ORAMED PHARMACEUTICALS INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of August 31, 2021. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective. 27 Management’s Annual Report on Internal Control over Financial Reporting Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and 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; and ● 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, 2021 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, 2021 at a reasonable assurance level. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended August 31, 2021 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION. Not applicable. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 28 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Set forth below is certain information with respect to the individuals who are our directors and executive officers. Name Age Position Nadav Kidron 47 President, Chief Executive Officer and Director Miriam Kidron 81 Chief Scientific Officer and Director David Silberman 38 Chief Financial Officer, Treasurer and Secretary Joshua Hexter 51 Chief Operating & Business Officer Michael Rabinowitz 56 Chief Commercial Officer Aviad Friedman 50 Director Arie Mayer 66 Director Kevin Rakin 61 Chairman, Director Leonard Sank 57 Director Dr. Miriam Kidron is Mr. Nadav Kidron’s mother. There are no other directors or officers of the Company who are related by blood or marriage. Business Experience The following is a brief account of the education and business experience during at least the past five years of each director and our 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. Mr. 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. Mr. 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. Dr. Miriam Kidron was appointed Chief Scientific Officer and a director in March 2006. Dr. Kidron 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. 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. Dr. 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. Dr. Kidron is a recipient of the Bern Schlanger Award. 29 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. Mr. David Silberman was appointed Chief Financial Officer, Treasurer and Secretary effective July 2021. Prior to his appointment, from April 2018 until May 2021, Mr. Silberman served as a Corporate Financial Planning and Analysis associate director and director at Teva Pharmaceutical Industries Ltd., a global pharmaceutical company, committed to helping patients around the world to access affordable medicines and benefit from innovations to improve their health. From 2014 to 2018, Mr. Silberman served as Global Internal Audit Senior Manager at Teva Pharmaceutical Industries Ltd.. From 2009 to 2014, Mr. Silberman provided internal audit and risk management services in the advisory department of Grant Thornton Fahn Kanne Control Management. From January 2009 until June 2009, Mr. Silberman worked in the audit department of KPMG, a certified public accounting firm. Mr. Silberman holds a DCG and a DSCG degrees from the French Ministry of higher study and research and is a certified public accountant in Israel. Mr. 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. (Nasdaq/TASE: BWAY) from 2018 to 2019, a 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 Ltd. (Nasdaq/TASE: 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. Mr. Hexter holds a bachelor’s degree from the University of Wisconsin and a master’s degree in management from Boston University. Mr. Michael Rabinowitz was appointed Chief Commercial Officer , effective August 1, 2021. Prior to his appointment, from June 1993 until February 2021, Mr. Rabinowitz served in various marketing, sales, business development, and financial leadership roles at the global biopharmaceutical company Merck & Co., where he launched and marketed products in over 30 countries across several disease areas, including launching billion-dollar oral agents in diabetes and managing a global business. Mr. Rabinowitz holds a Masters’ Degree from The Carlson School of Management, University of Minnesota. He has also participated in executive health care programs at the Harvard Business School. Mr. Aviad Friedman became a director in August 2016. Mr. Friedman is an international businessman and since July 2021, he has been acting as Director General of Israel’s Housing Ministry. From 2007 to 2021, he was Chief Executive Officer of Most Properties 1998 Ltd.. Mr. 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. Mr. 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, Rosetta Green Ltd and Aerodrome Groupe Ltd. Mr. 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. Mr. 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. Dr. Arie Mayer became a director in December 2019. Dr. Mayer, is currently the Managing Director and Chairman of the Board of Sigma-Aldrich Israel Ltd. and has held that position since January 2010. Dr. 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. Dr. Mayer holds a Bachelor of Science degree in chemistry from Hebrew University and a Ph.D. in biochemistry from Israel Institute of Technology. We 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. 30 Mr. Kevin Rakin became a director in August 2016 and Chairman of the Board in July 2017. Mr. Rakin is a co-founder and partner at Quantum Si Incorporated (formerly 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. 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 June 2011. Mr. Rakin currently serves on the boards of Quantum-Si Inc. (Nasdaq: QSI), Aziyo Biologics Inc. (Nasdaq: AZYO) and Nyxoah SA (Nasdaq: NYXH) as well as a number of private companies. Mr. Rakin holds 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. Mr. Leonard Sank became a director in October 2007. Mr. Sank is a South African entrepreneur and businessman, whose interests lie in entrepreneurial endeavors and initiatives, with over 25 years’ experience of playing significant leadership roles in developing businesses. Mr. Sank serves on the boards of a few national 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. 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. 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 and Leonard Sank are independent as defined under the rules promulgated by Nasdaq. We have determined that each of the directors is qualified to serve as a director of the Company based on a review of the experience, qualifications, attributes and skills of each director. In reaching this determination, we have considered a variety of criteria, including, among other things: character 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 2021, our Board held 15 meetings and took actions by written consent on 13 occasions. Board members are encouraged to attend our annual meetings of stockholders. All of our directors, except Mr. Gao Xiaoming, whose term as a director expired on August 30, 2021, 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. Committees Audit Committee and Audit Committee Financial Expert The 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. The Audit Committee operates under a written charter that is posted on the “Investors” section of our website, www.oramed.com. The primary responsibilities of our Audit Committee include: ● Overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company; ● Appointing, compensating and retaining our registered independent public accounting firm; ● Overseeing the work performed by any outside accounting firm; ● Assisting the Board in fulfilling its responsibilities by reviewing: (i) the financial reports provided by us to the SEC, our stockholders or to the general public and (ii) our internal financial and accounting controls; and ● Recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of our financial condition and results of operations. 31 Compensation Committee The 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; and ● Making recommendations to our Board with respect to director compensation. Nominating Committee The members of our Nominating Committee are Arie Mayer and Kevin Rakin. 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” 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; and ● 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 2021, we believe that during fiscal 2021, 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) Avraham Gabay, our former Chief Financial Officer, failed to timely file a Form 4 reporting his February 3, 2021 acquisition of options to purchase 40,000 shares of our common stock. Mr. Gabay filed a Form 4 reporting this transaction on February 8, 2021, (b) Joshua Hexter, our Chief Operating & Business Officer, failed to timely file a Form 4 reporting his February 3, 2021 acquisition of options to purchase 50,000 shares of our common stock. Mr. Hexter filed a Form 4 reporting this transaction on February 8, 2021, (c) Nadav Kidron, our President, Chief Executive Officer and one of our directors, failed to timely file a Form 4 reporting his February 3, 2021 acquisition of options to purchase 150,000 shares of our common stock. Mr. Kidron filed a Form 4 reporting this transaction on February 8, 2021 and (d) Miriam Kidron, our Chief Scientific Officer and one of our directors, failed to timely file a Form 4 reporting her February 3, 2021 acquisition of options to purchase 100,000 shares of our common stock. Ms. Kidron filed a Form 4 reporting this transaction on February 8, 2021. 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. 32 ITEM 11. EXECUTIVE COMPENSATION. Compensation Discussion and Analysis This section explains the policies and decisions that shape our executive compensation program, including its specific objectives and elements, as it relates to our “named executive officers,” or NEOs. Our NEOs for fiscal 2021 are those four individuals listed in the “Summary Compensation Table” below. The Compensation Committee believes that our executive compensation is appropriately designed to incentivize our named executive officers to work 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 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” section. Our executive compensation program and our NEOs’ compensation packages are designed around the following objectives: ● attract, hire, and retain talented and experienced executives; ● motivate, reward and retain executives whose knowledge, skills and performance are critical to our success; ● ensure fairness among the executive management team via recognizing the contributions of each executive to our success; ● focus executive behavior on achievement of our corporate objectives and strategy; and ● align the interests of management and stockholders by providing management with longer-term incentives through equity ownership. The Compensation Committee reviews the allocation of compensation components regularly to ensure alignment with strategic and operating goals, competitive market practices and legislative changes. The Compensation Committee does not apply a specific formula to determine the allocation 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. With 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. Elements of Compensation Our 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; and (iv) benefits and perquisites. In establishing overall executive compensation levels and making specific compensation decisions for our NEOs in fiscal 2021, 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. 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. 33 Base Salary 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. 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. 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 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 year. 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 2021, our Compensation Committee increased the base salary of one of our NEOs by 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 increase. 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 the NEOs. 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 objectives. Long-Term Equity Incentive Compensation Long-term incentive compensation allows the NEOs to share in any appreciation in the value of our common stock. The Compensation 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. 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 vesting. 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. 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. 