What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-06 compared with 2021-11-24 · 358 added, 216 removed, 116 unchanged (83% of the section changed)

1 unchanged sentence

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and

analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements

and the related notes included elsewhere herein and in our consolidated financial statements.

In addition to our consolidated

financial statements, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.

actual results could differ materially from those discussed in the forward-looking statements.

Factors that could cause or contribute

to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Cautionary

The following discussion

and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial

statements and the related notes included elsewhere herein and in our audited consolidated financial statements.

In addition to our audited

consolidated financial statements, the following discussion contains forward-looking statements that reflect our plans, estimates and

Our actual results could differ materially from those discussed in the forward-looking statements.

Factors that could cause

or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Cautionary

Statement Regarding Forward-Looking Statements” and “Item 1A.

1 unchanged sentence

Overview of Operations

We are a pharmaceutical company

currently engaged in the research and development of 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 or pills for delivery of other polypeptides.

An overview of our current clinical studies can be found in “Item 1.

Business–- Research and Development.”

We are currently a pharmaceutical

company engaged in the research and development of innovative pharmaceutical solutions with a technology platform that allows for the

oral delivery of therapeutic proteins.

Through our research and development

efforts, we have developed an oral dosage form intended to withstand the harsh environment of the stomach and effectively deliver active

biological insulin or other proteins.

The excipients in the formulation are not intended to modify the proteins chemically or biologically,

and the dosage form is designed to be safe to ingest.

We plan to continue to conduct clinical trials to show the effectiveness of our

On January 11, 2023, we announced

that the ORA-D-013-1 Phase 3 trial did not meet its primary and secondary endpoints.

As a result, we have initiated a comprehensive analysis

of the data to understand if there is a path forward for our oral insulin candidate.

Concurrently, we are examining our existing pipeline

and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders.

Impact of COVID-19

We do not expect any material

impact on our development timeline and our liquidity due to COVID-19.

However, we experienced approximately six months of delays in clinical

trials due to slow-downs of recruitment for trials generally.

On the other hand, Oravax continues to develop its oral vaccine, the demand

for which may be reduced if COVID-19 continues to abate.

We continue to assess the effect on our operations by monitoring the status of

Results of Operations

Critical accounting

Our significant accounting

policies are more fully described in the notes to our accompanying consolidated financial statements.

We believe that the accounting policies

below are critical for one to fully understand and evaluate our financial condition and results of operations.

The discussion and analysis

of our financial condition and results of operations is based on our consolidated financial statements, which we prepared in accordance

generally accepted accounting principles, or GAAP.

The preparation of our consolidated financial statements requires us to make

estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities

at the date of the consolidated financial statements, as well as the reported revenues and expenses during the reporting periods.

ongoing basis, we evaluate such estimates and judgments.

We base our estimates on historical experience and on various other factors that

we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of

assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different

assumptions or conditions.

Valuation of options

and warrants :

We grant options to purchase shares of our common stock to employees and consultants and have and may in the future

issue warrants in connection with some of our financings and to certain other consultants.

We account for share-based

payments to employees, directors and consultants in accordance with the guidance that requires awards classified as equity awards to be

accounted for using the grant-date fair value method.

The fair value of share-based payment transactions is based on the Black Scholes

option-pricing model or Monte Carlo model when appropriate and is recognized as an expense over the vesting period.

We elected to recognize compensation

cost for awards to employees, directors and consultants that have a graded vesting schedule using the accelerated method based on the

multiple-option award approach.

Revenue recognition :

Revenue is recognized when delivery has occurred, evidence of an arrangement exists, title and risks and rewards for the products are

transferred to the customer and collection is reasonably assured.

Under Accounting Standards

Codification, or ASC, 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018)

given our continuing involvement through the expected product submission in June 2023, amounts received relating to the License Agreement

were recognized over the period from which we were entitled to the respective payment, and the expected product submission date using

a time-based model approach over the periods that the fees were earned.

