensing and developing innovative therapeutic candidates.

Prior to his employment with BioLineRx, Mr.

Hexter was a member of the board of directors and Chief Executive

Officer of Biosensor Systems Design, Inc., a company developing market-driven biosensors.

Hexter holds a bachelor’s degree

from the University of Wisconsin and a master’s degree in management from Boston University.

Aviad Friedman became a director

in August 2016.

Hexter was a member

of the board of directors and Chief Executive Officer of Biosensor Systems Design, Inc., a company developing market-driven biosensors.

Hexter holds a bachelor’s degree from the University of Wisconsin and a master’s degree in management from Boston

Aviad Friedman became a director in August 2016.

Friedman is an international businessman.

Since 2007, he has been Chief Executive Officer of Most Properties

and the Chairman of the Israel Association of Community Centers since 2013.

Friedman was the first Director General

of Israel’s Ministry of Diaspora Affairs and served as personal advisor to Prime Minister Ariel Sharon from 1996 to 1999.

Friedman served as Chief 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 of public and private companies including Maayan Ventures, Capital Point

and Rosetta Green Ltd.

he has been Chief Executive Officer of Most Properties 1998 Ltd.

Friedman was the first Director General of Israel’s

Ministry of Diaspora Affairs and served as personal advisor to Prime Minister Ariel Sharon from 2001 to 2005.

Friedman served

as Chief Operating Officer of one of Israel’s premier newspapers, Ma’ariv from 2003 to 2007, and has more than 18

years of experience serving on boards of public and private companies including Maayan Ventures, Capital Point, Rosetta Green

and Aerodrome Groupe Ltd.

Friedman additionally served as an investor and consultant at Rhythmia Medical Inc.

from 2007, and was

actively involved in the sale of the company to Boston Scientific in 2012.

Friedman holds a bachelor’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 companies as well as his knowledge

and familiarity with corporate finance.

Kevin Rakin became a director

in August 2016 and Chairman of the Board in July 2017.

Rakin is a co-founder and partner at HighCape Partners, a growth equity

life sciences fund where he has served since 2013.

From June 2011 to November 2012, Mr.

Rakin was the President of Regenerative

Medicine at Shire plc, or Shire, a leading specialty biopharmaceutical company.

and was actively involved in the sale of the company to Boston Scientific in 2012.

Friedman holds a bachelor’s degree

and master’s degree with honors in Public Administration from Bar-Ilan University.

believe that Mr.

Friedman’s qualifications to serve on our Board include his experience in serving as a director of public

and private companies as well as his knowledge and familiarity with corporate finance.

Arie Mayer became a director in December 2019.

Mayer is currently the Managing Director and Chairman

of the Board of Merck Life Science Israel (formerly Sigma-Aldrich Israel Ltd.) and has held that position since January 2010.

Mayer has held various roles with Sigma-Aldrich Israel Ltd.

since 1995 and was instrumental in introducing and developing

the Cell Culture and Molecular Biology business for Sigma Aldrich Israel Ltd.

Mayer holds a Bachelor of Science degree in

chemistry from Hebrew University and a Ph.D.

in biochemistry from Israel Institute of Technology.

believe that Dr.

Mayer’s qualifications to serve on our Board include his experience as an executive in the biotechnology

industry, as well as his experience and relevant education in the fields of chemistry and biochemistry.

Kevin Rakin became a director in August 2016 and Chairman of the Board in July 2017.

Rakin is a co-founder

and partner at HighCape Partners, a growth equity life sciences fund where he has served since 2013.

From June 2011 to November

Rakin was the President of Regenerative Medicine at Shire plc, or Shire, a leading specialty biopharmaceutical company.

Prior to joining Shire, Mr.

Rakin served as the

Chairman and Chief Executive Officer of Advanced BioHealing, Inc.

from 2007 until its acquisition by Shire for $750 million in

Rakin currently serves on the board of Histogenics Corporation and a number of private companies.

an MBA from Columbia University and received his graduate and undergraduate 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, as well as his service in

positions in various companies as a chief executive officer, chief financial officer and president and his involvement in public

and private financings and mergers and acquisitions in the biotechnology industry.

Leonard Sank became a director

in October 2007.

Sank is a South African entrepreneur and businessman, whose interests lie in entrepreneurial endeavors and

initiatives, with over 20 years’

experience of playing significant leadership roles in developing businesses.

seventeen 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 his experience serving as a director

of many entities.

Gao Xiaoming became a director

in July 2019.

Rakin served as the Chairman and Chief Executive Officer of Advanced BioHealing, Inc.

from 2007 until

its acquisition by Shire for $750 million in June 2011.

Rakin currently serves on the boards of Nyxoah SA, HighCape Capital

Acquisition Corp., Aziyo Biologics, Inc.

and on the boards of number of private companies.

Rakin holds an MBA from Columbia

University and received his graduate and undergraduate degrees in Commerce from the University of Cape Town, South Africa.

believe that Mr.

Rakin’s qualifications to serve on our Board include his extensive experience as an executive in the biotechnology

industry, as well as his service in positions in various companies as a chief executive officer, chief financial officer and president

and his involvement in public and private financings and mergers and acquisitions in the biotechnology industry.

Leonard Sank became a director in October 2007.

Sank is a South African entrepreneur and businessman,

whose interests lie in entrepreneurial endeavors and initiatives, with over 20 years’

experience of playing significant

leadership roles in developing businesses.

For the past nineteen years, Mr.

Sank has served on the boards of a few national businesses

and local non-profit charity organizations in Cape Town and South Africa, where he resides.

believe that Mr.

Sank’s qualifications to serve on our Board include his years of experience in development stage businesses,

as well as his experience serving as a director of many entities.

Gao Xiaoming became a director in July 2019.

Gao has more than 25 years’

experience in the bio-pharmaceutical field.

Gao has experience

in the registration, license-in, sales and promotion of pharmaceuticals and was involved in the introduction of Novo Nordisk (Denmark)’s

insulin into China.

experience in the bio-pharmaceutical

Gao has experience in the registration, license-in, sales and promotion of pharmaceuticals and was involved in the

introduction of Novo Nordisk (Denmark)’s insulin into China.

Gao is proficient in the insulin industry.

From 2005 to 2009, Mr.

Gao led a team for the registration

of imported Insulin-SciLin in China and obtained an Imported Drug License.

Since 2007, Mr.

Gao founded Hefei Tianmai Biotechnology

Development Co., Ltd.

and HTIT, which are committed to the research, development and commercialization of high-tech bio-pharmaceutical

Gao led a team for the registration of imported Insulin-SciLin in China and obtained an Imported Drug License.

Gao founded Hefei Tianmai Biotechnology Development Co., Ltd.

and HTIT, which are committed to the research, development

and commercialization of high-tech bio-pharmaceutical products.

Gao is the Chairman and chief executive officer of HTIT.

We believe that Mr.

Gao’s qualifications

to serve on our Board include his years of experience in the bio-pharmaceutical industry as well as his experience and familiarity

with the Eastern market.

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 of stockholders 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.

may also appoint additional directors.

A director so chosen or appointed will hold office until the next annual meeting of stockholders

and until his or her successor is duly elected and qualified or until his or her earlier resignation or removal.

The Board has

determined that Aviad Friedman, Kevin Rakin, Leonard Sank and Xiaoming Gao are independent as defined under the rules promulgated

by the Nasdaq.

Other than Mr.

Gao, none of the independent directors has any relationship with us besides serving on our Board.

Gao is the chairman chief executive officer of HTIT, a stockholder holding more than 5% of our common stock, but does not

otherwise have any relationship with us.

The Board considered this relationship and determined that they would not interfere with

Gao'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:

and integrity;

ability to review critically, evaluate, question and discuss information provided, to exercise effective business

judgment and to interact effectively with the other directors;

and willingness and ability to commit the time necessary to perform

the duties of a director.

Board Meeting Attendance

During fiscal 2019, our Board held 5 meetings

and took actions by written consent on 5 occasions.

All of our directors attended at least 75% of the aggregate number of meetings

of the Board and the committees that were held during the period such director served on the Board.

Board members are encouraged

to attend our annual meetings of stockholders.

Audit Committee and Audit Committee Financial

The members of our Audit Committee are Aviad

Friedman, Kevin Rakin and Leonard Sank.

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”

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”

believe that Mr.

Gao’s qualifications to serve on our Board include his years of experience in the bio-pharmaceutical industry

as well as his experience and familiarity with the Eastern market.

are no agreements with respect to the election of directors.

Each director is elected for a period of one year at our annual meeting

of stockholders 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 Board may also appoint additional directors.

A director so chosen or appointed will hold office until

the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until his or her earlier

resignation or removal.

The Board has determined that Aviad Friedman, Arie Mayer, Kevin Rakin, Leonard Sank and Gao Xiaoming are

independent as defined under the rules promulgated by the Nasdaq.

Gao is the chief executive officer of HTIT, 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 securities

purchase agreement with HTIT dated November 30, 2015, but does not otherwise have any relationship with us.

The Board considered

this relationship and determined that they would not interfere with Mr.

Gao’s exercise of independent judgment in carrying

out the responsibilities of a director.

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 and integrity;

ability to review critically, evaluate, question and discuss information

provided, to exercise effective business judgment and to interact effectively with the other directors;

and willingness and ability

to commit the time necessary to perform the duties of a director.

Meeting Attendance

fiscal 2020, our Board held 7 meetings and took actions by written consent on 8 occasions.

Board members are encouraged to attend

our annual meetings of stockholders.

of our directors, except Mr.

Gao Xiaoming, attended at least 75% of the aggregate number of meetings of the Board and the committees

that were held during the period such director served on the Board.

Committee and Audit Committee Financial Expert

members of our Audit Committee are Aviad Friedman, Arie Mayer 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”

as defined by the rules of the SEC and the Nasdaq rules and regulations.

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

● 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 the general public and (ii) our internal financial and accounting controls;

● Recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our

financial condition 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 the members of the Compensation Committee are

“independent”

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;

the work performed by any outside accounting firm;

the Board in fulfilling its responsibilities by reviewing:

(i) the financial reports

provided by us to the SEC, our stockholders or to the general public and (ii) our internal

financial and accounting controls;

● Recommending,

establishing and monitoring procedures designed to improve the quality and reliability

of the disclosure of our financial condition and results of operations.

members of our Compensation Committee are Aviad Friedman, Kevin Rakin and Leonard Sank.

The Board has determined that all of the

members of the Compensation Committee are “independent”

as defined by the rules of the SEC and Nasdaq rules and regulations.

The Compensation Committee operates

under a written charter that is posted on the “Investors”

section of our website, www.oramed.com.

The primary responsibilities

of our Compensation Committee include:

● Reviewing, negotiating and approving, or recommending for approval by our Board the salaries and incentive compensation of

our executive officers;

● Administering our equity based plans and making recommendations to our Board with respect to our incentive-compensation plans

and equity-based plans;

● 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 the Nominating Committee are “independent”

The Compensation Committee operates under a written charter that is posted on the “Investors”

section of our website,

www.oramed.com.

The primary responsibilities of our Compensation Committee include:

negotiating and approving, or recommending for approval by our Board the salaries and

incentive compensation of our executive officers;

● Administering

our equity based plans and making recommendations to our Board with respect to our incentive-compensation

plans and equity-based plans;

recommendations to our Board with respect to director compensation.

members of our Nominating Committee are Aviad Friedman and Leonard Sank.

The Board has determined that all of the members of the

Nominating Committee are “independent”

as defined by the rules of the SEC and Nasdaq rules and regulations.

The Nominating Committee operates under a written charter

that is posted on the “Investors”

The Nominating

Committee operates under a written 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 and screening individuals qualified to become Board members for recommendation to the Board;

● Recommending the composition of the Board for each annual meeting of stockholders;

● Reviewing periodically with the Chairman of the Board and the Chief Executive Officer the succession plans relating to positions

held by directors, and making recommendations to the Board with respect to the selection and development of individuals to occupy

those positions.

Delinquent Section 16(a) Reports

Based solely upon a review of Forms 3, 4 and

5, and amendments thereto, furnished to us during fiscal 2019, we believe that during fiscal 2019, our executive 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) filing

requirements, except:

Avraham Gabay, our Chief Financial Officer, Treasurer and Secretary, failed to timely file a Form

4 reporting his June 17, 2019 acquisition of 33,146 shares of our common stock.

Gabay filed a Form 4 reporting this transaction

on June 27, 2019, and (b) Mr.

Xiaoming Gao, a member of our board of directors, failed to timely file a Form 3 reporting his status

as a reporting person effective July 1, 2019.

Gao filed a Form 3 reporting his status on July 19, 2019.

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 Business Conduct is located at our website

at www.oramed.com.

We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver from, a provision of

the Code of Ethics that applies to our Chief Executive Officer, or CEO, Chief Financial Officer or controller, or persons performing

similar functions and that relates to the Code of Ethics by posting such information on our website, www.oramed.com.

The primary responsibilities of our Nominating Committee include:

the composition and size of the Board, developing qualification criteria for Board members

and actively seeking, interviewing and screening individuals qualified to become Board

members for recommendation to the Board;

● Recommending

the composition of the Board for each annual meeting of stockholders;

periodically with the Chairman of the Board and the Chief Executive Officer the succession

plans relating to positions held by directors, and making recommendations to the Board

with respect to the selection and development of individuals to occupy those positions.

Section 16(a) Reports

solely upon a review of Forms 3, 4 and 5, and amendments thereto, furnished to us during fiscal 2020, we believe that during fiscal

2020, our executive 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) filing requirements, except:

(a) Aviad Friedman, one of our directors, failed to timely file a

Form 4 reporting his January 8, 2020 acquisition of options to purchase 20,000 shares of our common stock.

Friedman filed

a Form 4 reporting this transaction on January 14, 2020, (b) Gao Xiaoming, one of our directors, failed to timely file a Form

4 reporting his January 8, 2020 acquisition of options to purchase 20,000 shares of our common stock.

Gao filed a Form 4 reporting

this transaction on January 14, 2020, (c) Miriam Kidron, our Chief Scientific Officer and one of our directors, failed to timely

file a Form 4 reporting her January 8, 2020 acquisition of options to purchase 100,000 shares of our common stock.

filed a Form 4 reporting this transaction on January 14, 2020, (d) Nadav Kidron, our President, Chief Executive Officer and one

of our directors, failed to timely file a Form 4 reporting his January 8, 2020 acquisition of options to purchase 190,000 shares

of our common stock.

Kidron filed a Form 4 reporting this transaction on January 14, 2020, (d) Arie Mayer, one of our directors,

failed to timely file a Form 4 reporting his January 8, 2020 acquisition of options to purchase 20,000 shares of our common stock.

Mayer filed a Form 4 reporting this transaction on January 14, 2020, (e) Kevin Rakin, one of our directors, failed to timely

file a Form 4 reporting his January 8, 2020 acquisition of options to purchase 20,000 shares of our common stock.

a Form 4 reporting this transaction on January 14, 2020, and (f) Leonard Sank, one of our directors, failed to timely file a Form

4 reporting his January 8, 2020 acquisition of options to purchase 20,000 shares of our common stock.

Sank filed a Form 4

reporting this transaction on January 14, 2020.

have adopted a Code of Ethics and Business Conduct for our senior officers, directors and employees.

A copy of the Code of Ethics

and Business Conduct is located at our website at www.oramed.com.

We intend to satisfy the disclosure requirement regarding any

amendment to, or a waiver from, a provision of the Code of Ethics that applies to our Chief Executive Officer, or CEO, Chief Financial

Officer or controller, or persons performing similar functions and that relates to the Code of Ethics by posting such information

on our website, www.oramed.com.

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 it relates to our “named

executive officers,”

Our NEOs for fiscal 2019 are those three individuals listed in the “Summary Compensation

The Compensation Committee believes that our executive compensation is appropriately designed to incentivize

our named executive officers to work for our long-term prosperity, is reasonable in comparison with the levels of compensation

provided by comparable companies and reflects a reasonable cost.

We believe 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 as defined by Rule 16b-3 under the Exchange

The Compensation Committee has the authority and responsibility to review and approve the compensation of 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”

Our executive compensation program and our

Discussion and Analysis

section explains the policies and decisions that shape our executive compensation program, including its specific objectives and

elements, as it relates to our “named executive officers,”

Our NEOs for fiscal 2020 are those four individuals

listed in the “Summary Compensation Table”

The Compensation Committee believes that our executive compensation

is appropriately designed to incentivize our named executive officers to work for our long-term prosperity, is reasonable in comparison

with the levels of compensation provided by comparable companies and reflects a reasonable cost.

We believe our named executive

officers are critical to the achievement of our corporate goals, through which we can drive stockholder value.

Compensation Committee of our Board is comprised solely of independent directors as defined by Nasdaq and non-employee directors

as defined by Rule 16b-3 under the Exchange Act.

The Compensation Committee has the authority and responsibility to review and

approve the compensation of 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”

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;

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

The Compensation Committee does not apply a specific formula to determine the allocation between cash and non-cash forms

attract, hire, and retain

talented and experienced executives;

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;

align the interests of management

and stockholders by providing management with longer-term incentives through equity ownership.

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 between cash 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 reward performance.

Long-term incentives are intended to reward

NEOs for our long-term performance and executing our business strategy, and to strongly align NEOs’

interests with those

of stockholders.

respect to equity compensation, the Compensation Committee makes awards to executives under our 2019 Stock Incentive Plan, as

amended and restated, or the 2019 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.

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 reward performance.

Long-term incentives are intended to reward NEOs for our long-term performance and executing

our business strategy, and to strongly align NEOs’

interests with those of stockholders.

With respect to equity compensation, the

Compensation Committee made awards during fiscal 2019 to executives under our Second Amended and Restated 2008 Stock Incentive

Plan, or 2008 Plan.

Beginning September 11, 2019, the Compensation Committee began making awards to executives under our 2019 Stock

Incentive Plan, or 2019 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:

executive officer compensation program is comprised of:

(i) base salary or monthly compensation;

(ii) discretionary bonus;

(iii) long-term equity incentive compensation

in the form of stock option grants;

long-term equity incentive compensation in the form of stock option grants;

and (iv) benefits and perquisites.

In establishing overall executive compensation

levels and making specific compensation decisions for our NEOs in fiscal 2019, the Compensation Committee considered a number of

criteria, including the executive’s position, scope of responsibilities, prior base salary and annual incentive awards and

expected contribution.

Generally, our Compensation Committee reviews

and, as appropriate, approves compensation arrangements for the NEOs from time to time but not less than once each year.

Compensation Committee also takes into consideration the CEO’s recommendations for executive compensation of the other NEOs.

The CEO generally presents these recommendations at the time of our Compensation Committee’s review of executive compensation

arrangements.

The Compensation Committee performs a review

of base salaries and monthly compensation for our NEOs from time to time as appropriate.

In determining salaries, the Compensation

Committee members also take into consideration the scope of the NEOs’

responsibilities and independent third party market

data, such as compensation surveys to industry, individual experience and performance and contribution to our clinical, regulatory,

commercial and operational performance.

None of the factors above has a dominant weight in determining the compensation of

our named executive officers, and our Compensation Committee considers the factors as a whole when considering such compensation.

addition, our Compensation Committee uses comparative data regarding compensation paid by peer companies in order to obtain a general

understanding of current trends in compensation practices and ranges of amounts being awarded by other public companies, and not

as part of an analysis or a formula.

We believe that a competitive base salary and

monthly compensation is a necessary element of any compensation program that is designed to attract and retain talented and experienced

We also believe that attractive base salaries can motivate and reward executives for their overall performance.

salary and monthly compensation are established in part based on the individual experience, skills and expected contributions to

our performance, as well as such executive’s performance during the prior year.

establishing overall executive compensation levels and making specific compensation decisions for our NEOs in fiscal 2020, the

Compensation Committee considered a number of criteria, including the executive’s position, scope of responsibilities, prior

base salary and annual incentive awards and expected contribution.

our Compensation Committee reviews and, as appropriate, approves compensation arrangements for the NEOs from time to time but

not less than once each year.

The Compensation Committee also takes into consideration the CEO’s recommendations for executive

compensation of the other NEOs.

The CEO generally presents these recommendations at the time of our Compensation Committee’s

review of executive compensation arrangements.

Compensation Committee performs a review of base salaries and monthly compensation for our NEOs from time to time as appropriate.

In determining salaries, the Compensation Committee members also take into consideration the scope of the NEOs’

responsibilities

and independent third-party market data, such as compensation surveys to industry, individual experience and performance and contribution

to our clinical, regulatory, commercial and operational performance.

None of the factors above has a dominant weight in determining

the compensation of our named executive officers, and our Compensation Committee considers the factors as a whole when considering

such compensation.

In addition, our Compensation Committee uses comparative data regarding compensation paid by peer companies

in order to obtain a general understanding of current trends in compensation practices and ranges of amounts being awarded by

other public companies, and not as part of an analysis or a formula.

believe that a competitive base salary and monthly compensation is a necessary element of any compensation program that is designed

to attract and 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, as well as such executive’s performance during the prior

Generally, we believe that executives’

base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities,

experience and performance at comparable companies.

Compensation adjustments are made occasionally based on changes in an executive’s

level of responsibility, company progress or on changed local and specific executive employment market conditions.

In fiscal 2019, our Compensation Committee

did not increase the base salaries of our NEOs.

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 on various factors, including, among others,

the achievement of scientific and business goals and our financial and operational performance.

The Compensation Committee takes

into account the overall performance of the individuals, as well as the overall performance of the Company over the period being

reviewed and the recommendation of management.

For any given year, the compensation objectives vary, but relate generally to strategic

factors such as developments in 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 adjustments made within a range for individual performance,

at the discretion of the Compensation Committee.

The Compensation Committee determines, on a discretionary 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 historic compensation of

We believe that annual bonuses payable based

on the achievement of short-term corporate goals incentivize our NEOs to create stockholder value and attain short-term performance

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 Committee believes that stock participation

aligns executive officers’

base salaries should be targeted near the median of the range of salaries for

executives in similar positions with similar responsibilities, experience and performance at comparable companies.

adjustments are made occasionally based on changes in an executive’s level of responsibility, company progress or on changed

local and specific executive employment market conditions.

fiscal 2020, our Compensation Committee increased the base salaries of two of our NEOs by 10% and 15% as it deemed this to be

a reasonable rate based on, among other factors, such NEO’s increased responsibilities and time passed since the last salary

NEOs are eligible to receive discretionary annual bonuses based upon performance.

The amount of annual bonus to our NEOs is based

on various factors, including, among others, the achievement of scientific and business goals and our financial and operational

The Compensation Committee takes into account the overall performance of the individuals, as well as the overall

performance of the Company over the period being reviewed and the recommendation of management.

For any given year, the compensation

objectives vary, but relate generally to strategic factors such as developments in 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

adjustments made within a range for individual performance, at the discretion of the Compensation Committee.

The Compensation

Committee determines, on a discretionary 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 historic compensation of the NEOs.

believe that annual bonuses payable based on the achievement of short-term corporate goals incentivize our NEOs to create stockholder

value and attain short-term performance objectives.

Equity Incentive Compensation

incentive compensation allows the NEOs to share in any appreciation in the value of our common stock.

The Compensation Committee

believes that stock participation aligns executive officers’

interests with those of our stockholders.

Equity incentive awards are generally made at the commencement

of employment and following a significant change in job responsibilities, or to meet other special retention or performance objectives.

The amounts of the awards are designed to reward past performance and create incentives to meet long-term objectives.

made at a level expected to be competitive within the biotechnology industry, as well as with Israeli-based companies.

are made on a discretionary basis and not pursuant to specific criteria set out in advance.

In determining the amount of each grant,

the Compensation Committee also takes into account the number of shares held by the executive prior to the grant.

The vesting schedule

for NEOs generally provides for annual installments for new grants, though the Compensation Committee also utilizes quarterly vesting

from time to time.

The Compensation Committee believes that time-based vesting encourages recipients to build stockholder value

over a long period of time.

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 disability insurance and other customary

or mandatory social benefits in Israel.

We provide our NEOs with a phone and a company car, which are customary benefits in

Israel to managers and officers.

We do not believe that the benefits and perquisites

described above deviate materially from the customary practice for compensation of executive officers by other companies similar

in size and stage of development in Israel.

These benefits represent a relatively small portion of the executive officers’

Equity incentive

awards are generally made at the commencement of employment and following a significant change in job responsibilities, or to

meet other special retention or performance objectives.

The amounts 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 be competitive within the biotechnology

industry, as well as with Israeli-based companies.

Awards are made on a discretionary basis and not pursuant to specific criteria

set out in advance.

In determining the amount of each grant, the Compensation Committee also takes into account the number of

shares held by the executive prior to the grant.

The vesting schedule for NEOs generally provides for annual installments for

new grants, though the Compensation Committee also utilizes quarterly vesting from time to time, as well as performance-based

The Compensation Committee believes that time-based vesting encourages recipients to build stockholder value over a long

period of time and that performance-based vesting encourages recipients to achieve goals that benefit the Company.

and Perquisites

benefits available to NEOs are available to all employees on similar terms and include welfare benefits, paid time-off, life and

disability insurance and other customary or mandatory social benefits in Israel.

We provide our NEOs with a phone and a company

car, which are customary benefits in Israel to managers and officers.

do not believe that the benefits and perquisites described above deviate materially from the customary practice for compensation

of executive officers 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.

The Company pays for certain direct costs,

related taxes and expenses incurred in connection with the relocation of our CEO to New York.

During fiscal 2019, such relocation

expenses totaled approximately $486,000, 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 August 28, 2018.

We did not seek or receive

any specific feedback from our stockholders concerning our executive compensation program during the past fiscal year.

The Compensation

Committee did not specifically rely on the results of the prior vote in making any compensation-related decisions during fiscal

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and

discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management and,

based on such review and discussions, the Compensation Committee recommended to our Board that the Compensation Discussion and

Analysis be included in this Annual Report on Form 10-K and in our proxy statement relating to our next annual meeting of stockholders.

Compensation Committee Members:

Aviad Friedman

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation

earned by our NEOs for fiscals 2019, 2018 and 2017.

Name and Principal

Option Awards

The Company pays for

certain direct costs, related taxes and expenses incurred in connection with the relocation of our CEO to United States.

fiscal 2020, such relocation expenses totaled approximately $515,693, 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.

stockholders approved, on an advisory basis, our executive compensation program at our annual meeting of stockholders held on

August 3, 2020.

We did not seek or receive any specific feedback from our stockholders concerning our executive compensation program

during the past fiscal year.

The Compensation Committee did not specifically rely on the results of the prior vote in making any

compensation-related decisions during fiscal 2020.

OF THE COMPENSATION COMMITTEE

Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of

Regulation S-K with our management and, based on such review and discussions, the Compensation Committee recommended to our Board

that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K and in our proxy statement relating

to our next annual meeting of stockholders.

Committee Members:

COMPENSATION TABLE

following table sets forth the compensation earned by our NEOs for fiscals 2020, 2019 and 2018.

Name and Principal Position

President and CEO and director (7)

1 unchanged sentence

Chief Scientific Officer and director (8)

Hilla Eisenberg

Chief Financial Officer (9)

Avraham Gabay

Chief Financial Officer (9)

Mark Hasleton VP Business Development (11)

(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.

Joshua Hexter

Chief Operating & Business Officer(10)

information is provided for each fiscal year, which begins on September 1 and ends on

paid for Salary, Bonus and All Other Compensation were originally denominated in NIS

and were translated into U.S.

Dollars at the then current exchange rate for each payment.

(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 fair value of the RSU awards are set forth in Note 8 to our audited consolidated financial statements included

were granted at the discretion of the Compensation Committee.

amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718,

of these option awards.

The assumptions used to determine the fair value of the option

awards 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 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.

assumptions used to determine the 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”

Our NEOs will not realize the value of these awards

in cash unless and until these awards are exercised and the underlying shares subsequently

exclude the fair market value of the options that were re-granted on September 11, 2020,

as it was offset by the negative amount created by the cancelled options (that is, it

was accounted for as a modification under FASB ASC Topic 718, and no incremental compensation

expense was recorded).

For more information about the regrant see Note 7(a) to our audited

consolidated financial statements included in this Annual Report on Form 10-K.

information about the regrant fair market value see “Grants of Plan-Based Awards”

“All Other Compensation Table”

Kidron receives certain compensation from Oramed Ltd.

through KNRY, Ltd., an Israeli entity owned by Dr.

Miriam Kidron,

See “—Employment and Consulting Agreements”

through KNRY, Ltd., an Israeli

entity owned by Dr.

Miriam Kidron, or KNRY.

See “—Employment and Consulting

Agreements”

Kidron receives compensation from Oramed Ltd.

through KNRY.

See “—Employment and Consulting Agreements”

Eisenberg resigned from her positions with us, effective May 25, 2019.

Gabay was appointed as Chief Financial Officer, Treasurer and Secretary effective June 1, 2019.

Hasleton was appointed as VP Business Development effective November 15, 2018 and terminated his employment effective August

All Other Compensation Table

The “All Other Compensation”

set forth in the Summary Compensation Table above consist of the following:

See “—Employment

and Consulting Agreements”

Gabay was appointed as Chief Financial Officer, effective June 1, 2019.

Hexter was appointed Chief Operating & Business Officer, effective September 19,

From 2013 to 2018, Mr.

Hexter served as Chief Operating Officer and VP Business

Development of the Company.

Other Compensation Table

“All Other Compensation”

amounts set forth in the Summary Compensation Table above consist of the following:

Related Expenses

2 unchanged sentences

Miriam Kidron

Hilla Eisenberg

Avraham Gabay

Mark Hasleton

* Manager’s insurance and education funds are customary benefits provided to employees based in Israel.

Joshua Hexter

* Manager’s

insurance is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings

and disability insurance premiums.

An education fund is a savings fund of pre-tax contributions to be used after a specified period

of time for educational or other permitted purposes.

** Relocation expenses represents additional compensation for the period during which Mr.

Kidron was in the United States.

expenses mainly include relocation expenses, supplemental living expenses, accommodation allowances, education allowances, health

insurance and related costs.

Employment and Consulting Agreements

insurance and education funds are customary benefits provided to employees based in Israel.

Manager’s insurance is a combination of severance savings (in accordance with Israeli

law), defined contribution tax-qualified pension savings and disability insurance premiums.

An education fund is a savings fund of pre-tax contributions to be used after a specified

period of time for educational or other permitted purposes.

** Relocation

expenses represents additional compensation for the period during which Mr.

in the United States.

These expenses mainly include relocation expenses, supplemental

living expenses, accommodation allowances, education allowances, health insurance and

related costs.

and Consulting Agreements

July 1, 2008, Oramed Ltd.

entered into a consulting agreement with KNRY, whereby Mr.

Nadav Kidron, through KNRY, provides services

as President 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 Mr.

Nadav Kidron, through KNRY, provides services as President and Chief Executive Officer

of both the Company and Oramed Ltd., or the Nadav Kidron Consulting Agreement.

Additionally, on July 1, 2008, Oramed Ltd.

into a consulting agreement with KNRY whereby Dr.

Miriam Kidron, through KNRY, provides services as Chief Scientific Officer of

both the Company and Oramed Ltd., or the Miriam Kidron Consulting Agreement.

We refer to the Miriam Kidron Consulting Agreement

and Nadav Kidron Consulting 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 Nadav Kidron receives a monthly

consulting fee of NIS 127,570 and Miriam Kidron receives a monthly consulting fee of NIS 80,454.

Pursuant to the Consulting Agreements,

KNRY, Nadav Kidron and Miriam Kidron each agree that during the term of the Consulting Agreements and for a 12 month period thereafter,

none of them will compete with Oramed Ltd.

nor solicit employees of Oramed Ltd.

We, through Oramed Ltd., entered into an employment

agreement with Hilla Eisenberg as of July 20, 2017, pursuant to which Ms.

Eisenberg was appointed as Chief Financial Officer, Treasurer

and Secretary of the Company and Oramed Ltd., effective August 1, 2017.

In accordance with the employment agreement, as amended,

Eisenberg’s gross monthly salary was NIS 35,700.

In addition, Ms.

Eisenberg was provided with a cellular phone and travel

reimbursement pursuant to the terms of her agreement.

Eisenberg resigned from her positions with us, effective May 25, 2019.

We, through Oramed Ltd., have entered into an

employment agreement with Avi Gabay as of May 16, 2019, pursuant to which Mr.

Gabay was appointed as Chief Financial Officer, Treasurer

and Secretary of the Company and Oramed Ltd., effective June 1, 2019.

In accordance with the employment agreement, as amended,

entered into a consulting agreement with KNRY whereby Dr.

Miriam Kidron, through KNRY, provides services

as Chief Scientific Officer of both the Company and Oramed Ltd., or the Miriam Kidron Consulting Agreement.

We refer to the Miriam

Kidron Consulting Agreement and Nadav Kidron Consulting Agreement collectively as the Consulting Agreements.

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 Nadav Kidron receives a monthly consulting fee of NIS 127,570 and Miriam Kidron receives a monthly consulting fee of

Pursuant to the Consulting Agreements, KNRY, Nadav Kidron and Miriam Kidron each agree that during the term of the

Consulting Agreements and for a 12-month period thereafter, none of them will compete with Oramed Ltd.

nor solicit employees of

through Oramed Ltd., have entered into an employment agreement with Avraham Gabay as of May 16, 2019, pursuant to which Mr.

was appointed as Chief Financial Officer, Treasurer and Secretary of the Company and Oramed Ltd., effective June 1, 2019.

In accordance

with the employment agreement, as amended, Mr.

Gabay’s current gross monthly salary is NIS 38,500.

In addition, Mr.

Gabay is provided with a cellular phone and a company

car pursuant to the terms of his agreement.

We have entered into indemnification agreements

with our directors and officers pursuant to which we agreed to indemnify each director and officer for 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 such officers in the event of termination

of employment (as a result of resignation, retirement, change-in- control) or a change of responsibilities following a change-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 directors and executive officers may

receive stock options, RSUs or restricted shares at the discretion of our Compensation Committee in the future.

GRANTS OF PLAN-BASED AWARDS

The following table shows grants of plan-based

equity awards made to our NEOs during fiscal 2019:

is provided with a cellular phone and a company car pursuant to the terms of his agreement.

through Oramed Ltd., have entered into an employment agreement with Joshua Hexter as of August 5, 2019, pursuant to which Mr.

Hexter was appointed as Chief Operating & Business Officer of the Company and Oramed Ltd., effective September 19, 2019.

accordance with the employment agreement, as amended, Mr.

Hexter’s current gross monthly salary is NIS 56,000.

Hexter is provided with a cellular phone and a company car pursuant to the terms of his agreement.

have entered into indemnification agreements with our directors and officers pursuant to which we agreed to indemnify each director

and officer for 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.

Payments upon Termination or Change-in-Control

have no plans or arrangements in respect of remuneration received or that may be received by our named executive officers to compensate

such officers in the event of termination of employment (as a result of resignation, retirement, change-in- control) or a change

of responsibilities following a change-in-control.

Retirement or Similar Benefit Plans

have no arrangements or plans under which we provide pension, retirement or similar benefits for directors or executive officers.

Our directors and executive officers may receive stock options, RSUs or restricted shares at the discretion of our Compensation

Committee in the future.

OF PLAN-BASED AWARDS

following table shows grants of plan-based equity awards made to our NEOs during fiscal 2020:

Options Awards:

Grant Date Fair Value of Stock Awards

Nadav Kidron (1) *

Miriam Kidron (2) *

Hilla Eisenberg (3)

Avraham Gabay (4) *

Mark Hasleton (5)

(1) These options were granted under our 2008 Plan and vest in 4 equal installments of 49,125 on each of December 31, 2019, December

31, 2020, December 31, 2021 and December 31, 2022.

(2) These options were granted under our 2008 Plan and vest in 4 equal installments of 26,000 on each of December 31, 2019, December

31, 2020, December 31, 2021 and December 31, 2022.

(3) These options were granted under our 2008 Plan and vest in 4 equal installments of 9,250 on each of December 31, 2019, December

31, 2020, December 31, 2021 and December 31, 2022.

Fair Value of

These options were canceled

and re-granted under our 2019 Plan, in the same amounts and under the same terms as the original grants.

These options were

originally granted on June 17, 2019.

5,396 vested on December 31, 2019, and the balance vests in 3 equal installments of 9,250

on each of December 31, 2020, December 31, 2021 and December 31, 2022.

These options were granted under our 2019 Plan

5,396 of the options shall vest on December 31, 2019 and the remining options

shall vest in 3 equal installments of 9,250 on each of December 31, 2020, December 31, 2021 and December 31, 2022.

(5) These options were granted under our 2008 Plan and vest in 4 equal installments of 5,625 on each of December 31, 2019, December

31, 2020, December 31, 2021 and December 31, 2022.

(*) On September 11, 2019, the options in this table were canceled and re-granted under the 2019 Plan in the same amounts and under

the same terms as the original grants.

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, 2019.

and vest in 16 equal installments of 6,250 on the first day of each three months period beginning November 1, 2019.

of the options vested as of August 31, 2020.

These options were granted under the 2019 Plan

and vest upon achievement of certain performance conditions, such as consummating licensing agreements and entering into R&D

collaboration agreements.

These options were canceled and re-granted under

the 2019 Plan in the same amounts and under the same terms as the original grants.

These options were originally granted on

February 26, 2019.

26,000 vested on December 31, 2019, and the balance vests in 3 equal installments of 26,000 on each of

December 31, 2020, December 31, 2021 and December 31, 2022.

These options were canceled and re-granted under

the 2019 Plan in the same amounts and under the same terms as the original grants.

These options were originally granted on

February 26, 2019.

49,125 vested on December 31, 2019, and the balance vests in 3 equal installments of 49,125 on each of

December 31, 2020, December 31, 2021 and December 31, 2022.

These options were granted under our 2019 Plan

and vest in 4 equal installments of 25,000 on each of December 31, 2020, December 31, 2021, December 31, 2022 and December

These options were granted under our 2019 Plan

and vest in 4 equal installments of 47,500 on each of December 31, 2020, December 31, 2021, December 31, 2022 and December

EQUITY AWARDS AT FISCAL YEAR-END

following table sets forth information concerning stock options and stock awards held by the NEOs as of August 31, 2020.

Unexercisable

Number of shares that have not vested (#)

value of shares that have not vested ($)

196,500 (11)(14)

Miriam Kidron

Avraham Gabay

33,146 (13)(14)

(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 May 31, 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 on August 31, 2012.

Joshua Hexter

August 8, 2012, 72,000 options were granted to each of Nadav Kidron and Miriam Kidron

under the Second Amended and Restated 2008 Stock Incentive Plan, or 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

on August 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,

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.

The options 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 options vested on December 31, 2017, 49,000 of such options were forfeited on December 31, 2018 as a result of the

Company’s share price not reaching the target and the remaining 49,000 vest on December 31, 2019, subject to the Company

share price reaching the target of $12.50 per share.

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 options vested 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, subject to the Company share price reaching the target of $9.50

and $12.50 per share, respectively.

The options expire on June 30, 2027.

(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;

24,250 of such options vested on January 1, 2019 and the remaining options vest in 3 equal installments of 24,250 on each of January

1, 2020, January 1, 2021 and January 1, 2022.

31, 2020, 98,000 options were forfeited.

January 31, 2018, 97,000 options were granted to Nadav Kidron under the 2008 Plan at

an exercise price of $8.14 per share;

48,500 of such options vested on each of January

1, 2019 and January 1, 2020 and the reminder vest in two equal installments of 24,250

on each of 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 options vested on December 31, 2017, 23,000 of such options vested on December 31, 2018 and the remaining 23,000

of such options vest on December 31, 2019.

The options 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;

11,750 of such options vested on January 1, 2019 and the remaining options vest in 3 equal installments of 11,750 on each of January

1, 2020, January 1, 2021 and January 1, 2022.

June 30, 2017, 69,999 options were granted to Miriam Kidron under the 2008 Plan at an

exercise price of $7.77 per share;

Such options vested in 3 equal installments of 23,333

on each of December 31, 2017, December 31, 2018 and December 31, 2019.

The options have

an expiration date of June 30, 2027.

January 31, 2018, 47,000 options were granted to Miriam Kidron under the 2008 Plan at

an exercise price of $8.14 per share;

23,500 of such options vested in 2 equal installments

of 11,750 on each of January 1, 2019 and January 1, 2020 and the reminder shall vest

in 2 equal installments of 11,750 on each of January 1, 2021 and January 1, 2022.

options expire on January 31, 2028.

November 13, 2014, 9,788 RSUs, representing a right to receive shares of the Company’s

common stock, were granted to Nadav Kidron.

The RSUs vested in two equal installments,

each of 4,894 shares, on November 30 and December 31, 2014.

The shares of common stock

underlying the RSUs will be issued upon request of the grantee.

February 23, 2015, 79,848 RSUs, representing a right to receive shares of the Company’s

common stock, were granted to Nadav Kidron.

The RSUs vested 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.

June 30, 2017, 75,000 RSUs, representing a right to receive shares of the Company’s

common stock, were granted to Miriam Kidron.

The RSUs vested immediately, have an exercise

price of $0.012 per share of common stock and expire on June 30, 2027.

February 26, 2019, 196,500 options were granted to Nadav Kidron under the 2008 Plan at

an exercise price of $3.16 per share;

49,125 of such option vested on December 31, 2019

and the reminder shall vest in three equal installments of 49,125 on each of December

31, 2020, December 31, 2021 and December 31, 2022.

The options expire on February 26,

For additional information please see note 13 below.

February 26, 2019, 104,000 options were granted to Miriam Kidron under the 2008 Plan

at an exercise price of $3.16 per share;

26,000 of such option vested on December 31,

2019 and the reminder shall vest in three equal installments of 26,000 on each of December

31, 2020, December 31, 2021 and December 31, 2022.

The options expire on February 26,

For additional information please see note 13 below.

June 17, 2019, 33,146 options were granted to Avraham Gabay under the 2008 Plan at an

exercise price of $3.55 per share;

5,396 of the options vested on December 31, 2019 and

the remining options shall vest in 3 equal installments of 9,250 on each of December

31, 2020, December 31, 2021 and December 31, 2022.

The options expire on June 17, 2029.

For additional information please see note 13 below.

September 11, 2019, the options in this table were canceled and re-granted under the

2019 Plan in the same amounts and under the same terms as the original grants.

September 11, 2019, 200,000 options were granted to Joshua Hexter under the 2019 Plan

at an exercise price of $3.69 per share;

100,000 of such options shall vest in 16 equal

installments of 6,250 on the first day of every three month period beginning November

1, 2019 and the remaining 100,000 shall vest upon achievement of certain performance

conditions, such as consummating licensing agreements and entering into R&D collaboration

The options expire on November 9, 2029.

January 8, 2020, 190,000 options were granted to Nadav Kidron under the 2019 Plan at

an exercise price of $4.80 per share.

Such options will vest in 4 equal installments

of 47,500 on each of December 31, 2020, December 31, 2021, December 31, 2022 and December

The options expire on January 8, 2030.

(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 RSUs vested in two equal installments, each of 4,894 shares, on November 30 and December 31, 2014.

of common stock underlying the RSUs will be 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 RSUs vested 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 RSUs vested immediately, have an exercise price of $0.012 per share of common stock and expire on June 30, 2027.

(11) On February 26, 2019, 196,500 options were granted to Nadav Kidron under the 2008 Plan at an exercise price of $3.16 per share;

the options vest in four installments of 49,125 on each of December 31, 2019, December 31, 2020, December 31, 2021 and December

(12) On February 26, 2019, 104,000 options were granted to Miriam Kidron under the 2008 Plan at an exercise price of $3.16 per share;

the options vest in four installments of 26,000 on each of December 31, 2019, December 31, 2020, December 31, 2021 and December

(13) On June 17, 2019, 33,146 options were granted to Avraham Gabay under the 2008 Plan at an exercise price of $3.55 per share;

5,396 of the options shall vest on December 31 and the remining options shall vest in 3 equal installments of 9,250 on each of

December 31, 2020, December 31, 2021 and December 31, 2022.

(14) On September 11, 2019, the options were canceled and re-granted under the 2019 Plan in the same amounts and under the same

terms as the original grants.

Compensation Committee Interlocks and Insider Participation

During fiscal 2019, Mr.

January 8, 2020, 100,000 options were granted to Miriam Kidron under the 2019 Plan at

an exercise price of $4.80 per share.

Such options will vest in 4 equal installments

of 25,000 on each of December 31, 2020, December 31, 2021, December 31, 2022 and December

The options expire on January 8, 2030.

Committee Interlocks and Insider Participation

fiscal 2020, Mr.

Aviad Friedman, Mr.

1 unchanged sentence

Leonard Sank served as the members of our Compensation Committee.

None of the members of our Compensation

Committee is, or has been, an officer or employee of ours.

During the last year, none of our NEOs served

(1) a member of the compensation committee (or other committee of the Board performing equivalent functions or, in the absence

of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the compensation

(2) a director of another entity, one of whose executive officers served on the compensation committee;

or (3) a member

of the compensation committee (or other committee of the board of directors performing equivalent functions or, in the absence

of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director on

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 an executive officer during fiscal

of the members of our Compensation Committee is, or has been, an officer or employee of ours.

the last year, none of our NEOs served as:

(1) a member of the compensation committee (or other committee of the Board performing

equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose

executive officers served on the compensation committee;

(2) a director of another entity, one of whose executive officers served

on the compensation committee;

or (3) a member of the compensation committee (or other committee of the board of directors performing

equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose

executive officers served as a director on our Board.

following table provides information regarding compensation earned by, awarded or paid to each person for serving as a director

who is not an executive officer during fiscal 2020:

Name of Director

Option Awards (3)

All Other Compensation

Nadav Kidron (1)

1 unchanged sentence

Aviad Friedman

Xiaoming Gao (4)

Xiaopeng Li (4)

Kevin Rakin (5)

David Slager (6)

(1) Please refer to the Summary Compensation Table for executive compensation with respect to the named individual.

(2) As of August 31, 2019, our non-employee directors then in office held options to purchase shares of our common stock as follows:

refer to the Summary Compensation Table for executive compensation with respect to the named individual.

of August 31, 2020, our non-employee directors then in office held options to purchase shares of our common stock as follows:

Name of Director

1 unchanged sentence

Aviad Friedman

(3) The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards.

assumptions used to determine the 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.

Li resigned from the board as of June 25, 2019.

Gao joined the board as of July 1, 2019.

Our directors are entitled to reimbursement

for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings 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

as directors.

The Board may award special remuneration to any director undertaking any special services on behalf of us other than

services ordinarily required of 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.

Other than indicated above, no director

received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments

during fiscal 2019.

(5) On September 11, 2019, 10,000 of the options were canceled and re-granted under the 2019 Plan in the same amounts and under

the same terms as the original grants.

Slager ceased to be a director as of August 29, 2019.

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, restricted stock, RSUs, and stock

amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards.

The assumptions

used to determine the fair value of the option awards 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.

Mayer joined the Board as of December 5, 2019.

directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance

at meetings 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 as directors.

The Board may award special remuneration to any director undertaking

any special services on behalf of us other than services ordinarily required of a director.

than as described above, we have no present formal plan for compensating our directors for their service in their capacity as

Other than indicated above, no director received and/or accrued any compensation for his services as a director, including

committee participation and/or special assignments during fiscal 2020.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Board adopted the 2008 Plan and the 2019 Plan in order to attract and retain quality personnel.

2008 Plan, which is no longer utilized for new grants, provided for the grant of stock options, restricted stock, RSUs, and stock

appreciation rights, collectively referred to as “awards.”

Stock options granted under the 2008 Plan may be either

incentive stock options 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 for the grant of awards, which may be issued at the discretion of our Board from time to

The 2008 Plan permits awards to be based on performance-based criteria that will allow us to maximize its ability to pay

deductible compensation for U.S.

federal income tax purposes.

As of August 31, 2019, options with respect to 2,512,994 shares have

been granted, of which 148,658 have been forfeited, 182,227 have been exercised and 860,065 have expired.

As of August 31, 2019,

525,824 RSUs have been granted, of which 164,636 have vested and the shares of common stock underlying those RSUs will be issued

upon request 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 Plan may become available for future grant under the 2008 Plan if the award is forfeited, canceled

In August 2019, the Company became aware of

a shareholder derivative claim and putative class action alleging, among other things, that the 2008 Plan may have terminated in

However, the Company disputes these claims and believes that the 2008 Plan does not terminate until 2026 and any suggestion

to the contrary is not well-founded.

For the sake of clarity and out of an abundance of caution, the Company adopted the 2019 Plan,

which was approved at the Company’s 2019 shareholders meeting.

The 2019 Plan allows the Company to grant up to 1,000,000

Since the Company had granted options during the time after the old plan allegedly terminated, and out of an abundance

Under the 2008 Plan, as amended, 2,400,000 shares were

reserved for the grant of awards.

As of August 31, 2020, options with respect to 2,287,989 shares had been granted, of which 563,804

had been forfeited, 182,227 had been exercised and 841,303 have expired.

As of August 31, 2020, 525,824 RSUs had been granted,

of which 164,636 have vested and the shares of common stock underlying those RSUs have been issued and 33,248 have been forfeited.

August 2019, the Company became aware of a shareholder derivative claim and putative class action alleging, among other things,

that the 2008 Plan may have terminated in 2018.

However, the Company disputes these claims and believes that the 2008 Plan does

not terminate until 2026, and any suggestion to the contrary is not well-founded.

For the sake of clarity and out of an abundance

of caution, the Company adopted the 2019 Plan, which was approved on August 29, 2019, at the Company’s 2019 shareholders

2019 Plan provides for the grant of stock options, restricted stock, RSUs, and stock appreciation rights, collectively referred

to as “awards.”

Under the 2019 Plan, 1,000,000 shares were initially reserved for the grant of awards.

2020, and August 3, 2020, respectively, our Board and stockholders approved to amend and restate the 2019 Plan, the principal

change being an increase in the number of shares of common stock available under the 2019 Plan from 1,000,000 shares to 3,000,000

Stock options granted under the 2019 Plan may be either incentive stock options under the provisions of Section 422 of

the Code, or non-qualified stock options.

Under the 2019 Plan, as amended, 3,000,000 shares are reserved for the grant of awards,

which may be issued at the discretion of our Board from time to time.

As of August 31, 2020, options with respect to 999,646 shares

have been granted, of which 20,000 have expired and none of them were exercised or forfeited.

No RSUs have been granted under

the 2019 Plan.

Since the Company had granted options during the time after the 2008 Plan allegedly terminated, and out of an abundance

of caution, the Company canceled these grants and re-granted certain of the options under 2019 Plan in the same amounts and under

the same terms as the original grants.

The following table sets forth additional information

with respect to our equity compensation plans as of August 31, 2019:

following table sets forth additional information with respect to our equity compensation plans as of August 31, 2020:

Plan category

5 unchanged sentences

Equity compensation plans not approved by security holders

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, 2019 by:

(1) each person who is known by us to own

beneficially more than 5% of our common stock;

Ownership of Certain Beneficial Owners and Management

following table sets forth certain information regarding the beneficial ownership of our common stock as of November 24, 2020

(1) each person 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 “Summary Compensation

Table”;

and (4) all of our directors and current executive officers as a group.

On such date, we had 17,383,359 shares of

common stock outstanding.

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 voting power, 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,

with respect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to

acquire such power(s) during the next 60 days following November 26, 2019.

Inclusion of shares in the table does not, however,

constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares.

Unless otherwise indicated,

(1) each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s

spouse) with respect to all shares of common stock listed as owned by that person or entity and (2) the address of each of the

individuals named below is:

c/o Oramed Pharmaceuticals Inc., 1185 Avenue of the Americas, Suite 228, New York, NY 10036.

(3) each of our

NEOs listed above under “Summary Compensation Table”;

and (4) all of our directors and current executive officers

On such date, we had 23,675,530 shares of common stock outstanding.

used in the table below and elsewhere in this form, the term “beneficial ownership”

with respect to a security consists

of sole or shared voting power, 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, with respect to the security through any contract, arrangement, understanding,

relationship, or otherwise, including a right to acquire such power(s) during the next 60 days following November 24, 2020.

of shares in the table does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial

owner of those shares.

Unless otherwise indicated, (1) each person or entity named in the table has sole voting power and investment

power (or shares that power with that person’s spouse) with respect to all shares of common stock listed as owned by that

person or entity and (2) the address of each of the individuals named below is:

c/o Oramed Pharmaceuticals Inc., 1185 Avenue of

the Americas, Third Floor, New York, NY 10036.

Name and Address of Beneficial Owner

3 unchanged sentences

1,317,123 (1)

199 Fanhua Road

Economic and Technological Development Zone

Heifei, Anhui Province, P.R.

China, Zip Code:

1,155,367 (2)

Sabby Volatility Warrant Master Fund, Ltd.

c/o Ogier Fiduciary Services (Cayman) Limited

89 Nexus Way, Camana Bay

Grand Cayman KY1-9007

Cayman Islands

Nadav Kidron #+

1 unchanged sentence

Miriam Kidron #+

Hilla Eisenberg+

Aviad Friedman #

Avraham Gabay+

Xiaoming Gao #

1,155,367 (7)

Joshua Hexter+

Kevin Rakin #

Leonard Sank #

Mark Hasleton+

All current executive officers and directors, as a group (eight persons)

Gao Xiaoming #

1,162,033 (10)

* Less than 1%

(1) Regals Management is the investment manager of Regals Fund LP, the owner of record of these shares of common stock.

Slager, a former director of the Company, is the managing member of the general partner of Regals Management.

All investment decisions

are made by Mr.

Slager, and thus the power to vote or direct the votes of these shares of common stock, as well as the power to

All current executive officers and directors, as a group (nine persons)

3,999,881 (11)

Management is the investment manager of Regals Fund LP, the owner of record of these

shares of common stock.

David Slager is the managing member of the general partner of

Regals Management.

All investment decisions are made by Mr.

Slager, and thus the power

to vote or direct the votes of these shares of common stock, as well as the power to

dispose or direct the disposition of such shares of common stock is held by Mr.

Slager through Regals 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 HTIT pursuant 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 behalf of 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 our stockholders, 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.

Kidron deems appropriate except for matters

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.

(3) Includes 933,050 shares of common stock owned by Sabby Volatility Warrant Master Fund, Ltd., or Sabby Volatility.

Sabby Management,

LLC, or Sabby Management, is the investment manager of Sabby Volatility, and Hal Mintz, or Mr.

Mintz is the manager of Sabby Management.

The foregoing is based solely on a Schedule 13G filed jointly by Sabby Volatility, Sabby Management and Mr.

Mintz on January 7,

(4) Includes 337,759 shares of common stock issuable upon the exercise of outstanding stock options and 89,636 shares of Common

Stock underlying vested 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 218,603 shares of common stock held by Xiaopeng Li, former director of the Company.

(5) Includes 310,633 shares of common stock issuable upon the exercise of outstanding stock options and 75,000 shares of Common

Stock underlying vested RSUs that are issuable upon request.

(6) Includes 20,857 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

Friedman, and thus the power to vote or direct the votes of these shares of common stock, as well as the power to dispose or

direct the disposition of such shares of common stock is held by Mr.

through Regals Management.

386,634 shares of common stock issuable upon the exercise of outstanding stock options

and 89,636 shares of Common Stock underlying vested RSUs that are issuable upon request.

On November 30, 2015, we entered into a securities purchase agreement with HTIT pursuant

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 behalf of 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 our stockholders, to consent or dissent to any action

taken without a meeting and to vote all the Purchased Shares held by HTIT in any manner

Kidron deems appropriate except for matters related to our activities in the People’s

Republic of China, on which Mr.

Kidron will consult with HTIT before taking any action

Nadav’s beneficial ownership includes the 1,155,367 shares of common

stock held by HTIT, as well as 218,603 shares of common stock held by Xiaopeng Li, a

former director of the Company, over which he holds a similar proxy.

301,383 shares of common stock issuable upon the exercise of outstanding stock options

and 75,000 shares of Common Stock underlying vested RSUs that are issuable upon request.

27,523 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.

and thus the power to vote or direct the votes of these shares of common stock, as well

as the power to dispose or direct the disposition of such shares of common stock is held

Friedman through Shikma.

(7) Includes 1,155,367 shares of common stock held by HTIT.

Gao is the chairman of HTIT.

(8) Includes 62,470 shares of common stock issuable upon the exercise of outstanding stock options.

14,646 shares of common stock issuable upon the exercise of outstanding stock options.

31,250 shares of common stock issuable upon the exercise of outstanding stock options.

6,666 shares of common stock issuable upon the exercise of outstanding stock options.

79,136 shares of common stock issuable upon the exercise of outstanding stock options

(9) Includes:

(a) 374,999 shares of common stock held by Mr.

(b) 78,125 shares of common stock held by Mr.

(b) 78,125 shares of common stock

Sank’s wife;

Sank upon the exercise of outstanding stock options;

and (d) 138,889 shares of

common stock owned by a company wholly owned by a trust of which Mr.

upon the exercise of outstanding stock options;

and (d) 138,889 shares of common stock

owned by a company wholly owned by a trust of which Mr.

Sank is a trustee.

Sank disclaims beneficial ownership

of the securities referenced in (b) and (d) above.

(10) Includes 830,021 shares of common stock issuable upon the exercise of options beneficially owned by the referenced persons

and 164,636 shares of common stock underlying vested RSUs that are issuable upon request.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE.

During fiscals 2019 and 2018, except for compensation

arrangements described elsewhere herein, we did not participate in any transaction, and we are not currently participating in any

proposed transaction, or series of transactions, in which the amount involved exceeded the lesser of $120,000 or one percent of

the average of our total assets at year end for the last two completed fiscal years, and in which, to our knowledge, any of our

directors, officers, five percent 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 unaffiliated third parties.

on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties,

we believe that 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 to which we granted HTIT an exclusive

commercialization license in the Territory related to our oral insulin capsule, ORMD-0801.

Pursuant to this license agreement,

HTIT will conduct certain pre-commercialization and regulatory activities with respect to our subsidiary's technology related to

the ORMD-0801 capsule, and will pay certain royalties and an aggregate of approximately $37.5 million.

On November 30, 2015, we

also entered into a securities purchase agreement 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, to cast 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 or dissent 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 for matters related

to our activities in the People’s Republic of China, on which Mr.

Kidron will consult with HTIT before taking any action

The Board has determined that Leonard Sank,

Kevin Rakin, Aviad Friedman and Xiaoming Gao are independent as defined under the rules promulgated by Nasdaq.

Sank disclaims

beneficial ownership of the securities referenced in (b) and (d) above.

(10) Includes

6,666 shares of common stock issuable upon the exercise of outstanding stock options

and 1,155,367 shares of Common Stock held by HTIT.

Gao is the chairman of HTIT.

(11) Includes

890,467 shares of Common Stock issuable upon the exercise of options beneficially owned

by the referenced persons and 164,636 shares of Common Stock underlying vested RSUs that

are issuable upon request.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

fiscals 2020 and 2019, except for compensation arrangements described elsewhere herein, we did not participate in any transaction,

and we are not currently participating in any proposed transaction, or series of transactions, in which the amount involved exceeded

the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years,

and in which, to our knowledge, any of our directors, officers, five percent beneficial security holders, or any member of the

immediate family of the foregoing persons had, or will have, a direct or indirect material interest.

policy is to enter into transactions with related persons on terms that, on the whole, are no less favorable than those available

from unaffiliated third parties.

Based on our experience in the business sectors in which we operate and the terms of our transactions

with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time

they occurred.

All related person transactions are approved by our Board.

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 related to our oral insulin capsule,

Pursuant to this license agreement, HTIT will conduct certain pre-commercialization and regulatory activities with

respect to our subsidiary’s technology related to the ORMD-0801 capsule, and will pay certain royalties and an aggregate

of approximately $37.5 million.

On November 30, 2015, we also entered into a securities purchase agreement 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, to

cast 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 or dissent 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 for matters related to our activities in the People’s Republic of China,

Kidron will consult with HTIT before taking any action as proxy.

Board has determined that Aviad Friedman, Arie Mayer, Kevin Rakin, Leonard Sank and Gao Xiaoming are independent as defined under

the rules promulgated by Nasdaq.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The aggregate fees billed by Kesselman &

Kesselman, independent registered public accounting firm, and member firm of PricewaterhouseCoopers International Limited, for

services rendered to us during fiscals 2019 and 2018:

Audit Fees (1)

Audit-Related Fees

aggregate fees billed by Kesselman & Kesselman, independent registered public accounting firm, and member firm of PricewaterhouseCoopers

International Limited, for services rendered to us during fiscals 2020 and 2019:

Audit-Related

All Other Fees

(1) Amount represents fees paid for professional services for the audit of our consolidated annual financial statements, review

of our interim condensed consolidated financial statements included in quarterly reports and services that are normally provided

by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements.

(2) 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-audit related service, the engagement

represents fees paid for professional services for the audit of our consolidated annual

financial statements, review of our interim condensed consolidated financial statements

included in quarterly reports and services that are normally provided by our independent

registered public accounting firm in connection with statutory and regulatory filings

or engagements.

(2) Represents

fees paid for services rendered in connection with our Offering.

(3) Represents

fees paid for tax consulting services.

rules require that before the independent registered public accounting firm are engaged by us to render any auditing or permitted

non-audit related service, the engagement be:

(1) pre-approved by our Audit Committee;

or (2) entered into pursuant to pre-approval policies and procedures established by

the Audit Committee, provided the policies and procedures are detailed as to the particular service, the Audit Committee is informed

of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to

The Audit Committee pre-approves all services

provided by our independent registered public accounting firm.

All of the above services and fees were reviewed and approved by

the Audit Committee before the services were rendered.

or (2) entered into pursuant to pre-approval

policies and procedures established by the Audit Committee, provided the policies and procedures are detailed as to the particular

service, the Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit

Committee’s responsibilities to management.

Audit Committee pre-approves all services provided by our independent registered public accounting firm.

All of the above services

and fees were reviewed and approved by the Audit Committee before the services were rendered.

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:

to Financial Statements

following consolidated financial statements are filed as part of this Annual Report on Form 10-K:

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONSOLIDATED FINANCIAL STATEMENTS:

FINANCIAL STATEMENTS:

Balance sheets

3 unchanged sentences

Notes to financial statements

F - 6 - F - 34

________________

1 unchanged sentence

________________

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 subsidiaries

(the “Company”) as of August 31, 2019 and

2018, and the related consolidated statements of comprehensive loss, changes in stockholders’

equity and cash flows for each

of the three years in the period ended August 31, 2019, including the related notes (collectively referred to as the “consolidated

of Independent Registered Public Accounting Firm

the Board of Directors and Stockholders of Oramed Pharmaceuticals Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Oramed Pharmaceuticals Inc.

and its subsidiaries (the “Company”)

as of August 31, 2020 and 2019, and the related consolidated statements of comprehensive loss, changes in stockholders’

equity and cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the

financial position of the Company as of August 31, 2019 and 2018, and the results of its operations and its cash flows for each

of the three years in the period ended August 31, 2019 in conformity with accounting principles generally accepted in the United

States of America.

Change in Accounting Principle

As discussed in Note 1(k) to the consolidated

financial statements, the Company changed the manner in which it accounts for revenues from contracts with customers during the

year ended August 31, 2019.

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’s consolidated

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

federal securities laws and the applicable 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 and perform the audit

to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether

due to error or fraud.

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 we are required to obtain an understanding of internal control over financial reporting

but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

In our opinion, the consolidated financial statements present fairly, in all material respects,

the financial position of the Company as of August 31, 2020 and 2019, and the results of their operations and its cash flows for

the years then ended in conformity with accounting principles generally accepted in the United States of America.

in Accounting Principle

discussed in Note 1(k) to the audited consolidated financial statements, the Company changed the manner in which it accounts for

revenues from contracts with customers during the year ended August 31, 2019.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an

opinion on the Company’s consolidated 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 the applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements

are free of material misstatement, whether due to error or fraud.

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 we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the 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

disclosures in 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.

that our audits provide a reasonable basis for our opinion.

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 disclosures in 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

4 unchanged sentences

November 24, 2020

We have served as the Company's auditor since 2008.

Kesselman & Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,

We have served as the Company’s auditor since 2008.

Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel,

P.O Box 50005 Tel-Aviv 6150001 Telephone:

1 unchanged sentence

Fax:+972 -3- 7954556, www.pwc.com/il

ORAMED PHARMACEUTICALS INC.

PHARMACEUTICALS INC.

CONSOLIDATED BALANCE SHEETS

Dollars in thousands (except share

and per share data)

In thousands (except share and per share

CURRENT ASSETS:

9 unchanged sentences

Property and equipment, net

Operating lease right of use assets

Total long-term assets

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS’

CURRENT LIABILITIES:

2 unchanged sentences

Payable to related parties (note 11c)

Operating lease liabilities

Total current liabilities

3 unchanged sentences

Provision for uncertain tax position (note 10f)

Operating lease liabilities

Other liabilities

2 unchanged sentences

STOCKHOLDERS’

Common stock, $ 0.012 par value (30,000,000 authorized shares as of August 31, 2019 and 2018;

Common stock, $ 0.012 par value (60,000,000 authorized shares as of August 31, 2020 and 30,000,000 authorized shares as of August 31, 2019;

23,675,530 and 17,383,359 shares issued and outstanding as of August 31, 2020 and 2019, respectively)

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

1 unchanged sentence

Total liabilities and stockholders’

The accompanying notes are an integral

part of the financial statements.

ORAMED PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE

Dollars in thousands (except share

and per share data)

Year ended August 31,

COST OF REVENUES (INCOME) (note

accompanying notes are an integral part of the financial statements.

PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

thousands (except share and per share data)

COST OF REVENUES (INCOME) (note 6f)

RESEARCH AND DEVELOPMENT EXPENSES

1 unchanged sentence

OPERATING LOSS

FINANCIAL INCOME (note

EXPENSES (note 9b)

FINANCIAL INCOME (note 9a)

FINANCIAL EXPENSES

LOSS BEFORE TAXES ON INCOME

INCOME (note 10d)

TAXES ON INCOME (note

NET LOSS FOR THE YEAR

1 unchanged sentence

TOTAL OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE LOSS FOR THE PERIOD

COMPREHENSIVE LOSS FOR THE PERIOD

LOSS PER SHARE OF COMMON STOCK:

1 unchanged sentence

WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK

The accompanying notes are an integral

part of the financial statements.

ORAMED PHARMACEUTICALS INC.

accompanying notes are an integral part of the financial statements.

PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

Dollars in thousands (except share

comprehensive

Total stockholders’

BALANCE AS OF AUGUST 31, 2016

ISSUANCE OF COMMON STOCK, NET

BALANCE AS OF SEPTEMBER 1, 2018

INITIAL ADOPTION OF ASU 2016-01

INITIAL ADOPTION OF ASC 606

SHARES ISSUED FOR SERVICES

EXERCISE OF WARRANTS AND OPTIONS

STOCK-BASED COMPENSATION

OTHER COMPREHENSIVE INCOME

BALANCE AS OF AUGUST 31, 2019

ISSUANCE OF COMMON STOCK AND WARRANTS, NET

SHARES ISSUED FOR SERVICES

ISSUANCE OF COMMON STOCK, NET

EXERCISE OF WARRANTS AND OPTIONS

STOCK-BASED COMPENSATION

OTHER COMPREHENSIVE INCOME

BALANCE AS OF AUGUST 31, 2020

INITIAL ADOPTION OF ASU 2016-01

INITIAL ADOPTION OF ASC 606

SHARES ISSUED FOR SERVICES

STOCK-BASED COMPENSATION

BALANCE AS OF AUGUST 31, 2019

* Represents an amount of less

The accompanying notes are an integral

part of the financial statements

ORAMED PHARMACEUTICALS INC.

Represents an amount of less than $1.

accompanying notes are an integral part of the financial statements

PHARMACEUTICALS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

Year ended August 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments required to reconcile net loss to net cash used in operating activities:

Adjustments required to reconcile net loss to net cash provided by (used in) operating activities:

Exchange differences and interest on deposits and held to maturity bonds

Stock-based compensation

Change in fair value of investments

Change at fair value of investments

Shares issued for services

1 unchanged sentence

Prepaid expenses and other current assets

Accounts payable, accrued expenses and payable to related parties

Accounts payable, accrued expenses and related parties

Deferred revenue

Liability for employee rights upon retirement

Provision for uncertain tax position

Other liabilities

3 unchanged sentences

Purchase of short-term deposits

Purchase of mutual funds

Purchase of long-term deposits

Purchase of held to maturity securities

Proceeds from maturity of short-term deposits

Proceeds from sale of short-term deposits

Proceeds from maturity of held to maturity securities

11 unchanged sentences

Interest received

The accompanying notes are an integral

part of the financial statements

ORAMED PHARMACEUTICALS INC.

accompanying notes are an integral part of the financial statements

ORAMED PHARMACEUTICALS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:

1 unchanged sentence

Oramed Pharmaceuticals Inc.

(collectively with

its subsidiary, the “Company”, unless the context indicates otherwise) was incorporated on April 12, 2002, under the

laws of the State of Nevada.

From incorporation until March 3, 2006, the Company was an exploration stage company engaged in the

acquisition and exploration of mineral properties.

On February 17, 2006, the Company entered into an agreement with Hadasit Medical

Services and Development Ltd.

to acquire the provisional patent related to orally ingestible insulin capsule to be used for the

treatment of individuals with diabetes.

On May 14, 2007, the Company incorporated a wholly-owned

subsidiary in Israel, Oramed Ltd.

(collectively

with its subsidiaries, the “Company”, unless the context indicates otherwise) was incorporated on April 12, 2002, under

the laws of the State of Nevada.

From incorporation until March 3, 2006, the Company was an exploration stage company engaged in

the acquisition and exploration of mineral properties.

On February 17, 2006, the Company entered into an agreement with Hadasit

Medical Services and Development Ltd.

to acquire the provisional patent related to orally ingestible insulin capsule to be used

for the treatment of individuals with diabetes.

On May 14, 2007, the Company incorporated

a wholly-owned subsidiary in Israel, Oramed Ltd.

(the “Subsidiary”), which is engaged in research and development.

1 unchanged sentence

from the State of Nevada to the State of Delaware.

On July 30, 2019, the Company's subsidiary incorporated

a wholly-owned subsidiary in Hong Kong, Oramed HK Limited.

As of August 31, 2019, Oramed HK Limited has no operation.

On November 30, 2015, the Company entered into

a Technology License Agreement with Hefei Tianhui Incubation of Technologies Co.

(“HTIT”) and on December 21,

2015, the parties entered into an Amended and Restated Technology License Agreement that was further amended by the parties on

June 3, 2016 and July 24, 2016 (the “License Agreement”).

According to the License Agreement, the Company granted

HTIT an exclusive commercialization license in the territory of the People's Republic of China, Macau and Hong Kong (the “Territory”),

related to the Company’s oral insulin capsule, ORMD-0801 (the "Product").

Pursuant to the License Agreement, HTIT

will conduct, at its own expense, certain pre-commercialization and regulatory activities with respect to the Subsidiary’s

technology and ORMD-0801 capsule, and will pay to the Subsidiary (i) royalties of 10% on net sales of the related commercialized

products to be sold by HTIT in the Territory (“Royalties”), and (ii) an aggregate of $37,500, of which $3,000 was

payable immediately, $8,000 will be paid subject to the Company entering into certain agreements with certain third parties, and

$26,500 will be paid upon achievement of certain milestones and conditions.

In the event that the Company does not meet certain

conditions, the Royalties rate may be reduced to a minimum of 8%.

Following the final expiration of the Company's patents covering

the technology in the Territory in 2033, the Royalties rate may be reduced, under certain circumstances, to 5%.

The royalty payment obligation shall apply during

the period of time beginning upon the first commercial sale of the Product in the Territory, and ending upon the later of (i)

the expiration of the last-to-expire licensed patents in the Territory;

and (ii) 15 years after the first commercial sale of the

Product in the Territory (the "Royalty Term").

The License Agreement shall remain in effect until

the expiration of the Royalty Term.

On July 30, 2019, the Company’s subsidiary

incorporated a wholly-owned subsidiary in Hong Kong, Oramed HK Limited (the “Hong Kong Subsidiary”).

As of August 31,

2020, the Hong Kong Subsidiary has no operation.

On November 30, 2015, the Company entered

into a Technology License Agreement (the “TLA”), with Hefei Tianhui Incubation of Technologies Co.

(“HTIT”)

and on December 21, 2015, the parties entered into an Amended and Restated Technology License Agreement that was further amended

by the parties on June 3, 2016 and July 24, 2016 (the “License Agreement”).

According to the License Agreement, the

Company granted HTIT an exclusive commercialization license in the territory of the People’s Republic of China, Macau and

Hong Kong (the “Territory”), related to the Company’s oral insulin capsule, ORMD-0801 (the “Product”).

Pursuant to the License Agreement, HTIT will conduct, at its own expense, certain pre-commercialization and regulatory activities

with respect to the Subsidiary’s technology and ORMD-0801 capsule, and will pay to the Subsidiary (i) royalties of 10% on

net sales of the related commercialized products to be sold by HTIT in the Territory (“Royalties”), and (ii) an aggregate

of $37,500, of which $3,000 was payable immediately, $8,000 will be paid subject to the Company entering into certain agreements

with certain third parties, and $26,500 will be paid upon achievement of certain milestones and conditions.

In the event that the

Company does not meet certain conditions, the Royalties rate may be reduced to a minimum of 8%.

Following the final expiration

of the Company’s patents covering the technology in the Territory in 2033, the Royalties rate may be reduced, under certain

circumstances, to 5%.

The royalty payment obligation shall apply

during the period of time beginning upon the first commercial sale of the Product in the Territory, and ending upon the later of

(i) the expiration of the last-to-expire licensed patents in the Territory;

and (ii) 15 years after the first commercial sale of

the Product in the Territory (the “Royalty Term”).

The License Agreement shall remain in effect

until the expiration of the Royalty Term.

The License Agreement contains customary termination provisions.

Among others, the Company's involvement through

the product submission date will include consultancy for the pre-commercialization activities in the Territory, as well as advisory

services to HTIT on an ongoing basis.

Among others, the Company’s involvement

through the product submission date will include consultancy for the pre-commercialization activities in the Territory, as well

as advisory services to HTIT on an ongoing basis.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

As of August 31, 2019 the Company has received

milestone payments in an aggregate amount of $20,500 as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

As of August 31, 2020, the Company has

received milestone payments in an aggregate amount of $20,500 as follows:

the initial payment of $3,000 was received in January

the achievement of certain milestones, the second and third payments of $6,500 and $4,000, respectively, were received in July

2016, the fourth milestone payment of $4,000 was received in October 2016 and the fifth milestone payment of $3,000 was received

in January 2019.

In addition, on November 30, 2015, the Company

entered into a Stock Purchase Agreement with HTIT (the “SPA”).

Following the achievement of certain milestones, the second and third payments of $6,500 and $4,000, respectively, were received

in July 2016, the fourth milestone payment of $4,000 was received in October 2016 and the fifth milestone payment of $3,000 was

received in January 2019.

On August 21, 2020, the Company

received a letter from HTIT, disputing certain pending payment obligations of HTIT under the TLA.

The payment obligation being

disputed is $4,000, out of which only an amount of $2,000 has been received and has been included in Deferred revenue in each of

the consolidated balance sheets as of the fiscal years ended August 31, 2020, and 2019.

In addition, the dispute includes a payment

obligation of $2,000 for certain milestones that the Company asserts it met under the TLA subsequent to the fiscal year ended August

The Company wholly disputes the claims made by HTIT and has been engaged in discussions and exchanges with HTIT in an

attempt to clarify and resolve disagreements between the parties regarding milestone payments and work plan implementation.

In addition, on November 30, 2015, the

Company entered into a Stock Purchase Agreement with HTIT (the “SPA”).

According to the SPA, the Company issued 1,155,367

1 unchanged sentence

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 total consideration of $49,500 between the License

Agreement and the SPA according to their fair value, as follows:

$10,617 was allocated to the issuance of common stock (less issuance

expenses of $23), based on the quoted price of the Company's shares on the closing date of the SPA on December 28, 2015, and $38,883

was allocated to the License Agreement.

Given the Company's continuing involvement through the expected product submission (June

2023), amounts received relating to the License Agreement are recognized over the period from which the Company is entitled to

the respective payment, and the expected product submission date using a time-based model approach over the periods that the fees

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

The License Agreement and the SPA were

considered a single arrangement with multiple deliverables.

The Company allocated the total consideration of $49,500 between the

License Agreement and the SPA according to their fair value, as follows:

$10,617 was allocated to the issuance of common stock

(less issuance expenses of $23), based on the quoted price of the Company’s shares on the closing date of the SPA on December

28, 2015, and $38,883 was allocated to the License Agreement.

Given the Company’s continuing involvement through the expected

product submission (June 2023), amounts received relating to the License Agreement are recognized over the period from which the

Company is entitled to the respective payment, and the expected product submission date using a time-based model approach over

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 of the License Agreement.

Amounts that were allocated to the License Agreement

as of August 31, 2019 aggregated $22,382, all of which were received through the balance sheet date.

Through August 31, 2019,

the Company recognized revenue in the amount of $10,021, and deferred the remaining amount of $12,361.

The following table sets forth the transactions

in deferred revenues balances for the years ended August 31, 2019 and 2018:

Deferred revenue at the beginning of period

Amounts received

Initial adoption of ASC 606 (note 1k)

Revenue recognized

Deferred revenue at the end of period

current deferred revenue portion

Non-current deferred revenue portion

For the Company’s revenue recognition policy see note 1k.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

2) Development and liquidity risks

The Company is engaged in research and development

in the biotechnology field for innovative pharmaceutical solutions, including an orally ingestible insulin capsule to be used for

the treatment of individuals with diabetes, and the use of orally ingestible capsules for delivery of other polypeptides, and has

not generated significant revenues from its operations.

To date, we have financed our operations principally through offerings

of securities and we will require substantial additional financing at various intervals in order to continue our research and development

programs, including significant requirements for operating expenses including intellectual property protection and enforcement,

for pursuit of regulatory approvals, and for commercialization of our products.

We can provide no assurance that additional funding

will be available on a timely basis, on terms acceptable to us, or at all.

In the event that we are unable to obtain such financing,

we will not be able to fully develop and commercialize our technology.

Based on our current cash resources and commitments, we

believe we will be able to maintain our current planned development activities and the corresponding level of expenditures for

at least the next 12 months, although no assurance can be given that we will not need additional funds prior to such time.

are unexpected increases in our operating expenses, we may need to seek additional financing during the next 12 months.

Successful completion of the Company’s development

programs and its transition to normal operations is dependent upon obtaining necessary regulatory approvals from the U.S.

and Drug Administration prior to selling its products within the United States, obtaining foreign regulatory approvals to sell

its products internationally, or entering into licensing agreements with third parties.

There can be no assurance that the Company

will receive regulatory approval of any of its product candidates, and a substantial amount of time may pass before the Company

achieves a level of revenues adequate to support its operations, if at all.

The Company also expects to incur substantial expenditures

in connection with the regulatory approval process for each of its product candidates during their respective developmental periods.

Obtaining marketing approval will be directly dependent on the Company’s ability to implement the necessary regulatory steps

required to obtain marketing approval in the United States and in other countries.

The Company cannot predict the outcome of these

The Company is engaged in research and

development in the biotechnology field for innovative pharmaceutical solutions, including an orally ingestible insulin capsule

to be used for the treatment of individuals with diabetes, and the use of orally ingestible capsules for delivery of other polypeptides,

and has not generated significant revenues from its operations.

Based on the Company’s current cash resources and commitments,

the Company believes it will be able to maintain its current planned development activities and the corresponding level of expenditures

for at least the next 12 months, although no assurance can be given that the Company will not need additional funds prior to such

If there are unexpected increases in its operating expenses, the Company may need to seek additional financing during the

next 12 months.

Successful completion of the Company’s development programs and its transition to normal operations is dependent

upon obtaining necessary regulatory approvals from the U.S.

Food and Drug Administration prior to selling its products within the

United States, obtaining foreign regulatory approvals to sell its products internationally, or entering into licensing agreements

with third parties.

There can be no assurance that the Company will receive regulatory approval of any of its product candidates,

and a substantial amount of time may pass before the Company achieves a level of revenues adequate to support its operations, if

The Company also expects to incur substantial expenditures in connection with the regulatory approval process for each

of its product candidates during their respective developmental periods.

Obtaining marketing approval will be directly dependent

on the Company’s ability to implement the necessary regulatory steps required to obtain marketing approval in the United

States and in other countries.

The Company cannot predict the outcome of these activities.

In addition to the foregoing, based on

the Company’s current assessment, the Company does not expect any material impact on its development timeline and its liquidity

due to the worldwide spread of the COVID-19 virus.

However, the Company is continuing to assess the effect on its operation by

monitoring the spread of COVID-19 and the actions implemented by the governments to combat the virus throughout the world.

Basis of presentation

The consolidated financial statements have been

prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

The consolidated financial statements have

been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”).

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 and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the financial statements date and the reported expenses

during the reporting periods.

Use of estimates in the preparation of financial

The preparation of the consolidated financial

statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and disclosure of contingent assets and liabilities at the financial statements 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, expectation of milestone payments and to the

expected product submission date for revenue recognition purposes.

As applicable to these consolidated financial

statements, the most significant estimates and assumptions relate to stock-based compensation, expectation of milestone payments

and to the expected product submission date for revenue recognition purposes.

ORAMED PHARMACEUTICALS INC.

CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

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.

in which the operations of the Company and its Subsidiaries are conducted is the U.S.

dollar (“$”

or “dollar”).

Therefore, the functional currency of the Company and its Subsidiary is the dollar.

Therefore, the functional currency of the Company and its Subsidiaries is the dollar.

Transactions and balances originally denominated

8 unchanged sentences

Principles of consolidation

The consolidated financial statements include the

accounts of the Company and its Subsidiary.

The consolidated financial statements include

the accounts of the Company and its Subsidiaries.

All inter-company transactions and balances have been eliminated in consolidation.

Cash equivalents

The Company considers all short-term, highly liquid

investments, which include short-term deposits with original maturities of three months or less 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 cash equivalents.

The Company considers all short-term, highly

liquid investments, which include short-term deposits with original maturities of three months or less 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 cash equivalents.

Fair value measurement:

The Company measures fair value and discloses fair

value measurements for financial assets.

The Company measures fair value and discloses

fair value measurements for financial assets.

Fair value is based on the price that would be received to sell an asset in an orderly

3 unchanged sentences

fair value into three broad levels, which are described as follows:

Quoted prices (unadjusted) in active markets that are

accessible at the measurement date for assets or liabilities.

The fair value hierarchy gives the highest priority to Level 1 inputs.

Quoted prices (unadjusted) in active markets that

are accessible at the measurement date for assets or liabilities.

The fair value hierarchy gives the highest priority to Level

Observable prices that are based on inputs other than

3 unchanged sentences

The fair value hierarchy gives the lowest priority to Level 3 inputs.

As of August 31, 2019, the assets measured at fair

value are comprised of equity securities (Level 1).

The fair value of held to maturity bonds as presented in note 3 was based on

a Level 2 measurement.

As of August 31, 2019, the carrying amounts of

cash equivalents, short-term deposits and accounts payable approximate their fair values due to the short-term maturities of these

As of August 31, 2019, the carrying amounts of

long-term deposits approximate their fair values due to the stated interest rates which approximate market rates.

The amounts funded in respect of employee rights

are stated at cash surrender value which approximates its fair value.

There were no Level 3 items for the years ended

August 31, 2019, 2018 and 2017.

As of August 31, 2020, the assets measured

at fair value are comprised of equity securities (Level 1).

The fair value of held to maturity bonds as presented in note 3 was

based on a Level 2 measurement.

As of August 31, 2020, the carrying amounts

of cash equivalents, short-term deposits and accounts payable approximate their fair values due to the short-term maturities of

these instruments.

As of August 31, 2020, the carrying amounts

of long-term deposits approximate their fair values due to the stated interest rates which approximate market rates.

The amounts funded in respect of employee

rights are stated at cash surrender value which approximates its fair value.

There were no Level 3 items for the years

ended August 31, 2020 and 2019.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Marketable securities

1) Available-for-sale securities

In January 2016, the Financial Accounting Standards

Board (“FASB”) issued guidance which updates certain aspects of recognition, measurement, presentation and disclosure

of financial assets and financial liabilities (“ASU 2016-01”).

The guidance requires entities to recognize changes

in fair value in net income rather than in accumulated other comprehensive income.

The Company adopted the provisions of this

update in the first quarter of fiscal year 2019.

Following the adoption, as of September 1, 2018, the Company classified the available

for sale securities (investments in equity securities of D.N.A Biomedical Solutions Ltd.

(“D.N.A”) and Entera Bio

(“Entera”)) to financial assets measured at fair value through profit or loss.

The Company adopted the standard

using the modified retrospective method and, accordingly, reclassified the cumulative unrealized gain from accumulated other comprehensive

income to a reduction of its accumulated deficit in an amount of $702.

1) Equity securities

In January 2016,

the Financial Accounting Standards Board (“FASB”) issued guidance which updates certain aspects of recognition, measurement,

presentation and disclosure of financial assets and financial liabilities (“ASU 2016-01”).

The guidance requires entities

to recognize changes in fair value in net income rather than in accumulated other comprehensive income.

The Company adopted the

provisions of this update in the first quarter of fiscal year 2019.

Following the adoption, as of September 1, 2018, the Company

classified the available for sale securities (investments in equity securities of D.N.A Biomedical Solutions Ltd.

(“D.N.A”),

Entera Bio Ltd.

(“Entera”) and other mutual funds) to financial assets measured at fair value through profit or loss.

The Company adopted the standard using the modified retrospective method and, accordingly, reclassified the cumulative unrealized

gain from accumulated other comprehensive income to a reduction of its accumulated deficit in an amount of $702.

2) Held to maturity securities

7 unchanged sentences

of the decline.

In the Company’s evaluation, the Company considers its ability and intent to hold these investments for

a reasonable period of time sufficient for the Company to recover its cost basis.

A marketable security is impaired if the fair

value of the security is less than the carrying value of the security and such difference is deemed to be other-than temporary.

To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the

estimated fair value of the security.

In the Company’s evaluation, the Company considers its ability and intent to hold these investments for a

reasonable period of time sufficient for the Company to recover its cost basis.

A marketable security is impaired if the fair value

of the security is less than the carrying value of the security and such difference is deemed to be other-than temporary.

extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the security over the estimated

fair value of the security.

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 and marketable securities which are

deposited in major financial institutions.

The Company is of the opinion that the credit risk in respect of these balances is

As of the date of issuing these financial statements,

all amounts due from HTIT with regard to the License Agreement have been received, as described in note 1 above.

As of August 31, 2019, amounts due from HTIT with

regard to expense reimbursements owed to the Company totaled $805 and are included in the balance of prepaid expenses and other

current assets.

HTIT had paid $390 of these reimbursements as of the date of issuing these financial statements.

Financial instruments that subject the

Company to credit risk consist primarily of cash and cash equivalents, short and long-term deposits and marketable securities which

are deposited in major financial institutions.

The Company is of the opinion that the credit risk in respect of these balances

As of the date of

issuing these financial statements, all amounts due from HTIT with regard to the License Agreement have been received, as described

in note 1 above.

However, the balance of prepaid expenses and other current assets composed of $290 was due as an expenses reimbursement

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Deferred taxes

Deferred taxes are determined utilizing the asset

and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of

assets and liabilities under the applicable tax laws.

Deferred tax balances are computed using the tax rates expected to be in

effect when those differences reverse.

A valuation allowance in respect of deferred tax assets is provided if, based upon the

weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Company has provided a full valuation allowance with respect to its deferred tax assets.

Regarding the Subsidiary, the recognition is prohibited

for deferred tax liabilities or assets that arise from differences between the financial reporting and tax bases of assets and

liabilities that are measured from the local currency into dollars using historical exchange rates, and that result from changes

in exchange rates or indexing for tax purposes.

Consequently, the abovementioned differences were not reflected in the computation

of deferred tax assets and liabilities.

Taxes that would apply in the event of disposal

of investments in the Subsidiary have not been taken into account in computing deferred taxes, as it is the Company’s intention

to hold this investment, not to realize it.

Deferred taxes are determined utilizing

the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax

bases of assets and liabilities under the applicable tax laws.

Deferred tax balances are computed using the tax rates expected

to be in effect when those differences reverse.

A valuation allowance in respect of deferred tax assets is provided if, based upon

the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company has provided a full valuation allowance with respect to its deferred tax assets.

Regarding the Subsidiary, the recognition

is prohibited for deferred tax liabilities or assets that arise from differences between the financial reporting and tax bases

of assets and liabilities that are measured from the local currency into dollars using historical exchange rates, and that result

from changes in exchange rates or indexing for tax purposes.

Consequently, the abovementioned differences were not reflected in

the computation of deferred tax assets and liabilities.

Taxes that would apply in the event of

disposal of investments in the Subsidiary have not been taken into account in computing deferred taxes, as it is the Company’s

intention to hold this investment, not to realize it.

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 tax position for recognition by determining if the weight

of available evidence indicates that it is more likely than not that the position will be sustained on audit.

The second step

is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance

The Company follows a two-step approach

to recognizing and measuring uncertain tax positions.

The first step is to evaluate the tax position for recognition by determining

if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit.

second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income

1 unchanged sentence

Revenue recognition

The License Agreement and the SPA were considered

a single arrangement with multiple deliverables.

The Company allocated the total consideration of $49,500 between the License

Agreement and the SPA according to their fair value, as follows:

$10,617 was allocated to the issuance of common stock (less issuance

expenses of $23), based on the quoted price of the Company's shares on the closing date of the SPA on December 28, 2015, and $38,883

was allocated to the License Agreement.

Under Accounting Standards Codification ("ASC")

605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018) given the Company's

continuing involvement through the expected product submission in June 2023, amounts received relating to the License Agreement

were recognized over the period from which the Company was entitled to the respective payment, and the expected product submission

date using a time-based model approach over the periods that the fees were earned.

The License Agreement and the SPA were

considered a single arrangement with multiple deliverables.

The Company allocated the total consideration of $49,500 between the

License Agreement and the SPA according to their fair value, as follows:

$10,617 was allocated to the issuance of common stock

(less issuance expenses of $23), based on the quoted price of the Company’s shares on the closing date of the SPA on December

28, 2015, and $38,883 was allocated to the License Agreement.

Under Accounting Standards Codification

(“ASC”) 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1,

2018) given the Company’s continuing involvement through the expected product submission in June 2023, amounts received relating

to the License Agreement were recognized over the period from which the Company was entitled to the respective payment, and the

expected product submission date using a time-based model approach over the periods that the fees were earned.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

On September 1, 2018, the Company adopted Accounting

Standards Update ("ASU") 2014-09 “Revenue from Contracts with Customers (Topic 606)”

(“ASC 606”),

using the modified retrospective method of adoption.

Under this method, the Company applied ASC 606 to the License Agreement at

the adoption date and was required to make an adjustment to the September 1, 2018 opening accumulated deficit balance.

periods continue to be presented under ASC 605.

The most significant impact from adopting ASC 606 was the impact of the timing

of recognition of revenue associated with the milestone payment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

On September 1, 2018, the Company adopted

Accounting Standards Update (“ASU”) 2014-09 “Revenue from Contracts with Customers (Topic 606)”

606”), using the modified retrospective method of adoption.

Under this method, the Company applied ASC 606 to the License

Agreement at the adoption date and was required to make an adjustment to the September 1, 2018 opening accumulated deficit balance.

All prior periods continue to be presented under ASC 605.

The most significant impact from adopting ASC 606 was the impact of the

timing of recognition of revenue associated with the milestone payment.

Under ASC 605, which was the authoritative revenue recognition

guidance applied for all periods prior to September 1, 2018, given the Company's continuing involvement through the expected product

submission in June 2023, amounts received relating to the License Agreement were recognized over the period from which the Company

was entitled to the respective payment and the expected product submission date using a time-based model approach over the periods

that the fees were earned.

However, under ASC 606, the Company is required to recognize the total transaction price (which includes

consideration related to milestones once the criteria for recognition have been satisfied) using the input method over the period

the performance obligation is fulfilled.

Accordingly, once the consideration associated with a milestone is included in the transaction

price, incremental revenue is recognized immediately based on the period of time that has elapsed towards complete satisfaction

of the performance obligation.

This method results in the recognition of revenue earlier than under ASC 605, and the resulting

impact was recorded as a reduction of the opening balance of accumulated deficit at September 1, 2018, as further described below.

Under ASC 606, the Company identified a single

performance obligation in the agreement and determined that the license and services are not distinct as the license and services

are highly dependent on each other.

In other words, HTIT cannot benefit from the license without the related services, and vice

Since the customer benefits from the services as

the entity performs, revenue is recognized over time through the expected product submission date in June 2023, using the input

guidance applied for all periods prior to September 1, 2018, given the Company’s continuing involvement through the expected

product submission in June 2023, amounts received relating to the License Agreement were recognized over the period from which

the Company was entitled to the respective payment and the expected product submission date using a time-based model approach over

the periods that the fees were earned.

However, under ASC 606, the Company is required to recognize the total transaction price

(which includes consideration related to milestones once the criteria for recognition have been satisfied) using the input method

over the period the performance obligation is fulfilled.

Accordingly, once the consideration associated with a milestone is included

in the transaction price, incremental revenue is recognized immediately based on the period of time that has elapsed towards complete

satisfaction of the performance obligation.

This method results in the recognition of revenue earlier than under ASC 605, and the

resulting impact was recorded as a reduction of the opening balance of accumulated deficit at September 1, 2018, as further described

Under ASC 606, the Company identified a

single performance obligation in the agreement and determined that the license and services are not distinct as the license and

services are highly dependent on each other.

In other words, HTIT cannot benefit from the license without the related services,

and vice versa.

Since the customer benefits from the services

as the entity performs, revenue is recognized over time through the expected product submission date in June 2023, using the input

The Company used the input method to measure the process for the purpose of recognizing revenue, which approximates the

1 unchanged sentence

The Company used significant judgment when it determined the product submission date.

Under ASC 606, the consideration that the Company

would be entitled to upon the achievement of contractual milestones, which are contingent upon the occurrence of future events,

are a form of variable consideration.

When assessing the portion, if any, of such milestones-related consideration to be included

in the transaction price, the Company first assesses the most likely outcome for each milestone and excludes the consideration

Under ASC 606, the consideration that the

Company would be entitled to upon the achievement of contractual milestones, which are contingent upon the occurrence of future

events, are a form of variable consideration.

When assessing the portion, if any, of such milestones-related consideration to be

included in the transaction price, the Company first assesses the most likely outcome for each milestone and excludes the consideration

related to milestones of which the occurrence is not considered the most likely outcome.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

The Company then evaluates if any of the variable

consideration determined in the first step is constrained by including in the transaction price variable consideration to the

extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the

uncertainty associated with the variable consideration is subsequently resolved.

The Company used significant judgment when

it determined the first step of variable consideration.

The potential future royalty consideration is also

considered a form of variable consideration under ASC 606 as it is based on a percentage of potential future sales of the Company's

However, the Company applies the sales-based royalty exception and accordingly will recognize the sales-based royalty

amounts when the related sale has occurred.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

The Company then evaluates if any of the

variable consideration determined in the first step is constrained by including in the transaction price variable consideration

to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when

the uncertainty associated with the variable consideration is subsequently resolved.

The Company used significant judgment

when it determined the first step of variable consideration.

The potential future royalty consideration

is also considered a form of variable consideration under ASC 606 as it is based on a percentage of potential future sales of the

Company’s products.

However, the Company applies the sales-based royalty exception and accordingly will recognize the sales-based

royalty amounts at the earlier of the time (a) when the related sale has occurred and (b) the Company has fulfilled the related

performance obligation.

To date, the Company has not recognized any royalty-related revenue.

As of the adoption date, the Company adjusted its

accumulated deficit by $1,773 against contract liabilities due to the effect of variable consideration.

Amounts that were allocated to the License Agreement

as of August 31, 2019 aggregated $22,383, all of which was received through the balance sheet date.

Through August 31, 2019, the

Company recognized revenue associated with this agreement in the aggregate amount of $10,022 (of which $2,703 was recognized in

the twelve-months period ended August 31, 2019 and $1,773 was recognized as an increase to the September 1, 2018 opening balance

of stockholders’

equity associated with the impact of the adoption of ASC 606 under the modified retrospective method of

adoption), and deferred the remaining amount of $12,361, which is presented as a contract liability on the condensed consolidated

balance sheet.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

In accordance with ASC 606, the disclosure of the impact

of adoption to the Company's consolidated balance sheet as of August 31, 2019 was as follows:

Deferred revenue (short-term)

Deferred revenue (long-term)

Accumulated deficit

The impact of adoption of ASC 606 on the consolidated

balance sheet as of August 31, 2019 and on the consolidated statement of operations for the twelve months ended August 31, 2019

was as follows:

Cost of revenues

Deferred revenue (short term)

Deferred revenue (long term)

Accumulated deficit

As of the adoption date, the Company adjusted

its accumulated deficit by $1,773 against contract liabilities due to the effect of variable consideration.

Amounts that were allocated to the License

Agreement as of August 31, 2020 aggregated $22,383, all of which was received through the balance sheet date.

Through August 31,

2020, the Company recognized revenue associated with this agreement in the aggregate amount of $12,732 (of which $2,710 was recognized

in the twelve-months period ended August 31, 2020), and deferred the remaining amount of $9,650, which is presented as a contract

liability on the condensed consolidated balance sheet.

Cost of revenues

Cost of revenues consists of royalties to the Israel

Innovation Authority ("IIA") related to the License Agreement with HTIT.

The royalties are recognized when proceeds

related to the License Agreement are received.

Cost of revenues consists of royalties

to the IIA related to the License Agreement with HTIT.

The royalties are recognized when proceeds related to the License Agreement

are received.

Research and development

Research and development expenses include costs

directly attributable to the conduct of research and development programs, including the cost of salaries, employee benefits,

the cost of supplies, the cost of services provided by outside contractors, including services related to the Company’s

clinical trials, clinical trial expenses and the full cost of manufacturing drug for use in research and preclinical

All costs associated with research and development are expensed as incurred.

Research and development expenses include

costs directly attributable to the conduct of research and development programs, including the cost of salaries, employee benefits,

the cost of supplies, the cost of services provided by outside contractors, including services related to the Company’s clinical

trials, clinical trial expenses and the full cost of manufacturing drug for use in research and preclinical development.

associated with research and development are expensed as incurred.

Clinical trial costs are a significant

component of research and development expenses and include costs associated with third-party contractors.

The Company outsources

a substantial portion of its clinical trial activities, utilizing external entities such as Clinical Research Organizations (“CROs”),

independent clinical investigators, and other third-party service providers to assist the Company with the execution of its clinical

For each clinical trial that the Company conducts, clinical trial costs are expensed immediately.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

Clinical trial

expenses are charged to research and development expense as incurred.

The Company accrues for expenses resulting from obligations

under contracts with clinical research organizations (CROs).

The financial terms of these contracts are subject to negotiations,

which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services

are provided.

The Company’s objective is to reflect the appropriate trial expense in the consolidated financial statements

by matching the appropriate expenses with the period in which services and efforts are expended.

In the event advance payments

are made to a CRO, the payments are recorded as other assets, which will be recognized as expenses as services are rendered.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Stock-based compensation

Equity awards granted to employees are accounted

for using the grant date fair value method.

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 market conditions

using a Monte Carlo model and for RSUs with service conditions based on the grant date share price.

The fair value of share based

payment awards is recognized as an expense over the requisite service period.

The expected term is the length of time until the

expected dates of exercising the award and is estimated using the simplified method due to insufficient specific historical information

of employees' exercise behavior, unless the award includes a market condition, in which case the contractual term is used.

volatility is based on a historical volatility, by statistical analysis of the weekly share price for past periods.

elected to recognize compensation cost for awards granted to employees that have a graded vesting schedule using the accelerated

method based on the multiple-option award approach.

For awards with only market conditions, compensation expense is not reversed

if the market conditions are not satisfied.

for stock options and

restricted stock units (“RSUs”) with an exercise price using the Black Scholes pricing model, for stock options with

market conditions using a Monte Carlo model and for RSUs with service conditions based on the grant date share price.

value of share based payment awards is recognized as an expense over the requisite service period.

The expected term is the length

of time until the expected dates of exercising the award and is estimated using the simplified method due to insufficient specific

historical information of employees’

exercise behavior, unless the award includes a market condition, in which case the contractual

term is used.

The volatility is based on a historical volatility, by statistical analysis of the weekly share price for past periods.

The Company elected to recognize compensation cost for awards granted to employees that have a graded vesting schedule using the

accelerated method based on the multiple-option award approach.

For awards 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 for based 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

the options granted to consultants and other non-employees is measured on a final basis at the end of the related service period

using the Black Scholes pricing model and is recognized over the related service period using the straight-line method.

On September 1, 2018, the Company adopted 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 to apply modification

accounting in ASC Topic 718, see note 7b.

The Company elects to account for forfeitures as

for services provided by consultants and other non-employees, the transaction is accounted for based 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 the options granted

to consultants and other non-employees is measured on a final basis at the end of the related service period using the 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.

September 1, 2019 the Company adopted the FASB issued ASU No.

2018-07, Compensation-Stock Compensation (Topic 718) Improvements

to Nonemployee Share-based Payments.

This ASU was issued to simplify the accounting for share-based transactions by expanding the

scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions

for acquiring goods and services from nonemployees.

As a result, nonemployee share-based transactions are being measured by estimating

the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance

Loss per common share

Basic and diluted net loss per common share are

computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding for each

Basic and diluted net loss per common share

are computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding for each

Outstanding stock options, warrants and RSUs have been excluded from the calculation of the diluted loss per share because

1 unchanged sentence

The weighted average number of stock options, warrants and RSUs

excluded from the calculation of diluted net loss was 4,423,325, 1,873,098 and 1,827,719 for the years ended August 31, 2019,

2018 and 2017, respectively.

excluded from the calculation of diluted net loss was 5,025,723 and 4,423,325 for the years ended August 31, 2020 and 2019, respectively.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued):

Newly issued Accounting Pronouncements

1) In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)"

(“ASU 2016-02”), which supersedes

the existing guidance for lease accounting, "Leases (Topic 840)".

ASU 2016-02 requires lessees to recognize leases on

their balance sheets, and leaves lessor accounting largely unchanged.

The amendments in ASU 2016-02 are effective for fiscal years

beginning after December 15, 2018 and interim periods within those fiscal years.

Early application is permitted for all entities.

ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application,

with an option to elect to use certain transition relief.

The Company adopted ASU 2016-02 on September 1, 2019 and expects the

impact of this new standard on the consolidated financial statements to be approximately $116 on right of use assets and lease

liabilities and does not expect a material impact on its expenses.

2) In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326)”

("ASU 2016-13").

ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis.

The income statement reflects

the measurement of credit losses for newly recognized financial assets, as well as the expected credit losses during the period.

The measurement of expected credit losses is based upon historical 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 direct write-down to the security.

ASU 2016-13 is effective

for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

Early adoption is permitted

as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

The Company is currently

evaluating the impact of the guidance on its consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

Newly issued and recently adopted Accounting Pronouncements

In February 2016, the FASB issued ASU No.

“Leases (Topic 842)”, which supersedes the existing guidance for lease accounting, Leases (Topic 840).

The new standard

requires a lessee to record assets and liabilities on its balance sheet for all leases with terms longer than 12 months.

will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the lessee’s

income statement.

The Company adopted this standard as of September 1, 2019 on a modified retrospective basis and will not

restate comparative periods.

The Company elected the package of practical expedients permitted under the transition guidance within

the new standard which, among other things, allows the Company to carryforward the historical lease classification.

made an accounting policy election to keep leases with an initial term of 12 months or less off of its balance sheet.

recognized those lease payments in its statements of operations on a straight-line basis over the lease period.

As of the adoption

date, the Company recognized an operating lease asset and liability of $168 and $168, respectively, as of September 1, 2019 on

its balance sheet.

On September 1,

2019 the Company adopted the FASB issued ASU No.

2018-07, Compensation-Stock Compensation (Topic 718) Improvements to Nonemployee

Share-based Payments.

This ASU was issued to simplify the accounting for share-based transactions by expanding the scope of Topic

718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring

goods and services from nonemployees.

As a result, nonemployee share-based transactions are being measured by estimating the fair

value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions.

The adoption of this slandered had no material impact on the Company’s consolidated financial statements.

Recently issued Accounting Pronouncements, not

June 2016, the FASB issued ASU 2016-13 “Financial Instruments—Credit

Losses—Measurement of Credit Losses on Financial Instruments.”

This guidance replaces the current incurred loss impairment

methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable

and supportable information to inform credit loss estimates.

The guidance will be effective for the fiscal year beginning after

December 15, 2022, including interim periods within that year.

The adoption of this guidance will not have a significant impact

on the Company’s consolidated financial statements.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 2 - SHORT-TERM DEPOSITS:

Composition :

Annual interest rate

interest rate

Dollar deposits

NOTE 3 - MARKETABLE SECURITIES:

The Company's marketable securities include investments

in equity securities of D.N.A, Entera and in held to maturity bonds.

The Company’s marketable securities

include investments in equity securities of D.N.A, Entera, mutual funds and in held to maturity bonds.

Composition :

2 unchanged sentences

Held to maturity bonds (see d below)

Preferred equity

Mutual funds*

Held to maturity bonds (see d below)

The D.N.A ordinary shares are traded on the Tel

Aviv Stock Exchange.

The fair value of those securities is measured at the quoted prices of the securities on the measurement

During the years ended August 31, 2019, 2018 and

2017, the Company did not sell any of the D.N.A ordinary shares.

As of August 31, 2019, the Company owns approximately 6.9% of

D.N.A’s outstanding ordinary shares.

* Mutual funds include equity funds only

The D.N.A ordinary shares are traded on the Tel Aviv Stock Exchange.

The fair value of those securities is measured at the

quoted prices of the securities on the measurement date.

During the years ended August 31, 2020

and 2019, the Company did not sell any of the D.N.A ordinary shares.

As of August 31, 2020, the Company owns approximately 5.6%

of D.N.A’s outstanding ordinary shares.

The cost of the securities as of August

31, 2020 and 2019 is $595.

Entera ordinary shares have been traded on Nasdaq

since June 28, 2018.

The Company measures the investment at fair value from such date, since it has a readily determinable fair

value (prior to such date the investment was accounted for as a cost method investment (amounting to $1)).

Entera ordinary shares have been traded

on The Nasdaq Capital Market since June 28, 2018.

The Company measures the investment at fair value from such date, since it has

a readily determinable fair value (prior to such date the investment was accounted for as a cost method investment (amounting to

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 3 - MARKETABLE SECURITIES (continued):

Held to maturity bonds

The amortized cost and estimated fair value of held-to-maturity

securities at August 31, 2019, are as follows:

The amortized cost and estimated fair value

of held-to-maturity securities at August 31, 2020, are as follows:

August 31, 2020

Amortized cost

Gross unrealized gains (losses)

Estimated fair value

yield to maturity rate

Commercial bonds

Accrued interest

As of August 31, 2019, the contractual maturities

of debt securities classified as held-to-maturity are as follows:

after one year through two years, $1,295 and the yield to maturity

rates vary between 2.55% to 3.20%.

The amortized cost and estimated fair value of held-to-maturity

securities at August 31, 2018, are as follows:

The amortized cost and estimated fair value

of held-to-maturity securities at August 31, 2019, are as follows:

August 31, 2019

Amortized cost

Gross unrealized gains (losses)

Estimated fair value

yield to maturity rate

Commercial bonds

Accrued interest

As of August 31, 2018, the contractual maturities

of debt securities classified as held-to-maturity are as follows:

after one year through two years, $2,785 and the yield to maturity

rates vary between 1.45% to 3.13%.

Held to maturity securities which will mature during

the 12 months from the balance sheet date are included in short-term marketable securities.

Held to maturity securities with maturity

dates of more than one year are considered long-term marketable securities.

Held to maturity securities which will

mature during the 12 months from the balance sheet date are included in short-term marketable securities.

Held to maturity securities

with maturity dates of more than one year are considered long-term marketable securities.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 4 - LONG-TERM DEPOSITS AND INVESTMENT:

Bank deposits (see (1) below)

Lease car deposits

(1) Represents U.S.

dollar bank deposits which carry fixed annual

interest rates between 1.80% to 3.44%, with maturities of more than one year from the

balance sheet date.

The latest maturity date is during the fiscal year ending August

NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable

Payroll and related accruals

Other accrued liabilities

Accrued liabilities

NOTE 6 - COMMITMENTS:

In March 2011, the Subsidiary sold shares of its investee

company, Entera, to D.N.A, retaining 117,000 ordinary shares after a stock split which

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 (the “Patent Transfer Agreement”) according to which the Subsidiary assigned to Entera

all of its right, title and interest in and to a certain patent application related to the oral administration of proteins that

it has licensed to Entera since August 2010.

company, Entera, to D.N.A, retaining 117,000 ordinary shares (after giving effect to a stock split by Entera in July 2018).

consideration for the shares sold to D.N.A, the Company received, among other payments, ordinary shares of D.N.A (see also note

As part of this agreement, the Subsidiary

entered into a patent transfer agreement (the “Patent Transfer Agreement”) according to which the Subsidiary assigned

to Entera all of its right, title and interest in and to a certain patent application related to the oral administration of proteins

that it has licensed to Entera since August 2010.

Under this agreement, the Subsidiary is entitled to receive from Entera royalties

1 unchanged sentence

of diabetes and influenza.

On December 11, 2018, Entera announced that it had entered into a research collaboration and license

agreement (the “Amgen License”) with Amgen related to research of inflammatory disease and other serious illnesses.

As reported by Entera, under the terms of the Amgen License, Entera will receive a modest initial technology access fee from Amgen

and will be responsible for preclinical development at Amgen’s expense.

Entera will be eligible to receive up to $270,000

in aggregate payments, as well as tiered royalties up to mid-single digits, upon achievement of various clinical and commercial

milestones if Amgen decides to move all of these programs forward.

Amgen is responsible for clinical development, manufacturing

and commercialization of any of the resulting programs.

To the extent the Amgen License results in net revenues as defined in

the Patent Transfer Agreement, the Subsidiary will be entitled to the aforementioned royalties.

In addition, as part of a consulting agreement with a third party, dated February15, 2011, the Subsidiary

is obliged to pay this third party royalties of 8% of the net royalties received in respect of the patent that was sold to Entera

in March 2011.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 6 - COMMITMENTS (continued):

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

60 months 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, 2019, the future

lease payments until the expiration of the lease agreement will be $77, based on the exchange rate as of August 31, 2019).

As security for its obligation under this lease

agreement, the Company provided a bank guarantee in an amount equal to three monthly lease payments.

The lease expenses related to the Israeli offices

for the years ended August 31, 2019, 2018 and 2017 were $37, $32 and $32, respectively.

On December 18, 2017, the Subsidiary entered into an

agreement with a vendor for the process development and production of one of its oral

capsule ingredients in the amount of $2,905 that will be paid over the term of the engagement

and based on the achievement of certain development milestones, $1,542 of which was recognized

in research and development expenses through August 31, 2019.

On February 14, 2018, the Subsidiary entered into a Clinical

Research Organization Services Agreement with a third party, effective as of November

1, 2017, to retain it as a clinical research organization ("CRO") for the Subsidiary’s

three-month dose-ranging clinical trial for its oral insulin capsule for type 2 diabetes

patients and, on May 20, 2019, the Subsidiary entered into amendments to such agreement.

As consideration for its services, the Subsidiary will pay the CRO a total amount of

$10,206 during the term of the engagement and based on achievement of certain milestones,

of which $6,408 was recognized in research and development expenses through August 31,

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 food effect

clinical trial for its oral insulin capsule.

As consideration for its services, the Subsidiary

will pay the CRO a total amount of $1,166 during the term of the engagement and based

on achievement of certain milestones, $1,141 of which was recognized in research and

development expenses through August 31, 2019.

On July 29, 2019, the Subsidiary entered into a CRO Services

Agreement with a third party to retain it as a CRO for the Subsidiary’s dose-ranging

clinical trial for its oral insulin.

As consideration for its services, the Subsidiary

will pay the CRO a total amount of $658 during the term of the engagement and based on

achievement of certain milestones, of which no cost was recognized through August 31,

As of August 31, 2020, Entera had not yet realized any revenues and had not paid any royalties to the

On December 11, 2018, Entera announced that it had entered into a research collaboration and license agreement (the

“Amgen License”) with Amgen related to research of inflammatory disease and other serious illnesses.

As reported by

Entera, under the terms of the Amgen License, Entera will receive a modest initial technology access fee from Amgen and will be

responsible for preclinical development at Amgen’s expense.

Entera will be eligible to receive up to $270,000 in aggregate

payments, as well as tiered royalties up to mid-single digits, upon achievement of various clinical and commercial milestones if

Amgen decides to move all of these programs forward.

Amgen is responsible for clinical development, manufacturing and commercialization

of any of the resulting programs.

To the extent the Amgen License results in net revenues as defined in the Patent Transfer Agreement,

the Subsidiary will be entitled to the aforementioned royalties.

In addition, as part of a consulting agreement

with a third party, dated February 15, 2011, the Subsidiary is obliged to pay this third party royalties of 8% of the net royalties

received in respect of the patent that was sold to Entera in March 2011.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 6 - COMMITMENTS (continued) :

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 60 months commencing October 1, 2016.

The annual lease payment was New Israeli

Shekel (“NIS”) 119,000 ($35) from October 2016 through September 2018 and NIS 132,000 ($39) from October 2018 through

September 2021, and is linked to the increase in the Israeli consumer price index (“CPI”).

On August 2, 2020, the Subsidiary entered

into a new lease agreement for its facilities in Israel.

The new lease agreement is for a period of 60 months commencing September

The Company has the option to extend the period in another 60 months.

The annual lease payment, including management fees,

is NIS 435,000 ($130).

The Company intends to terminate its current lease agreement before moving to the new office.

As security for its obligation under these

lease agreements, the Company provided a bank guarantee in an amount equal to three monthly lease payments.

On December 18, 2017, the Subsidiary entered into

an agreement with a vendor for the process development and production of one of its oral capsule ingredients in the amount of

$2,905 that will be paid over the term of the engagement and based on the achievement of certain development milestones, of which

$1,542 was recognized in research and development expenses through August 31, 2020.

On September 2, 2020 (effective as of January 15,

2020), the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a CRO for the Subsidiary’s

phase 3 clinical trial for its oral insulin.

As consideration for its services, the Subsidiary will pay the CRO a total amount

of $21,589 during the term of the engagement and based on achievement of certain milestones, of which $178 was recognized in research

and development expenses through August 31, 2020.

On September 16, 2020 (effective as of January 15,

2020), the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a CRO for the Subsidiary’s

phase 3 clinical trial for its oral insulin.

As consideration for its services, the Subsidiary will pay the CRO a total amount

of $12,343 during the term of the engagement and based on achievement of certain milestones, of which $400 was recognized in research

and development expenses through August 31, 2020.

Grants from the Israel Innovation Authority (“IIA”)

Under the terms of the Company’s funding from

the IIA, royalties of 3% are payable on sales of products developed from a project so funded, up to a maximum amount equaling

100%-150% of the grants received (dollar linked) with the addition of interest at an annual rate based on LIBOR.

Following an amendment to applicable regulations

that was published by the IIA, the royalties rate that the Company is obligated to pay to the 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 fiscal 2018.

Under the terms of the Company’s

funding from the IIA, royalties of 3% are payable on sales of products developed from a project so funded, up to a maximum amount

equaling 100%-150% of the grants received (dollar linked) with the addition of interest at an annual rate based on LIBOR.

At the time the grants were received, successful

1 unchanged sentence

The total amount that was received through August 31, 2020 was $2,207.

of August 31, 2019, the Company has recorded expenses of $615 and paid $224.

The royalty expenses which are related to the funded

project were recognized in cost of revenues in the year ended August 31, 2019 and in prior periods.

For the years ended August 31, 2019, 2018 and 2017,

no grants from the IIA were recognized.

NOTE 7 - STOCKHOLDERS’

The following are the significant capital stock

transactions that took place during the years ended August 31, 2019, 2018 and 2017:

On July 2, 2018, the Company entered into a Securities

Purchase Agreement with each of three investors (the “Purchasers”), pursuant

to which the Company agreed to sell, in a registered direct offering (the “Offering”)

an aggregate of 2,892,000 units (the “Units”), each Unit consisting of one

share of the Company’s common stock, par value $0.012 per share, and a warrant

to purchase one share of common stock at 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 be exercisable

commencing six months following their issuance for a period of three and one-half years

from the date of issuance.

For accounting purposes, the warrants were classified as equity

considering the warrant conditions.

The closing of the sale of the Units occurred on

July 6, 2018.

The net proceeds to the Company from the Offering, after deducting the

placement agent’s fees and expenses and the Company’s Offering expenses were

approximately $16,484.

On July 2, 2018, the Company entered into a letter agreement

Wainwright & Co., LLC (“HCW”), pursuant to which HCW agreed

to 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 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 common stock of the

Company, exercisable commencing six months following their issuance for a period of three

and one-half years from the date of issuance and with an exercise price of $7.8125 per

The Company recognized the fair value of the warrants as a share based payment

which was included as part of the offering costs.

Upon the exercise of the Warrants,

HCW will receive a fee equal to 7% of the gross proceeds raised as a result of such exercise.

The agreement with HCW was terminated on July 19, 2019.

grants were received before fiscal year 2020 and recorded as a reduction of Research and development expenses at that time.

The royalty expenses which are related

to the funded project were recognized in cost of revenues in the year ended August 31, 2020 and in prior periods.

Grants from the European Commission (“EC”)

During fiscal year 2020, the Company received

an aggregate payment of €50 from the EC under The European Innovation Council Accelerator (previously known as SME Instrument)

of the European Innovation Programme Horizon 2020.

As part of the grant terms, the Company

is required to use the proceeds from the grant in Europe.

The Company intends on using the grant to explore the possibility of

running clinical trials in Europe.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 7 - STOCKHOLDERS’

EQUITY (continued):

On September 5, 2019, we entered into an Equity Distribution

Agreement, or the Sales Agreement, pursuant to which we may, from time to time and at

our option, issue and sell shares of our common stock having an aggregate offering price

of up to $15,000,000, through a sales agent, subject to certain terms and conditions.

Any shares sold will be sold pursuant to our effective shelf registration statement on

Form S-3 including a prospectus dated February 2, 2017, as supplemented by a prospectus

supplement dated September 5, 2019.

We will pay the sales agent a cash commission of

3.0% of the gross proceeds of the sale of any shares sold through the sales agent under

the Sales Agreement.

As of August 31, 2019, no shares were sold under the Sales Agreement.

The following are the significant capital

stock transactions that took place during the years ended August 31, 2020 and 2019:

In August 2019, the Company became aware of a shareholder

derivative claim and putative class action alleging, among other things, that the Company’s

Second Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”) may

have terminated in 2018.

However, the Company disputes these claims and believes

that the 2008 Plan does not terminate until 2026 and any suggestion to the contrary is

not well-founded.

For the sake of clarity and out of an abundance of caution, the Company

adopted its 2019 Stock Incentive Plan (the “2019 Plan”) at its 2019 shareholders

The 2019 Plan allows the Company to grant up to 1,000,000 options.

Company has granted options during the time after the 2008 Plan allegedly terminated,

and out of an abundance of caution, the Company canceled these grants and re-granted

certain of these options under the 2019 Plan in the same amounts and under the same terms

as the original grants.

The cancelation and reissuance was approved by the Company's

board of directors on September 11, 2019.

Out of the available 1,000,000 options under

the 2019 Plan, the Company has granted 563,646 to replace the options under dispute as

mentioned above.

The cancellation of the award accompanied by the concurrent grant of

a replacement award was accounted for as modification of the terms of the cancelled award.

Since the replacement award was given under the same terms as the cancelled award, no

incremental compensation cost was recognized.

As of August 31, 2019, the Company had outstanding warrants

exercisable commencing January 6, 2019 for 3,007,680 shares of common stock 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, 2019, 2018 and 2017:

Year ended August 31,

Weighted-Average Exercise Price

derivative claim and putative class action alleging, among other things, that the Second Amended and Restated 2008 Stock Incentive

Plan (the “2008 Plan”) may have terminated in 2018.

However, the Company disputed these claims and believes that

the 2008 Plan does not terminate until 2026 and any suggestion to the contrary is not well-founded.

For the sake of clarity and

out of an abundance of caution, the Company adopted a new option plan, which was approved at its 2019 shareholder meeting.

2019 Stock Incentive Plan, as amended and restated (the “2019 Plan”) originally allowed the Company to grant up to

1,000,000 options.

Since the Company had granted options during the time after the old plan allegedly terminated, and out of an

abundance of caution, the Company canceled these grants and reissued the options under the new option plan in the same amounts

and under the same terms as the original grants.

The cancelation and grants were approved by the Company’s board on September

Out of the available options under the 2019 Plan, the Company have been granted 563,646 to replace the options under

dispute as mentioned above.

The cancellation of the award accompanied by the concurrent grant of a replacement award was accounted

for as modification of the terms of the cancelled award.

Since the replacement award was given under the same terms as the cancelled

award, no incremental compensation cost was recognized.

On August 3, 2020, the stockholders of the Company adopted the amended

and restated 2019 Plan which increased the shares available to grant under the plan by an additional 2,000,000 to 3,000,000 options.

On September 5, 2019, the Company entered into an

Equity Distribution Agreement (the “Sales Agreement”), pursuant to which the Company may, from time to time and at

the Company’s option, issue and sell shares of Company common stock having an aggregate offering price of up to $15,000,

through a sales agent, subject to certain terms and conditions.

Any shares sold will be sold pursuant to the Company’s effective

shelf registration statement on Form S-3 including a prospectus and prospectus supplement, each dated February 10, 2020 (which

superseded a prior registration statement, prospectus and prospectus supplement that related to shares sold under the Sales Agreement).

The Company will pay the sales agent a cash commission of 3.0% of the gross proceeds of the sale of any shares sold through the

sales agent under the Sales Agreement.

As of August 31, 2020, 839,357 shares were issued under the Sales Agreement for aggregate

net proceeds of $3,879.

On February 27, 2020, the Company entered into an

underwriting agreement (“Agreement”) with National Securities Corporation (“Underwriter”), in connection

with a public offering (“Offering”) of 5,250,000 shares of the Company’s common stock, at an offering price

of $4.00 per share.

Under the terms of the Agreement, the Company granted the Underwriter a 45-day option to purchase from the

Company up to an additional 787,500 shares of common stock at the public offering price (“Over-Allotment Option”).

In connection with the Offering, the Company also agreed to issue to the Underwriter, or its designees, warrants (“Underwriter’s

Warrants”), to purchase up to an aggregate of 7% of the shares of common stock sold in the Offering (including any additional

shares sold during the 45-day option period), at an exercise price of $4.80 per share.

The Underwriter’s Warrants issued

in the Offering will be exercisable at any time and from time to time, in whole or in part, commencing six months from issuance

for a period of three years from the date of issuance.

The closing of the sale of the Offering occurred on March 2, 2020.

9, 2020, the Company issued 180,561 shares of Common Stock and 12,640 Underwriter’s Warrants pursuant to a partial exercise

by the Underwriter of the Over-Allotment Option (“Partial Over-Allotment Option Exercise”).

The net proceeds to the

Company from the Offering, including from the Partial Over-Allotment Option Exercise, after deducting the underwriting discount

and the Company’s estimated Offering expenses were $19,894.

As of August 31, 2020, the Company had outstanding

warrants exercisable commencing January 6, 2019 for 3,407,820 shares of common stock at exercise prices ranging from $4.80 to

$7.8125 per share and expiring from January 6, 2022 to April 10, 2029.

The following table presents the warrant

activity for the years ended August 31, 2020 and 2019:

Average Exercise Price

Warrants outstanding at beginning of year

2 unchanged sentences

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 8 - STOCK-BASED COMPENSATION:

During the year ended August 31, 2019, the Company

made awards under the 2008 Plan.

Beginning September 11, 2019, the Company began making awards under the 2019 Plan, under which,

the Company has reserved a pool of 1,000,000 shares of the Company’s common stock which may be issued at the discretion of

the Company’s Board of Directors from time to time.

Under the 2019 Plan, each option is exercisable into one share of common

stock of the Company.

The options may be exercised after vesting and in accordance with vesting schedules which will be determined

by the Board of Directors for each grant.

The Company makes awards only under the

2019 Plan, under which, the Company had reserved a pool of 3,000,000 shares of the Company’s common stock which may be issued

at the discretion of the Company’s Board of Directors from time to time.

Under this 2019 Plan, each option is exercisable

into one share of common stock of the Company.

The options may be exercised after vesting and in accordance with vesting schedules

which will be determined by the Board of Directors for each grant.

The maximum 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 ended August 31, 2019, 2018 and 2017:

On February 9, 2017, options to purchase an aggregate

of 27,731 shares of the Company were granted to four members of the Company’s Board

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 date of 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 the following assumptions:

stock price of $6.23;

dividend yield of 0% for

expected volatility of 77.29%;

risk-free interest rates of 1.88%;

term of 5 years;

(b) 11,394 options at an exercise price of $6.23 per share (equivalent

to the traded market price on the date 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

on the following assumptions:

The following are the significant stock

options transactions with employees, board members and non-employees made during the years ended August 31, 2020 and 2019:

On February 26, 2019, the Company granted options

to purchase an aggregate of 360,000 shares of common stock of the Company at an exercise price of $3.16 per share (equivalent

to the closing price of the Company’s common stock on the date of grant) as follows:

196,500 to the CEO;

104,000 to the

and 59,500 to employees of the Subsidiary.

49,125, 26,000 and 14,875 options of the CEO, CSO and the employees, respectively,

were vested and the remainder will vest in three equal annual installments on each of December 31, 2020, 2021 and 2022.

options expire on February 26, 2029.

The fair value of all these options on the date of grant was $731, using the Black Scholes

option-pricing model and was based on the following assumptions:

stock price of $3.16;

dividend yield of 0% for all years;

expected volatility of 77.29%;

risk-free interest rates of 1.88%;

and expected term of

All the options vested immediately and expire on February 9, 2027.

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

at an 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,

The fair value of these options on the date of grant was $177.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 the options that remain unvested will vest in 24 consecutive

equal monthly installments of 516 shares each, commencing July 31, 2018.

The amendment did not have any impact on the Company's

financial statements.

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 per share (equivalent

to the traded market price on the date of grant).

49,000 of such options vested on December

31, 2017, as the Company share price reached the target of $8.00 per share, and the remainder

will vest in two equal annual installments of 49,000, on each 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 Carlo model, which utilizes multiple

input variables to estimate the probability that market conditions will be achieved,

and was based on the following assumptions:

dividend yield of 0% for all years;

volatility of 69.05%;

1 unchanged sentence

and expected term of 6.25 years.

(2) To the Chief Scientific Officer:

(a) 75,000 RSUs representing

a right to receive shares of the Company’s common stock which vested immediately,

have an exercise price of $0.012 per share of common stock and expire on June 30, 2027.

The total fair value of these RSUs 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 of common stock

underlying the RSUs will be issued upon request of the grantee.

As of August 31, 2018,

none of these RSUs were exercised;

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 remainder will 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 the following assumptions:

stock price of $7.77;

dividend yield of 0% for

expected volatility of 74.77%;

risk-free interest rates of 1.89%;

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 (16,773 options 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 of such options (5,591 options for each director) 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 June 30, 2027.

The fair value

of all these options on the date 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.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 exercise price 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, and 10,000 of which

will vest on December 31, 2020.

These options expire on June 30, 2027.

The fair value

of these options on the date of grant was $294, using the Black Scholes option-pricing

On April 10, 2019 and April 15, 2019, the Company granted options to its directors to purchase an aggregate of 30,000 shares of common stock of the Company at an exercise price of $4.17 and $4.13 per share, respectively (equivalent to the closing price of the Company’s common stock on the date of grant).

20,000 of such options vested immediately and the remaining 10,000 options vested on December 31, 2019.

The fair value of all these options on the date of grant was $64, using the Black Scholes option-pricing model and was based on the following assumptions:

stock price of $4.13 and $4.17, respectively;

dividend yield of 0% for all years;

expected volatility of 54.64% and 66.40%, respectively;

risk-free interest rates of 2.37% and 2.28%, respectively;

and expected term of 5 and 5.5 years, respectively.

On June 17, 2019, the Company granted options to its

chief financial officer to purchase an aggregate of 33,146 shares of common stock of the Company at an exercise price of $3.55

per share (equivalent to the closing price of the Company’s common stock on the date of grant).

5,396 of such options vested

will vest on December 31, 2019 and the remaining 27,750 will vest in 3 equal installments on each of December 31, 2020, December

31, 2021 and December 31, 2022.

The fair value of all these options on the date of grant was $74, using the Black Scholes option-pricing

model and was based on the following assumptions:

stock price of $3.55;

dividend yield

of 0% for all years;

expected volatility of 74.15%;

dividend yield of 0% for all years;

expected volatility

risk-free interest rates of 2.03%;

and expected term of 6.25 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 per share (equivalent

to the traded market price on the date of grant).

4,912 of such options vested on December

31, 2017, 22,777 of such options were forfeited through August 31, 2018, 1,388 options

expired through August 31, 2018 and the remainder will vest in two equal annual installments,

on each of December 31, 2018 and 2019.

These options expire on June 30, 2027.

value of all these options on the date of grant was $200, using the Black Scholes option-pricing

model and was based on the following assumptions:

On September 11, 2019, the Company granted options to its chief business and operation officer to purchase an aggregate of 100,000 shares of common stock of the Company at an exercise price of $3.69 per share (equivalent to the closing price of the Company’s common stock on the date of grant).

The options shall vest in 16 equal installments of 6,250 on the first day of every three months period beginning November 1, 2019.

As of August 31, 2020, 25,000 of such options are vested.

The options expire on September 11, 2029.

The fair value of all these options on the date of grant was $224, using the Black Scholes option-pricing model and was based on the following assumptions:

stock price of $3.69;

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.

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 an exercise

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 July 19, 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 the following assumptions:

price of $8.57;

dividend yield of 0% for all years;

expected volatility of 65.60%;

interest rates of 1.83%;

and expected term of 6 years.

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

Chief Executive Officer;

47,000 to the Chief Scientific Officer;

and 15,000 to an 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.

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 of 71.96%;

risk-free interest rates of 1.89%;

and expected term of 6.14 years.

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 the Subsidiary

at exercise prices of $7.05 and $6.70 per share, respectively (equivalent to the traded

market price on the date of grant).

The options vest in sixteen consecutive equal installments

on the last day of each quarter commencing June 30, 2018.

30,000 options expire on April

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 Black Scholes option-pricing model and was based

on the following assumptions:

(a) for the options granted on April 8, 2018:

dividend yield of 0% for all years;

expected volatility of 71.54%;

interest rates of 2.70%;

and expected term of 6.07 years;

and (b) for the options granted

on May 3, 2018:

The options shall vest in 4 installments upon achievement of certain performance conditions.

As of August 31, 2020, no such options are vested.

The options expire on September 11, 2029.

The fair value of all these options on the date of grant was $127, using the Black Scholes option-pricing model and was based on the following assumptions:

stock price of $3.69;

dividend yield of 0% for all years;

expected volatility

expected volatility of 67.96%;

risk-free interest rates of 1.68%;

and expected term of 6.02 years.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 8 - STOCK-BASED COMPENSATION (continued):

On February 26, 2019, the Company granted options to

purchase an aggregate of 360,000 shares of common stock of the Company at an exercise

price of $3.16 per share (equivalent to the closing price of the Company's common stock

on the date of grant) as follows:

196,500 to the Chief Executive Officer;

the Chief Scientific Officer;

and 59,500 to employees of the Subsidiary.

will vest in four equal annual installments, on each of December 31, 2019, 2020, 2021

These options expire on February 26, 2029.

The fair value of all these options

on the date of grant was $731, using the Black Scholes option-pricing model and was based

on the following assumptions:

expected term of 6.91 years;

and the probability that such performance conditions will occur.

On January 8, 2020, the Company granted options to

its directors to purchase an aggregate of 100,000 shares of common stock of the Company at an exercise price of $4.80 per share

(equivalent to the closing price of the Company’s common stock on the date of grant).

The options shall vest in three equal

installments on each of December 31, 2020, December 31, 2021 and December 31, 2022.

The options expire on January 8, 2030.

fair value of all these options on the date of grant was $278, using the Black Scholes option-pricing model and was based on the

following assumptions:

stock price of $4.80;

1 unchanged sentence

expected volatility of 62.55%;

risk-free interest rates of 2.54%;

risk-free interest

rates of 1.67%;

and expected term of 5.99.

On September 11, 2019, the options were canceled and re-granted at the same terms

under the 2019 Plan.

On April 10, 2019 and April 15, 2019, the Company granted options to its directors to purchase an aggregate of 30,000 shares

of common stock of the Company at an exercise price of $4.17 and $4.13 per share, respectively (equivalent to the closing price

of the Company's common stock on the date of grant).

20,000 of such options vested immediately and the remaining 10,000 options

will vest on December 31, 2019.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 8 - STOCK-BASED COMPENSATION (continued):

On January 8, 2020, the Company granted options to

purchase an aggregate of 290,000 shares of common stock of the Company at an exercise price of $4.80 per share (equivalent to

the closing price of the Company’s common stock on the date of grant) as follows:

190,000 to the CEO and 100,000 to the

The options will vest in four equal annual installments, on each of December 31, 2020, 2021, 2022 and 2023.

These options

expire on January 8, 2030.

The fair value of all these options on the date of grant was $868, using the Black Scholes option-pricing

model and was based on the following assumptions:

stock price of $4.13 and $4.17, respectively;

dividend yield of 0% for all years;

expected volatility of 54.64% and 66.40%, respectively;

risk-free interest rates of 2.37% and 2.28%, respectively;

term of 5 and 5.5 years, respectively.

On September 11, 2019, the options were canceled and re-granted at the same terms under

the 2019 Plan.

On June 17, 2019, the Company granted options to its Chief Financial Officer to purchase an aggregate of 33,146 shares of common

stock of the Company at an exercise price of $3.55 per share (equivalent to the closing price of the Company's common stock on

the date of grant).

5,396 of such options will vest on December 31, 2019 and the remaining 27,750 will vest in 3 equal installments

on each of December 31, 2020, December 31, 2021 and December 31, 2022.

The fair value of all these options on the date of grant

was $74, using the Black Scholes option-pricing model and was based on the following assumptions:

stock price of $4.80;

yield of 0% for all years;

expected volatility of 67.79%;

dividend yield of 0% for all years;

expected volatility

risk-free interest rates of 1.67%;

and expected term of 6.24 years.

September 11, 2019, the options were canceled and re-granted at the same terms under the 2019 Plan.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 8 - STOCK-BASED COMPENSATION (continued):

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 model with the following range of assumptions:

For options granted in

the year ended August 31 ,

The fair value of each option grant is

estimated on the date of grant using the Black Scholes option-pricing model or Monte Carlo model with the following range of assumptions:

For options granted

in the year ended

Expected option life (years)

2 unchanged sentences

Expected dividend yield (%)

A summary of the status of the stock options granted

to employees and directors as of August 31, 2019, 2018 and 2017, and changes during the years ended on those dates, is presented

Year ended August 31,

A summary of the status of the stock options

granted to employees and directors as of August 31, 2020, and 2019, and changes during the years ended on those dates, is presented

Options outstanding at beginning of year

3 unchanged sentences

Weighted average fair value of options granted during the year

Expenses recognized in respect of stock options

granted to employees and directors, for the years ended August 31, 2019, 2018 and 2017 were $791, $1,350 and $451, 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, 2019.

Expenses recognized in respect of stock

options granted to employees and directors, for the years ended August 31, 2020 and 2019 were $1,086 and $791, respectively.

The total intrinsic value of employees’

options exercised during the year ended August 31, 2020 was $27.

None of the options were exercised by employees during the year

ended August 31, 2019.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

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, 2019:

The following table

presents summary information concerning the options granted to employees and directors outstanding as of August 31, 2020:

Number outstanding

8.14 to 12.45

As of August 31, 2019, there were $832 of unrecognized

compensation costs related to non-vested options previously granted to employees and directors.

The unrecognized compensation

costs are expected to be recognized over a weighted average period of 1.25 years.

A summary of the status of the stock options granted

to non-employees outstanding as of August 31, 2019, 2018 and 2017, and changes during the years ended on those dates, is presented

Year ended August 31,

687,024 of options granted to employees

and directors that were outstanding as of August 31, 2020, were also exercisable as of August 31, 2020.

As of August 31, 2020, there were $1,167

of unrecognized compensation costs related to non-vested options previously granted to employees and directors.

The unrecognized

compensation costs are expected to be recognized over a weighted average period of 2.1 years.

A summary of the status of the stock options

granted to non-employees outstanding as of August 31, 2020 and 2019, and changes during the years ended on those dates, is presented

Options outstanding at beginning of year

2 unchanged sentences

Options exercisable at end of year

The Company recorded stock-based compensation of

$22, $111 and $59 during the years ended August 31, 2019, 2018 and 2017, respectively, related to non-employees' awards.

Weighted average fair value of options granted during the year

The Company recorded stock-based compensation

of $87 and $22 during the years ended August 31, 2020 and 2019, respectively, related to non-employees’

None of the options were exercised by non-employees

1 unchanged sentence

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 8 - STOCK-BASED COMPENSATION (continued):

The following table presents summary information

concerning the options granted to non-employees outstanding as of August 31, 2019:

As of August 31, 2019, there were no unrecognized

compensation costs related to non-vested non-employee options.

The following table

presents summary information concerning the options granted to non-employees outstanding as of August 31, 2020:

Number outstanding

65,152 options granted to non-employees

that were outstanding as of August 31, 2020, were also exercisable as of August 31, 2019.

As of August 31, 2020, there were $51 of

unrecognized compensation costs related to non-vested options previously granted to non-employees.

The unrecognized compensation

costs are expected to be recognized over a weighted average period of 1.5 years.

Restricted stock units

The following table summarizes the activities for

unvested RSUs granted to employees and directors for the years ended August 31, 2019, 2018 and 2017:

Year ended August 31,

The following table summarizes the activities

for unvested RSUs granted to employees and directors for the years ended August 31, 2020 and 2019:

Number of RSUs

3 unchanged sentences

Vested and unissued

The Company recorded compensation income related

to RSUs of $5 for the year ended August 31, 2019 and compensation expense of $86 and $1,064 during the years ended August 31,

2018 and 2017, respectively, related to RSU awards.

As of August 31, 2019, there were no unrecognized

The Company recorded compensation income

related to RSUs of $5 for the year ended August 31, 2019, related to RSU awards.

During the year ended August 31, 2020, the Company

did not record expense or income related to RSU.

As of August 31, 2020, there are no unrecognized

compensation costs related to RSUs.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 9 - FINANCIAL INCOME AND EXPENSES

Financial income

Year ended August 31,

Income from interest on deposits

Exchange rate differences

Income from interest on corporate bonds

Financial expenses

Year ended August 31,

Exchange rate differences

Bank commissions

Loss from securities

NOTE 10 - TAXES ON INCOME:

Bank and broker commissions

Loss (gain) from securities, net

NOTE 10 - TAXES

Taxes on income included in the consolidated

statements of operations represent current taxes due to taxable income of the Company and its Subsidiary.

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 and local tax.

On December 22, 2017,

the TCJA was signed into law, which among other changes reduced the federal corporate income tax rate from 35% to 21%, effective

January 1, 2018.

As of August 31, 2019, the Company has an accumulated

tax loss carryforward of approximately $14,336 (as of August 31, 2018, approximately $12,053).

tax laws, subject to

certain limitations, carryforward tax losses expire 20 years after the year in which incurred.

In the case of the Company, subject

to potential limitations in accordance with the relevant law, the net loss carryforward will expire in the years 2026 through

The applicable corporate tax rate for the

Company is 21% following the U.S.

Tax Cuts and Jobs Act (the “TCJA”), excluding state tax and local tax.

22, 2017, the TCJA was signed into law, which among other changes reduced the federal corporate income tax rate from 35% to 21%,

effective January 1, 2018.

of August 31, 2020, the Company has an accumulated tax loss carryforward of approximately $15,880 (as of August 31, 2019, $13,013).

tax laws, subject to certain limitations, carryforward tax losses originating in tax years beginning after January

1, 2018 , have no expiration date, but they are limited to 80% of the company's taxable income

in any given tax year.

carryforward tax losses originating in tax years beginning prior to January 1, 2018 , expire

20 years after the year in which incurred.

In the case of the Company, subject to potential limitations in accordance with the

relevant law, the net loss carryforward will expire in the years 2027 through 2039.

Corporate taxation in Israel:

The Subsidiary is taxed in accordance with Israeli

The corporate tax rates applicable to 2019, 2018 and 2017 are 23%, 23% and 24%, respectively.

As of August 31, 2019, the Subsidiary has an accumulated

tax loss carryforward of approximately $44,469 (as of August 31, 2018, approximately $34,695).

Under the Israeli tax laws, carryforward

tax losses have no expiration date.

The Subsidiary is taxed in accordance with

Israeli tax laws.

The corporate tax rates applicable to 2020 and 2019 is 23%.

As of August 31, 2020, the Subsidiary has

an accumulated tax loss carryforward of approximately $57,900 (as of August 31, 2019, approximately $44,469).

Under the Israeli

tax laws, carryforward tax losses have no expiration date.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 10 - TAXES ON INCOME (continued):

5 unchanged sentences

Net deferred tax assets

Deferred taxes are determined based on temporary differences

between financial reporting and tax bases of assets and liabilities and are measured 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 temporary differences and carryforwards are expected to be

available to reduce taxable income.

As the achievement of required future taxable income is 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.

Deferred taxes are determined based on

temporary differences between financial reporting and tax bases of assets and liabilities and are measured 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 temporary differences and carryforwards are expected to

be available to reduce taxable income.

As the achievement of required future taxable income is 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.

Loss before taxes on income and income taxes included

in the income statements of operations:

Year ended August 31,

Loss before taxes on income:

Taxes on income (tax benefit):

Taxes on income of $300 in the year ended August 31,

2019 resulted from withholding tax deducted from HTIT milestones payments, which were received during the year ended August 31,

2019, according to the License Agreement.

As of August 31, 2019, the Company did not expect to reach taxable income in the 5 years

following the balance sheet date, and therefore recognized this amount as taxes on income.

Taxes on income

of $300 in the year ended August 31, 2019 resulted from withholding tax deducted from HTIT milestones payments, which were received

during the year ended August 31, 2019, according to the License Agreement.

As of August 31, 2020, the Company did not expect to

reach taxable income in the 5 years following the balance sheet date, and therefore recognized this amount as taxes on income.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 10 - TAXES ON INCOME (continued):

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 in the United States, and the actual tax

Year ended August 31,

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 in the United States, and the actual

Loss before income taxes as reported in the consolidated statement of comprehensive loss

5 unchanged sentences

Withholding tax, see note 10d above

Uncertain tax position

Taxes on income for the reported year

in Income Taxes

Uncertainty in Income Taxes

ASC Topic 740, “Income Taxes”

significant judgment in determining what constitutes an individual tax position as well as assessing the outcome of each tax position.

Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective tax

rate and consequently, affect the operating results of the Company.

The Company recognizes interest and penalties 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,

requires significant judgment in determining what constitutes an individual tax position as well as assessing the outcome of each

tax position.

Changes in judgment as to recognition or measurement of tax positions can materially affect the estimate of the effective

tax rate and consequently, affect the operating results of the Company.

The Company recognizes interest and penalties related to

its tax contingencies as income tax expense.

The following table summarizes the activity

of the Company unrecognized tax benefits:

Balance at Beginning of Year

1 unchanged sentence

Balance at End of Year

The Company does not expect unrecognized tax expenses

to change significantly over the next 12 months.

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.

income tax examinations for the tax years of 2016 through 2018.

The Subsidiary is subject to Israeli income

tax examinations for the tax years of 2014 through 2019.

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

In thousands (except share and per share

NOTE 10 - TAXES ON INCOME (continued):

Valuation Allowance Rollforward

ended August 31,

Balance at beginning of period

Balance at end of period

Allowance in respect of carryforward tax losses:

Year ended August 31, 2020

ended August 31, 2018

ended August 31, 2017

NOTE 11 - RELATED PARTIES - TRANSACTIONS:

Year ended August 31, 2019

11 - RELATED PARTIES - TRANSACTIONS:

During each of the fiscal years of 2020 and 2019,

the Company paid to directors $100 as directors' fees.

the Company paid to directors $95 and $100, respectively, as directors’

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 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 the monthly consulting fee paid to the CEO and the

CSO is NIS 127,570 ($36) and NIS 80,454 ($23), respectively.

In addition to the Consulting Agreements, based on

a relocation cost analysis prepared by consulting company ORI - Organizational Resources International Ltd., the Company pays

for certain direct costs, related taxes and expenses incurred in connection with the relocation of the CEO to New York.

fiscal 2019, such relocation expenses totaled $486.

(“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 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 the monthly consulting fee paid to the

CEO and the CSO is NIS 127,570 ($38) and NIS 92,522 ($28), respectively.

In addition to the Consulting Agreements,

based on a relocation cost analysis prepared by consulting company ORI - Organizational Resources International Ltd., the Company

pays for certain direct costs, related taxes and expenses incurred in connection with the relocation of the CEO to New York.

fiscal 2020 and 2019 such relocation expenses totaled $516 and $486, respectively.

Balances with related parties:

Accounts payable and accrued expenses - KNRY

Accounts payable and accrued expenses –

CEO (relocation)

ORAMED PHARMACEUTICALS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands (except share

and per share data)

NOTE 12 - SUBSEQUENT EVENTS

As mentioned in note 7d above on September 11, 2019,

some of the options that were granted during 2019 were canceled and re-granted under the 2019 Plan in the same amounts and under

the same terms as the original grants.

On September 11, 2019, the Company granted options to its Chief Operating & Business Officer to purchase an aggregate of 100,000 shares of common stock of the Company at an exercise price of $3.69 per share.

6,250 of such options vested on November 1, 2019 and the remaining 93,750 of such options vest in 15 consecutive equal installments of 6,250 options on the first day of every three month period thereafter.

Such officer was granted additional options to purchase 100,000 shares of the Company’s common stock at an exercise price of $3.69 per share.

Such options vest based on such officer’s performance as determined by the Company's Board of Directors pursuant to the criteria set forth in the stock option award agreement between such officer and the Company.

These options expire on September 11, 2029.

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

Composite Copy of Certificate of Incorporation, as amended as of January 22, 2013, corrected February 8, 2013, further amended July 25, 2014 and corrected September 5, 2017 (incorporated by reference from our annual report on Form 10-K filed November 29, 2017).

Expenses to related parties:

Nadav Kidron (CEO)

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.

Composite Copy of Certificate of Incorporation, as amended as

of January 22, 2013, corrected February 8, 2013, as amended as of July 25, 2014, corrected September 5, 2017 and as further

amended as of August 3, 2020.

Composite Copy of Certificate of Incorporation, as amended as

of January 22, 2013, corrected February 8, 2013, as amended as of July 25, 2014, corrected September 5, 2017 and as further

amended as of August 3, 2020 (marked copy).

Amended and Restated By-laws (incorporated by reference from our current report on Form 8-K filed February 1, 2013).

1 unchanged sentence

Form of Common Stock Purchase Warrant (incorporated by reference from our current report on Form 8-K filed July 5, 2018).

Form of Underwriter’s Warrant (incorporated by reference from our current report on Form 8-K filed February 28, 2020).

Description of Securities.

22 unchanged sentences

and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 29, 2017).

Amendment, dated January 10, 2020, to Consulting Agreements 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 quarterly report on Form 10-Q filed April 6, 2020).

Oramed Pharmaceuticals Inc.

5 unchanged sentences

2019 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed August 6, 2019).

Form of Notice of Stock Option Award and Stock Option Award Agreement.

Amended and Restated Employment Agreement, dated July 20, 2017, by and between Oramed Ltd.

and Hilla Eisenberg (incorporated by reference from our current report on Form 8-K filed July 21, 2017).

Amendment to Amended and Restated Employment Agreement, dated October 29, 2018, by and between Oramed Ltd.

and Hilla Eisenberg (incorporated by reference from our annual report on Form 10-K filed November 28, 2018).

Employment Agreement, dated November 6, 2018, by and between Oramed Ltd.

and Mark Hasleton (incorporated by reference from our annual report on Form 10-K filed November 28, 2018).

Oramed Pharmaceuticals Inc.

Amended and Restated 2019 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed June 30, 2020).

Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our annual report on Form 10-K filed November 27, 2019).

Employment Agreement, dated May 16, 2019, by and between Oramed Ltd.

and Avraham Gabay (incorporated by reference from our quarterly report on Form 10-Q filed July 10, 2019).

and Avraham Gabay (incorporated by reference from our current report on Form 8-K filed May 16, 2019).

First Amendment, dated December 19, 2019, to Employment Agreement, entered into as of May 16, 2019, by and between Oramed Ltd.

and Avraham Gabay (incorporated by reference from our quarterly report on Form 10-Q filed January 9, 2020).

Clinical Trial Agreement, dated September 11, 2011, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., Miriam Kidron and Daniel Schurr (incorporated by reference from our annual report on Form 10-K/A filed December 21, 2012).

7 unchanged sentences

Representative Form of Indemnification Agreements between Oramed Pharmaceuticals Inc.

and each of our directors and officers.

Employment Agreement, dated August 18, 2019, between Oramed Ltd.

and Joshua Hexter.

Consulting Agreement, dated December 12, 2018, between Oramed Pharmaceuticals Inc.

and Joshua Hexter (incorporated by reference from our quarterly report on Form 10-Q filed January 14, 2019).

and each of our directors and officers (incorporated by reference from our quarterly report on Form 10-Q filed January 9, 2020).

Employment Agreement, dated August 18, 2019, between Oramed

and Joshua Hexter (incorporated by reference from our annual report on Form 10-K filed November 27, 2019).

Securities Purchase Agreement, dated November 30, 2015, between Oramed Pharmaceuticals, Inc.

5 unchanged sentences

Incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2016).

Amendment to the Amended and Restated Technology License Agreement, dated June 3, 2016, between Hefei Tianhui Incubator of Technologies Co., Ltd., Oramed Pharmaceuticals, Inc.

to the Amended and Restated Technology License Agreement, dated June 3, 2016, between Hefei Tianhui Incubator of Technologies

Co., Ltd., Oramed Pharmaceuticals, Inc.

and Oramed Ltd.

(Confidential treatment has been granted for portions of this document.

The confidential portions have been 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).

Amendment to the Amended and Restated Technology License Agreement, dated July 24, 2016, between Hefei Tianhui Incubator of Technologies Co., Ltd., Oramed Pharmaceuticals, Inc.

(Confidential treatment has been requested for portions of this

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).

to the Amended and Restated Technology License Agreement, dated July 24, 2016, between Hefei Tianhui Incubator of

Technologies Co., Ltd., Oramed Pharmaceuticals, Inc.

and Oramed Ltd.

(Confidential treatment has been granted for portions of this document.

(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,

Service Agreement, dated as of June 3, 2016, between Oramed Ltd.

7 unchanged sentences

and Canaccord Genuity LLC (incorporated by reference from our current report on Form 8-K filed September 5, 2019).

Amendment to the Equity Distribution Agreement, dated February 10, 2020, by and between the Company and Canaccord Genuity LLC (incorporated by reference from our quarterly report on Form 10-Q filed April 6, 2020).

Clinical Research Organization Services Agreement, dated February 14, 2018 and effective as of November 1, 2017, between Oramed Ltd.

5 unchanged sentences

and Integrium, LLC (incorporated by reference from our quarterly report on Form 10-Q filed July 10, 2019).

Subsidiaries.

Clinical Research Organization Services Agreement, dated September 2, 2020 and effective as of January 15, 2020, between Oramed Ltd.

and Integrium, LLC (incorporated by reference from our Form 8-K filed September 9, 2020).

Clinical Research Organization Services Agreement, dated September 16, 2020 and effective as of January 15, 2020, between Oramed Ltd.

and Integrium, LLC (incorporated by reference from our Form 8-K filed September 18, 2020).

Subsidiaries (incorporated by reference from our annual report on Form 10-K filed November 27, 2019).

Consent of Kesselman & Kesselman, Independent Registered Public Accounting Firm.

13 unchanged sentences

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 on its behalf by

the undersigned, thereunto duly authorized.

13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

ORAMED PHARMACEUTICALS INC.

6 unchanged sentences

and on the dates indicated.

/s/ NADAV KIDRON

November 27, 2019

Nadav Kidron,

President and Chief Executive Officer and Director

(principal executive officer)

/s/ AVRAHAM GABAY

November 27, 2019

and Chief Executive Officer and Director

executive officer)

AVRAHAM GABAY

Chief Financial Officer

(principal financial and accounting officer)

/s/ AVIAD FRIEDMAN

November 27, 2019

Financial Officer

financial and accounting officer)

AVIAD FRIEDMAN

/s/ MIRIAM KIDRON

November 27, 2019

MIRIAM KIDRON

/s/ XIAOMING GAO

November 27, 2019

Xiaoming Gao,

/s/ KEVIN RAKIN

November 27, 2019

/s/ LEONARD SANK

November 27, 2019

Leonard Sank,

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures