rinse
Oramed's quarterly confessional filed with the SEC provides a glimpse at the cost of hiding a shell on behalf of Chinese investors in US capital markets through the appearance of a company in pursuit of oral insulin.
The financials are underwhelming. $15 million in losses on $2 million in revenue and that revenue is not from a product being sold rather the accounting recognition of monies already received from a 2015 Chinese investment.
| Nine months ended | Three months ended | |||||||||||||||
| May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | |||||||||||||
| Revenues | $ | 2,020 | $ | 2,029 | $ | 681 | $ | 681 | ||||||||
| Cost of revenues | - | - | - | - | ||||||||||||
| Research and development expenses | 15,145 | 7,267 | 5,502 | 1,925 | ||||||||||||
| General and administrative expenses | 3,688 | 3,502 | 1,297 | 1,030 | ||||||||||||
| Financial income (expenses), net | 1,010 | 225 | 493 | (10 | ) | |||||||||||
| Taxes on income | - | - | - | - | ||||||||||||
| Net loss for the period | $ | 15,803 | $ | 8,515 | $ | 5,625 | $ | 2,284 | ||||||||
| Loss per common share - basic and diluted | $ | 0.57 | $ | 0.44 | $ | 0.17 | $ | 0.10 | ||||||||
| Weighted average common shares outstanding | 26,899,914 | 19,496,205 | 29,929,606 | 23,215,205 | ||||||||||||
Management explained that research and development expenses doubled because of Phase III clinical trial expenses (patient enrollment outsourced to Integrium) with half the patients enrolled. Management did say that the trial had been outsourced but did not say that the trial was projected to complete by November 2023, that timeline courtesy of the US government tracking of clinical trials.
Management's largest expense was hiding a shell company in a new shell company uniting witting conspirators. Oramed paid $1.5 million for 63% of Oravax. Akers, now MyMd, paid $1.5 million plus an Oravax license for 13% of Oravax. And Oramed disclosed that its CEO, Mr Nadav Kidron, was a former member of Cystron.
Interesting but the disclosure of Mr Kidron's membership is roughly 18 months late. Cystron was formed in March 2020 between Akers, Premas, Kidron, and HC Wainright underwriters to pursue a Covid 19 vaccine. It lived a tortured existence. The Cystron License now the Oravax License was negotiated by Premas Biotech with itself as both a shareholder in Cystron and Licensor of the claimed vaccine without even the pretense of disclosure.
Akers has lost $190 million, Oramed has lost $107 million and between them have no product and no revenue, though both managed to raise a total of $100 million from capital markets during the pandemic first on the promise of a Covid 19 vaccine, then on the promise of an Oral Covid 19 vaccine, for Oramed now the promise of Oral Insulin clinical trials, and Akers, now MyMd, the promise of an Alzheimers cure complete with an august board from Johns Hopkins.
business model
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock, net of issuance costs | 41,127 | 22,295 | ||||||
| Proceeds from exercise of options | 6,742 | 13 | ||||||
| Total net cash provided by financing activities | 47,869 | 22,308 | ||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | 5 | (5 | ) | |||||
| INCREASE IN CASH AND CASH EQUIVALENTS | 38,118 | 5,984 | ||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 19,296 | 3,329 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 57,414 | $ | 9,313 | |
The promises unkept have been rewarded with $50 million. This simple math means either that capital market investors are convinced of management rhetoric layered on $100 million in losses or that there is enough liquidity for intermediaries to raise the money, create the shells, and trade in and out of a palpable fiction until a dentist from San Diego ends up with the bag and what is not in it.
The known shareholders stretch from Lichtenstein to Tel Aviv with a few balmy jurisdictions in between. In a market bid at 11 Oramed Director, Mr Leonard Sank sold 4's to an offshore trust managed by his wife with the aplomb of roadside vegetable seller disposing of the decaying remains of the day.
In the meantime Oramed intends to hold a Board Meeting August 15, 2021 to ratify the past conduct of the Board and Management subject of a suit in Delaware Chancery Court and to confirm the Board Seats of Mr Kidron, Mr Sank, and Mr Gao Xiaming of the Hefei Tianhui Incubator of Technologies Ltd.
Maybe Mr Gao Xiaming of Sinopharm might explain the reach of Chinese control on Oramed and Oravax consistent with SEC guidelines.
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