However, under ASC 606, we

are required to recognize the total transaction price (which includes consideration related to milestones once the criteria for recognition

have been satisfied) using the input method over the period the performance obligation is fulfilled.

Accordingly, once the consideration

associated with a milestone is included in the transaction price, incremental revenue is recognized immediately based on the period of

time that has elapsed towards complete satisfaction of the performance obligation.

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.

Comparison of Fiscal

2021 to Fiscal 2020

The following table summarizes

certain statements of operations data for us for the twelve month periods ended August 31, 2021 and 2020:

Operating Data:

(dollar amounts in thousands, except per share data)

The table and discussion that

follows includes a comparison of our results of operations and liquidity and capital resources for the year ended December 31, 2022 and

the year ended December 31, 2021 and the four month periods ended December 31, 2021 and 2020.

For a comparison of our results of operations

and financial condition for the fiscal years ended August 31, 2021 and 2020, see “Item 7.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended August 31,

2021, filed with the SEC on November 24, 2021.

For information regarding the change in the Company’s fiscal year from the period

beginning on September 1 and ending on August 31 to the period beginning on January 1 and ending on December 31, see note 1 to our audited

consolidated financial statements.

(dollar amounts in thousands, except share and per share data)

Cost of revenues

Research and development expenses

Sales and marketing expenses

General and administrative expenses

Financial income, net

Financial income (expense), net

Loss before taxes on income

Taxes on income

Net loss for the year

Net loss attributable to Company’s shareholders

Net loss for the period

Net loss attributable to Company’s stockholders

Net loss attributable to non-controlling interest

Net loss for the year

Loss per common share – basic and diluted

Weighted average common shares outstanding

Net loss for the period

Basic and diluted loss per share of common stock

Weighted average shares of common stock outstanding used in computing basic and diluted loss per share of common stock

Revenues consist of proceeds

related to the License Agreement that are recognized over the period from which the Company is entitled to the respective payments and

through June 2023.

Revenues for fiscal 2021 totaled

$2,703,000, consistent with $2,710,000 for fiscal 2020.

related to the HTIT License Agreement that are recognized on a cumulative basis when it is probable that a significant reversal in the

amount of cumulative revenue recognized will not occur, through the expected product submission date by HTIT of June 2023, using the input

Revenues for the years ended

December 31, 2022 and 2021 were both $2,703.

Revenues for the four month

periods ended December 31, 2021 and 2020 were both $904.

Cost of Revenues

Cost of revenues consists

of royalties related to the License Agreement that will be paid over the term of the License Agreement in accordance with revenue recognition

accounting and the Law for the Encouragement of Industrial Research, Development and Technological Innovation, 1984, as amended, including

any regulations or tracks promulgated thereunder, or the R&D Law.

There were no cost of revenues

for fiscal 2021 and 2020.

of royalties related to the HTIT License Agreement that will be paid over the term of the HTIT License Agreement in accordance with revenue

recognition accounting and the Law for the Encouragement of Industrial Research, Development and Technological Innovation, 1984, as amended,

including any regulations or tracks promulgated thereunder, or the R&D Law.

There was no cost of revenues

for the years ended December 31, 2022 and 2021 and the four month periods ended December 31, 2021 and 2020.

Research and Development

9 unchanged sentences

portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-party

service providers to assist us with the execution of our clinical studies.

service providers to assist us with the execution of our clinical trials.

Clinical activities which

6 unchanged sentences

expenses of research and development staff.

From August 2009 to March

2014, Oramed Ltd.

was awarded five government grants amounting to a total net amount of NIS 8 million (approximately $2,194,000 during

such period) from the IIA.

We used the funds to support further research and development and clinical studies of our oral insulin capsule

and oral GLP-1 analog during the period from February 2009 to December 2014.

The five grants are subject to repayment according to the

terms determined by the IIA and applicable law.

See “—Government grants” below.

Research and development

expenses for fiscal 2021 increased by 105% to $20,989,000 from $10,235,000 for fiscal 2020.