34 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’ total compensation. The Company pays for certain direct costs, related taxes and expenses incurred in connection with the relocation of our CEO to United States. During fiscal 2021, such relocation expenses totaled approximately $377,000, and included mainly payments intended to reflect the difference in the cost of living between Israel and the United States, relocation expenses, accommodation allowances, education allowances, health insurance and related taxes. Say-on-Pay Vote Our stockholders approved, on an advisory basis, our executive compensation program at our annual meeting of stockholders held on August 3, 2020. We did not seek or receive any specific feedback from our stockholders concerning our executive compensation program during the past fiscal year. The Compensation Committee did not specifically rely on the results of the prior vote in making any compensation-related decisions during fiscal 2021. REPORT OF THE COMPENSATION COMMITTEE The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management and, based on such review and discussions, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K and in our proxy statement relating to our next annual meeting of stockholders. Compensation Committee Members: Aviad Friedman Kevin Rakin Leonard Sank SUMMARY COMPENSATION TABLE The following table sets forth the compensation earned by our NEOs for fiscals 2021, 2020 and 2019. Name and Principal Position Year (1) Salary ($) (2) Bonus ($) (2)(3) RSUs Awards ($) (4) Option Awards ($) (4)(5) All Other Compensation ($) (2)(6) Total ($) Nadav Kidron 2021 465,982 300,000 1,995,666 876,693 382,240 4,020,581 President and CEO and director (7) 2020 439,076 220,582 - 569,062 539,131 1,767,851 2019 419,460 224,975 - 398,910 507,750 1,551,095 Miriam Kidron 2021 319,868 86,000 1,330,451 584,462 14,193 2,334,974 Chief Scientific Officer and director (8) 2020 305,840 70,000 - 299,506 13,354 688,700 2019 267,386 123,149 - 211,128 14,503 616,166 Avraham Gabay 2021 156,113 60,000 532,174 233,785 43,616 1,025,688 Former Chief Financial Officer (9) 2020 130,554 15,951 - - 44,912 191,418 2019 32,122 - - 73,928 9,441 115,491 David Silberman 2021 27,762 - - - 4,376 32,138 Chief Financial Officer (10) Joshua Hexter 2021 206,223 60,000 665,215 292,231 60,720 1,284,389 Chief Operating & Business Officer (11) 2020 190,801 12,169 - 351,128 54,735 608,833 2019 52,848 - - - 9,022 61,870 Michael Rabinowitz 2021 30,015 - 986,352 860,416 - 1,876,783 Chief Commercial Officer (12) 35 (1) The information is provided for each fiscal year, which begins on September 1 and ends on August 31. (2) Amounts paid for Salary, Bonus and All Other Compensation were originally denominated in NIS and were translated into U.S. Dollars at the then 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 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. 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 these awards are exercised and the underlying shares subsequently sold. (6) Amounts exclude the fair market value of the options that were re-granted on September 11, 2019, 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. For more information about the regrant fair market value see “Grants of Plan-Based Awards” below. (6) See “All Other Compensation Table” below. (7) Mr. Kidron receives certain compensation from Oramed Ltd. through KNRY, Ltd., an Israeli entity owned by Dr. Miriam Kidron, or KNRY. See “—Employment and Consulting Agreements” below. (8) Dr. Kidron receives compensation from Oramed Ltd. through KNRY. See “—Employment and Consulting Agreements” below. (9) Mr. Gabay resigned from his positions, effective July 4, 2021. (10) Mr. Silberman was appointed as Chief Financial Officer, effective July 5, 2021. (11) Mr. Hexter was appointed Chief Operating & Business Officer, effective September 19, 2019. From 2013 to 2018, Mr. Hexter served as Chief Operating Officer and VP Business Development of the Company. (12) Mr. Rabinowitz was appointed as Chief Commercial Officer, effective August 1, 2021. All Other Compensation Table The “All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following: Name Year Automobile- Related Expenses ($) Manager’s Insurance* ($) Education Fund* ($) Relocation Expenses** ($) Total ($) Nadav Kidron 2021 4,926 - - 377,314 382,240 2020 23,438 - - 515,693 539,131 2019 21,090 - - 486,660 507,750 Miriam Kidron 2021 14,193 - - - 14,193 2020 13,354 - - - 13,354 2019 14,503 - - - 14,503 Avraham Gabay 2021 14,223 19,222 10,171 - 43,616 2020 16,625 18,606 9,681 - 44,912 2019 2,808 4,405 2,228 - 9,441 David Silberman 2021 - 3,527 849 - 4,376 Joshua Hexter 2021 18,163 28,327 14,230 - 60,720 2020 13,685 26,820 14,230 - 54,735 2019 4,409 1,985 2,628 - 9,022 Michael Rabinowitz 2021 - - - - - 36 * Manager’s insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance premiums. An education fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational or other permitted purposes. ** Relocation expenses represents additional compensation for the period during which Mr. Kidron was in the United States. These expenses mainly include relocation expenses, supplemental living expenses, accommodation allowances, education allowances, health insurance and related costs. Employment and Consulting Agreements On July 1, 2008, Oramed Ltd. entered into a consulting agreement with KNRY, whereby Mr. Nadav Kidron, through KNRY, provides services 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 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 92,522. 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. Starting September 1, 2021, Nadav Kidron receives a monthly consulting fee of NIS 146,705 and Miriam Kidron receives a monthly consulting fee of NIS 106,400. We, through Oramed Ltd., have entered into an employment agreement with David Silberman as of May 23, 2021, pursuant to which Mr. Silberman was appointed as Chief Financial Officer, Treasurer and Secretary of the Company and Oramed Ltd., effective July 5, 2021. In accordance with the employment agreement, as amended, Mr. Silberman’s current gross monthly salary is NIS 37,500. In addition, Mr. Silberman is provided with a cellular phone and a company car allowance pursuant to the terms of his agreement. Starting September 1, 2021, Mr. Silberman’s gross monthly salary is NIS 43,125. We, through Oramed Ltd., have entered into an employment agreement with Joshua Hexter as of August 18, 2019, pursuant to which Mr. Hexter was appointed as Chief Operating & Business Officer of the Company and Oramed Ltd., effective September 19, 2019. In accordance with the employment agreement, as amended, Mr. Hexter’s current gross monthly salary is NIS 56,000. In addition, Mr. Hexter is provided with a cellular phone and a company car pursuant to the terms of his agreement. Starting September 1, 2021, Mr. Hexter’s gross monthly salary is NIS 64,400. We, through Oramed Inc., have entered into an employment agreement with Michael Rabinowitz as of July 25, 2021, pursuant to which Mr. Rabinowitz was appointed as Chief Commercial Officer of the Company, effective August 1, 2021. In accordance with the employment agreement, as amended, Mr. Rabinowitz’s current gross monthly salary is $27,500. In addition, Mr. Rabinowitz is entitled to a monthly reimbursement of his cell phones expenses and medical and dental benefits up to a certain amount per year. We have entered into indemnification agreements with our directors and officers pursuant to which we agreed to indemnify each director and officer for any liability he or she may incur by reason of the fact that he or she serves as our director or officer, to the maximum extent permitted by law. 37 Potential Payments upon Termination or Change-in-Control We have no plans or arrangements in respect of remuneration received or that may be received by our named executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change-in- control) or a change of responsibilities following a change-in-control. Pension, Retirement or Similar Benefit Plans We have no arrangements or plans under which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options, RSUs or restricted shares at the discretion of our Compensation Committee in the future. GRANTS OF PLAN-BASED AWARDS The following table shows grants of plan-based equity awards made to our NEOs during fiscal 2021. Mr. Silberman received no awards during fiscal 2021. Name Grant Date Options Awards: Number of Securities Underlying Options (#) All Other Stock Awards: Number of Securities Underlying RSUs (#) Grant Date Fair Value of Stock Awards ($) Nadav Kidron (1) 02/03/2021 150,000 - 876,693 Nadav Kidron (2) 02/03/2021 - 300,000 1,995,666 Miriam Kidron (3) 02/03/2021 100,000 - 584,462 Miriam Kidron (4) 02/03/2021 - 200,000 1,330,451 Avraham Gabay (5) 02/03/2021 40,000 - 233,785 Avraham Gabay (6) 02/03/2021 - 80,000 532,174 Joshua Hexter (7) 02/03/2021 50,000 - 292,231 Joshua Hexter (8) 02/03/2021 - 100,000 665,215 Michael Rabinowitz (9) 08/04/2021 100,000 - 860,416 Michael Rabinowitz (10) 08/04/2021 - 100,000 986,352 (1) These options were granted under our 2019 Plan and shall vest in four equal installments of 37,500 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. (2) These RSUs were granted under our 2019 Plan and shall vest as follows: 100,000 shall vest upon our common stock achieving a price per share of $15 during 20 days out of any 30-day trading period, 100,000 shall vest upon our common stock achieving a price per share of $25 during 20 days out of any 30-day trading period and 100,000 upon achievement of a certain licensing agreement as specified by the Board of Directors. (3) These options were granted under our 2019 Plan and shall vest in four equal installments of 25,000 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. (4) These RSUs were granted under our 2019 Plan and shall vest as follows: 66,667 shall vest upon our common stock achieving a price per share of $15 during 20 days out of any 30-day trading period, 66,667 shall vest upon our common stock achieving a price per share of $25 during 20 days out of any 30-day trading period, and 66,666 upon achievement of a certain licensing agreement as specified by the Board of Directors. (5) These options were granted under our 2019 Plan and shall vest in four equal installments of 10,000 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. (6) These RSUs were granted under our 2019 Plan and shall vest as follows: 26,666 shall vest upon our common stock achieving a price per share of $15 during 20 days out of any 30-day trading period, 26,667 shall vest upon our common stock achieving a price per share of $25 during 20 days out of any 30-day trading period, and 26,667 upon achievement of a certain licensing agreement as specified by the Board of Directors. 38 (7) These options were granted under our 2019 Plan and shall vest in four equal installments of 12,500 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. (8) These RSUs were granted under our 2019 Plan and shall vest as follows: 33,333 shall vest upon our common stock achieving a price per share of $15 during 20 days out of any 30-day trading period, 33,333 shall vest upon our common stock achieving a price per share of $25 during 20 days out of any 30-day trading period, and 33,334 upon achievement of a certain licensing agreement as specified by the Board of Directors. (9) These options were granted under our 2019 Plan. 12,500 shall vest on December 31, 2021, 25,000 on each of December 31, 2022, December 31, 2023 and December 31, 2024 and 12,500 on August 4, 2025. (10) These RSUs were granted under our 2019 Plan and shall vest as follows: 33,333 shall vest upon our common stock achieving a price per share of $15 during 20 days out of any 30-day trading period, 33,333 shall vest upon our common stock achieving a price per share of $25 during 20 days out of any 30-day trading period, and 33,334 upon achievement of a certain licensing agreement as specified by the Board of Directors. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth information concerning stock options and stock awards held by the NEOs as of August 31, 2021. Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of shares that have not vested (#) Market value of shares that have not vested ($) Nadav Kidron 72,000 (1) - 4.08 8/8/22 47,134 (2) - 12.45 4/9/24 49,000 (3) - 7.77 6/30/27 72,750 (4) 24,250 (4) 8.14 1/31/28 98,250 (10) 98,250 (10)(13) 3.16 2/26/29 47,500 (15) 142,500 (15) 4.80 1/8/30 150,000 (17) 10.40 2/3/31 200,000 (7)(8)(21) 3,936,000 Miriam Kidron 72,000 (1) - 4.08 8/8/22 47,134 (2) - 12.45 4/9/24 69,999 (5) - 7.77 6/30/27 35,250 (6) 11,750 (6) 8.14 1/31/28 52,000 (11) 52,000 (11)(13) 3.16 2/26/29 25,000 (16) 75,000 (16) 4.80 1/8/30 100,000 (18) 10.40 2/3/31 133,334 (9)(22) 2,624,013 Avraham Gabay - (12) 18,500 (12)(13) 3.55 6/17/29 40,000 (19) 10.40 2/3/31 (26) Joshua Hexter 50,000 (14) 150,000 (14) 3.69 9/11/29 66,667 (23) 1,312,007 50,000 (20) 10.40 2/3/31 Michael Rabinowitz 100,000 (24) 100,000 (24) 15.10 8/4/31 100,000 (25) 1,968,000 39 (1) On 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. (2) On April 9, 2014, 47,134 options were granted to each of Nadav Kidron and Miriam Kidron under the 2008 Plan at an exercise price of $12.45 per share; 15,710 of such options vested on April 30, 2014 and the remainder vested in eight equal monthly installments, commencing on May 31, 2014. The options have an expiration date of April 9, 2024. (3) 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 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. As of August 31, 2021, 98,000 options were forfeited. (4) 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; 72,250 of such options vested on each of January 1, 2019, January 1, 2020 and January 1, 2021 and the remainder of 24,250 shall vest on January 1, 2022. The options expire on January 31, 2028. (5) On 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. (6) 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; 35,250 of such options vested in three equal installments of 11,750 on each of January 1, 2019, January 1, 2020 and January 1, 2021 and the remainder of 11,750 shall vest on January 1, 2022. The options expire on January 31, 2028. (7) 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. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (8) 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. (9) 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. (10) 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; 98,250 of such option vested on December 31, 2019 and December 31, 2020 and the remainder shall vest in two equal installments of 49,125 on each of December 31, 2021 and December 31, 2022. The options expire on February 26, 2029. For additional information please see note 13 below. (11) 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; 52,000 of such option vested on December 31, 2019 and December 31, 2020 and the remainder shall vest in two equal installments of 26,000 on each of December 31, 2021 and December 31, 2022. The options expire on February 26, 2029. For additional information please see note 13 below. (12) 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 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. (13) 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. 40 (14) On 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 agreements. The options expire on September 11, 2029. (15) On January 8, 2020, 190,000 options were granted to Nadav Kidron under the 2019 Plan at an exercise price of $4.80 per share. 47,500 of the options vested on December 31, 2020 and the remainder shall vest in three equal installments of 47,500 on each of December 31, 2021, December 31, 2022 and December 31, 2023. The options expire on January 8, 2030. (16) On January 8, 2020, 100,000 options were granted to Miriam Kidron under the 2019 Plan at an exercise price of $4.80 per share. 25,000 of the options vested on December 31, 2020 and the remainder shall vest in three equal installments of 25,000 on each of December 31, 2021, December 31, 2022 and December 31, 2023. The options expire on January 8, 2030. (17) On February 3, 2021, 150,000 options were granted to Nadav Kidron under the 2019 Plan at an exercise price of $10.40 per share. Such options shall vest in four equal installments of 37,500 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. The options expire on February 3, 2031. (18) On February 3, 2021, 100,000 options were granted to Miriam Kidron under the 2019 Plan at an exercise price of $10.40 per share. Such options shall vest in four equal installments of 25,000 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. The options expire on February 3, 2031. (19) On February 3, 2021, 40,000 options were granted to Avraham Gabay under the 2019 Plan at an exercise price of $10.40 per share. Such options shall vest in four equal installments of 10,000 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. The options expire on February 3, 2031. (20) On February 3, 2021, 50,000 options were granted to Joshua Hexter under the 2019 Plan at an exercise price of $10.40 per share. Such options shall vest in four equal installments of 12,500 on each of December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. The options expire on February 3, 2031. (21) On February 3, 2021, 300,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Nadav Kidron. 100,000 RSUs vested in one installment on August 31, 2021 and the remainder shall vest per the following: 100,000 shares shall vest upon our common stock achieving a specified price per share, and 100,000 shall vest upon our achievement of certain business objectives. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (22) On February 3, 2021, 200,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Miriam Kidron. 66,666 RSUs vested in one installment on August 31, 2021 and the remainder shall vest per the following: 66,667 shares shall vest upon our common stock achieving a specified price per share, and 66,667 shall vest upon our achievement of certain business objectives. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (23) On February 3, 2021, 100,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Joshua Hexter. 33,333 RSUs vested in one installment on August 31, 2021 and the remainder shall vest per the following: 33,333 shares shall vest upon our common stock achieving a specified price per share, and 33,334 shall vest upon our achievement of certain business objectives. The shares of common stock underlying the RSUs will be issued upon request of the grantee. (24) On August 4, 2021, 100,000 options were granted to Michael Rabinowitz under the 2019 Plan at an exercise price of $15.10 per share. The options shall vest as follows: 12,500 on December 31, 2021, three equal annual installments of 25,000 on each of December 31, 2022, 2023 and 2024 and 12,500 on August 4, 2025. The options expire on August 4, 2031. (25) On August 4, 2021, 100,000 RSUs, representing a right to receive shares of the Company’s common stock, were granted to Michael Rabinowitz. 66,666 shares shall vest upon our common stock achieving a specified price per share, and 33,334 shall vest upon our achievement of certain business objectives. (26) Mr. Gabay resigned from his positions, effective July 4, 2021. Following his resignation, 39,250 options and 53,334 RSUs were forfeited. Compensation Committee Interlocks and Insider Participation During fiscal 2021, Mr. Aviad Friedman, Mr. Kevin Rakin and Mr. Leonard Sank served as the members of our Compensation Committee. None of the members of our Compensation Committee is, or has been, an officer or employee of ours. 41 During the last year, none of our NEOs served as: (1) a member of the compensation committee (or other committee of the Board performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on the compensation committee; (2) a director of another entity, one of whose executive officers served on the compensation committee; or (3) a member of the compensation committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director on our Board. DIRECTOR COMPENSATION The following table provides information regarding compensation earned by, awarded or paid to each person for serving as a director who is not an executive officer during fiscal 2021: Name of Director Fees Earned or Paid in Cash ($) Stock Awards (2) (3) ($) Option Awards (2) (3) ($) All Other Compensation ($) Total ($) Nadav Kidron (1) - - - - - Miriam Kidron (1) - - - - - Aviad Friedman 20,000 - - - 20,000 Arie Mayer 20,000 - - - 20,000 Kevin Rakin 20,000 217,764 98,048 - 335,812 Leonard Sank 20,000 - - - 20,000 Gao Xiaoming (4) 20,000 - - - 20,000 (1) Please refer to the Summary Compensation Table for executive compensation with respect to the named individual. (2) As of August 31, 2021, our non-employee directors then in office held options to purchase shares of our common stock and RSUs as follows: Name of Director Aggregate Number of Shares Underlying Stock Awards Aggregate Number of Shares Underlying Option Awards Aviad Friedman - 40,857 Arie Mayer - 20,000 Kevin Rakin 30,000 28,334 Leonard Sank - 69,867 Gao Xiaoming - 6,666 (3) The amounts reflect the grant date fair value, as calculated pursuant to FASB ASC Topic 718, of these option awards. The assumptions used to 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. (4) Gao Xiaoming’s term as a director expired on August 30, 2021. 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 2021. 42 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Stock Option Plans Our Board adopted the 2008 Plan and the 2019 Plan in order to attract and retain quality personnel. The 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”. Under the 2008 Plan, as amended, 2,400,000 shares were reserved for the grant of awards. As of August 31, 2021, options with respect to 2,287,989 shares had been granted, of which 275,673 had been forfeited, 254,697 had been exercised and 1,166,586 have expired. As of August 31, 2021, 525,824 RSUs had been granted, of which 164,636 have vested and the shares of common stock underlying those RSUs have not been issued and 34,118 have been forfeited. The 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. On June 29, 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 shares. 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, 2021, options with respect to 1,454,646 shares have been granted, of which 52,584 had been forfeited, 31,312 had been exercised and none of them were expired. As of August 31, 2021, 810,000 RSUs had been granted, of which 236,665 have vested and the shares of common stock underlying those RSUs have not been issued and 53,334 have been forfeited. 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, 2021: Plan category Number of securities to be issued upon exercise of outstanding options, RSUs and rights (a) Weight- average exercise price of outstanding options, RSUs and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2,883,085 $ 4.57 841,272 Equity compensation plans not approved by security holders -- -- -- Total 2,883,085 $ 4.57 841,272 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 24, 2021 by: (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 38,086,020 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 24, 2021. 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, Third Floor, New York, NY 10036. 43 Name and Address of Beneficial Owner Number of Shares Percentage of Shares Beneficially Owned Nadav Kidron #+ 1,601,821 (1) 4.1 % Miriam Kidron #+ 530,799 (2) 1.4 % Aviad Friedman # 34,190 (3) * Avraham Gabay+ - (4) * David Silberman+ - * Joshua Hexter+ 172,083 (5) * Michael Rabinowitz+ 66,666 (6) * Arie Mayer # 16,333 (7) * Kevin Rakin # 68,671 (8) * Leonard Sank # 202,089 (9) * All current executive officers and directors, as a group (nine persons) 2,692,652 (10) 7.0 % * Less than 1% # Director + NEO (1) Includes 545,009 shares of common stock issuable upon the exercise of outstanding stock options and 189,636 shares of Common Stock underlying vested RSUs that are issuable upon request. Mr. Nadav’s beneficial ownership includes the 218,603 shares of common stock held by Xiaopeng Li, a former director of the Company, over which he holds a proxy. (2) Includes 389,133 shares of common stock issuable upon the exercise of outstanding stock options and 141,666 shares of Common Stock underlying vested RSUs that are issuable upon request. (3) Includes 34,190 shares of common stock issuable upon the exercise of outstanding stock options. (4) Mr. Gabay resigned from his positions, effective July 4, 2021. (5) Includes 68,750 shares of common stock issuable upon the exercise of outstanding stock options. (6) Includes 33,333 shares of common stock issuable upon the exercise of outstanding stock options and 33,333 shares of Common Stock underlying vested RSUs that are issuable upon request. (7) Includes 13,333 shares of common stock issuable upon the exercise of outstanding stock options. (8) Includes 11,667 shares of common stock issuable upon the exercise of outstanding stock options (9) Includes 63,200 shares of common stock issuable upon the exercise of outstanding stock. (10) Includes 1,158,615 shares of Common Stock issuable upon the exercise of options beneficially owned by the referenced persons and 364,635 shares of Common Stock underlying vested RSUs that are issuable upon request. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. During fiscals 2021 and 2020, 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. 44 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. 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. 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 would 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 deemed appropriate except for matters related to our activities in the People’s Republic of China, on which Mr. Kidron would consult with HTIT before taking any action as proxy. On August 19, 2021, the proxy was revoked in accordance with its terms by HTIT. The Board has determined that Aviad Friedman, Arie Mayer, Kevin Rakin and Leonard Sank are independent as defined under the rules promulgated by Nasdaq. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The aggregate fees billed by Kesselman & Kesselman, independent registered public accounting firm, and member firm of PricewaterhouseCoopers International Limited, for services rendered to us during fiscals 2021 and 2020: 2021 2020 Audit Fees (1) $ 90,000 $ 95,000 Audit-Related Fees (2) 47,500 101,000 Tax Fees (3) 1,400 2,000 All Other Fees - - Total Fees $ 138,900 $ 198,000 (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 services rendered in connection with our February 2020 public offering of common stock for fiscal 2020 and at-the-market offering related fees. (3) 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 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 management. 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. 45 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Index to Financial Statements The following consolidated financial statements are filed as part of this Annual Report on Form 10-K: Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1 CONSOLIDATED FINANCIAL STATEMENTS: Balance sheets F-2 Statements of loss F-3 Statements of changes in equity F-4 Statements of cash flows F-5 Notes to financial statements F-6 - F-26 ________________ 46 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, 2021 and 2020, and the related consolidated statements of 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, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’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. 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. 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. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. We determined there are no critical audit matters. /s/ Kesselman & Kesselman Certified Public Accountants (Isr.) A member firm of PricewaterhouseCoopers International Limited Tel Aviv, Israel November 24, 2021 We have served as the Company’s auditor since 2008. Kesselman& Kesselman, Trade Tower, 25 Hamered Street, Tel-Aviv 6812508, Israel, P.O Box 50005 Tel-Aviv 6150001 Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il F- 1 ORAMED PHARMACEUTICALS INC. CONSOLIDATED BALANCE SHEETS In thousands (except share and per share data) August 31, 2021 2020 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 77,245 $ 19,296 Short-term deposits (note 2) 11,044 11,060 Marketable securities (note 3) 5,851 9,544 Prepaid expenses and other current assets 1,197 611 Total current assets 95,337 40,511 LONG-TERM ASSETS: Long-term deposits (note 4) 25,016 2 Marketable securities (note 3) 6,692 3,928 Amounts funded in respect of employee rights upon retirement 24 18 Property and equipment, net 397 99 Operating lease right of use assets 533 75 Total long-term assets 32,662 4,122 Total assets $ 127,999 $ 44,633 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses (note 5) $ 3,792 $ 1,699 Deferred revenues 2,703 2,703 Payable to related parties (note 11c) 54 90 Operating lease liabilities 130 44 Total current liabilities 6,679 4,536 LONG-TERM LIABILITIES: Long-term deferred revenues 4,244 6,947 Employee rights upon retirement 21 18 Provision for uncertain tax position (note 10f) 11 11 Operating lease liabilities 403 31 Other liabilities 124 211 Total long-term liabilities 4,803 7,218 COMMITMENTS (note 6) EQUITY EQUITY ATTRIBUTABLE TO COMPANY’S STOCKHOLDERS’ : Common stock, $ 0.012 par value ( 60,000,000 authorized shares as of August 31, 2021 and August 31, 2020; 35,293,889 and 23,675,530 shares issued and outstanding as of August 31, 2021 and 2020, respectively) 424 284 Additional paid-in capital 230,201 125,209 Accumulated deficit ( 114,852 ) ( 92,614 ) Total stockholders’ equity 115,773 32,879 Non-controlling interests 744 - Total equity 116,517 32,879 Total liabilities and equity $ 127,999 $ 44,633 The accompanying notes are an integral part of the financial statements. F- 2 ORAMED PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF LOSS In thousands (except share and per share data) Year ended August 31, 2021 2020 REVENUES $ 2,703 $ 2,710 RESEARCH AND DEVELOPMENT EXPENSES 20,989 10,235 GENERAL AND ADMINISTRATIVE EXPENSES 5,937 4,232 OPERATING LOSS 24,223 11,757 FINANCIAL INCOME (note 9a) 1,242 690 FINANCIAL EXPENSES (note 9b) 8 444 NET LOSS $ 22,989 $ 11,511 NET LOSS ATTRIBUTABLE TO: COMPANY’S SHAREHOLDERS 22,238 11,511 NON-CONTROLLING INTERESTS 751 - NET LOSS 22,989 11,511 BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK $ 0.78 $ 0.56 WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK USED IN COMPUTING BASIC AND DILUTED LOSS PER SHARE OF COMMON STOCK 28,469,068 20,532,347 The accompanying notes are an integral part of the financial statements. F- 3 ORAMED PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY in thousands Attributable to Company’s Shareholders Additional Total Non- Common Stock paid-in Accumulated stockholders’ controlling Total Shares $ capital deficit equity interests Equity In thousands BALANCE AS OF SEPTEMBER 1, 2019 17,383 208 100,288 ( 81,103 ) 19,393 - 19,393 SHARES ISSUED FOR SERVICES 10 * 38 38 38 ISSUANCE OF COMMON STOCK, NET 6,270 75 23,698 23,773 23,773 EXERCISE OF WARRANTS AND OPTIONS 12 1 12 13 13 STOCK-BASED COMPENSATION - - 1,173 1,173 1,173 NET LOSS ( 11,511 ) ( 11,511 ) ( 11,511 ) BALANCE AS OF AUGUST 31, 2020 23,675 284 125,209 ( 92,614 ) 32,879 32,879 ISSUANCE OF COMMON STOCK, NET 8,467 102 79,881 79,983 79,983 EXERCISE OF WARRANTS AND OPTIONS 3,151 38 21,371 21,409 21,409 STOCK-BASED COMPENSATION - - 2,695 2,695 2,695 ASSET ACQUISITION TRANSACTION 1,045 1,045 ( 751 ) 294 NET LOSS ( 22,238 ) ( 22,238 ) 1,495 ( 20,743 ) BALANCE AS OF AUGUST 31, 2021 35,293 424 230,201 ( 114,852 ) 115,773 744 116,517 * Represents an amount of less than $1. The accompanying notes are an integral part of the financial statements F- 4 ORAMED PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands Year ended August 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 22,989 ) $ ( 11,511 ) Adjustments required to reconcile net loss to net cash used in operating activities: Depreciation 77 7 Non-cash expense for acquired In-Process Research & Development (or IPR&D) 1,040 - Exchange differences and interest on deposits and held to maturity bonds 187 546 Changes in fair value of investments ( 876 ) 1,173 Stock-based compensation 2,695 465 Shares issued for services - 38 Changes in operating assets and liabilities: Prepaid expenses and other current assets ( 586 ) 431 Accounts payable, accrued expenses and related parties 2,060 ( 816 ) Deferred revenues ( 2,703 ) ( 2,710 ) Liability for employee rights upon retirement 3 ( 4 ) Other liabilities ( 89 ) ( 59 ) Total net cash used in operating activities ( 21,181 ) ( 12,440 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 375 ) ( 82 ) Investment in short-term deposits ( 18,460 ) ( 27,204 ) Purchase of mutual funds - ( 3,750 ) Investment in long-term deposits ( 25,000 ) - Proceeds from sale of mutual funds 3,765 - Purchase of held to maturity securities ( 10,362 ) ( 8,428 ) Proceeds from redemption of short-term deposits 18,460 40,891 Proceeds from maturity of held to maturity securities 8,209 3,200 Funds in respect of employee rights upon retirement ( 1 ) ( 1 ) Total net cash provided by (used in) investing activities ( 23,764 ) 4,626 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock, net of issuance costs 79,983 23,773 Proceeds from exercise of warrants and options 21,409 13 Transaction with non-controlling interests 1,500 Total net cash provided by financing activities 102,892 23,786 EFFECT OF EXCHANGE RATE CHANGES ON CASH 2 ( 5 ) INCREASE IN CASH AND CASH EQUIVALENTS 57,949 15,967 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 19,296 3,329 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 77,245 $ 19,296 (A) SUPPLEMENTARY DISCLOSURE ON CASH FLOWS: Interest received $ 563 $ 1,313 (B) SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: Recognition of operating lease right of use assets and liabilities 582 - (C) ASSET ACQUISITION TRANSACTION (see note 12): IPR&D 1,040 - Transaction with non-controlling interests 1,500 - Additional paid in capital ( 1,045 ) - Non-controlling interests ( 1,495 ) - The accompanying notes are an integral part of the financial statements F- 5 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: a. General 1) Incorporation and operations Oramed Pharmaceuticals Inc. (collectively with its 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. On March 11, 2011, the Company was reincorporated 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 (the “Hong Kong Subsidiary”). As of August 31, 2021, 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. Ltd. (“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”). See note 6b. On March 18, 2021, the Company entered into a license agreement (the “Oravax License Agreement”) and into the Stockholders Agreement (as defined below) with Oravax Medical Inc. (“Oravax”). According to the Stockholders Agreement, Oravax issued 1,890,000 shares of its capital stock to the Company, representing 63 % of the issued and outstanding share capital of Oravax, on a fully diluted basis, as of the date of issuance. See note 12. 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. 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 time. 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 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 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. b. 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. GAAP”). F- 6 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): c. Use of estimates in the preparation of financial statements The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates 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. d. Functional currency The currency of the primary economic environment 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 subsidiaries is the dollar. Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in foreign currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For foreign transactions and other items reflected in the statements of operations, the following exchange rates are used: (1) for transactions - exchange rates at transaction dates or average rates and (2) for other items (derived from non-monetary balance sheet items such as depreciation) - historical exchange rates. The resulting transaction gains or losses are carried to financial income or expenses, as appropriate. e. Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. f. 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. g. Fair value measurement: The Company measures fair value and discloses fair value measurements for financial assets. Fair value is based on the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. August 31, 2021 Level 1 Level 2 Level 3 Fair Value Assets: Marketable Securities D.N.A 701 - - 701 Entera 571 - - 571 1,272 - - 1,272 August 31, 2020 Level 1 Level 2 Level 3 Fair Value Assets: Marketable Securities D.N.A 246 - - 246 Entera 150 - - 150 Mutual Funds 3,298 - - 3,298 3,694 - - 3,694 As of August 31, 2021, 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. F- 7 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): As of August 31, 2021, 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, 2021, 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. Other than items related to the asset acquisition transaction of Oravax (see note 12), there were no Level 3 items measured at fair value for the fiscal 2021. h. Marketable securities 1) Equity securities 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. 2) Held to maturity securities All debt securities are classified as held-to-maturity because the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. On a continuous basis, management assesses whether there are any indicators that the value of the Company’s marketable securities may be impaired, which includes reviewing the underlying cause of any decline in value and the estimated recovery period, as well as the severity and duration 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. i. Concentration of credit risks Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, short and long-term deposits 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 remote. j. Income taxes 1. Deferred taxes Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between 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. See note 10. Regarding the Israeli 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. Until fiscal 2019, the Israeli subsidiary has measured its results for tax purposes in nominal terms in NIS. In order to avoid unfavorable tax implications derived from the fluctuations in the exchange rate, the Israeli subsidiary's results for tax purposes are measured is U.S. dollars starting from fiscal 2020. Taxes that would apply in the event of disposal of investments in the Israeli 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. F- 8 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): 2. Uncertainty in income tax The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the 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. Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance sheet date. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income tax expenses. k. Revenue recognition The License Agreement and the SPA (as defined below) 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 Standard Codification, or 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 method. The Company used the input method to measure the process for the purpose of recognizing revenue, which approximates the straight-line attribution. 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 related to milestones of which the occurrence is not considered the most likely outcome. 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 when the related sale has occurred. To date, the Company has not recognized any royalty-related revenue. Amounts that were allocated to the License Agreement as of August 31, 2021 aggregated $ 22,382 , all of which was received through the balance sheet date. Through August 31, 2021, the Company recognized revenue associated with this agreement in the aggregate amount of $ 15,435 (of which $ 2,703 was recognized in the twelve-months period ended August 31, 2021), and deferred the remaining amount of $ 6,947 , which is presented as a contract liability on the condensed consolidated balance sheet. F- 9 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): l. 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 development. All costs associated with research and development are expensed as incurred. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-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 studies. For each clinical trial that the Company conducts, clinical trial costs are expensed immediately. m. Stock-based compensation Equity awards granted to employees are accounted for using the grant date fair value method. The grant date fair value is determined as follows: for stock options and restricted stock units (“RSUs”) with an exercise price using the Black Scholes pricing model, for stock options and RSUs 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. 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. The Company elects to account for forfeitures as they occur. n. 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 period. Outstanding stock options, warrants and RSUs have been excluded from the calculation of the diluted loss per share because all such securities are anti-dilutive for all periods presented. The weighted average number of stock options, warrants and RSUs excluded from the calculation of diluted net loss was 5,042,299 and 5,025,723 for the years ended August 31, 2021 and 2020, respectively. o. Asset acquisition When determining whether a transaction gives rise to an acquisition of a business or asset group, the Company applies a screening test to determine whether substantially all of the fair value of the gross assets acquired in the transaction is concentrated in a single identifiable asset or group of similar identifiable assets. If so, then the assets are not considered a business and the transaction is accounted for as an asset acquisition. When a transaction is accounted for as an asset acquisition, an IPR&D asset is only capitalized if it has an alternative future use other than in a particular research and development project. Otherwise, amounts allocated to IPR&D that have no alternative use are expensed. The Company has elected an accounting policy to measure non-controlling interests in an asset acquisition at fair value on the date of acquisition. F- 10 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (continued): p. Leases The Company leases real estate and cars for use in its operations, which are classified as operating leases. In addition to rent, the leases may require the Company to pay directly for fees, insurance, maintenance and other operating expenses. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right of use assets and operating lease liabilities in the consolidated balance sheets. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. Lease expenses are recognized on a straight-line basis over the lease term. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities but recognizes lease expenses over the lease term on a straight line basis. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will either exercise or not exercise the option to renew or terminate the lease. The Company’s lease agreements have remaining lease terms ranging from 1 year to 4 years. Some of these agreements include options to extend the leases for up to an additional 5 years and some include options to terminate the leases immediately. See also note 6h. q. Recently issued Accounting Pronouncements, not yet adopted In June 2016, the Financial Accounting Standards Board 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 is not expected to have a significant impact on the Company’s consolidated financial statements. NOTE 2 - SHORT-TERM DEPOSITS: Composition : August 31, 2021 2020 Annual interest rate Amount Annual interest rate Amount Dollar deposits 0.73 - 0.82 % $ 11,044 0.85 - 1.60 % $ 11,060 F- 11 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 3 - MARKETABLE SECURITIES: a. Composition: The Company’s marketable securities include investments in equity securities of D.N.A, Entera, mutual funds and in held to maturity bonds. Composition : August 31, 2021 2020 Short-term: D.N.A (see b below) $ 701 $ 246 Entera (see c below) 571 150 Held to maturity bonds (see d below) 4,579 5,369 Preferred equity - 481 Mutual funds* - 3,298 $ 5,851 $ 9,544 Long-term: Held to maturity bonds (see d below) $ 6,692 $ 3,928 $ 12,543 $ 13,472 * Mutual funds include equity funds only b. D.N.A The D.N.A ordinary shares are traded on the Tel Aviv Stock Exchange. The fair value of those securities is measured at the quoted prices of the securities on the measurement date. During the years ended August 31, 2021 and 2020, the Company did not sell any of the D.N.A ordinary shares. As of August 31, 2021, the Company owns approximately 1.7 % of D.N.A’s outstanding ordinary shares. The cost of the securities as of August 31, 2021 and 2020 was $ 595 . c. Entera 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. The cost of the securities as of August 31, 2021 and 2020 was $ 1 . d. Held to maturity bonds The amortized cost and estimated fair value of held-to-maturity securities at August 31, 2021, are as follows: August 31, 2021 Amortized cost Gross unrealized gains (losses) Estimated fair value Average yield to maturity rate Short-term: Commercial bonds $ 4,463 $ ( 98 ) $ 4,365 1.73 % Accrued interest 116 - 116 Long-term 6,692 610 7,302 1.08 % $ 11,271 $ 512 $ 11,783 F- 12 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 3 - MARKETABLE SECURITIES (continued): 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 Average yield to maturity rate Short-term: Commercial bonds $ 5,295 $ ( 29 ) $ 5,266 2.26 % Accrued interest 74 - 74 Long-term 3,928 56 3,984 2.20 % $ 9,297 $ 27 $ 9,324 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. NOTE 4 - LONG-TERM DEPOSITS: August 31, 2021 2020 Composition: Long-term deposits* $ 25,014 - Lease car deposits $ 2 2 $ 25,016 $ 2 * Long term deposits include one deposit of $ 25,000 with an annual interest rate of 0.93 % and a maturity date of August 10, 2023 . NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Composition: August 31, 2021 2020 Accounts payable $ 2,606 $ 594 Payroll and related accruals 324 54 Institutions 39 19 Accrued liabilities 823 1,032 $ 3,792 $ 1,699 NOTE 6 - COMMITMENTS: a. In March 2011, the Subsidiary sold shares of its investee company, Entera, to D.N.A, retaining 117,000 ordinary shares (after giving effect to a stock split 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. Under this agreement, the Subsidiary is entitled to receive from Entera royalties of 3 % of Entera’s net revenues (as defined in the agreement) and a license back of that patent application for use in respect of diabetes and influenza. As of August 31, 2021, Entera had not yet realized any revenues and had not paid any royalties to the Subsidiary. 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. F- 13 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 6 - COMMITMENTS (continued) : b. 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. As of August 31, 2021, 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 2016. 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 $ 6,000 , 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, 2021, and 2020. 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 shares of common stock to HTIT for $12,000. The transaction closed on December 28, 2015 . The License Agreement and the SPA were considered a single arrangement with multiple deliverables. The Company allocated the 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. The Company determined that revenues are recognized over time through the expected product submission date in June 2023. 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. For the Company’s revenue recognition policy see note 1k. F- 14 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 6 - COMMITMENTS (continued): c. 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 $ 1,592 was recognized in research and development expenses through August 31, 2021. d. 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 III 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 $ 7,663 was recognized in research and development expenses through August 31, 2021. e. 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 III 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 $ 2,935 was recognized in research and development expenses through August 31, 2021. f. 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. At the time the grants were received, successful development of the related projects was not assured. The total amount that was received through August 31, 2021 was $ 2,207 ($ 2,505 including LIBOR). All grants were received before fiscal 2020 and recorded as a reduction of Research and development expenses at that time. As of August 31, 2021, the liability to the IIA was $ 243 . The royalty expenses which are related to the funded project were recognized in cost of revenues in the relevant periods. g. Grants from the European Commission (“EC”) During fiscal 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 of August 31, 2021, all amounts were recognized in the Company’s profit and loss statement. F- 15 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 6 - COMMITMENTS (continued): h. Leases On August 2, 2020, the Subsidiary entered into a lease agreement for its facilities in Israel. The lease agreement is for a period of 60 months commencing September 1, 2020. The Subsidiary has the option to extend the period for another 60 months. The annual lease payment, including management fees, as of August 31, 2021 is approximately NIS 435,000 ($136). 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 total expenses related to leases were $ 124 and $ 56 as of August 31, 2021 and 2020 respectively. The right-of-use asset and lease liability are initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate based on the information available at the date of adoption in determining the present value of the lease payments. The Company’s incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located. The Company has various operating leases for office space and vehicles that expire through 2025 . Below is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of August 31, 2021 and 2020: August 31, 2021 August 31, 2020 Operating right-of-use assets $ 533 $ 75 Operating lease liabilities, current 130 44 Operating lease liabilities long-term 403 31 Total operating lease liabilities $ 533 $ 75 Weighted Average of Remaining Lease Term Operating leases 3.88 1.74 Weighted Average Discount Rate Operating leases 3.00 % 3.00 % Minimum lease payments for the Company’s right-of-use assets over the remaining lease periods as of August 31, 2021 are as follows: August 31, 2021 2022 $ 156 2023 138 2024 136 2025 136 Total undiscounted lease payments 565 Less: Interest* ( 32 ) Present value of lease liabilities $ 533 * Future lease payments were discounted by 3 % interest rate. F- 16 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 7 - STOCKHOLDERS’ EQUITY: The following are the significant capital stock transactions that took place during the years ended August 31, 2021 and 2020: a. In August 2019, the Company became aware of a shareholder 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. Such 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 11, 2019. Out of the available options under the 2019 Plan, the Company 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. b. On September 5, 2019, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”), pursuant to which the Company could, 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 were to 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 paid 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, 2021, 3,212,621 shares were issued under the Sales Agreement for aggregate net proceeds of $ 14,397 . c. 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. On April 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. d. On December 1, 2020, the Company entered into a new equity distribution agreement (the “New Sales Agreement”), pursuant to which the Company could, 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 $ 40,000 , 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 dated February 10, 2020 as supplemented by a prospectus supplement dated December 1, 2020. The Company paid 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 New Sales Agreement. As of August 31, 2021, 4,061,956 shares were issued under the New Sales Agreement for aggregate net proceeds of $ 38,799 . F- 17 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 7 - STOCKHOLDERS’ EQUITY (continued): e. On June 16, 2021, the Company entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC, as agent (“Canaccord Genuity”), pursuant to which the Company could issue and sell shares of its common stock having an aggregate offering price of up to $ 28,000 from time to time through Canaccord Genuity. The Equity Distribution Agreement replaced the New Sales Agreement, once it had been exhausted. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus dated February 10, 2020 and prospectus supplement dated June 16, 2021. The Company paid 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 Equity Distribution Agreement. As of August 31, 2021, 1,823,287 shares were issued under the Equity Distribution Agreement for aggregate net proceeds of $ 27,119 . f. On July 15, 2021, the Company entered into a new equity distribution agreement (the “New Equity Distribution Agreement”) with Canaccord Genuity, pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 100,000 from time to time through Canaccord Genuity. The New Equity Distribution Agreement replaced the Equity Distribution Agreement, once it had been exhausted. Any shares sold will be sold pursuant to the Company’s effective shelf registration statement on Form S-3 including a prospectus dated July 15, 2021. The Company paid 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 New Equity Distribution Agreement. As of August 31, 2021 and through November 24, 2021, 208,451 and 273,997 shares were respectively issued under the New Equity Distribution Agreement for aggregate net proceeds of $ 3,884 . g. As of August 31, 2021, the Company had outstanding warrants exercisable commencing January 6, 2019 for 232,175 shares of common stock at exercise prices ranging from $ 4.13 to $ 7.8125 per share and expiring from January 6, 2022 to April 15, 2029. The following table presents the warrant activity for the years ended August 31, 2021 and 2020: Year ended August 31, 2021 2020 Warrants Weighted- Average Exercise Price Warrants Weighted- Average Exercise Price Warrants outstanding at beginning of year 3,407,820 $ 6.98 3,007,680 $ 7.27 Issued - $ - 400,140 $ 4.77 Exercised 3,175,645 $ 7.07 - $ - Expired - $ - - $ - Warrants outstanding at end of year 232,175 $ 5.57 3,407,820 $ 6.98 Warrants exercisable at end of year 232,175 $ 5.57 3,407,820 $ 6.98 NOTE 8 - STOCK-BASED COMPENSATION: 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 or RSU 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 and RSUs is 10 years. The following are the significant stock options and RSUs transactions with employees, board members and non-employees made during the years ended August 31, 2021 and 2020: a. On September 11, 2019, the Company granted options to its Chief Operating and 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 (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, 2021, 50,000 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 65.60 %; risk-free interest rates of 1.89 %; and expected term of 6.14 years. F- 18 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): b. On September 11, 2019, the Company granted options to its Chief Operating and 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 (equivalent to the closing price of the Company’s common stock on the date of grant). The options shall vest in four installments upon achievement of certain performance conditions. As of August 31, 2021, 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 of 67.96 %; risk-free interest rates of 1.68 %; expected term of 6.91 years; and the probability that such performance conditions will occur. c. 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. As of August 31, 2021, 33,330 of such options are vested. The options expire on January 8, 2030. The 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 ; dividend yield of 0 % for all years; expected volatility of 62.55 %; risk-free interest rates of 1.67 %; and expected term of 5.99 . d. 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 Company’s Chief Executive Officer, or CEO, and 100,000 to the Company’s Chief Scientific Officer, or CSO. The options shall vest in four equal annual installments, on each of December 31, 2020, 2021, 2022 and 2023. As of August 31, 2021, 72,500 of such options are vested. 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 $ 4.80 ; dividend yield of 0 % for all years; expected volatility of 67.87 %; risk-free interest rates of 1.67 %; and expected term of 6.24 years. e. On February 3, 2021, the Company granted options to purchase an aggregate of 340,000 shares of common stock of the Company at an exercise price of $ 10.40 per share (equivalent to the closing price of the Company’s common stock on the date of grant) as follows: 150,000 to the CEO, 100,000 to the CSO, 40,000 to the Company’s former Chief Financial Officer and 50,000 to the Company’s Chief Operating & Business Officer. The options shall vest in four equal annual installments, on each of December 31, 2021, 2022, 2023 and 2024. These options expire on February 3, 2031. The fair value of all these options on the date of grant was $ 1,987 , using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $ 10.40 ; dividend yield of 0 % for all years; expected volatility of 61.07 %; risk-free interest rates of 0.64 %; and expected term of 6.21 years. On February 3, 2021, the Company granted a total of 680,000 RSUs as follows: 300,000 to the CEO, 200,000 to the CSO, 80,000 to the Company’s former Chief Financial Officer and 100,000 to the Company’s Chief Operating and Business Officer. These RSUs were granted under the Company’s 2019 Plan and shall vest as follows: 226,666 shall vest upon the Company’s common stock achieving a price per share of $ 15 during 20 days out of any 30-day trading period, 226,667 shall vest upon the Company’s common stock achieving a price per share of $ 25 during 20 days out of any 30-day trading period, and 226,667 upon achievement of a certain licensing agreement as specified by the Board of Directors. The total fair value of these RSUs on the date of the grant was $ 4,511 , using the Monte-Carlo model. f. On February 17, 2021, the Company granted options to purchase an aggregate of 15,000 shares of common stock of the Company at an exercise price of $ 11.33 per share (equivalent to the closing price of the Company’s common stock on the date of grant) to the chairman of the Board of Directors. The options shall vest in three equal annual installments, on each of December 31, 2021, 2022 and 2023. These options expire on February 17, 2031. The fair value of all these options on the date of grant was $ 98 , using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $ 11.33 ; dividend yield of 0 % for all years; expected volatility of 64.39 %; risk-free interest rates of 0.76 %; and expected term of 5.94 years. On February 17, 2021, the Company granted a total of 30,000 RSUs to the chairman of the Board of Directors. These RSUs were granted under the Company’s 2019 Plan and shall vest as follows: 10,000 shall vest upon the Company’s common stock achieving a price per share of $ 15 during 20 days out of any 30-day trading period, 10,000 shall vest upon the Company’s common stock achieving a price per share of $ 25 during 20 days out of any 30-day trading period, and 10,000 upon achievement of a certain licensing agreement as specified by the Board of Directors. The total fair value of these RSUs on the date of the grant was $ 217 , using the Monte-Carlo model. F- 19 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): g. On August 4, 2021, the Company granted options to purchase an aggregate of 100,000 shares of common stock of the Company at an exercise price of $ 15.10 per share (equivalent to the closing price of the Company’s common stock on the date of grant) to the Chief Commercial Officer. The options shall vest as follows: 12,500 on December 31, 2021, three equal annual installments of 25,000 on each of December 31, 2022, 2023 and 2024 and 12,500 on August 4, 2025. These options expire on August 4, 2031. The fair value of all these options on the date of grant was $ 860 , using the Black Scholes option-pricing model and was based on the following assumptions: stock price of $ 15.10 ; dividend yield of 0 % for all years; expected volatility of 61.98 %; risk-free interest rates of 0.82 %; and expected term of 6.17 years. On August 4, 2021, the Company granted a total of 100,000 RSUs to the Chief Commercial Officer. These RSUs were granted under the Company’s 2019 Plan and shall vest as follows: 33,333 shall vest upon the Company’s common stock achieving a price per share of $ 15 during 20 days out of any 30-day trading period, 33,333 shall vest upon the Company’s common stock achieving a price per share of $ 25 during 20 days out of any 30-day trading period, and 33,334 upon achievement of a certain licensing agreement as specified by the Board of Directors. The total fair value of these RSUs on the date of the grant was $ 985 , using the Monte-Carlo model. h. 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, 2021 2020 Expected option life (years) 5.94 - 6.21 5.74 - 6.24 Expected stock price volatility (%) 61.07 - 64.39 57.77 - 68.14 Risk free interest rate (%) 0.64 - 0.82 1.67 - 1.89 Expected dividend yield (%) 0.0 0.0 A summary of the status of the stock options granted to employees and directors as of August 31, 2021 and 2020, and changes during the years ended on those dates, is presented below: Year ended August 31, 2021 2020 Number of options Weighted average exercise price Number of options Weighted average exercise price $ $ Options outstanding at beginning of year 1,597,149 5.47 1,264,645 6.11 Changes during the year: Granted 455,000 11.46 943,646 3.98 Forfeited ( 52,584 ) 7.78 ( 392,646 ) 3.79 Expired - - ( 206,243 ) 6.02 Exercised ( 93,782 ) 6.42 ( 12,253 1.00 Options outstanding at end of year 1,905,783 6.79 1,597,149 5.47 Options exercisable at end of year 859,447 687,024 Weighted average fair value of options granted during the year $ 6.47 $ 2.79 Expenses recognized in respect of stock options granted to employees and directors, for the years ended August 31, 2021 and 2020 were $ 1,409 and $ 1,086 , respectively. The total intrinsic value of employees’ options exercised during the year ended August 31, 2021 was $ 1,287 and $ 27 during the year ended August 31, 2020. F- 20 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): The following table presents summary information concerning the options granted to employees and directors outstanding as of August 31, 2021: Exercise prices Number outstanding Weighted Average Remaining Contractual Life Weighted average exercise price $ Years $ 1.00 to 6.00 1,064,084 7.01 3.98 6.23 to 9.12 306,781 6.11 7.94 10.40 to 15.10 534,918 8.12 11.73 1,905,783 7.18 6.79 859,447 options granted to employees and directors that were outstanding as of August 31, 2021 were also exercisable as of August 31, 2021, compared to 687,024 as of August 31, 2020. As of August 31, 2021, there were $ 2,598 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 1.3 years. A summary of the status of the stock options granted to non-employees outstanding as of August 31, 2021 and 2020, and changes during the years ended on those dates, is presented below: Year ended August 31, 2021 2020 Number of options Weighted average exercise price Number of options Weighted average exercise price $ $ Options outstanding at beginning of year 103,152 6.64 47,152 9.51 Changes during the year: Granted - - 56,000 4.21 Exercised ( 10,000 ) 7.36 - - Forfeited - - - - Expired ( 37,152 ) 6.00 - - Options outstanding at end of year 56,000 4.22 103,152 6.64 Options exercisable at end of year 46,000 4.03 65,152 5.58 Weighted average fair value of options granted during the year $ - $ 2.47 The Company recorded stock-based compensation of $ 22 and $ 87 during the years ended August 31, 2021 and 2020, respectively, related to non-employees’ awards. 10,000 options were exercised by non-employees during the year ended August 31, 2021 for a total intrinsic value of $ 100 while no options were exercised by non-employees during the year ended August 31, 2020. F- 21 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 8 - STOCK-BASED COMPENSATION (continued): The following table presents summary information concerning the options granted to non-employees outstanding as of August 31, 2021: Range of exercise prices Number outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ Years $ 3.74-5.08 56,000 8.30 4.22 46,000 options granted to non-employees that were outstanding as of August 31, 2021, were also exercisable as of August 31, 2021. As of August 31, 2021, there were $ 2 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 0.17 years. i. Restricted stock units The following table summarizes the activities for unvested RSUs granted to employees and directors for the years ended August 31, 2021 and 2020: Year ended August 31, 2021 2020 Number of RSUs Vested and unissued at the beginning of period 164,636 164,636 Granted 810,000 - Forfeited ( 53,334 ) - Outstanding at the end of the period 921,302 164,636 Vested 236,665 - Vested and unissued 401,301 164,636 The Company recorded compensation expenses related to RSUs of $ 1,265 for the year ended August 31, 2021. During the year ended August 31, 2020, the Company did not record expense or income related to RSUs. As of August 31, 2021, there were unrecognized compensation costs of $ 4,201 related to RSUs. The unrecognized compensation costs are expected to be recognized over a weighted average period of 1.06 years. F- 22 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 9 - FINANCIAL INCOME AND EXPENSES a. Financial income Year ended August 31, 2021 2020 Income from interest on deposits $ 130 $ 552 Income from interest on corporate bonds 217 138 Gain from securities, net 6 - Revaluation of securities, net 889 - $ 1,242 $ 690 b. Financial expenses Year ended August 31, 2021 2020 Exchange rate differences, net $ 2 $ 6 Bank and broker commissions 5 6 Loss from securities, net - 432 Other 1 - $ 8 $ 444 NOTE 10 - TAXES ON INCOME: Taxes on income included in the consolidated statements of operations represent current taxes due to taxable income of the Company and its Israeli subsidiary. a. Corporate taxation in the U.S. The applicable corporate tax rate for the Company is 21 %. As of August 31, 2021, the Company has an accumulated tax loss carryforward of approximately $ 19,159 (as of August 31, 2020, $ 15,880 ). Under U.S. 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. b. Corporate taxation in Israel: The Subsidiary is taxed in accordance with Israeli tax laws. The corporate tax rate applicable to 2021 and 2020 is 23 %. As of August 31, 2021, the Subsidiary has an accumulated tax loss carryforward of approximately $ 73,762 (as of August 31, 2020, approximately $ 57,900 ). Under the Israeli tax laws, carryforward tax losses have no expiration date. F- 23 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - TAXES ON INCOME (continued): c. Deferred income taxes: August 31, 2021 2020 In respect of: Net operating loss carryforward $ 21,196 $ 16,652 Research and development expenses 3,877 2,740 Less - valuation allowance ( 25,073 ) ( 19,392 ) 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. d. Loss before taxes on income and income taxes included in the income statements of operations: Year ended August 31, 2021 2020 Loss before taxes on income: U.S. $ 5,307 $ 2,868 Outside U.S. 17,682 8,643 $ 22,989 $ 11,511 Taxes on income (tax benefit): Current: U.S. - - Outside U.S. - - $ - $ - e. Reconciliation of the statutory tax benefit to effective tax expense Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies in the United States, and the actual tax expense: Year ended August 31, 2021 2020 Loss before income taxes as reported in the consolidated statement of comprehensive loss $ ( 22,989 ) $ ( 11,511 ) Statutory tax benefit ( 4,828 ) ( 2,417 ) Increase in income taxes resulting from: Change in the balance of the valuation allowance for deferred tax 4,872 3,154 Disallowable deductions 310 135 Influence of different tax rate applicable to the Subsidiary and changes in tax rates from previous years ( 354 ) ( 872 ) Withholding tax, see note 10d above - - Uncertain tax position - - Taxes on income for the reported year $ - $ - F- 24 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 10 - TAXES ON INCOME (continued): f. Uncertainty in Income Taxes ASC Topic 740, “Income Taxes” 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: Year ended August 31, 2021 2020 Balance at Beginning of Year $ 11 $ 11 Decrease in uncertain tax positions for the current year - - Balance at End of Year $ 11 $ 11 The Company does not expect unrecognized tax expenses to change significantly over the next 12 months. The Company is subject to U.S. Federal income tax examinations for the tax years of 2016 through 2018. The Subsidiary is subject to Israeli income tax examinations for the tax years of 2014 through 2019. g. Valuation Allowance Rollforward Year ended August 31, Balance at beginning of period Additions Balance at end of period Allowance in respect of carryforward tax losses: Year ended August 31, 2021 $ 19,392 $ 5,681 $ 25,073 Year ended August 31, 2020 16,238 3,154 19,392 NOTE 11 - RELATED PARTIES - TRANSACTIONS: a. During each of the fiscal years of 2021 and 2020, the Company paid to directors $ 100 and $ 95 , respectively, as directors’ fees. b. On July 1, 2008, the Subsidiary entered into two consulting agreements with KNRY Ltd. (“KNRY”), an Israeli company owned by the CSO, whereby the CEO and the CSO, through KNRY, provide services to the Company (the “Consulting Agreements”). The 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 ($40) and NIS 92,522 ($29), respectively. Starting September 1, 2021, the CEO receives a monthly consulting fee of NIS 146,705 ($46) and the CSO receives a monthly consulting fee of NIS 106,400 ($33) F- 25 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 11 - RELATED PARTIES - TRANSACTIONS (continued): In addition to the Consulting Agreements, based on a relocation cost analysis, the Company pays for certain direct costs, related taxes and expenses incurred in connection with the relocation of the CEO to New York. During fiscal 2021 and 2020, such relocation expenses totaled $ 377 and $ 516 , respectively. c. Balances with related parties: August 31, 2021 2020 Accounts payable and accrued expenses - KNRY $ 54 $ 90 d. Expenses to related parties: Year ended August 31, 2021 2020 KNRY $ 872 $ 766 Nadav Kidron (CEO) $ 687 801 NOTE 12 - ASSET ACQUISITION TRANSACTION On March 18, 2021, the Company entered into the Oravax License Agreement and into the Stockholders Agreement (as defined below) with Oravax. On that date, Oravax’s assets were (1) in process research and development of COVID-19 vaccine technology; and (2) $1,500 received in cash. According to the Stockholders Agreement, Oravax issued 1,890,000 shares of its capital stock to the Company, representing 63% of the issued and outstanding share capital of Oravax, on a fully diluted basis, as of the date of issuance. Consequently, the Company is consolidating Oravax in its consolidated financial statements as from the inception of Oravax. In addition, under the terms of the Oravax License Agreement, the Company has licensed out to Oravax certain patent rights, know-how and information related to the Company’s oral drug delivery technology with respect to the combination with the COVID-19 vaccine technology (the “Licensed IP”). In consideration for the grant of the License, the Oravax License Agreement provides that the Company will receive (i) royalties equal to 7.5 % on net sales, as defined in the Oravax License Agreement, of each product commercialized by Oravax, its affiliates and permitted sublicensees related to the License during the term specified in the Oravax License Agreement, (ii) sublicensing fees equal to 15 % of any non-sales-based consideration received by Oravax from a permitted sublicensee and (iii) other payments ranging between $ 25,000 to $ 100,000 , based on certain sales milestones being achieved by Oravax. The parties further agreed to establish a development and steering committee, which will consist of three members, of which two members will be appointed by the Company, that will oversee the ongoing research, development, clinical and regulatory activity with respect to the Oravax Product. Akers Biosciences Inc. (“Akers”) contributed Oravax $ 1,500 in cash and a license agreement to the Oravax Product which includes a maximum of 2.5 % royalties of all net sales. Concurrently with the execution and delivery of the Oravax License Agreement, the Company entered into a Stockholders Agreement (the “Stockholders Agreement”), with Akers, Premas Biotech Pvt. Ltd. (“Premas”), Cutter Mill Capital LLC (“Cutter Mill”), and Run Ridge LLC (“Run Ridge”), entities controlled by Michael Vasinikovich and Craig Schwabe, former members of Cystron, and collectively with Akers, Premas, Cutter Mill and Run Ridge, the Stockholders Parties. Pursuant to the Stockholders Agreement, among other things, the Company will have the right to appoint two out of the three members to the board of directors of Oravax (the “Oravax Board”), one of which is the Company’s Chief Executive Officer who will serve as the chairman of the Oravax Board, conditioned upon the Company maintaining certain ownership thresholds. Akers will have the right, until the third anniversary of the Stockholders Agreement effective date, to appoint one member to the Oravax Board. Oravax’s common stock held by the Stockholders Parties will be subject to certain transfer restrictions. In addition, the Stockholders Parties will have certain rights of participation in future financings as well as rights of first refusal and co-sale related to future potential transactions. F- 26 ORAMED PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In thousands (except share and per share data) NOTE 12 - ASSET ACQUISITION TRANSACTION (continued): According to ASC 805, the transaction was accounted for as an asset acquisition. No gain or loss was recognized on the transfer of the cash or the Licensed IP to Oravax while the Company retained control of those assets. The Company has recognized an increase in non-controlling interests of $ 1,495 based on the carrying amount of the contributed assets and, according to the Company’s accounting policy, the fair value of Oravax excluding the contributed assets. Any difference between the fair value of consideration paid and the increase in the non-controlling interests’ carrying amount was recognized in equity. As a result of the acquisition, the Company recognized IPR&D expense in the amount of $ 1,040 . NOTE 13 - SUBSEQUENT EVENTS a. On September 1, 2021, the Company granted options to its Chief Financial Officer to purchase an aggregate of 50,000 shares of common stock of the Company at an exercise price of $ 20.19 per share. The options shall vest in four equal installments of 12,500 options on each of June 27, 2022, June 27, 2023, June 27, 2024 and June 27, 2025. In addition, The Company granted 50,000 RSUs that shall vest as follows: 33,333 if the closing price per share of the Company’s common stock will be at least $25 for at least 20 days out of any 30-trading day period; and 1. If the first condition is met anytime before June 27, 2022, then the RSUs will vest in three equal installments (on June 27, 2022, June 27, 2023 and June 27, 2024). 2. If the first condition is met anytime between June 27, 2022 and June 27, 2023, then 1/3 of the RSUs will vest immediately, and the remainder will vest in two equal installments (on June 27, 2023 and June 27, 2024). 3. If the first condition is met anytime between June 27, 2023 and June 27, 2024, then 2/3 of the RSUs will vest immediately, and the remaining 1/3 will vest on June 27, 2024). 4. If the first condition is met anytime after June 27, 2024, then the RSUs will vest immediately. 16,667 upon achievement of a certain licensing agreement as specified by the Board of Directors; and 1. If the first condition is met anytime before June 27, 2022, then the RSUs will vest in three equal installments (on June 27, 2022, June 27, 2023 and June 27, 2024). 2. If the first condition is met anytime between June 27, 2022 and June 27, 2023, then 1/3 of the RSUs will vest immediately, and the remainder will vest in two equal installments (on June 27, 2023 and June 27, 2024). 3. If the first condition is met anytime between June 27, 2023 and June 27, 2024, then 2/3 of the RSUs will vest immediately, and the remaining 1/3 will vest on June 27, 2024). 4. If the first condition is met anytime after June 27, 2024, then the RSUs will vest immediately. These options and RSUs expire on September 1, 2031 . The total value of the options and RSUs is $ 1,572 . b. On September 1, 2021, the Company entered into a controlled equity offering agreement, or the Cantor Equity Distribution Agreement, with Cantor Fitzgerald & Co., as agent (“Cantor Fitzgerald”), pursuant to which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $ 100,000 from time to time through Cantor Fitzgerald. As of November 24, 2021, 565,120 shares issued under the Cantor Equity Distribution Agreement for aggregate net proceeds of $ 12,298 . c. On November 3, 2021, the Company entered into a securities purchase agreement with several institutional and accredited investors, or the Purchasers, pursuant to which the Company agreed to sell, in a registered direct offering, or the Offering, an aggregate of 2,000,000 shares of the Company’s common stock, or the Shares, to the Purchasers for an offering price of $ 25 per Share. The closing of the sale of the Shares occurred on November 5, 2021. The net proceeds to the Company from the Offering, after deducting the placement agent’s fees and expenses and the Company’s estimated Offering expenses, were approximately $ 46,375 . 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. F- 27 (b ) Exhibits 3.1 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 (incorporated by reference from our annual report on Form 10-K filed November 24, 2020) 3.3 Second Amended and Restated By-laws (incorporated by reference from our current report on Form 8-K filed July 15, 2021). 4.1 Specimen Common Stock Certificate (incorporated by reference from our registration statement on Form S-1 filed February 1, 2013). 4.2 Form of Common Stock Purchase Warrant (incorporated by reference from our current report on Form 8-K filed July 5, 2018). 4.3 Form of Underwriter’s Warrant (incorporated by reference from our current report on Form 8-K filed February 28, 2020). 4.4 Description of Securities (incorporated by reference from our annual report on Form 10-K filed November 24, 2020). 10.1+ Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Nadav Kidron (incorporated by reference from our current report on Form 8-K filed July 2, 2008). 10.2+ Amendment, dated July 13, 2013, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.3+ Amendment, dated November 13, 2014, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Nadav Kidron and Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 47 10.4+ Amendment, dated July 21, 2015, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2015). 10.5+ Amendment, dated June 27, 2016, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Nadav Kidron (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.6+ Amendment, dated November 28, 2016, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Nadav Kidron (incorporated by reference from our quarterly report on Form 10-Q filed January 11, 2017). 10.7+* Amendment, dated September 19, 2021, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Nadav Kidron. 10.8+ Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron (incorporated by reference from our current report on Form 8-K filed July 2, 2008). 10.9+ Amendment, dated July 13, 2013, to Consulting Agreement by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008 for the services of Miriam Kidron (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 10.10+ Amendment, dated July 21, 2015, 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 annual report on Form 10-K filed November 25, 2015). 10.11+ Amendment, dated June 27, 2016, 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 annual report on Form 10-K filed November 25, 2016). 10.12+ Amendment, dated June 30, 2017, 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 annual report on Form 10-K filed November 29, 2017). 10.13+ 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). 10.14+* Amendment, dated September 19, 2021, to Consulting Agreements by and between Oramed Ltd. and KNRY, Ltd., entered into as of July 1, 2008, for the services of Miriam Kidron . 10.15+ Oramed Pharmaceuticals Inc. Second Amended and Restated 2008 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed August 4, 2016). 10.16+ Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement (incorporated by reference from our annual report on Form 10-K filed November 14, 2014). 48 10.17+ Form of Restricted Stock Unit Notice and Restricted Stock Unit Agreement between the Company and the CSO or CEO (incorporated by reference from our annual report on Form 10-K filed November 29, 2017). 10.18+ Form of Notice of Stock Option Award and Stock Option Award Agreement (incorporated by reference from our current report on Form 8-K filed July 2, 2008). 10.19+ Oramed Pharmaceuticals Inc. 2019 Stock Incentive Plan (incorporated by reference from our definitive proxy statement on Schedule 14A filed August 6, 2019). 10.20+ 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). 10.21+ 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). 10.22+ Employment Agreement, dated May 16, 2019, by and between Oramed Ltd. and Avraham Gabay (incorporated by reference from our current report on Form 8-K filed May 16, 2019). 10.23+ 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). 10.24+* Employment Agreement, dated July 25, 2021, by and between the Company and Michael Rabinowitz. 10.25+ Employment Agreement, dated May 23, 2021, by and between Oramed Ltd. and David Silberman (incorporated by reference from our quarterly report on Form 10-Q filed July 14, 2021). 10.26+* First Amendment, dated September 19, 2021, to Employment Agreement, by and between Oramed Ltd. and David Silberman. 10.27+ 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). 10.28+ Clinical Trial Agreement, dated July 8, 2009, between Oramed Ltd., Hadasit Medical Research Services and Development Ltd., Miriam Kidron and Itamar Raz (incorporated by reference from our current report on Form 8-K filed July 9, 2009). 10.29 Agreement, dated January 7, 2009, between Oramed Pharmaceuticals Inc. and Hadasit Medical Research Services and Development Ltd. (incorporated by reference from our current report on Form 8-K filed January 7, 2009). 10.30 Patent Transfer Agreement, dated February 22, 2011, between Oramed Ltd. and Entera Bio Ltd. (incorporated by reference from our registration statement on Form S-1 filed March 25, 2011). 49 10.31+* Representative Form of Indemnification Agreements between Oramed Pharmaceuticals Inc. and each of our directors and officers. 10.32+ Employment Agreement, dated August 18, 2019, between Oramed Ltd. and Joshua Hexter (incorporated by reference from our annual report on Form 10-K filed November 27, 2019). 10.33+* First Amendment, dated September 19, 2021, to Employment Agreement, by and between Oramed Ltd. and Joshua Hexter. 10.34 Amended and Restated Technology License Agreement, dated December 21, 2015, between Hefei Tianhui Incubator of Technologies Co., Ltd., Oramed Pharmaceuticals, Inc. and Oramed Ltd. (Confidential treatment has been granted for portions of this document. Incorporated by reference from our quarterly report on Form 10-Q filed January 13, 2016). 10.35 Amendment 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 requested for portions of this document. The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission) (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.36 Amendment 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 requested for portions of this document. The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission) (incorporated by reference from our annual report on Form 10-K filed November 25, 2016). 10.37 Service Agreement, dated as of June 3, 2016, between Oramed Ltd. and XERTECS GmbH (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). 10.38 General Technical Agreement between Oramed Ltd. and Premas Biotech Pvt. Ltd., dated July 24, 2016 (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). 10.39 Equity Distribution Agreement, dated July 15, 2021, by and between the Company and Canaccord Genuity LLC (incorporated by reference from our current report on Form 8-K filed July 15, 2021). 10.40 Equity Distribution Agreement, dated September 1, 2021, by and between the Company and Cantor Fitzgerald & Co. (incorporated by reference from our current report on Form 8-K filed September 1, 2021). 10.41 Clinical Research Organization Services Agreement, dated February 14, 2018 and effective as of November 1, 2017, between Oramed Ltd. and Integrium, LLC (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 quarterly report on Form 10-Q filed April 9, 2018). 50 10.42 Amendment #1 to Clinical Research Organization Services Agreement Protocol # ORA-D-015 between Oramed, Inc. and Integrium, LLC (incorporated by reference from our quarterly report on Form 10-Q filed July 10, 2019). 10.43 Amendment #2 to Clinical Research Organization Services Agreement Protocol # ORA-D-015 between Oramed, Inc. and Integrium, LLC (incorporated by reference from our quarterly report on Form 10-Q filed July 10, 2019). 10.44 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). 10.45 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). 10.46 License Agreement, dated as of March 18, 2021, between the Company, Oramed Ltd. and Oravax Medical Inc. (incorporated by reference from our Form 8-K filed March 19, 2021). 10.47 Stockholders Agreement, dated as of March 18, 2021, between Oramed Pharmaceuticals Inc., Akers Biosciences Inc., Premas Biotech PVT Ltd., Cutter Mill Capital LLC, and Run Ridge LLC. (incorporated by reference from our Form 8-K filed March 19, 2021). 21.1* Subsidiaries. 23.1* Consent of Kesselman & Kesselman, Independent Registered Public Accounting Firm. 31.1* Certification Statement of the Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. 31.2* Certification Statement of the Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. 32.1** Certification Statement of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350. 32.2** Certification Statement of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350. 101.1* The following financial statements from the Company’s annual report on Form 10-K for the year ended August 31, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Loss, (iii) Consolidated Statements of Changes in Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail. 104.1* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith. ** Furnished herewith. + Management contract or compensation plan. ITEM 16. FORM 10-K SUMMARY. None. 51 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ORAMED PHARMACEUTICALS INC. /s/ NADAV KIDRON Nadav Kidron, President and Chief Executive Officer Date: November 24, 2021 52 Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ NADAV KIDRON November 24, 2021 Nadav Kidron, President and Chief Executive Officer and Director (principal executive officer) /s/ DAVID SILBERMAN November 24, 2021 David Silberman, Chief Financial Officer (principal financial and accounting officer) /s/ AVIAD FRIEDMAN November 24, 2021 Aviad Friedman, Director /s/ MIRIAM KIDRON November 24, 2021 Miriam Kidron, Director /s/ ARIE MAYER November 24, 2021 Arie Mayer, Director /s/ KEVIN RAKIN November 24, 2021 Kevin Rakin, Director /s/ LEONARD SANK November 24, 2021 Leonard Sank, Director 53