The increase is primarily due to an increase

in expenses related to our Phase III clinical trial in addition to expenses related to the in process research and development costs related

to Oravax, partially offset by a decrease in expenses related to our Phase II clinical trial.

During fiscal 2021, stock-based compensation

costs totaled $1,120,000, as compared to $458,000 during fiscal 2020.

The increase is mainly attributable to new grants in fiscal 2021.

Research and development expenses

for the year ended December 31, 2022 increased by 19% to $27,639,000, compared to $23,203,000 for the year ended December 31, 2021.

increase was mainly due to an increase in expenses related to our Phase 3 clinical trials and to stock-based compensation expenses.

compensation expenses for the year ended December 31, 2022, were $3,176,000, compared to $1,598,000 for the year ended December 31, 2021.

The increase was mainly due to new grants in 2022.

Research and development expenses

for the four month period ended December 31, 2021 increased by 31% to $9,037,000, compared to $6,889,000 for the four month period ended

December 31, 2020.

The increase was mainly due to an increase in expenses related to our Phase 3 and NASH clinical trials in addition

to expenses related to in process research and development costs related to Oravax.

Stock-based compensation expenses for the four month

period ended December 31, 2021, were $649,000, compared to $171,000 for the four month period ended December 31, 2020.

The increase was

mainly due to equity awards granted to a consultant and to new grants awarded in 2021.

Following the results of the ORA-D-013-1 Phase 3 trial, which

did not meet its primary and secondary endpoints, we terminated both ORA-D-013-1 and ORA-D-013-2 Phase 3 clinical trials.

we have initiated a comprehensive analysis of the data to understand if there is a path forward for our oral insulin candidate.

examining our existing pipeline and have commenced an evaluation process of potential strategic opportunities, with the goal of enhancing

value for our stockholders.

Government Grants

4 unchanged sentences

Each plan must be approved by the IIA.

In fiscals 2021 and 2020,

we did not recognize any research and development grants.

As of August 31, 2021, our liability to pay royalties to the IIA was $243,000.

From August 2009 to March

2014, our subsidiary Oramed Ltd.

was awarded five government grants amounting to a total net amount of NIS 8 million (approximately $2,194,000

during such period) from the IIA.

We used these funds to support further research and development and clinical trials of our oral insulin

capsule and oral GLP-1 analog candidate during the period from February 2009 to December 2014.

The five grants are subject to repayment

according to the terms determined by the IIA and applicable law.

In the years ended December

31, 2022 and 2021, the four month periods ended December 31, 2021 and 2020 and the year ended August 31, 2021, we did not recognize any

research and development grants.

As of December 31, 2022, we had incurred liabilities to pay royalties to the Israel Innovation Authority

of the Israeli Ministry of Economy and Industry of $133,000.

Under the terms of the grants

61 unchanged sentences

incorporate technology funded through IIA programs which may lead to additional royalties being payable on additional products.

Sales and Marketing

Sales and marketing expenses

include the salaries and related expenses of our commercial functions, consulting costs and other general costs.

Sales and marketing expenses for the year ended December 31, 2022 increased

by 106% to $1,851,000, compared to $898,000 for the year ended December 31, 2021.

The increase was mainly due to stock-based compensation

expenses, salary related expenses and consulting expenses, mainly resulting from hiring our Chief Commercial Officer.

Stock-based compensation

expenses for the year ended December 31, 2022 were $1,172,000, compared to $579,000 for the year ended December 31, 2021.

was mainly due to equity awards granted to an employee during 2022.

Sales and marketing expenses

for the four month period ended December 31, 2021 were $898,000, compared to no expenses for the four month period ended December 31,

The increase was mainly due to stock-based compensation expenses, salary related expenses and consulting expenses.

Stock-based compensation

costs for the four month period ended December 31, 2021 were $579,000, compared to no stock-based compensation expenses during the four

month period ended December 31, 2020.

The increase was mainly due to equity awards granted to an employee during 2021.

General and Administrative

3 unchanged sentences

General and administrative

expenses increased by 40% from $4,232,000 for fiscal 2020 to $5,937,000 for fiscal 2021.

The increase in costs incurred related to general

and administrative activities during fiscal 2021, is primarily attributable to an increase in stock-based compensation costs, an increase

in costs related to the directors and officers insurance policy and an increase in legal expenses, partially offset by a decrease in public

and investor relations expenses.

During fiscal 2021, as part of our general and administrative expenses, we incurred expenses of $1,575,000

related to stock-based compensation costs, as compared to an expense of $714,000 during fiscal 2020.

The increase is mainly attributable

to new grants during fiscal 2021.

Financial income, net

expenses for the year ended December 31, 2022 increased by 82% to $13,811,000, compared to $7,591,000 for the year ended December 31,

The increase was mainly due to higher stock-based compensation costs, an increase in legal expenses and higher salary expenses due

to the recruitment of new employees in the year ended December 31, 2022, partially offset by lower bonuses in the year ended December

Stock-based compensation expenses for the year ended December 31, 2022 were $7,160,000, compared to $2,368,000 for the year

ended December 31, 2021.

The increase was mainly due to equity awards granted to employees during 2022.

General and administrative

expenses for the four month period ended December 31, 2021 increased by 109% to $3,295,000, compared to $1,576,000 for the four month

period ended December 31, 2020.

The increase was mainly due to an increase in stock-based compensation expenses and professional fees

as well as public relations and investor relations expenses.

Stock-based compensation costs for the four month period ended December 31,

2021 were $1,034,000, compared to $242,000 during the four month period ended December 31, 2020.

The increase was mainly due to equity

awards granted to employees during the four month period ended December 31, 2021 and to new award grants during 2021.

Financial Income (Expense),

Net financial income was $2,934,000

for fiscal 2021 as compared to net financial income of $246,000 for fiscal 2020.

The increase is mainly attributable to an increase in

the fair market value of some investments.

Taxes on income

No taxes on income were recognized

for fiscal 2021 and 2020.

Fiscal 2020 compared with Fiscal 2019

For a discussion of fiscal

2020 compared with fiscal 2019, see Management’s Discussion and Analysis of Financial Condition and Results of Operations included

in our Annual Report on Form 10-K for the fiscal year ended August 31, 2020.

for the year ended December 31, 2022, compared to net financial income of $1,068,000 for the year ended December 31, 2021.

is mainly due to interest from short and long-term bank deposits, partially offset by loss from revaluation of the shares we hold in Entera

Net financial income was $71,000

for the four month period ended December 31, 2021, compared to $237,000 for the four month period ended December 31, 2020.

is mainly due to a decrease in fair value of the ordinary shares of Entera.

Basic and Diluted Loss

Per Share of Common Stock

Basic and diluted loss per

share of common stock for the year ended December 31, 2022 increased by 16% to $0.94, compared to $0.81 for the year ended December 31,

The increase in loss was mainly due to the higher net loss in the year ended December 31, 2022 compared to the year ended December

Basic and diluted loss per

share of common stock for the four month period ended December 31, 2021 increased by 3% to $0.31, compared to $0.30 for the four month

period ended December 31, 2020.

The increase in loss per share was due to a higher net loss and a higher number of weighted average shares

of common stock in the four month period ended December 31, 2021 compared to the four month period ended December 31, 2020.

Weighted Average Shares

of Common Stock Outstanding

Weighted average shares of

common stock outstanding for the year ended December 31, 2022 were 38,997,649, compared to 32,641,288 for the year ended December 31,

The increase was mainly due to shares issued in connection with our controlled equity offering and registered direct offering.

Weighted average shares of

common stock outstanding for the four month period ended December 31, 2021 were 37,113,137, compared to 24,394,010 for the four month

period ended December 31, 2020.

The increase was mainly due to shares issued in connection with our controlled equity offering and registered

direct offering.

Liquidity and Capital Resources

From our inception through

August 31, 2021, we have incurred losses in an aggregate amount of $114,852,000.

During that period we have financed our operations through

several private placements of our common stock, as well as public offerings of our common stock, raising a total of $181,492,000, net

of transaction costs.

During that period we also received cash consideration of $27,300,000 from the exercise of warrants and options.

We will seek to obtain additional financing through similar sources in the future as needed.

As of August 31, 2021, we had $77,245,000

of available cash, $11,044,000 of short term deposits, $25,016,000 of long term deposits and $12,543,000 of marketable securities.

Management continues to evaluate

various financing alternatives for funding future research and development activities and general and administrative expenses through

fundraising in the public or private equity markets.

Although there is no assurance that we will be successful with those initiatives,

management believes that it will be able to secure the necessary financing as a result of future third party investments.

current cash resources and commitments, we believe we will be able to maintain our current planned development activities and the corresponding

level of expenditures for at least the next 12 months.

As of August 31, 2021, our

December 31, 2022, we have incurred losses in an aggregate amount of $163,081,000.

During that period and through December 31, 2022, we

have financed our operations through several private placements of our common stock, as well as public offerings of our common stock,

raising a total of $252,946,000, net of transaction costs.

During that period, we also received cash consideration of $28,001,000 from

the exercise of warrants and options.

We expect to seek additional financing through similar sources in the future, as needed.

As of December

31, 2022, we had $40,464,000 of available cash, $111,513,000 of short-term bank deposits, $3,743,000 of marketable securities and $2,700,000

of long-term investments.

From inception through December

31, 2022, we have not generated significant revenues from our operations.

Management continues to evaluate various financing alternatives

for funding new strategic activities, future research and development activities and general and administrative expenses through fundraising

in the public or private equity markets.

Although there is no assurance that we will be successful with those initiatives, management

believes that it will be able to secure the necessary financing as a result of future third party investments.

Based on our current cash

resources and commitments, we believe we will be able to maintain our current planned activities and the corresponding level of expenditures

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

If there are increases in

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

Successful completion of our development programs

and our transition to normal operations is dependent upon obtaining necessary regulatory approvals from the FDA prior to selling our products

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

with third parties.

There can be no assurance that we will receive regulatory approval of any of our product candidates, and a substantial

amount of time may pass before we achieve a level of revenues adequate to support our operations, if at all.

We also expect to incur substantial

expenditures in connection with the regulatory approval process for each of our product candidates during their respective developmental

Obtaining marketing approval will be directly dependent on our ability to implement the necessary regulatory steps required to

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

We may also need additional funds to realize the decisions made

as part of our strategic review process.

We cannot predict the outcome of these activities.

As of December 31, 2022, our

total current assets were $157,109,000 and our total current liabilities were $5,746,000.

On August 31, 2021, we had a working capital

On December 31, 2022, we had a working capital

surplus of $151,363,000 and an accumulated loss of $163,081,000.

As of August 31, 2020, our total current assets were $40,511,000 and our

total current liabilities were $4,536,000.

On August 31, 2020, we had a working capital surplus of $35,975,000 and an accumulated loss

of $92,614,000.

The increase in working capital surplus from August 31, 2020 to August 31, 2021 was primarily due to an increase in cash

and cash equivalents.

During fiscal 2021, cash and

cash equivalents increased to $77,245,000 from $19,296,000 as of August 31, 2020, which is due to the reasons described below.

Operating activities used cash

of $21,181,000 in fiscal 2021 compared to $12,440,000 used in fiscal 2020.

Cash used in operating activities in fiscal 2021 and 2020 primarily

consisted of net loss resulting from research and development and general and administrative expenses.

Investing activities used cash

of $23,764,000 in fiscal 2021, as compared to $4,626,000 provided by investing activities in fiscal 2020.

Cash used in investing activities

in fiscal 2021 consisted primarily of the acquisition of short-term and long-term investments, and acquisition of short-term and long-term

marketable securities, partially offset by proceeds from short-term investments and proceeds from the sale of marketable securities.

As of December 31, 2021, our total current assets were $147,937,000 and

our total current liabilities were $7,368,000.

On December 31, 2021, we had a working capital surplus of $140,569,000 and an accumulated

loss of $126,520,000.

The increase in working capital surplus from December 31, 2021 to December 31, 2022 was mainly due to an increase

in cash and cash equivalents.

During the year ended December

31, 2022, cash and cash equivalents decreased to $40,464,000 from $77,245,000 as of August 31, 2021.

The decrease was mainly due to the

reasons described below.

Operating activities used

cash of $27,918,000 in the year ended December 31, 2022, compared to $21,181,000 used in the year ended August 31, 2021.

operating activities consisted mainly of net loss resulting from research and development, general and administrative and sales and marketing

Investing activities provided cash of $30,211,000 in the year ended

December 31, 2022, compared to cash used by investing activities of $23,764,000 in the year ended August 31, 2021.

Cash provided in investing

activities is mainly due to proceeds from short-term investments, partially offset by the acquisition of short-term investments.

Financing activities provided

cash of $102,892,000 in fiscal 2021, as compared to $23,786,000 in fiscal 2020.

Cash provided by financing activities during fiscal 2021

consisted of proceeds from our issuance of common stock and proceeds from exercise of warrants and options.

Our primary financing activities

since the beginning of fiscal 2021 were as follows:

During fiscal 2021, 3,175,645 warrants were exercised and 103,782 options were exercised and resulted in the issuance of 3,253,334 shares of common stock.

Out of these exercised options, 24,646 options were exercised for cash and 79,136 via cashless method.

The cash consideration received for the exercise of options was $125,593.

During fiscal 2020, no warrants were exercised and 12,253 options were exercised for cash and resulted in the issuance of 12,253 shares of common stock.

The cash consideration received for the exercise of options was $12,253.

On December 1, 2020, we entered into an Equity Distribution Agreement,

or the New Sales Agreement, pursuant to which we could, from time to time and at our option, issue and sell shares of our common stock

having an aggregate offering price of up to $40,000,000 through a sales agent, subject to certain terms and conditions.

Any shares sold

were to be sold pursuant to our 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.

We 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 $38,799,000.

On June 16, 2021, we entered into an Equity Distribution Agreement,

or the Equity Distribution Agreement, pursuant to which we could, from time to time and at our option, issue and sell shares of our common

stock having an aggregate offering price of up to $28,000,000 through a sales agent, subject to certain terms and conditions.

sold were to be sold pursuant to our 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 Equity Distribution Agreement).

We 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 $27,119,000.

On July 15, 2021, we entered into an additional Equity Distribution

Agreement, or the New Equity Distribution Agreement, pursuant to which we may, from time to time and at our option, issue and sell shares

of our common stock having an aggregate offering price of up to $100,000,000 through a sales agent, subject to certain terms and conditions.

Any shares sold was sold pursuant to our effective shelf registration statement on Form S-3 including a prospectus and prospectus supplement,

each dated July 15, 2021.

We 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 $3,884,000 and $5,129,000 respectively.

November 3, 2021, we entered into a Securities Purchase Agreement with several institutional and accredited investors, pursuant to which

we agreed to sell, in a registered direct offering, 2,000,000 shares of our common stock for an aggregate offering price of $50,000,000

to the Purchasers.

The net proceeds from this offering were approximately $46,375,000.

cash of $10,779,000 in the year ended December 31, 2022, compared to $102,892,000 in the year ended August 31, 2021.

Cash provided by

financing activities consisted mainly of proceeds from our issuance of common stock and proceeds from exercise of warrants and options.

Our primary financing activities since the beginning of the year ended December 31, 2022 were as follows:

During the year ended December 31, 2022,

4,200 warrants were exercised and 71,607 options were exercised, resulting in the issuance of 38,651 shares of common stock.

of these exercised options, 10,750 options were exercised for cash and 60,857 via a cashless method.

The cash consideration received

for the exercise of options and warrants was $62,490.

During the four month period ended December 31, 2021, 73,800 warrants were

exercised and 18,166 options were exercised for cash, resulting in the issuance of 91,966 shares of common stock.

The cash consideration

received for the exercise of options and warrants was $638,267.

On September 1, 2021, we entered into a

controlled equity offering agreement, or the Cantor Equity Distribution Agreement, with Cantor Fitzgerald & Co., as agent, pursuant

to which we may issue and sell shares of our common stock having an aggregate offering price of up to $100,000,000, through a sales

agent, subject to certain terms and conditions.

Any shares sold will be sold pursuant to our effective shelf registration statement

on Form S-3, including a prospectus dated July 26, 2021 and prospectus supplement dated September 1, 2021.

We 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 Cantor Equity Sales

As of December 31, 2022 and through March 6, 2023, 1,778,147 and 1,971,447 shares, respectively, were issued under the

Cantor Equity Distribution Agreement for aggregate net proceeds of $23,823,000 and $26,253,000, respectively.

During the four month period

ended December 31, 2021, cash and cash equivalents decreased to $27,456,000 from the $77,245,000 reported as of August 31, 2021, which

is due to the reasons described below.

Operating activities used

cash of $11,122,000 in the four month period ended December 31, 2021, compared to $8,263,000 used in the four month period ended December

Cash used in operating activities primarily consisted of research and development, sales and marketing and general and administrative

expenses, as well as changes in deferred revenue due to the HTIT License Agreement, partially offset by changes in accounts payable and

accrued expenses and stock-based compensation.

Investing activities used

cash of $99,248,000 in the four month period ended December 31, 2021, compared to cash used in investing activities of $2,405,000 in the

four month period ended December 31, 2020.

Cash used in investing activities in the four month period ended December 31, 2021 consisted

primarily of the purchase of short-term deposits.

Cash used in investing activities in the four month period ended December 31, 2020 consisted

primarily of the purchase of short-term deposits, offset by the proceeds from bonds held to maturity.

Financing activities provided

cash of $60,572,000 in the four month period ended December 31, 2021, compared to $13,001,000 provided in the four month period ended

December 31, 2020.

Cash provided by financing activities consisted primarily of proceeds from the issuance of our common stock.

On November 3, 2021, we entered

into a securities purchase agreement with several institutional and accredited investors, or the Purchasers, pursuant to which we agreed

to sell, in a registered direct offering, or the Offering, an aggregate of 2,000,000 shares of our common stock to the Purchasers for

an offering price of $25.00 per share.

The closing of the sale of the shares occurred on November 5, 2021.

The net proceeds to us from

the Offering, after deducting the placement agent’s fees and expenses and the Company’s Offering expenses, were approximately

Trend Information

Following the results of the

Phase 3 trials for our oral insulin capsule candidate, ORMD-0801, we have initiated a comprehensive analysis of the data to understand

if there is a path forward for our oral insulin candidate.

Concurrently, we are examining our existing pipeline and have commenced an

evaluation process of potential strategic opportunities, with the goal of enhancing value for our stockholders.

At this time, we cannot

foresee how these strategic decisions will impact our financial results and operations in 2023.

Planned Expenditures

We invest heavily in research

and development, and we expect that in the upcoming years our research and development expenses, net, will continue to be our major operating

We have expected obligations with respect to an aggregate of approximately $31 million of clinical research obligations over

the next three years.

and development, and we expect that in the upcoming years our research and development expenses will continue to be our major operating

As of December 31, 2022, we had expected obligations with respect to an aggregate of approximately $21 million of clinical research

obligations over the next three years.

Following the results of the

Phase 3 trials for our oral insulin capsule candidate, ORMD-0801 and the current strategic review initiated by the Company, our obligations

may change significantly.

Critical Accounting Policies

Our significant accounting

policies are more fully described in the notes to our accompanying consolidated financial statements.

We believe that the accounting policies

below are critical for one to fully understand and evaluate our financial condition and results of operations.

The discussion and analysis

of our financial condition and results of operations is based on our consolidated financial statements, which we prepared in accordance

generally accepted accounting principles, or GAAP.

The preparation of our consolidated financial statements requires us to make

estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities

at the date of the consolidated financial statements, as well as the reported revenues and expenses during the reporting periods.

ongoing basis, we evaluate such estimates and judgments.

We base our estimates on historical experience and on various other factors that

we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of

assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different

assumptions or conditions.

Valuation of RSUs, options

and warrants :

We grant options to purchase shares of our common stock to employees and consultants and have and may in the future

issue warrants in connection with some of our financings and to certain other consultants.

We account for share-based

payments to employees, directors and consultants in accordance with the guidance that requires awards classified as equity awards to be

accounted for using the grant-date fair value method.

The fair value of share-based payment transactions is based on the Black Scholes

option-pricing model or Monte Carlo model when appropriate and is recognized as an expense over the vesting period.

We elected to recognize compensation

cost for awards to employees, directors and consultants that have a graded vesting schedule using the accelerated method based on the

multiple-option award approach.

Revenue recognition :

Revenue is recognized when delivery has occurred, evidence of an arrangement exists, title and risks and rewards for the products are

transferred to the customer and collection is reasonably assured.

Under Accounting Standards

Codification, or ASC, 605 (which was the authoritative revenue recognition guidance applied for all periods prior to September 1, 2018)

given our continuing involvement through the expected product submission by HTIT in June 2023, amounts received relating to the HTIT License

Agreement were recognized over the period from which we were entitled to the respective payment, and the expected product submission date

using a time-based model approach over the periods that the fees were earned.

However, under ASC 606, we

are required to recognize the total transaction price (which includes consideration related to milestones once the criteria for recognition

have been satisfied) using the input method over the period the performance obligation is fulfilled.

Accordingly, once the consideration

associated with a milestone is included in the transaction price, incremental revenue is recognized immediately based on the period of

time that has elapsed towards complete satisfaction of the performance obligation.

Since the customer benefits

from the services as the entity performs, revenue is recognized over time through the expected product submission date by HTIT 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.

On November 13, 2022,

we entered into a distribution license agreement with Medicox, or the Medicox License Agreement.

The Medicox License Agreement grants

Medicox an exclusive license to apply for regulatory approval and distribute ORMD-0801 in the Republic of Korea.

Under ASC 606, we identified

Medicox as a customer and the Medicox License Agreement as a contract with a customer.

We identified a performance

obligation in the Medicox License Agreement to stand-ready and provide Medicox with support in its commercialization efforts in the Republic

This performance obligation includes a non-distinct distribution license for ORMD-0801, which we view a predominant item in

the combined performance obligation.

We concluded that the license is not distinct, as no party other than us is capable of providing

related services to Medicox, and both the license and related services are necessary for the customer to obtain a regulatory approval

in the Republic of Korea.

In addition, the agreement covers the terms of future manufacturing services, that are contingent on the completion

and success of the commercialization efforts.

The Medicox License Agreement contains a fixed consideration of $2

million, which was received by Oramed as of December 31, 2022 and is presented under long-term deferred revenues.

It also contains variable

consideration of contractual milestone payments and sales-based royalties.

Our obligation to stand-ready

and support Medicox will be recognized on a straight-line basis over the period we expect to provide support to Medicox.

As of December

31, 2022, this support has not commenced, and no revenue was recognized from the Medicox License Agreement.

If Medicox proceeds with the

regulatory approval process in the Republic of Korea, we expect most of the revenue to be recognized in 2024, going forward.

our Phase 3 trial did not meet its primary and secondary endpoints.

If Medicox chooses to terminate the agreement as a result of the outcome

of the Phase 3 trials, we will accelerate revenue recognition and recognize it in 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis