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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-50298

ORAMED PHARMACEUTICALS INC.(Name of small business issuer in its charter)

|Nevada                                                               | 98-0376008                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|2 Elza Street, Jerusalem, Israel                                     | 93706                               
|(Address of principal executive offices)                             | (Zip Code)                          

011 972-54-7909058(Issuers telephone number)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Shares, par value $0.001(Title of
class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
[X]No [ ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

State issuers revenues for its most recent fiscal year. Nil

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12-b-2 of the Exchange Act). Yes [ ]No [X]

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- ii -

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.).

| | 27,754,552 common shares @ $0.34(1)=
      $9,436,548
| | -----------------------------------------------------
| | (1)                                                  
| | by non-affiliates)                                   
| | (2)                                                  

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ]No
[ ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of equity stock, as of the latest practicable date. 46,034,804 common
shares issued and outstanding as at November 29, 2007

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual report to
security holders; (2) any proxy or information statement; and (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities
Act). The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for fiscal year ended December
24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes [
]No [X]

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- iii -

ORAMED PHARMACEUTICALS INC. 
  ANNUAL REPORT ON FORM 10-KSBTABLE OF CONTENTS

|PART I       | 5                                                                                                                                   
|------------ | ------------------------------------------------------------------------------------------------------------------------------------
|             | ITEM 1. DESCRIPTION OF BUSINESS                                                                                                     
|             | Forward-Looking Statements                                                                                                          
|             | Corporate Overview                                                                                                                  
|             | Our Current Business                                                                                                                
|             | Governmental Approval and Effect of Regulations                                                                                     
|             | Research and Development                                                                                                            
|             | Marketing, Advertising and Promotion                                                                                                
|             | Employees                                                                                                                           
|             | Competition                                                                                                                         
|             | Intellectual Property                                                                                                               
|             |                                                                                                                                     
|RISK FACTORS | 10                                                                                                                                  
|             | Risks Related to Our Business                                                                                                       
|             | Risks Related to Our Company                                                                                                        
|             | Risks Related to Our Common Stock                                                                                                   
|             | ITEM 2.DESCRIPTION OF PROPERTY                                                                                                      
|             | ITEM 3.LEGAL PROCEEDINGS                                                                                                            
|             | ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                          
|             |                                                                                                                                     
|PART II      | 17                                                                                                                                  
|             | ITEM 5. MARKET FOR COMMON EQUITY AND RELATED
      STOCKHOLDER TRANSACTIONS.                                                        
|             | Securities Authorized For Issuance Under Equity Compensation
      Plans                                                            
|             | Holders of our Common Stock                                                                                                         
|             | Dividends                                                                                                                           
|             | Recent Sales of Unregistered Securities                                                                                             
|             | ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN
      OR OPERATION                                                             
|             | Overview                                                                                                                            
|             | Plan of Operation                                                                                                                   
|             | Cash Requirements                                                                                                                   
|             | Results of Operations                                                                                                               
|             | Financial Condition, Liquidity and Capital Resources                                                                                
|             | Going Concern                                                                                                                       
|             | Off-Balance Sheet Arrangements                                                                                                      
|             | Application of Critical Accounting Policies                                                                                         
|             | ITEM 7. FINANCIAL STATEMENTS                                                                                                        
|             | ITEM 8. CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT                                                                               
|             | ITEM 8A. CONTROLS AND PROCEDURES                                                                                                    
|             |                                                                                                                                     
|PART III     | 37                                                                                                                                  
|             | ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
      AND CONTROL PERSONS;  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT
|             | Business Experience                                                                                                                 
|             | Significant Employees                                                                                                               
|             | Family Relationships                                                                                                                
|             | Committees of the Board                                                                                                             
|             | Code of Ethics                                                                                                                      
|             | Audit Committee Financial Expert                                                                                                    
|             | Section 16(a) Beneficial Ownership Compliance                                                                                       
|             | ITEM 10. EXECUTIVE COMPENSATION                                                                                                     
|             | Director Compensation                                                                                                               
|             | Stock Option Grants                                                                                                                 

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- iv -

|           | Stock Option Plan                                                                                      | 42
|---------- | ------------------------------------------------------------------------------------------------------ | --
|           | Employment Contracts, Termination of Employment
      and Change In Control Arrangements               | 43
|           | Directors Compensation                                                                                | 43
|           | Family Relationships                                                                                   | 43
|           | Indebtedness of Directors,
      Senior Officers, Executive Officers and Other Management              | 43
|           | ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
      OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS | 43
|           | Changes in Control                                                                                     | 44
|           | ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS                                          | 44
|           | ITEM 13. EXHIBITS                                                                                      | 45
|           | ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
      AUDIT FEES                                       | 46
|           |                                                                                                        |   
|SIGNATURES | 47                                                                                                    

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

Forward-Looking Statements

This annual report contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our audited consolidated financial statements are stated in
United States Dollars and are prepared in accordance with United States
Generally Accepted Accounting Principles.

As used in this annual report, the terms we, us, our, and
Oramed means Oramed Pharmaceuticals Inc., unless otherwise indicated.

Corporate Overview

We were incorporated on April 12, 2002, in the State of Nevada
under the name Iguana Ventures Ltd. Following our incorporation we were an
exploration stage company engaged in the acquisition and exploration of mineral
properties. We were unsuccessful in implementing our business plan as a mineral
exploration company. Accordingly, we decided to change the focus of our business
by completing a share exchange with the shareholders of Integrated Security
Technologies, Inc., a New Jersey private corporation. On June 4, 2004 we also
changed our name to Integrated Security Technologies by filing a Certificate of
Amendment with the Nevada Secretary of State. Effective June 14, 2004 we
effected a 3.3:1 forward stock split, increasing the amount of authorized
capital to 200,000,000 shares of common stock with the par value of $.001 per
share. However, due to disappointing results, we later unwound the share
exchange agreement with the shareholders of Integrated Security Technologies,
Inc., the New Jersey private corporation.

Our Current Business

On March 8, 2006 we executed an agreement with Hadasit Medical
Services and Development Ltd. to acquire provisional patent application No.
60/718716 and related intellectual property. The provisional patent application
No. 60/718716 related to a method of preparing insulin so that it may be taken
orally to be used in the treatment for the treatment of individuals with
diabetes. Effective April 10, 2006, we changed our name from Integrated
Security Technologies, Inc. to Oramed Pharmaceuticals Inc. Based on
provisional patent application No. 60/718716, we filed a patent application
under the Patent Cooperation Treaty at the Israel Patent Office for Methods and
Compositions for Oral Administration of Proteins on August 31, 2006. We are now
a pharmaceutical company engaged in the research and development of innovative
pharmaceutical solutions, including an orally ingestible insulin pill to be used
for the treatment of individuals with diabetes, rectal application of insulin,
flu vaccines, use of oral ingestible pills for delivery other polypeptides and
use of rectal application for delivery of other polypeptides.

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Agreement with Hadasit Medical Services and Development Ltd.

On March 8, 2006 we executed an agreement with Hadasit Medical
Services and Development Ltd to acquire provisional patent application No.
60/718716, including related intellectual property. The provisional patent
application No. 60/718716 related to a method of preparing insulin so that it
may be taken orally for the use in the treatment of individuals with diabetes.
Under the terms of the agreement, we agreed to contract Hadasit Medical Services
and Development Ltd. to provide us with consulting services to assist us in the
completion of clinical trials on provisional patent application No. 60/718716.
When the clinical trials have been completed Hadasit Medical Services and
Development Ltd. will provide us with the preparation of a full report assessing
the results of the clinical trials and the viability of provisional patent
application No. 60/718716 and related intellectual property. We agreed to pay
Hadasit Medical Services and Development Ltd $200,000 for the provision of these
consulting services if we requested the consulting services from Hadasit Medical
Services and Development Ltd.

Under this agreement we also agreed to secure proper conditions
for the future development of provisional patent application No. 60/718716 and
related intellectual property by raising at least $1,000,000 through a private
placement of our securities.

If the assessment from the clinical trials is successful, we
have 120 days to attain the above mentioned financing or we will need to return
provisional patent application No. 60/718716 and related intellectual properties
to Hadasit Medical Services and Development Ltd. Even though the clinical trials
have not been fully completed, we believe we have achieved the required
financing of $1,000,000. Accordingly, we do not have to return provisional
patent application No. 60/718716 and related intellectual properties to Hadasit
Medical Services and Development Ltd.

Pursuant to this agreement with Hadasit Medical Research Services
  and Development Ltd. dated February 17, 2006, we also agreed to grant to Dr.
  Miriam Kidron an option to purchase 3,361,360 shares of our common stock at
  the exercise price of $0.001 per share if Dr. Miriam Kidron continued to provide
  consulting services directly to our company following consummation of clinical
  trials. Because we have successfully completed our exploratory clinical trials
  and Dr. Miriam Kidron is continuing to provide consulting services directly
  to our company, we are obligated to issue these options to Dr. Miriam Kidron.

Hadasit Medical Services and Development Ltd is a related party
  of the company due to it being a 9% shareholder of our company and the primary
  researcher for Hadasit Medical Services and Development Ltd is a director of
  our company.

Business Operations

The provisional patent application No. 60/718716 was set to
expire on September 6, 2006. On August 31, 2006, we filed a formal patent
application under the Patent Cooperation Treaty at the Israel Patent Office for
Methods and Compositions for Oral Administration of Proteins. Priority was
claimed from provisional patent application No. 60/718716. All countries were
designated and the United States Patent and Trademark Office was designated as
the Search and Examination Authority.

On October 26, 2006, we executed an agreement with Swiss Caps
AG. Under the terms of the agreement Swiss Caps AG agreed to manufacture oral
gel capsules for clinical testing of our oral insulin product. Under the terms
of this agreement, Swiss Caps AG will provide gel capsules for our clinical
trials. Following a stringent due diligence process and an in depth review of
our oral delivery technology, Swiss Caps AG agreed to accept shares of our
common stock in exchange for their services. According to the agreement, all
amounts due in payment to Swiss Caps AG have been paid in shares of our common
stock. A copy of the agreement with Swiss Caps AG can be found as exhibit
attached to our current report on Form 8-K filed on November 2, 2006.

On January 30, 2007 we formed a scientific advisory committee
to provide scientific advice to our board of directors. Our advisory committee
will not have authority to make decisions, carry out any functions or bind us to
any obligations. Currently, members of our scientific advisory committee include
Dr. Harold Jacob, Dr. Nir Barzilai, Dr. Itamar Raz, Prof. Ele Ferrannini, Dr.
Derek LeRoith and Dr. John Ziemniak. Dr. Harold Jacob has a strong background,
both in medical sciences as well as biotechnology and medical devices. He
practiced clinical gastroenterology in New York and served as Chief of
Gastroenterology at St. Johns Episcopal Hospital and South Nassau Communities
Hospital, and was a Clinical Assistant Professor of Medicine at SUNY. Dr.
Barzilai is the Director of the Institute for Aging Research at the Albert
Einstein College of Medicine. He is currently an Associate Professor in the
Department of Medicine, Molecular genetics and the Diabetes Research Center and
is a member of the Divisions of Endocrinology and Geriatrics. He is also the
Director of the Montefiore Hospital Diabetes Clinic.

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Dr. Itamar Raz, is a professor of Internal Medicine at Hadassah
University Medical Center and the head of the Diabetes Unit at Hadassah. During
1992-2005 he served as the President of the Israel Diabetes Association. He is
the head of the Israel National Council of Diabetes and president of D-Cure, a
foundation that supports research in the field of diabetes. Professor Ele
Ferrannini has worked with various institutions including the Department of
Internal Medicine, University of Pisa School of Medicine, and CNR (National
Research Council) Institute of Clinical Physiology, Pisa, Italy; Diabetes
Division, Department of Medicine, University of Texas Health Science Center at
San Antonio, Texas, USA. He also has published over 350 original papers and 50
book chapters. Dr. Derek LeRoith has served as the Chief of the Diabetes Branch
at the National Institute of Diabetes, Digestive and Kidney Diseases in the
National Institute of Health in Maryland, and he is now serving as the Chief of
the Division of Endocrinology, Diabetes and Bone Diseases. He is a prominent
member in over 15 professional societies globally, including the Society for
Endocrinology, Metabolism and Diabetes of South Africa, the European Association
for the Study of Diabetes, and the American Diabetes Association. Dr. Ziemniak
has over 20 years experience in the pharmaceutical industry. He has worked
extensively in drug development having been involved in the conception, filing,
and approval of over 13 NDAs and greater then 20 INDs covering a wide variety of
drugs and indications.

On May 2, 2007 we filed two additional provisional patents for
a suppository application to our technology portfolio. The first patent focuses
on a rectal application for insulin. The second patent focuses on the usage of
this rectal application to other polypeptides that at present are required to be
injected.

On May 1, 2007 we announced the commencement of Phase I of our
clinical trials, which will be conducted in Jerusalem, Israel. A small group of
healthy human volunteers will orally ingest our orally ingestible insulin pill
capsules in order to evaluate safety studies. The United States of America Food
and Drug Administration recognizes clinical trials in Israeli hospitals.

On June 19, 2007, we approved a proposal with the Encorium
Group Inc., a contract research organization, which provides comprehensive
clinical and drug development solutions, to assist us in the design,
implementation, advancement, and oversight of a scientific and regulatory
strategic plan for the filing and approval of our orally ingestible insulin pill
capsule. Under the terms of the Proposal, Encorium Group Inc. will be paid an
hourly fee ranging from US $283 to US $450 depending on level of expertise of
the medical personnel. A copy of the agreement with Encorium Group Inc. can be
found as exhibit attached to our current report on Form 8-K filed on June 19,
2007.

On August 14, 2007, we announced that we have successfully
completed our exploratory Phase 1A clinical trial with our oral insulin capsule.
The study was intended to assess both the safety/tolerability and absorption
properties of our proprietary oral insulin delivery technology. Based on the
pharmacokinetic and pharmacologic outcomes of this early stage trial, we have
decided to continue the development of our oral insulin product. Additional
Phase 1 bioavailability/pharmacokinetic trials to optimize and finalize the
formulation are anticipated to begin later this year.

On November 15, 2007, we announced that we have successfully
completed animal studies for Phase 1B trials of our oral insulin capsule. The
Phase 1B study was intended to assess the optimization of dosage for the
formulation of our proprietary oral insulin delivery technology.

For the next twelve months, we plan to conduct further research
and development on the technology covered by the patent application Methods and
Composition for Oral Administration of Proteins, which we acquired from
Hadasit. Through our research and development efforts, we intend to develop a
pill that will not break down in the stomach or intestines and will be effective
in delivering insulin to the bloodstream for the treatment of diabetes. The
enzymes and compounds that are added to the insulin to make the pill must not
change the composition of the insulin once it is absorbed into the bloodstream
and the pill must be safe to ingest. We also plan to conduct research and
development of other innovative pharmaceutical solutions, including rectal
application of insulin, flu vaccines, use of oral ingestible pills for delivery
other polypeptides and use of rectal application for delivery of other
polypeptides.

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Governmental Approval and Effect of Regulations

Our business is subject to extensive regulation by the Food and
Drug Administration, other governmental authorities in the United States and
governmental authorities in other countries.

The duration of the governmental approval process for marketing
new pharmaceutical substances, from the commencement of preclinical testing to
the receipt of governmental approval for marketing a new product, varies with
the nature of the product and with the country in which such approval is sought.
For new chemical entities, the approval process could take eight to ten years or
more. For reformulations of existing drugs, as management believes our potential
product should be considered, typically the process is shorter. In either case,
the procedures required to obtain governmental approval to market new drug
products will be costly and time-consuming for us, requiring rigorous testing of
the new drug product. Even after such time and effort, regulatory approval may
not be obtained for our products.

Before we can market or even transport a new human
pharmaceutical product commercially in the United States, regulations require
that we file an Investigational New Drug Application, conduct clinical trials
and file an Investigational New Drug Application with the Federal Drug
Administration.

In order to conduct the clinical investigations necessary to
obtain regulatory approval in the U.S., we must file an Investigational New Drug
Application with the Federal Drug Administration to permit the shipment and use
of the drug for investigational purposes. The Investigational New Drug
Application will state, in part, the results of preclinical (laboratory and
animal) toxicology testing that we have conducted and our initial Phase I plans
for clinical (human) testing. Unless notified that testing may not begin, the
clinical testing may commence 30 days after filing an Investigational New Drug
Application.

Under Federal Drug Administration regulations, the clinical
testing program required for marketing approval of a new drug typically involves
three clinical phases. In Phase I, safety studies are generally conducted on
normal, healthy human volunteers to determine the maximum dosages and side
effects associated with increasing doses of the substance being tested. In Phase
II, studies are conducted on small groups of patients, in our case those who
have diabetes or blood sugar problems, to gain preliminary evidence of efficacy
and to determine the common short-term side effects and risks associated with
the new product. Phase III involves large-scale trials conducted on
disease-afflicted patients to provide statistical evidence of efficacy and
safety and to provide an adequate basis for product labeling. Frequent reports
are required in each phase and, if unwarranted hazards to patients are found,
the Federal Drug Administration may request modification or discontinuance of
clinical testing until further studies have been conducted. Phase IV testing is
sometimes conducted, either to meet Federal Drug Administration requirements for
additional information as a condition of approval, or to gain post-approval
market acceptance of the pharmaceutical product. Our orally ingestible insulin
pill capsule will be subjected to each step of this lengthy process from
conception to market.

Once the above phases of clinical testing have been completed,
we will be required to file an Investigational New Drug Application with the
Federal Drug Administration seeking approval for marketing the drug product. The
Federal Drug Administration will review the Investigational New Drug Application
to determine whether the drug is safe and effective, and adequately labeled, and
whether the applicant can demonstrate proper and consistent manufacture of the
drug. The time required for Federal Drug Administration action on an
Investigational New Drug Application varies considerably, depending on the
characteristics of the drug, whether the Federal Drug Administration needs more
information than is originally provided in the Investigational New Drug
Application and whether the Federal Drug Administration has concerns with the
evidence submitted.

The facilities of each company involved in the commercial
manufacturing, processing, testing, control and labeling of pharmaceutical
products must be registered with and approved by the Federal Drug
Administration. Continued registration requires compliance with Good
Manufacturing Practices regulations and the Federal Drug Administration conducts
periodic establishment inspections to confirm continued compliance with its
regulations.

We are subject to various federal, state and local laws,
regulations and recommendations relating to such matters as laboratory and
manufacturing practices and the use, handling and disposal of hazardous or
potentially hazardous substances used in connection with our research and
development work. We do not produce and drugs at this time

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and are not subject to these commercial manufacturing
regulations at this time. However, it is important for the company to be aware
of these standards in case a need for compliance develops in the future.

Research and Development

We have spent approximately $2,412,000 during the last 2 fiscal
  years on the research and development of our orally ingestible insulin pill
  capsules. We plan to conduct research and development on innovative pharmaceutical
  solutions, including an orally ingestible insulin pill to be used for the treatment
  of individuals with diabetes, rectal application of insulin, flu vaccines, use
  of oral ingestible pills for delivery other polypeptides and use of rectal application
  for delivery of other polypeptides.

Marketing, Advertising and Promotion

We will not conduct any marketing, advertising or promotion
activities for our potential products in the next twelve months as the potential
products are still only in research and development stage.

Employees

Currently we have four employees: Nadav Kidron our President,
Chief Executive Officer and a director; Miriam Kirdon, our Chief Medical and
Technology Officer and a director; Alex Werber, our Chief Financial Officer and
Treasurer; and Tara Horn, who serves as our office manager in Israel. Both Mr.
Nadav Kidron and Dr. Miriam Kidron provide services to our company pursuant to
employment agreements we entered into with KNRY Ltd., an Israel company, dated
August 1, 2007. We also intend to periodically hire independent contractors to
execute our research and development activities. We may hire employees when
circumstances warrant. At present, however, we do not anticipate hiring
employees in the near future.

Competition

Our direct competitors are those companies that are also
developing methods for administration of insulin through ingestible pills or
capsules. To our knowledge, such companies include Biocon Ltd. in India and
Biodel, Inc. in the United States. Many other companies indirectly compete with
us by developing methods that allow for the administration of insulin through
other means such as inhalers, into the lungs and then into the bloodstream.
However, studies show that inhaled insulin is less effective than injected
insulin in terms of delivery of the insulin into the bloodstream. Eli Lilly
& Co., Alkermes and Mannkind Corp. are developing dry powder insulin
products. Novo Nordisk and Aradigm Corp. are developing inhalable liquid
insulin.

Intellectual Property

We have filed the following patent applications and provisional
patent applications;

Title
    Jurisdiction
    Patent
      Application #Methods and Compositions For Oral Administration of
      Proteins
    Patent Cooperation Treaty, All countries
      were designated and the United States Patent and Trademark Office
      was designated as the Search and Examination Authority.
    PCT/IL2006/001019Provisional patent application for
      methods and compositions for rectal application for insulin
    The United States Patent and
      Trademark Office
    60/924.004Provisional patent application for methods and
      compositions for rectal
    The United States Patent and Trademark
      Office
    60/024.005


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application of
      proteinsProvisional patent application for method and compositions for
      oral administration of proteins
    The United States Patent and Trademark Office
    11/513.343


RISK FACTORS

This annual report on Form 10-KSB contains forward-looking
statements which relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
may, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industrys actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

Risks Related to Our Business

We are dependent on the clinical success of our orally
ingestible insulin pill. Failure to develop, receive regulatory approval and
market our orally ingestible insulin pill will have a significant and negative
effect on our ability to continue operations.

If we fail to develop our orally ingestible insulin pill to
completion or obtain regulatory approval for it, either on our own or in
collaboration with other pharmaceutical companies, our ability to fund future
operations from either revenue or the issuance of additional equity is likely to
be adversely affected. We are dependent on the successful culmination of
clinical trials and regulatory approval of our orally ingestible insulin pill.
The failure to develop, receive regulatory approval and market our orally
ingestible insulin pill will have a significant and negative effect on our
ability to continue operations.

Our orally ingestible insulin pill is still in the
development stage and we cannot be certain that it will be suitable for
commercial purposes.

To be profitable, we must successfully research, develop,
obtain regulatory approval for, manufacture, introduce, market and distribute
our oral insulin product that is currently in the development stage. The time
necessary to achieve these goals for any individual product is long and
uncertain. Before we can sell any of our potential oral insulin products, we
will be required to demonstrate through clinical trials that such product is
safe and effective for human use in the treatment of people with diabetes. We
have never successfully commercialized a drug product and we cannot be certain
that we will be able to begin, or continue, planned clinical trials for our
potential product, or if we are able, that the potential product will prove to
be safe and will produce the intended effects.

Even if safe and effective, the size of the solid dosage
form, taste and frequency of dosage may impede the acceptance of our product by
patients.

A number of companies in the drug delivery, biotechnology and
pharmaceutical industries have suffered significant setbacks in clinical trials,
even after showing promising results in earlier studies or trials. We cannot
assure you that favorable results in any clinical trial will mean that favorable
results will ultimately be obtained in future clinical

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trials. Nor can we assure you that results of limited animal
and human studies are indicative of results that would be achieved in future
animal studies or human clinical studies, all or some of which will be required
in order to have our potential product obtain regulatory approval. Similarly, we
cannot assure you that our potential product will be approved by the FDA.

Our future business success depends heavily upon regulatory
approvals, which can be difficult to obtain for a variety of reasons, including
cost.

Our clinical trials, as well as the manufacturing and marketing
of our potential product, are subject to extensive, costly and rigorous
regulation by various governmental authorities in the United States and other
countries. The process of obtaining required approvals from the FDA and other
regulatory authorities often takes many years, is expensive and can vary
significantly based on the type, complexity and novelty of the potential
product. We cannot assure you that we will meet the applicable regulatory
criteria in order to receive the required approvals for manufacturing and
marketing. Delays in obtaining United States or foreign approvals for our
potential product could result in substantial additional costs to us, and,
therefore, could adversely affect our ability to continue operations. Even if
regulatory approval of our potential product is obtained, that approval may
place limitations on the intended uses of the product, and may restrict the way
in which we are allowed to market the product.

The regulatory approval process presents several risks to us:

- In general, clinical trials can take more than a year, and require the
  expenditure of substantial resources, and the data obtained from these tests
  and trials can be susceptible to varying interpretation that could delay,
  limit or prevent regulatory approval.
- Delays or rejections may be encountered during any stage of the regulatory
  process based upon the failure of the clinical or other data to demonstrate
  compliance with, or upon the failure of the product to meet, a regulatory
  agencys requirements for safety, efficacy and quality or, in the case of a
  product seeking an orphan drug indication, because another designee received
  approval first.
- Requirements for approval may become more stringent due to changes in
  regulatory agency policy, or the adoption of new regulations or legislation.
- The scope of any regulatory approval, when obtained, may significantly
  limit the indicated uses for which a product may be marketed and may impose
  significant limitations in the nature of warnings, precautions and
  contraindications that could materially affect the profitability of the drug.
- Approved drugs, as well as their manufacturers, are subject to continuing
  and on-going review, and discovery of previously unknown problems with these
  products or the failure to adhere to manufacturing or quality control
  requirements may result in restrictions on their manufacture, sale or use or
  in their withdrawal from the market.
- Regulatory authorities and agencies may promulgate additional regulations
  restricting the sale of our existing and proposed products.
- Once a product receives marketing approval, the FDA may not permit us to
  market that product for broader or different applications, or may not grant us
  clearance with respect to separate product applications that represent
  extensions of our basic technology. In addition, the FDA may withdraw or
  modify existing clearances in a significant manner or promulgate additional
  regulations restricting the sale of our present or proposed products.

Additionally, we face the risk that our competitors may gain
FDA approval for a product before us. Having a competitor reach the market
before us would impede the future commercial success for our competing product
because we believe that the FDA uses heightened standards of approval for
products once approval has been granted to a competing product in a particular
product area. We believe that this standard generally limits new approvals to
only those products that meet or exceed the standards set by the previously
approved product.

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Our business will suffer if we cannot adequately protect our
patent and proprietary rights.

Although we have submitted a patent application covering the
intellectual property for our potential oral insulin product, we cannot assure
you that our patent will be granted and, if it is granted, whether it will be
held to be valid and enforceable and provide us with meaningful protection from
competition. Furthermore, we may not possess the financial resources necessary
to enforce our patent even if our patent application is successful. Also, we
cannot be certain that any products that we or a prospective licensee develop
will not infringe upon any patent or other intellectual property right of a
third party.

We will also rely upon trade secrets, know-how and continuing
technological advances to develop and maintain our competitive position. We plan
to maintain a policy of requiring employees, scientific advisors, consultants
and collaborators to execute confidentiality and invention assignment agreements
upon commencement of a relationship with us. We cannot assure you that these
agreements will provide meaningful protection for our trade secrets in the event
of unauthorized use or disclosure of such information.

We may be at risk of having to obtain a license from third
parties making proprietary improvements to our technology. We cannot reasonably
determine the cost to us of the effect of being unable to obtain any such
license.

There is a possibility that third parties may make improvements
or innovations to our potential oral insulin product in a more expeditious
manner than we do. Although we are not aware of any such circumstance related to
our product portfolio, should such circumstances arise, we may need to obtain a
license from such third party to obtain the benefit of the improvement or
innovation. Royalties payable under such a license would reduce our share of
total revenue. Such a license may not be available to us at all or on
commercially reasonable terms. Although we currently do not know of any
circumstances related to potential oral insulin product that would lead us to
believe that a third party has developed any improvements or innovation with
respect to it, we cannot assure you that such circumstances will not arise in
the future. We cannot reasonably determine the cost to us of the effect of being
unable to obtain any such license.

We are dependent on third parties to manufacture and, in
some cases, test our products. As a result, the success of our business will be
dependent, in part, upon securing manufacturing capabilities and contracting
with clinical service providers.

We have no manufacturing facilities for production of our
potential oral insulin product. We have no facilities for clinical testing. The
success of our program will be dependent upon securing manufacturing
capabilities and contracting with clinical service providers.

The availability of manufacturers is limited by both the
capacity of such manufacturers and their regulatory compliance. Among the
conditions for New Drug Application approval is the requirement that the
prospective manufacturers quality control and manufacturing procedures
continually conform with the FDAs current Good Manufacturing Practice. For the
balance of this annual report on Form 10-KSB, we will refer to Good
Manufacturing Practices as GMPs to be concise. GMPs are regulations
established by the FDA that govern the manufacture, processing, packing, storage
and testing of drugs intended for human use. In complying with GMPs,
manufacturers must devote extensive time, money and effort in the area of
production and quality control and quality assurance to maintain full technical
compliance.

Manufacturing facilities and company records are subject to
periodic inspections by the FDA to ensure compliance. If a manufacturing
facility is not in substantial compliance with these requirements, regulatory
enforcement action may be taken by the FDA, which may include seeking an
injunction against shipment of products from the facility and recall of products
previously shipped from the facility. Such actions could severely delay our
ability to obtain product from that particular source.

The success of our clinical trials is dependent on our future
partners capacity and ability to adequately manufacture drug products to meet
the proposed demand of each respective market. Any significant delay in
obtaining a supply source could harm our potential for success. Additionally, if
a future manufacturer were to lose its ability to meet our supply demands during
a clinical trial, the trial may be delayed or may even need to be abandoned.

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- 13 -

We may face product liability claims related to
participation in clinical trials or future products.

The testing, manufacture and marketing of products for humans
utilizing our potential oral insulin product may expose us to product liability
and other claims. These may be claims directly by consumers or by pharmaceutical
companies or others selling our product in the future. We seek to structure
development programs with pharmaceutical companies that would complete the
development, manufacturing and marketing of the finished product in a manner
that would protect us from such liability, but the indemnity undertakings for
product liability claims that we secure from the pharmaceutical companies may
prove to be insufficient. We do not yet have product liability insurance.

We face rapid technological change and intense competition.

Our success depends, in part, upon maintaining a competitive
position in the development of our potential product. Developments in insulin
products are expected to continue at a rapid pace because many pharmaceutical
companies are in the process of developing new insulin products. If we are able
to develop our potential oral insulin product to the point where we can sell it
on the market, we will compete with other drug delivery, biotechnology and
pharmaceutical companies, research organizations, individual scientists and
non-profit organizations engaged in the development of insulin products,
especially those who are developing insulin products that can be taken orally.
Many of our competitors will have greater research and development capabilities,
experience, and marketing, financial and managerial resources than we have, and,
therefore, will represent significant competition.

Our products, when developed and marketed, may compete with
existing insulin products, some of which are well established in the marketplace
and manufactured by our competitors. Our potential oral insulin product, if
successful, would compete with insulin that is taken by injection and other
potential orally ingestible insulin pills or capsules developed by other
companies such as Biocon, Ltd. or Biodel, Inc. These products are marketed
throughout the world by leading pharmaceutical companies such as Eli Lilly and
Company and Pfizer, Inc.

Our competitors may succeed in developing competing
technologies or obtaining government approval for products before we do.
Developments by others may render our potential products non-competitive or
obsolete. We cannot assure you that, if our products are marketed, they will be
preferred to existing drugs or that they will be preferred to or available
before other products in development.

Risks Related to Our Company

We have incurred substantial losses since inception and as
we expect to continue to incur research and development costs to further develop
our potential oral insulin product, we are likely going to require additional
capital and if additional capital is not raised, we may have to cease business
operations and investors will lose their entire investment.

Since our inception in April 12, 2002, we have generated significant
  losses from operations. Now that we have abandoned our former business acquiring
  and exploring mineral properties and have become engaged in the pharmaceutical
  research and development business, we anticipate that we will continue to generate
  significant losses from operations for the foreseeable future. As at August
  31, 2007, our accumulated deficit was approximately $4,479,000. Our net loss
  was approximately $3,236,000 and $415,000 for the years ended August 31, 2007
  and 2006 respectively. As at August 31, 2007, we had cash of approximately $1,918,000.
  We have limited capital resources and no revenue from operations to date and
  have been funded with the proceeds from equity financings. These conditions
  raise substantial doubt about our ability to continue as a going concern. The
  audit report prepared by our independent registered public accounting firm relating
  to our consolidated financial statements for the year ended includes an explanatory
  paragraph expressing the substantial doubt about our ability to continue as
  a going concern.

Our existing capital resources will not enable us to continue
operations without implementing cost reductions or raising additional capital.
These circumstances may adversely affect our ability to raise additional
capital. If we fail to raise additional capital, we will be forced to cease
operations. If additional capital is raised through the sale of

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equity or convertible debt securities, the issuance of such
securities would result in dilution to our existing stockholders.

We are dependent on our key personnel and if we cannot
recruit and retain qualified individuals to perform our research, development,
manufacturing and commercial functions, our business will likely not be
successful.

We are highly dependent on our executive officers, especially
on the services to be provided by our Chief Medical and Technology Officer and
one of our directors, Dr. Miriam Kidron. Dr. Kidron is a pharmacist with a Ph.
D. in biochemistry and is the inventor of the method and composition of insulin
that can be administered orally, which is covered by patent application Methods
and Compositions For Oral Administration of Proteins.

We would be significantly disadvantaged if Dr. Kidron were to
leave our company. The loss of other officers could have an adverse effect as
well, given their specific knowledge related to our proprietary technology. If
we are not able to retain our executive officers, our business may suffer. None
of our key officers have announced any intention to leave us. We have only
recently entered into written employment agreements with KNRY, Ltd., an Israeli
company, for the provision of services by Dr. Miriam Kidron and Mr. Nadav Kidron
as our executive officers. We also only recently entered into a written
employment agreement with Alex Werber for him to serve as our Chief Financial
Officer and Treasurer. We do not maintain key-person life insurance policies
for any of our executive officers.

There is intense competition in the biotechnology industry for
qualified scientists and managerial personnel in the development, manufacture,
and commercialization of drugs. We may not be able to attract and retain the
qualified personnel necessary for developing our business. Additionally, because
of the knowledge and experience of our scientific personnel and their specific
knowledge with respect to our orally ingestible insulin pill, the continued
development of our orally ingestible insulin pill could be adversely affected by
the loss of any one of our executive officers or qualified personnel that we may
engage.

All of our assets and all of our directors and officers are
outside the United States, as a result it may be difficult for investors to
enforce within the United States any judgments obtained against us or any of our
directors or executive officers.

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. In addition, all of our directors and executive officers are nationals
and or residents of countries other than the United States, and all or a
substantial portion of such persons assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against us or our directors or executive
officers, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof. Consequently, you
may be effectively prevented from pursuing remedies under U.S. federal
securities laws against them.

Our principal research and development facilities will be
located in Israel and the unstable military and political conditions in Israel
may cause interruption or suspension of our business operations without
warning.

Our principal research and development facilities will
initially be located in Israel. As a result, we are directly influenced by the
political, economic and military conditions affecting Israel. Since the
establishment of the State of Israel in 1948, a number of armed conflicts have
taken place between Israel and its Arab neighbors and, since September 2000,
involving the Palestinian population, and a state of hostility, varying in
degree and intensity, has led to security and economic problems for Israel and
companies based in Israel. Acts of random terrorism periodically occur which
could affect our operations or personnel.

In addition, Israeli-based companies and companies doing
business with Israel have been the subject of an economic boycott by members of
the Arab League and certain other predominantly Muslim countries since Israels
establishment. Although Israel has entered into various agreements with certain
Arab countries and the Palestinian Authority, and various declarations have been
signed in connection with efforts to resolve some of the economic and political
problems in the Middle East, we cannot predict whether or in what manner these
problems will be resolved.

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Also, since the end of September 2000, there has been a marked
increase in the level of terrorism in Israel, which has significantly damaged
both the Israeli economy and levels of foreign and local investment.

Furthermore, certain of our officers and employees may be
obligated to perform annual reserve duty in the Israel Defense Forces and are
subject to being called up for active military duty at any time. All Israeli
male citizens who have served in the army are subject to an obligation to
perform reserve duty until they are between 45 and 54 years old, depending upon
the nature of their military service.

Risks Related to Our Common Stock

Our stock price will likely be volatile.

The trading price for our common stock is likely to be highly
volatile. The market prices for securities of drug delivery, biotechnology and
pharmaceutical companies have historically been highly volatile. Factors that
could adversely affect our stock price include:

- fluctuations in our operating results; announcements of partnerships or
  technological collaborations,
- innovations or new products by us or our competitors;
- changes in government regulations;
- developments in patent or other proprietary rights;
- public concern as to the safety of drugs developed by us or others;
- the results of clinical studies or trials by us, any partners we may have
  or our competitors;
- litigation;
- general stock market and economic conditions;
- number of shares available for trading (float);
- inclusion in or dropping from stock indexes.

Sales of a substantial number of shares of our common stock
into the public market by the selling stockholders may result in significant
downward pressure on the price of our common stock and could affect the ability
of our stockholders to realize any current trading price of our common
stock.

Sales of a substantial number of shares of our common stock in
the public market could cause a reduction in the market price of our common
stock. We are in a process of filing a registration statement to enable certain
selling stockholders to resell up to 18.76% of the issued and outstanding shares
of our common stock. As a result of such registration statement, a substantial
number of our shares of common stock which have been issued may be available for
immediate resale, which could have an adverse effect on the price of our common
stock. As a result of any such decreases in price of our common stock,
purchasers who acquire shares from the selling stockholders may lose some or all
of their investment.

We do not intend to pay dividends and there will be less
ways in which you can make a gain on any investment in our company.

We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through appreciation of the price of our common stock. There can be no assurance
that the price of our common stock will increase.

Trading of our stock may be restricted by the SECs penny
stock regulations, which may limit a stockholders ability to buy and sell our
stock.

The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
brokers or dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of

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- 16 -

$5,000,000 or individuals with a net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouse. The penny stock rules require a broker or dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document in a form prepared by the SEC, which provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker or dealer also must provide the customer with current
bid and offer quotations for the penny stock, the compensation of the broker or
dealer and its salesperson in the transaction and monthly account statements
showing the market value of each penny stock held in the customers account. The
bid and offer quotations, and the broker or dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customers confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules, the broker or dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of brokers or dealers to trade
our securities. We believe that the penny stock rules discourage investor
interest in and limit the marketability of our common stock. This may limit your
ability to buy and sell our stock and cause the price of the shares to decline

FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules described above, the
Financial Industry Regulatory Authority (FINRA) has adopted rules that require
that in recommending an investment to a customer, a broker or dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, brokers or dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the
FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The FINRA
requirements make it more difficult for brokers or dealers to recommend that
their customers buy our common stock, which may prevent you from reselling your
shares and may cause the price of the shares to decline.

ITEM 2. DESCRIPTION OF PROPERTY

Our executive and head office is currently located at 2 Elza
Street, Jerusalem, Israel 93706, which is provided to us at no cost and is
contributed to us by Nadav Kidron, our President, Chief Executive Officer and a
director. As of October 1, 2007, we signed a four year contract with Hebrew
University and The Jerusalem Development Authority, who are working to encourage
biotech companies to rent office space in Jerusalem. The cost of rent is $694
per month and may be terminated with a 60-day written notice. The total office
space is approximately 120 square meters or 390 square feet. We believe our
current premises are adequate for our current operations and we do not
anticipate that we will require any additional premises in the foreseeable
future. When and if we require additional space, we intend to move at that time.

ITEM 3. LEGAL PROCEEDINGS

Other than disclosed below, we know of no material, active or
pending legal proceedings against us, nor are we involved as a plaintiff in any
material proceedings or pending litigation:

On June 21, 2006, we commenced a legal action in the Supreme
Court of the State of New York against John Choi, Bernard Perini and Epifanio
Almodovar to enjoin them from selling, assigning, transferring, pledging,
encumbering or otherwise disposing their shares of our common stock.
Collectively Messrs. Choi, Perini and Almodovar obtained 2,897,342 shares of our
common stock pursuant to an aborted merger between our company and Integrated
Security Technologies, Inc., a privately held New Jersey Corporation, in 2004.
It is our position that Messrs. Choi, Perini and Almodovar are possessed of
stock that either should never have been issued to them at all or which should
have been returned to our company when our merger with Integrated Security
Technologies, Inc., the privately held New Jersey Corporation, was unwound. The
court subsequently granted us a temporary injunction to restrain Messrs. Choi,
Perini and Almodovar from selling their shares of our common stock.

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On August 10, 2006, we reached a settlement with Bernard Perini
and Epifanio Almodovar for the legal action in the Supreme Court of the State of
New York initiated by our company against them. As a result, the temporary
injunction to restrain Messrs. Perini and Almodovar from selling their shares of
our common stock has been lifted. Furthermore, pursuant to the settlement, all
claims by and between our company and Bernard Perini and Epifanio Almodovar have
been mutually released and discontinued with prejudice. Messrs. Perini and
Almodovar agreed to ask their legal counsel to hold their shares of our common
stock as an escrow agent, subject to a scheduled release. As of the date of this
annual report on Form 10-KSB, all of Messrs. Perini and Almodovars shares have
been released according to the release schedule.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of our security
holders either through solicitation of proxies or otherwise in the forth quarter
of the fiscal year ended August 31, 2007.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
TRANSACTIONS

Our shares of common stock were initially approved for
quotation on the OTC Bulletin Board under the name Iguana Ventures Ltd. under
the symbol, IGVL, on March 8, 2004. However, the first trade did not occur until
June 14, 2004 after we commenced quotation under the name Integrated Security
Technologies, Inc. under the symbol, ISTG. Effective April 10, 2006, we changed
our name from Integrated Security Technologies, Inc. to Oramed
Pharmaceuticals Inc. when we merged our subsidiary, Oramed Pharmaceuticals
Inc.

Our shares became ineligible for quotation on the OTC Bulletin
Board on October 14, 2004 but remained eligible for quotation on the Pink
Sheets. Our common stock became eligible again for quotation on the OTC Bulletin
Board on November 16, 2005. On April 10, 2006, as a result of our name change,
the National Association of Securities Dealers, Inc. changed our trading symbol
to ORMP.OB.

The following table reflects the high and low bid information
for our common stock for each fiscal quarter since November 16, 2005. The bid
information was obtained from Yahoo! Finance and reflects inter-dealer prices,
without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.

Quarter Ended(1)
    High
    LowFebruary 28, 2006
    $0.51
    $0.00May 31, 2006
    $1.10
    $0.40August 31, 2006
    $1.35
    $0.60November 30, 2006
    $1.11
    $0.60February 28, 2007
    $1.99
    $0.55May 31, 2007
    $0.91
    $0.55August 31, 2007
    $0.69
    $0.39


| | (1) | We changed our trading symbol on April 10, 2006 to
      ORMP.OB as a result of our name change. Because of the trading symbol
      change, we are unable to obtain prior high and low bid information for our
      common stock based on our previous trading symbols without undue
      hardship.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Securities Authorized For Issuance Under Equity Compensation
Plans

Our board of directors adopted a stock option plan on October
15, 2006. The following table sets forth certain information concerning all
equity compensation plans previously approved by stockholders and all previous
equity compensation plans not previously approved by stockholders, as of the
most recently completed fiscal year.

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- 18 -

Equity Compensation Plan Information As At August 31, 2007

Plan Category
    Number of securities to be issued upon
      exercise of outstanding options, warrants and
      rights (a)
    Weighted-average exercise price of
      outstanding options, warrants and rights
      (b)
    Number of securities remaining available
      for issuance under equity compensation plans
      (c)Equity Compensation Plans approved by security
      holders
    Nil
    Nil
    NilEquity Compensation Plans not approved
      by security holders
      5,811,360
    $0.25
    -Total
      5,811,360
      $0.23
      -


On November 23, 2006, we issued stock options to purchase up
  to 500,000 common shares at an exercise price of $0.76 per share to our director
  and then Chief Financial Officer, George Drazenovic. These options will vest
  1/12 every month with the first 1/12 vesting on December 23, 2006. On December
  31, 2006, we issued stock options to purchase up to 100,000 common shares at
  an exercise price of $0.76 per share to an employee. The options vested immediately.
  On March 18, 2007, we issued stock options to purchase up to 100,000 common
  shares at an exercise price of $0.76 per share to an employee. The options vested
  immediately. On August 2, 2007, we issued stock options to Dr. Miriam Kidron,
  Chief Medical and Technology Officer and a director of our company, to purchase
  an aggregate of 850,000 shares of our common stock at an exercise price of $0.45
  per share. The options vested upon grant. Also on August 2, 2007, we issued
  stock options to Nadav Kidron, President, Chief Executive Officer and a director
  of our company, to purchase an aggregate of 850,000 shares of our common stock
  at an exercise price of $0.45 per share. The options vested upon grant. As of
  August 14, 2007, pursuant to our contract with Hadasit Medical Services and
  Development Ltd, Dr. Miriam Kidron was entitled to receive stock options to
  purchase up to 3,361,360 common shares at an exercise price of $0.001 per share.
  The options vested immediately.

Holders of our Common Stock

As of November 29, 2007 we have 31 registered stockholders
holding 46,034,804 shares of our issued and outstanding common stock. Our
transfer agent is Pacific Stock Transfer Company, 500 E. Warm Springs Road,
Suite 240, Las Vegas, NV 89119, Telephone: 702-361-3033 Ext. 106, Fax:
702-433-1979, Web: www.pacificstocktransfer.com.

Dividends

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent Sales of Unregistered Securities

On October 30, 2007, we issued warrants to an advisor of our
  company, to purchase an aggregate of 100,000 shares of our common stock at an
  exercise price of $0.76 per share. These warrants will vest 1/12 every month
  with the first 1/12 vesting on November 30, 2007.

On September 7, 2007, we issued 283,025 shares of our common
stock to Swiss Caps AG pursuant to an agreement whereby Swiss Caps AG has agreed
to manufacture oral gel capsules for clinical testing of our oral insulin
project. We issued the shares of our common stock in an offshore transaction
relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On September 4, 2007, we granted 300,000 warrants exercisable
  for two years at an exercise price of $0.45 per share to executives of The Investor
  Relations Group Inc. pursuant to the terms of an investor relations agreement

On August 2, 2007, we completed a private placement consisting
of 510,000 units of our securities at a price of US $0.50 per unit for aggregate
proceeds of $255,000. Each unit consists of one common share and one share
purchase warrant, with each one warrant exercisable into one additional common
share at a price of $0.75 per share until August 2, 2010. We issued these units
to six non-U.S. persons (as that term is defined in Regulation S of the

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Securities Act of 1933) in an offshore transaction relying on
Regulation S and/or Section 4(2) of the Securities Act of 1933. We also issued
10,000 shares to one non-US individual on August 2, 2007 as a finders fee
pursuant to an offshore transaction relying on Regulation S and/or Section 4(2)
of the Securities Act of 1933.

On August 2, 2007, we issued stock options to two directors and
  executives of our company, to purchase an aggregate of 1,700,000 shares of our
  common stock at an exercise price of $0.45 per share. The options vested upon
  grant.

On June 15, 2007, we issued 3,600,000 units of our securities
at a price of $0.50 per unit for aggregate proceeds of $1,800,000. Each unit
consists of one common share and one share purchase warrant, one share purchase
warrant shall be exercisable into one common share at a price of $0.75 per
common share until June 15, 2010. We issued the units to seven non-U.S. persons
(as that term is defined in Regulation S of the Securities Act of 1933) in an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act of 1933.

On March 18, 2007, we issued stock options to an advisor of our
company, to purchase an aggregate of 100,000 shares of our common stock at an
exercise price of $0.76 per share. These options will vest 1/12 every month with
the first 1/12 vesting on April 18, 2007.

Effective February 12, 2007, we issued a $125,000 unsecured
convertible debenture to Epsom Investment Services. All of any portion of the
amounts due under the debenture may be converted at any time, at the option of
the holder, into common shares of our company at a conversion price of $0.50 per
share. The convertible debenture does not accrue any interest. The issuance of
the convertible debenture and the securities issuable upon conversion of the
convertible debenture were made pursuant to the exemption from registration
requirements of the United States Securities Act of 1933, as amended (the
Securities Act) provided by Regulation S promulgated thereunder. The
subscriber was not a U.S. person (as that term is defined in Regulation S).

On December 31, 2006, we issued stock options to an advisor of
our company, to purchase an aggregate of 100,000 shares of our common stock at
an exercise price of $0.76 per share. These options will vest 1/12 every month
with the first 1/12 vesting on January 31, 2007.

On December 27, 2006, we issued 125,000 shares of our common
stock to Swiss Caps AG pursuant to an agreement whereby Swiss Caps AG has agreed
to manufacture oral gel capsules for clinical testing of our oral insulin
project. We issued the shares of our common stock in an offshore transaction
relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On November 23, 2006, we entered issued stock options to one
consultant and one director of our company, granting options to purchase an
aggregate of 750,000 shares of our common stock at an exercise price of $0.76
per share. These options will vest 1/12 every month with the first 1/12 vesting
on December 23, 2006.

On February 6, 2006, we closed a private placement consisting
  of 22,981,228 shares at a price of $0.001 per share for gross proceeds of $22,981.23.
  We received promissory notes for the full amount and subsequently full payments
  for the promissory notes were made to our company. We issued the securities
  to 7 non-U.S. persons (as that term is defined in Regulation S of the Securities
  Act of 1933) in an offshore transaction relying on Regulation S and/or Section
  4(2) of the Securities Act of 1933.

As of August 14, 2007, pursuant to our contract with Hadasit
  Medical Services and Development Ltd, Dr. Miriam Kidron was entitled to receive
  stock options to purchase up to 3,361,360 common shares at an exercise price
  of $0.001 per share. The options vested immediately.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OR
OPERATION

Overview

Discussion of our financial condition and results of operations
should be read in conjunction with the consolidated audited financial statements
and the notes to consolidated audited financial statements included elsewhere in
this filing prepared in accordance with accounting principles generally accepted
in the United States. This discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those anticipated in these forward-looking statements.

---

- 20 -

Plan of Operation

For the next twelve months, we plan to conduct further research
and development on the technology covered by the patent application Methods and
Composition for Oral Administration of Proteins, which we acquired from
Hadasit. Through our research and development efforts, we intend to develop a
pill that will not break down in the stomach or intestines and will be effective
in delivering insulin to the bloodstream for the treatment of diabetes. The
enzymes and compounds that are added to the insulin to make the pill must not
change the composition of the insulin once it is absorbed into the bloodstream
and the pill must be safe to ingest. We also plan to conduct research and
development of other innovative pharmaceutical solutions, including rectal
application of insulin, flu vaccines, use of oral ingestible pills for delivery
other polypeptides and use of rectal application for delivery of other
polypeptides.

Cash Requirements

During the next 12 months, we plan to spend approximately
$2.555 million on our business. This budget includes the salaries of the
research team, office costs, cost of trials and materials, among others, all of
them necessary to execute our plan of operations. We will require additional
funds to implement our plans. These funds may be raised through equity
financing, debt financing, or other sources, which may result in the dilution in
the equity ownership of our shares. We will also need more funds if the costs of
our business operations are greater than we have anticipated. We will also
require additional financing to sustain our business operations if we are not
successful in earning revenues. We currently do not have any arrangements for
further financing and we may not be able to obtain financing when required. Our
future is dependent upon our ability to obtain financing.

|Estimated Funding Required During the Next 12 Months |   |           | 
|---------------------------------------------------- | - | --------- | 
|Salaries                                             | $ | 300,000   | 
|Operations                                           |   |           | 
|Legal Fees                                           | $ | 180,000   | 
|Office Expenses                                      | $ | 300,000   | 
|Research and Development                             |   |           | 
|Investigation New Drug
      Application Component   |   |           | 
|Bio-analytical                                       | $ | 200,000   | 
|Animal Pharmacokinetics                              | $ | 150,000   | 
|Animal Toxicology                                    | $ | 300,000   | 
|CMC Studies                                          | $ | 100,000   | 
|Clinical and Regulatory                              | $ | 250,000   | 
|Pharmacology, Histology, etc.                        | $ | 100,000   | 
|Clinical
      Study                                 |   |           | 
|Clinical costs                                       | $ | 375,000   | 
|Bio-analytical Assays                                | $ | 75,000    | 
|Supplies                                             | $ | 25,000    | 
|Analysis/Stats/                                      | $ | 100,000   | 
|Report                                               | $ | 50,000    | 
|Miscellaneous                                        | $ | 50,000    | 
|                                                     |   |           | 
|Total                                                | $ | 2,555,000 | 

Results of Operations

|Summary of Year-end results |   |                      |  |   |         |  |  |             | 
|--------------------------- | - | -------------------- |  | - | ------- |  |  | ----------- | 
|                            |   | Year Ended August 31 | 
|                            |   |                      |  |   |         |  |  | Percentage  | 
|                            |   |                      |  |   |         |  |  | Increase or | 
|                            |   | 2007                 |  |   | 2006    |  |  | (Decrease)  | 
|Revenue                     | $ | Nil                  |  | $ | Nil     |  |  | N/A         | 
|Expenses                    | $ | 3,132,000            |  | $ | 413,000 |  |  | 310%        | 

---

- 21 -

|Net Losses | $ | 3,236,000 |  | $ | 415,000 |  |  | 333% | 
|---------- | - | --------- |  | - | ------- |  |  | ---- | 

Revenue

We are presently in the research and development stage of our
business and have not earned any revenues to date.

Expenses

|The major
      components of our expenses for the year are outlined in the table below: |  
|---------------------------------------------------------------------------------------- | -
|                                                                                         |  
|Research and development expenses                                                        |  
|General and administrative expenses                                                      | $
|Loss on impairment                                                                       |  
|Interest income                                                                          |  
|Interest expense                                                                         |  
|Total                                                                                    | $

Financial Condition, Liquidity and Capital Resources

As at August 31, 2007, we had a working capital of $506,000. As
at August 31, 2007, we had $1,918,000 in cash. As at August 31, 2007, our total
liabilities were $1,424,000.

At August 31, 2006 we had a working capital deficit of
$433,000. At August 31, 2006 we had $176,000 in cash and cash equivalents. At
August 31, 2006, our total liabilities were $609,000.

We did not generate any revenue in the year ended August 31,
2007 and we have not generated any revenue since April 12, 2002 (date of
inception) to August 31, 2007.

There are no assurances that we will be able to obtain the
amount required for our continued operations. In such event that we do not raise
sufficient additional funds by secondary offering or private placement, we will
consider alternative financing options, if any, or be forced to scale down or
perhaps even cease our operations.

On June 15, 2007, we issued 3,600,000 units of our securities
at a price of $0.50 per unit for aggregate proceeds of $1,800,000. On August 2,
2007, we closed another private placement consisting of 510,000 units of our
securities at a price of US $0.50 per unit for aggregate proceeds of US
$255,000.

We have suffered recurring losses from operations. The
continuation of our company is dependent upon our ability to raise additional
capital. In this regard we have raised additional capital through the private
placements noted above but we will still require additional funds to continue
our operations and plans.

The continuation of our business is dependent upon obtaining
further financing, the successful completion of the clinical testing of our
orally ingestible insulin pill capsule, the approval by the Federal Drug
Administration of our orally ingestible insulin pill capsule, and further in the
future, achieving a profitable level of operations. The issuance of additional
equity securities by us could result in a significant dilution in the equity
interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We will pursue various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will be unable to conduct our operations as planned, and we will not be able
to meet our other obligations as they become due. In such event, we will be
forced to scale down or perhaps even cease our operations.

---

- 22 -

Going Concern

Due to the uncertainty of our ability to meet our current
operating and capital expenses, the audit report prepared by our independent
registered public accounting firm relating to our consolidated financial
statements for the year ended includes an explanatory paragraph expressing the
substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial
instruments, off-balance sheet guarantees, interest rate swap transactions or
foreign currency contracts. We do not engage in trading activities involving
non-exchange traded contracts.

---

- 23 -

ITEM 7. FINANCIAL STATEMENTS

Our consolidated financial statements are stated in United
States dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles.

The following consolidated financial statements are filed as
part of this annual report:

| | Independent Registered Public Accounting Firms Report,
      dated November 29, 2006                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                     
| | Consolidated Balance Sheets as at August 31, 2007                                                                                                                                   
| |                                                                                                                                                                                     
| | Consolidated Statements of Expenses for the years ended
      August 31, 2007 and August 31, 2006 and for the period from April 12, 2002
      (inception) through August 31, 2007  
| |                                                                                                                                                                                     
| | Consolidated Statement of Changes in Stockholders
      Deficit for the period from April 12, 2002 to August 31, 2007                                                              
| |                                                                                                                                                                                     
| | Consolidated Statements of Cash Flows for the years ended
      August 31, 2007 and August 31, 2006 and for the period from April 12, 2002
      (inception) through August 31, 2007

---

- 24 -

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

|To the Board of Directors    
|-----------------------------
|Oramed Pharmaceuticals, Inc. 
|(a development stage company)
|Jerusalem, Israel            

We have audited the accompanying consolidated balance sheet of
  Oramed Pharmaceuticals, Inc. as of August 31, 2007 and 2006, and the related
  consolidated statements of expenses, changes in stockholders deficit,
  and cash flows for the years then ended and the period from April 12, 2002 (Inception)
  through August 31, 2007. These financial statements are the responsibility of
  Orameds management. Our responsibility is to express an opinion on these
  financial statements based on our audits.

We conducted our audits in accordance with standards of the Public
  Accounting Oversight Board (United States). Those standards require that we
  plan and perform the audits to obtain reasonable assurance about whether the
  financial statements are free of material misstatement. An audit includes examining,
  on a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation. We believe that our audits provide a reasonable
  basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the consolidated financial
  position of Oramed, as of August 31, 2007, and the results of its consolidated
  operations and its cash flows for the periods described in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that Oramed will continue as a going concern. As discussed in Note 2 to the
  financial statements, Oramed suffered recurring losses from operations which
  raises substantial doubt about its ability to continue as a going concern. Managements
  plans regarding those matters are described in Note 2. The consolidated financial
  statements do not include any adjustments that might result from the outcome
  of this uncertainty.

|MALONE & BAILEY, PC  
|---------------------
|www.malone-bailey.com
|Houston, Texas       
|                     
|December 10, 2007    

---

- 25 -

|ORAMED PHARMACEUTICALS INC.                               
|----------------------------------------------------------
|(A development stage company)                             
|CONSOLIDATED BALANCE
      SHEETS                         
|U.S. dollars in thousands, except share and per share data

|                                                                            |   | August 31, |  
|--------------------------------------------------------------------------- | - | ---------- | -
|                                                                            |   | 2007       |  
|ASSETS                                                                      |   |            |  
|CURRENT ASSETS:                                                             |   |            |  
|Cash and cash equivalents                                                   | $ | 1,918      |  
|Prepaid expenses and other current assets                                   |   | 12         |  
|Total current assets                                                        |   | 1,930      |  
|                                                                            |   |            |  
|PROPERTY AND EQUIPMENT, NET                                                 |   | 2          |  
|                                                                            |   |            |  
|DEPOSITS                                                                    |   | 5          |  
|Total assets                                                                | $ | 1,937      |  
|                                                                            |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)                        |   |            |  
|CURRENT LIABILITIES:                                                        |   |            |  
|Accounts payable and accrued expenses                                       | $ | 341        |  
|Due to shareholder                                                          |   | 47         |  
|Convertible notes payable                                                   |   | 275        |  
|Stock payable                                                               |   | 761        |  
|Total current liabilities                                                   |   | 1,424      |  
|                                                                            |   |            |  
|STOCKHOLDERS' EQUITY (DEFICIT):                                             |   |            |  
|Common stock of
      $ 0.001 par value - Authorized: 200,000,000 shares at |   |            |  
|August 31,
      2007 and 2006; Issued and outstanding: 45,231,779 and      |   |            |  
|41,456,779
      shares at August 31, 2007 and 2006, respectively           |   | 45         |  
|Additional paid-in capital                                                  |   | 4,947      |  
|Deficit accumulated during the
      development stage                      |   | (4,479     | )
|Total stockholders' equity (deficit)                                        |   | 513        |  
|Total liabilities and stockholders' equity
      (deficit)                  | $ | 1,937      |  

See summary of accounting policies and notes to consolidated financial
  statements.

---

- 26 -

|ORAMED PHARMACEUTICALS INC.                               
|----------------------------------------------------------
|(A development stage company)                             
|CONSOLIDATED STATEMENTS
      OF EXPENSES                 
|U.S. dollars in thousands, except share and per share data

|                                                              |   |            |   |   |            |   |   | From           |  
|------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | -------------- | -
|                                                              |   |            |   |   |            |   |   | April 12, 2002 |  
|                                                              |   |            |   |   |            |   |   | (inception)    |  
|                                                              |   | Year ended |   |   | through    |  
|                                                              |   | August 31. |   |   | August 31. |  
|                                                              |   | 2007       |   |   | 2006       |   |   | 2007           |  
|                                                              |   |            |   |   |            |   |   |                |  
|Operating expenses:                                           |   |            |   |   |            |   |   |                |  
|Research and development expenses                             | $ | 2,214      |   | $ | 198        |   | $ | 2,412          |  
|Loss on impairment                                            |   | -          |   |   | -          |   |   | 435            |  
|General and administrative expenses                           |   | 918        |   |   | 215        |   |   | 1,525          |  
|Loss from Operations                                          |   | 3,132      |   |   | 413        |   |   | 4,372          |  
|                                                              |   |            |   |   |            |   |   |                |  
|Interest income                                               |   | (11        | ) |   | (2         | ) |   | (13            | )
|Interest expense                                              |   | 115        |   |   | 4          |   |   | 120            |  
|Net loss                                                      | $ | 3,236      |   | $ | 415        |   | $ | (4,479         | )
|                                                              |   |            |   |   |            |   |   |                |  
|Basic and diluted net loss per share                          | $ | 0.08       |   | $ | 0.01       |   |   | n/a            |  
|                                                              |   |            |   |   |            |   |   |                |  
|Weighted average number of shares used in computing basic and |   |            |   |   |            |   |   |                |  
|diluted net loss per share                                    |   | 42,298,080 |   |   | 33,397,609 |   |   | n/a            |  

See summary of accounting policies and notes to consolidated financial
  statements.

---

- 27 -

|ORAMED PHARMACEUTICALS INC.                                  
|-------------------------------------------------------------
|(A development stage company)                                
|STATEMENTS OF CHANGES
      IN STOCKHOLDERS' EQUITY (DEFICIT)
|U.S. dollars in thousands, except share data                 

|                                                   |  |              |   |   |         |   |   |             |   |   | Deficit     |   |   |               |  
|-------------------------------------------------- |  | ------------ | - | - | ------- | - | - | ----------- | - | - | ----------- | - | - | ------------- | -
|                                                   |  |              |   |   |         |   |   |             |   |   | accumulated |   |   | Total         |  
|                                                   |  |              |   |   |         |   |   | Additional  |   |   | during the  |   |   | stockholders' |  
|                                                   |  | Common Stock |   |   | paid-in |   |   | development |   |   | equity      |  
|                                                   |  | Shares       |   | $ |         |   |   | capital     |   |   | stage       |   |   | (deficit)     |  
|                                                   |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|Balance as of August 12, 2002 (Inception)          |  | 34,828,200   |   |   | 35      |   |   | 19          |   |   | -           |   |   | 54            |  
|Net loss                                           |  | -            |   |   | -       |   |   | -           |   |   | (65         | ) |   | (65           | )
|                                                   |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|Balance as of August 31, 2003                      |  | 34,828,200   |   |   | 35      |   |   | 19          |   |   | (65         | ) |   | (11           | )
|Shares cancelled                                   |  | (19,800,000  | ) |   | (20     | ) |   | 20          |   |   | -           |   |   | -             |  
|Shares issued for investment in ISTI-NJ            |  | 1,144,410    |   |   | 1       |   |   | 434         |   |   | -           |   |   | 434           |  
|Shares issued for offering costs                   |  | 1,752,941    |   |   | 2       |   |   | (2          | ) |   | -           |   |   | -             |  
|Shares issued cash                                 |  | 550,000      |   |   | -       |   |   | 274         |   |   | -           |   |   | 275           |  
|Contributions to paid in capital                   |  | -            |   |   | -       |   |   | 19          |   |   | -           |   |   | 19-           |  
|Net loss                                           |  | -            |   |   | -       |   |   | -           |   |   | (717        | ) |   | (717          | )
|                                                   |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|Balance as of August 31, 2004                      |  | 18,475,551   |   |   | 18      |   |   | 764         |   |   | (782        | ) |   | -             |  
|Imputed interest                                   |  | -            |   |   | -       |   |   | 1           |   |   | -           |   |   | 1             |  
|Net loss                                           |  | -            |   |   | -       |   |   | -           |   |   | (46         | ) |   | (46           | )
|                                                   |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|Balance as of August 31, 2005                      |  | 18,475,551   |   |   | 18      |   |   | 765         |   |   | (828        | ) |   | (45           | )
|Shares issued for cash                             |  | 22,981,228   |   |   | 23      |   |   | -           |   |   | -           |   |   | 23            |  
|Imputed interest                                   |  | -            |   |   | -       |   |   | 4           |   |   | -           |   |   | 4             |  
|Net loss                                           |  | -            |   |   | -       |   |   | -           |   |   | (415        | ) |   | (415          | )
|                                                   |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|Balance as of August 31, 2006                      |  | 41,456,779   |   |   | 41      |   |   | 769         |   |   | (1,243      | ) |   | (433          | )
|Shares issued for cash                             |  | 3,650,000    |   |   | 4       |   |   | 1,821       |   |   | -           |   |   | 1,825         |  
|Shares issued for services                         |  | 125,000      |   |   | -       |   |   | 99          |   |   | -           |   |   | 99            |  
|Stock based compensation related to options        |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|granted to employees and directors                 |  |              |   |   |         |   |   | 2,146       |   |   |             |   |   | 2,146         |  
|Discount on convertible note related to beneficial |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|conversion feature                                 |  |              |   |   |         |   |   | 108         |   |   |             |   |   | 108           |  
|Imputed interest                                   |  | -            |   |   | -       |   |   | 4           |   |   | -           |   |   | 4             |  
|Net loss                                           |  | -            |   |   | -       |   |   | -           |   |   | (3,236      | ) |   | (3,236        | )
|                                                   |  |              |   |   |         |   |   |             |   |   |             |   |   |               |  
|Balance as of August 31, 2007                      |  | 45,231,779   |   | $ | 45      |   | $ | 4,947       |   | $ | (4,479      | ) | $ | 513           |  

See summary of accounting policies and notes to consolidated financial
  statements.

---

- 28 -

|ORAMED PHARMACEUTICALS INC.                
|-------------------------------------------
|(A development stage company)              
|CONSOLIDATED STATEMENTS
      OF CASH FLOWS
|U.S. dollars in thousands                  

|                                                   |   |                       |   |   |                     |   |   | April 12, 2002  |  
|-------------------------------------------------- | - | --------------------- | - | - | ------------------- | - | - | --------------- | -
|                                                   |   | Year Ended August 31, |   |   | (inception) through |  
|                                                   |   | 2007                  |   |   | 2006                |   |   | August 31, 2007 |  
|                                                   |   |                       |   |   |                     |   |   |                 |  
|                                                   |   |                       |   |   |                     |   |   |                 |  
|Cash Flows from Operating Activities               |   |                       |   |   |                     |   |   |                 |  
|Net loss                                           | $ | (3,236                | ) | $ | (415                | ) | $ | (4,479          | )
|Adjustments to reconcile net loss to net cash      |   |                       |   |   |                     |   |   |                 |  
|used in operating activities:                      |   |                       |   |   |                     |   |   |                 |  
|Amortization of debt discount                      |   | 108                   |   |   | -                   |   |   | 108             |  
|Stock option expense                               |   | 2,146                 |   |   | -                   |   |   | 2,146           |  
|Common stock issued for services                   |   | 99                    |   |   | -                   |   |   | 99              |  
|Loss on impairment of investment                   |   | -                     |   |   | -                   |   |   | 435             |  
|Imputed interest                                   |   | 4                     |   |   | 4                   |   |   | 8               |  
|Changes in operating assets and liabilities:       |   |                       |   |   |                     |   |   |                 |  
|Prepaid expenses                                   |   | (17                   | ) |   | 1                   |   |   | (17             | )
|Accounts payable and accrued
      expenses        |   | 285                   |   |   | 48                  |   |   | 339             |  
|Net cash used in operating activities              |   | (611                  | ) |   | (362                | ) |   | (1,361          | )
|                                                   |   |                       |   |   |                     |   |   |                 |  
|Cash Flows from Investing Activities               |   |                       |   |   |                     |   |   |                 |  
|Purchase of fixed assets                           |   | (2                    | ) |   | -                   |   |   | (2              | )
|Net cash used in investing activities              |   | (2                    | ) |   | -                   |   |   | (2              | )
|                                                   |   |                       |   |   |                     |   |   |                 |  
|Cash Flows from Financing Activities               |   |                       |   |   |                     |   |   |                 |  
|Proceeds from sales of common stock                |   | 1,826                 |   |   | 23                  |   |   | 2,179           |  
|Cash received for stock payable                    |   | 255                   |   |   | 508                 |   |   | 761             |  
|Proceeds from convertible notes                    |   | 275                   |   |   | -                   |   |   | 275             |  
|Proceeds from short term note payable              |   | 20                    |   |   | 100                 |   |   | 120             |  
|Payments of short term note payable                |   | (20                   | ) |   | (100                | ) |   | (120            | )
|Shareholder advances                               |   | -                     |   |   | 7                   |   |   | 66              |  
|Net cash provided by financing activities          |   | 2,355                 |   |   | 538                 |   |   | 3,281           |  
|                                                   |   |                       |   |   |                     |   |   |                 |  
|Net Change in Cash and Cash Equivalents            |   | 1,742                 |   |   | 176                 |   |   | 1,918           |  
|Cash and cash equivalents - Beginning of period    |   | 176                   |   |   | -                   |   |   | -               |  
|Cash and Cash Equivalents - End of Period          | $ | 1,918                 |   | $ | 176                 |   | $ | 1,918           |  
|                                                   |   |                       |   |   |                     |   |   |                 |  
|Income Taxes Paid                                  | $ | -                     |   | $ | -                   |   | $ | -               |  
|Interest Paid                                      |   | -                     |   |   | -                   |   |   | -               |  
|Non-cash transactions:                             |   |                       |   |   |                     |   |   |                 |  
|                                                   |   |                       |   |   |                     |   |   |                 |  
|Discount on convertible note related to beneficial |   |                       |   |   |                     |   |   |                 |  
|conversion feature                                 |   | 108                   |   |   | -                   |   |   | 108             |  
|Shares issued for offering costs                   |   | -                     |   |   | -                   |   |   | 2               |  
|Forgiveness of debt by shareholder                 |   | -                     |   |   | -                   |   |   | 19              |  

See summary of accounting policies and notes to consolidated financial
  statements.

---

- 29 -

|ORAMED PHARMACEUTICALS INC.                                                       
|----------------------------------------------------------------------------------
|(A development stage company)                                                     
|NOTES TO CONSOLIDATED
      FINANCIAL STATEMENTS (IN THOUSANDS, except share data)

|NOTE 1  HISTORY OF COMPANY AND SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES
|--------------------------------------------------------------------------------

Oramed Pharmaceuticals, Inc. (Oramed) was incorporated
  on April 12, 2002, under the laws of the State of Nevada. From incorporation
  until March 3, 2006, Oramed was an exploration stage company engaged in the
  acquisition and exploration of mineral properties. On February 17, 2006, Oramed
  entered into an agreement with Hadasit Medical Services and Development Ltd.
  to acquire the provisional patent application No. 60/718716 and planned to engage
  in the research and development of a method to administer insulin orally. Oramed
  has been in the development stage since its formation and has not yet realized
  any revenues from its planned operations.

On May 14, 2007, Oramed incorporated a wholly-owned subsidiary
  in Israel, Oramed Ltd. ("the subsidiary"), which is engaged in research and
  development.

Basis of Presentation

The consolidated financial statements include the accounts of
  Oramed and its wholly owned subsidiary, Oramed Ltd. and have been prepared in
  accordance with accounting principles generally accepted in the United States.
  Significant inter-company accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States 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 date of the financial
  statements and the reported amounts of income and expenses during the reporting
  period. Actual results could differ from those estimates.

Reclassifications

Certain prior year amounts have been reclassified to conform
  to the current year presentation.

Cash and Cash Equivalents

Cash equivalents are short-term highly liquid investments that
  are readily convertible to cash. For the purposes of the financial statements,
  Oramed considers cash, money market accounts and certificates of deposit as
  cash.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation.
  Depreciation is calculated by the straight-line method over the estimated useful
  lives of the assets. Major renewals and improvements are capitalized, while
  minor replacements, maintenance and repairs are charged to current operations.
  Impairment losses are recorded on long-lived assets used in operations when
  indicators of impairment are present and the undiscounted cash flows estimated
  to be generated by those assets are less than the assets carrying amount.

Research and Development Costs

Research and development expenses include salaries, related employee
  expenses, clinical trial expenses, research expenses, consulting fees, and laboratory
  costs. All costs for research and development activities are expensed as incurred.
  For the years ended August 31, 2007 and 2006, Oramed expensed $2,214 and $198
  respectively in research and development costs related to consulting services
  and clinical trial services pursuant to the agreement relating to the purchase
  and sale of the provisional patent application No. 60/718716. $1,666 of research
  and development expense in fiscal 2007 was from stock options granted for services.

---

- 30 -

Accounting for Share-based Compensation

On September 1, 2006, Oramed adopted Statement of Financial Accounting
  Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123(R)") which
  requires the measurement and recognition of compensation expense based on estimated
  fair values for all share-based payment awards made to employees and directors.
  SFAS 123(R) supersedes Accounting Principles Board Opinion No. 25, "Accounting
  for Stock Issued to Employees" ("APB 25"), for periods beginning in fiscal 2006.
  In March 2005, the Securities and Exchange Commission issued Staff Accounting
  Bulletin No. 107 ("SAB 107") relating to SFAS 123(R). Oramed has applied the
  provisions of SAB 107 in its adoption of SFAS 123(R).

SFAS 123(R) requires companies to estimate the fair value of
  equity-based payment awards on the date of grant using an option-pricing model.
  The value of the portion of the award that is ultimately expected to vest is
  recognized as an expense over the requisite service periods in Oramed's consolidated
  statements of operations. Prior to the adoption of SFAS 123(R), Oramed accounted
  for equity-based awards to employees and non-employees directors using the intrinsic
  value method in accordance with APB 25 as allowed under Statement of Financial
  Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
  123").

Oramed adopted SFAS 123(R) using the modified prospective transition
  method, which requires the application of the accounting standard starting from
  September 1, 2006, the first day of Oramed's fiscal year 2007. At adoption date,
  Oramed had no unrecognized compensation cost from prior years.

Oramed recognizes compensation expenses for the value of its
  awards, which have graded vesting based on the straight line method over the
  requisite service period of each of the awards.

Oramed applies SFAS 123 and EITF 96-18, "Accounting for Equity
  Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction
  with Selling, Goods or Services" ("EITF 96-18") with respect to options and
  warrants issued to non-employees.

Basic and Diluted Net Loss per Share

Basic net loss per share is computed based on the weighted average
  number of shares outstanding during each year. Diluted net loss per share is
  computed based on the weighted average number of shares outstanding during each
  year, plus the dilutive potential of the Common stock considered outstanding
  during the year, in accordance with Statement of Financial Standard No. 128,
  "Earnings per Share." ("SFAS No. 128").

All outstanding share options and warrants have been excluded
  from the calculation of the diluted loss per share for the years ended August
  31. 2007 and 2006, because all such securities have an anti-dilutive effect.

Such outstanding securities consist of the following:

| |          |  | Year ended |  |  | Year ended | 
| | -------- |  | ---------- |  |  | ---------- | 
| |          |  | August 31. |  |  | August 31. | 
| |          |  | 2006       |  |  | 2007       | 
| |          |  |            |  |  |            | 
| | Options  |  | -          |  |  | 5,811,360  | 
| | Warrants |  | 1,012,317  |  |  | 5,372,317  | 
| | Total    |  | 1,012,317  |  |  | 11,183,677 | 

---

- 31 -

Income Taxes

Oramed recognizes deferred tax assets and liabilities based on
  differences between the financial reporting and tax bases of assets and liabilities
  using the enacted tax rates and laws that are expected to be in effect when
  the differences are expected to be recovered. Oramed provides a valuation allowance
  for deferred tax assets for which it does not consider realization of such assets
  to be more likely than not. Since Oramed has had recurring operating losses
  since inception and there is no assurance of future taxable income, a valuation
  allowance has been established to fully offset the deferred tax assets.

Concentrations of Credit Risks

Financial instruments that potentially subject Oramed and its
  subsidiary to concentrations of credit risk consist principally of cash and
  cash equivalents and short term deposits.

Cash and cash equivalents and short-term deposits are deposited
  in banks in Israel and in the United States. Such deposits in the United States
  may be in excess of insured limits and are not insured in other jurisdictions.
  Management believes that the financial institutions that hold Oramed's investments
  are financially sound and, accordingly, minimal credit risk exists with respect
  to these investments.

Oramed has no off-balance-sheet concentration of credit risk
  such as foreign exchange contracts, option contracts or other foreign hedging
  arrangements.

Foreign Currency Transactions

Orameds functional currency is the US dollar. Oramed Ltds
  functional currency is the Israeli Shekel. Management has adopted SFAS No. 52,
  Foreign Currency Translation. Monetary assets and liabilities denominated
  in foreign currencies are translated into United States dollars at rates of
  exchange in effect at the balance sheet date. Non-monetary assets, liabilities
  and items recorded in income arising from transactions denominated in foreign
  currencies are translated at rates of exchange in effect at the date of the
  transaction. As of August 31, 2007, the cumulative effect of foreign currency
  translations was nominal.

Recently Issued Accounting Pronouncements

In July 2006, the FASB issued Interpretation No. 48 (FIN No.
  48), "Accounting for Uncertainty in Income Taxes." This interpretation requires
  recognition and measurement of uncertain income tax positions using a "more-likely-than-not"
  approach. FIN No. 48 is effective for fiscal years beginning after December
  15, 2006. Management is still evaluating what effect this will have on the Orameds
  financial statements.

In September 2006, the FASB issued SFAS 157, Fair Value
  Measurements." This standard defines fair value, establishes a framework for
  measuring fair value in generally accepted accounting principles, and expands
  disclosure about fair value measurements. This statement is effective for financial
  statements issued for fiscal years beginning after November 15, 2007. Early
  adoption is encouraged. The adoption of SFAS 157 is not expected to have a material
  impact on the financial statements.

Oramed does not expect the adoption of any other recently issued
  accounting pronouncements to have a significant impact on Oramed results of
  operations, financial position or cash flow.

NOTE 2  GOING CONCERN

Oramed's has incurred losses since inception and has no revenues
  through August 31, 2007. The process of developing commercial products will
  require significant additional expenditures for research and development, maintaining
  the key technology license, pre-clinical testing and clinical trials, as well
  as obtaining regulatory approval. These activities, together with general and
  administrative expenses, are expected to result in substantial operating losses
  in the foreseeable future.

---

- 32 -

In the event Oramed is unable to successfully raise capital and
  generate revenues, it is unlikely that Oramed will have sufficient cash flows
  and liquidity to finance its business operations as currently contemplated.
  Accordingly, Oramed will likely reduce general and administrative expenses and
  cease or delay development projects until it is able to obtain sufficient financing.
  There can be no assurance that additional funds will be available on terms acceptable
  to Oramed, or at all.

These conditions raise substantial doubt about Oramed's ability
  to continue to operate as a going concern. The accompanying financial statements
  do not include any adjustments to reflect the possible future effect on the
  recoverability and classification of assets or the amounts and classification
  of liabilities that may result from the outcome of this uncertainly.

|NOTE 3 - RESEARCH AND LICENSE AGREEMENT WITH RELATED PARTY
|----------------------------------------------------------

On March 8, 2006 we executed an agreement with Hadasit Medical
  Services and Development Ltd to acquire provisional patent application No. 60/718716,
  including related intellectual property. The provisional patent application
  No. 60/718716 related to a method of preparing insulin so that it may be taken
  orally for the use in the treatment of individuals with diabetes. Under the
  terms of the agreement, we agreed to contract Hadasit Medical Services and Development
  Ltd. to provide us with consulting services to assist us in the completion of
  clinical trials on provisional patent application No. 60/718716. When the clinical
  trials have been completed Hadasit Medical Services and Development Ltd. will
  provide us with the preparation of a full report assessing the results of the
  clinical trials and the viability of provisional patent application No. 60/718716
  and related intellectual property. We agreed to pay Hadasit Medical Services
  and Development Ltd $200 for the provision of these consulting services if we
  requested the consulting services from Hadasit Medical Services and Development
  Ltd. As of August 31, 2007, the clinical trials have been completed.

Under this agreement we also agreed to secure proper conditions
  for the future development of provisional patent application No. 60/718716 and
  related intellectual property by raising at least $1,000 through a private placement
  of our securities. This condition has been fulfilled by Oramed.

Hadasit Medical Services and Development Ltd is a 9% shareholder
  and related party of Oramed. The primary researcher for Hadasit Medical Services
  and Development Ltd is Dr. Miriam Kidron, a director of Oramed. As part of the
  above agreement, Oramed entered into an employment agreement with Dr. Kidron
  that included the grant of 3,361,360 options exercisable at $0.001 per share
  for five years. (See note 6 below)

|NOTE 4 - NOTES PAYABLE
|----------------------

In December 2006, Oramed borrowed $20 with no stated interest
  rate, due in one year and unsecured. The note was repaid in the same month.

In February 2007, Oramed borrowed $125 on a convertible note
  without interest, due on demand and unsecured. The note is convertible at $0.50
  per share. Oramed analyzed the conversion option of the note and determined
  it did not require derivative treatment under FAS 133 and EITF 0019. Oramed
  also analyzed the note under EITF 985 and EITF 00-27 to determine if it
  contained a beneficial conversion feature. It was determined the note did contain
  a beneficial conversion feature with an intrinsic value of $60. Because the
  note is due on demand, the entire amount of the beneficial conversion feature
  was amortized immediately to interest expense.

In May 2007, Oramed borrowed $150 on a convertible note without
  interest, due on demand and unsecured. The note is convertible at $0.50 per
  share. Oramed analyzed the conversion option of the note and determined it did
  not require derivative treatment under FAS 133 and EITF 0019. Oramed also
  analyzed the note under EITF 985 and EITF 00-27 to determine if it contained
  a beneficial conversion feature. It was determined the note did contain a beneficial
  conversion feature with an intrinsic value of $48. Because the note is due on
  demand, the entire amount of the beneficial conversion feature was amortized
  immediately to interest expense.

---

- 33 -

Notes payable balance at August 31, 2007 consists of the following:

Principal
      $
      275Less: beneficial conversion feature
      
      (108
      )Add: amortization
      
      108Carrying value
      $
      275


|NOTE 5 -STOCK PAYABLE
|---------------------

During fiscal 2006, Oramed sold 1,012,317 shares of common stock
  for $506. During fiscal 2007 Oramed sold 510,000 shares of common stock for
  $255. Oramed also agreed to issue 10,000 shares to the placement agent in the
  transaction. As of August 31, 2007 the shares sold in these transactions had
  not been issued and are recorded as a stock payable.

|NOTE 6 -COMMON STOCK
|--------------------

Effective June 14, 2004, Oramed effected a 3.3:1 forward stock
  split, increased the amount of authorized shares to two hundred million (200,000,000),
  and reauthorized the par value of $.001 per share of common stock. All share
  and per share amounts reflected in these consolidated financial statements have
  been adjusted as if the split were effective on the first day of the first period
  presented.

During fiscal 2002, Oramed sold 34,828,200 shares of common stock
  to investors for $54 of cash.

On May 27, 2004, Oramed acquired 100% of the issued and outstanding
  shares of Integrated Security Technologies, Inc. (a New Jersey company) ("ISTI-NJ)
  in exchange for 15,258,797 shares of Oramed's common stock. In a separate agreement,
  the majority shareholder of ISTI-NJ purchased 19,800,000 shares of Oramed from
  Oramed's then majority shareholder. The total Oramed shares owned by ISTI-NJ
  shareholders immediately following the merger was 35,058,797. The acquisition
  was considered a reverse merger. In April 2005, most parties involved agreed
  to unwind the May 27, 2004 transaction as if it never occurred. 33,914,387 Oramed
  shares issued to ISTI-NJ and its Officers were returned to Oramed and cancelled
  and the ISTI-NJ shares except for 7.5% were returned to the ISTI shareholders.
  The statement of stockholders equity reflects the cancellation of the 19,800,000,
  but treats the 15,258,797 as if it were never issued. Oramed holds 7.5% of ISTI-NJ
  and the ISTI-NJ officer still holds 1,144,410 shares of Oramed. The 7.5% of
  ISTI-NJ was valued using the fair value of the 1,144,410 Oramed shares. The
  value of the investment in ISTI-NJ was $434,876. Orameds management determined
  the investment in ISTI-NJ was impaired as of the date they took ownership in
  ISTI-NJ due to ISTI-NJs inability to produce historical financial statements.

During fiscal 2004, Oramed sold 550,000 shares of common stock
  for $275. In connection with the sale, Oramed issued 1,752,941 shares of common
  stock to the placement agent for fees associated with the stock sale.

During the quarter ending February 28, 2006, Oramed sold 22,981,228
  shares of common stock to investors for a subscription receivable of $23. The
  proceeds were received by Oramed in the quarter ending August 31, 2006. The
  sale of the 22,981,228 shares represented more than a majority of the ownership
  of Oramed resulting in a change of control.

Stock issued for cash

During fiscal 2007, Oramed issued 50,000 shares of stock and
  50,000 warrants exercisable at $0.75 for 5 years for $25. The relative fair
  value of the stock and warrants in this transaction was $17 and $8, respectively.

On June 15, 2007, Oramed issued 3,600,000 shares of common stock
  and 3,600,000 warrants at a price of $0.50 per unit for aggregate proceeds of
  $1,800. On August 2, 2007, Oramed closed another private placement consisting
  of 510,000 shares of common stock and 510,000 warrants at a price of US $0.50
  per unit for aggregate proceeds of US $255. 10,000 shares of common stock were
  issued to a third party as a finders fee in this transaction. The warrants
  are exercisable at $0.75 per share for 3 years. The relative fair value of the
  stock and warrants in these transactions was $1,155 and $900, respectively.

---

- 34 -

Stock issued for services

In December 2006, Oramed issued 125,000 shares of common stock
  valued at $99 to a third party for services.

Stock options issued for services

Oramed estimates the fair value of stock options granted using
  the Black-Scholes-Merton option-pricing model. The option-pricing model requires
  a number of assumptions, of which the most significant are, expected stock price
  volatility, and the expected option term. Expected volatility was calculated
  based upon actual historical stock price movements over the most recent periods
  ending on the grant date, equal to the expected option term and ranged from
  97%-115%.. The expected option term represents the period that Oramed's stock
  options are expected to be outstanding, giving consideration to the contractual
  terms of the stock options. Oramed has historically not paid dividends and has
  no foreseeable plans to issue dividends. The risk-free interest rate is based
  on the yield from U.S. Treasury zero-coupon bonds with an equivalent term and
  ranged from 4.57% - 4.94% .

On November 23, 2006, Oramed granted to a director and an employee
  options to purchase 750,000 shares of Oramed's common stock at an exercise price
  of $ 0.76 per share for three years. The options vest over a period of one year.
  The fair value of the options was $322. $255 was expensed in fiscal 2007 related
  to these options.

On December 31, 2006, Oramed granted to an advisory board member
  options to purchase 100,000 shares of Oramed's common stock at an exercise price
  of $ 0.76 per share for one and a half years. The options vest immediately.
  The fair value of the options was $45, all of which was expensed in fiscal 2007.

On March 18, 2007, Oramed granted to an advisory board member
  options to purchase 100,000 shares of Oramed's common stock at an exercise price
  of $ 0.76 per share for three years. The options vest immediately. The fair
  value of the options was $45, all of which was expensed in fiscal 2007.

August 2, 2007, Oramed issued stock options to Dr. Miriam Kidron,
  Chief Medical and Technology Officer and a director of Oramed, to purchase an
  aggregate of 850,000 shares of our common stock at an exercise price of $0.45
  per share for five years. The options vested upon grant. The fair value of the
  options was $225, all of which was expensed in fiscal 2007.

August 2, 2007, Oramed issued stock options to Nadav Kidron,
  President, Chief Executive Officer and a director of Oramed, to purchase an
  aggregate of 850,000 shares of our common stock at an exercise price of $0.45
  per share for five years. The options vested upon grant. The fair value of the
  options was $225, all of which was expensed in fiscal 2007.

Pursuant to the agreement with Hadasit Medical Research Services
  and Development Ltd. dated February 17, 2006 (see Note 3), Oramed granted to
  Dr. Miriam Kidron an option to purchase 3,361,360 shares of our common stock
  at the exercise price of $0.001 per share for five years. The options vested
  immediately. The fair value of the options was $1,348, all of which was expensed
  in fiscal 2007.

As of August 31, 2007, Oramed had a total of 6,011,360 options
  outstanding with a weighted average exercise price of $0.25 and a weighted average
  remaining contractual term of 4.75 years. All options outstanding were granted
  during the year ended August 31, 2007. All options are fully vested except for
  750,000 which will vest in the first quarter of 2008. Oramed will recognize
  compensation expense of $67 related to these non-vested options in 2008. The
  aggregate intrinsic value of all options granted during the year was $1,356.

The following table summarizes warrants outstanding during the
  year:

|Outstanding at August 31, 2006                                                            |  | 1,012,317 | 
|----------------------------------------------------------------------------------------- |  | --------- | 
|Granted                                                                                   |  | 4,360,000 | 
|Exercised or expired                                                                      |  |           | 
|Outstanding at August 31, 2007                                                            |  | 5,372,317 | 
|All warrants outstanding are exercisable at
      $0.75 and expire between 2008 and 2010. |  |           | 

---

- 35 -

|NOTE 7 - INCOME TAXES
|---------------------

Oramed uses the liability method, where deferred tax assets and
  liabilities are determined based on the expected future tax consequences of
  temporary differences between the carrying amounts of assets and liabilities
  for financial and income tax reporting purposes. During fiscal 2007 Oramed incurred
  net losses and, therefore, has no tax liability. The net deferred tax asset
  generated by the loss carry-forward has been fully reserved. The cumulative
  net operating loss carry-forward was $1,800 and $800 at August 31, 2007 and
  2006 respectively, and will expire in the years 2022 to 2027.

At August 31, 2007, deferred tax assets consisted of the following:

|Deferred tax assets                                                 | $ | 609  |  
|------------------------------------------------------------------- | - | ---- | -
|Less:
      valuation allowance                                     |   | (609 | )
|Net deferred tax asset                                              | $ | -    |  
|At August 31, 2006, deferred tax assets consisted of the following: |   |      |  
|Deferred tax assets                                                 | $ | 275  |  
|Less:
      valuation allowance                                     |   | (275 | )
|Net deferred tax asset                                              | $ | -    |  

Internal Revenue Section 382 restricts the ability to use these
  carryforwards whenever an ownership change as defined occurs. Oramed incurred
  such an ownership change during the quarter ending February 28, 2006.

|NOTE 8 - RELATED PARTIES
|------------------------

In fiscal 2004 a shareholder paid $19 of expenses on behalf of
  Oramed. The debt was forgiven by the shareholder and was recorded as a contribution
  to capital.

During fiscal 2005 and 2006, a director of Oramed loaned Oramed
  $40 and $7, respectively totalling $47 as of August 31, 2006 and 2007. The loan
  is unsecured, due on demand, and bears no interest. Interest of 8% is being
  expensed and charged against paid in capital.

The president of Oramed provides office space to Oramed under
  a verbal agreement on a month to month rent free basis.

In fiscal 2007, Oramed entered into a research and license agreement
  with Hadasit Medical Services and Development Ltd, a 9% shareholder of Oramed.
  The primary researcher for Hadasit Medical Services and Development Ltd is a
  director of Oramed. See note 3 for more details.

On August 1, 2007 we entered into employment agreements with
  KNRY Ltd. (KNRY), an Israeli company owned by Mr. Nadav Kidron ("Nadav").
  Nadav is Oramed's President, CEO and Director. Nadav holds 10,371,735 of the
  company common stock representing 30% of Oramed ownership as of August 31, 2007
  and 850,000 options, vested upon grant, to purchase shares of Oramed common
  stock at an exercise price of $0.45 per share for five years period . Under
  this agreement KNRY will provide employment services of Nadav and Dr. Miriam
  Kidron ("Miriam") to Oramed. Miriam, Nadav's mother, is the Chief Scientific
  Officer and a Director of Oramed. Oramed issued to Miriam 850,000 options, vested
  upon grant, to purchase shares of Oramed common stock at an exercise price of
  $0.45 per share for a five year period. In addition, Miriam has an option to
  purchase 3,361,360 shares of our common stock at the exercise price of $0.001
  per share for five years. The options vested immediately. Under the employment
  agreement with KNRY, Nadav and Miriam receive a gross monthly salary of $10
  each.

---

- 36 -

|NOTE 9  COMMITMENTS
|--------------------

As of October 1, 2007, we signed a four year contract with Hebrew
  University and The Jerusalem Development Authority, who are working to encourage
  biotech companies to rent office space in Jerusalem. The cost of rent is $1
  per month and may be terminated with a 60-day written notice. Future base annual
  lease payments due under the lease for 2008, 2009 and 2010 are $15, $17, and
  $16 respectively.

|NOTE 10  LITIGATION
|--------------------

On June 21, 2006, we commenced a legal action in the Supreme
  Court of the State of New York against John Choi, Bernard Perini and Epifanio
  Almodovar to enjoin them from selling, assigning, transferring, pledging, encumbering
  or otherwise disposing their shares of our common stock. Collectively Messrs.
  Choi, Perini and Almodovar obtained 2,897,342 shares of our common stock pursuant
  to an aborted merger between our company and Integrated Security Technologies,
  Inc., a privately held New Jersey Corporation, in 2004. It is our position that
  Messrs. Choi, Perini and Almodovar are possessed of stock that either should
  never have been issued to them at all or which should have been returned to
  our company when our merger with Integrated Security Technologies, Inc., the
  privately held New Jersey Corporation, was unwound. The court subsequently granted
  us a temporary injunction to restrain Messrs. Choi, Perini and Almodovar from
  selling their shares of our common stock.

On August 10, 2006, we reached a settlement with Bernard Perini
  and Epifanio Almodovar for the legal action in the Supreme Court of the State
  of New York initiated by our company against them. As a result, the temporary
  injunction to restrain Messrs. Perini and Almodovar from selling their shares
  of our common stock has been lifted. Furthermore, pursuant to the settlement,
  all claims by and between our company and Bernard Perini and Epifanio Almodovar
  have been mutually released and discontinued with prejudice.

|NOTE 11  SUBSEQUENT EVENTS
|---------------------------

On September 4, 2007, Oramed granted 300,000 warrants to two
  consultants for services with a fair value of $69. The warrants are exercisable
  at $0.45 per share for two years.

In September 2007, Oramed issued 283,025 shares of common stock
  valued at $170 for services to a third party.

In September 2007, Oramed issued 510,000 shares of common stock
  for stock sales reflected as stock payables in fiscal 2007. Oramed also issued
  10,000 shares to a third party as a finders fee.

In October 2007, Oramed granted 100,000 warrants to a third party
  for services with a fair value of $9. The warrants are exercisable at $0.76
  for two and a half years.

---

- 37 -

ITEM 8. CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT

Malone & Bailey, PC, Certified Public Accountants, has been
engaged as the principal independent accountants. There has been no change in
our certifying accountant for the past two most recent fiscal years or interim
period.

ITEM 8A. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act
  of 1934, as of the end of the period covered by this annual report, being August
  31, 2007, we have carried out an evaluation of the effectiveness of the design
  and operation of our disclosure controls and procedures. This evaluation was
  carried out under the supervision and with the participation of our management,
  including our chief executive officer, Nadav Kidron, and our chief financial
  officer, Alex Werber. Based upon that evaluation, they concluded that our disclosure
  controls and procedures were not effective as at the end of the period covered
  by this report. because our independent auditor identified equity adjustments
  and a disclosure omission in the audit process. The equity adjustments related
  to certain options granted to advisors of our company. Appropriate adjustments
  and footnote disclosures have been recorded and disclosed in our Annual Report
  on Form 10-KSB. Since our engagement of Alex Werber as our Chief Financial Officer,
  we have begun improving our disclosure and internal controls in an effort to
  improve and strengthen our control processes and procedures to fully remedy
  these deficiencies. Our management and directors will continue to work with
  our auditors and other outside advisors to ensure that our controls and procedures
  are adequate and effective. There have been no changes in our internal controls
  over financial reporting that occurred during the period covered by this report
  that have materially affected, or are reasonably likely to materially affect
  our internal controls over financial reporting.

Disclosure controls and procedures and other procedures that
are designed to ensure that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time period specified in the
Securities and Exchange Commissions rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Securities Exchange Act of 1934 is accumulated and communicated to management
including our president and chief executive officer as appropriate, to allow
timely decisions regarding required disclosure.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The following table sets forth information regarding our
current and proposed executive officers and directors:

Name
    Position Held with the
      Company
    Age
    Date First Elected
      or AppointedNadav Kidron
    President, Chief Executive Officer and
      Director
    33
    March 8, 2006Alex Werber
    Chief Financial Officer and
      Treasurer
    51
    August 1, 2007George Drazenovic
    Secretary and Director
    36
    March 23, 2006Miriam Kidron
    Chief Medical and Technology
      Officer and Director
    67
    March 8, 2006Leonard Sank
    Director
    42
    October 23, 2007


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons business experience, principal occupation during
the period, and the name and principal business of the organization by which
they were employed.

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- 38 -

Nadav Kidron  President, Chief Executive Officer and
  Director

Nadav Kidron was appointed as our President, Chief Executive
Officer and Director on March 8, 2006. From 2003 to 2006, Mr. Kidron was the
managing director at the Institute of Advanced Jewish Studies of Bar Ilan
University. From 2001 to 2003, he was an intern then practiced as a lawyer with
Wine Mishaiker and Erenst-of Law Offices in Jerusalem, Israel. Mr. Kidron
completed the International MBA program at Bar Ilan University in 2007. He
earned his LLB from Bar Ilan University in 2002 and in 2003 joined the Israeli
Bar Association. He has no prior experience in working for public companies.

Alex Werber  Chief Financial Officer and Treasurer

Alex Werber was appointed as our Chief Financial Officer and
Treasurer on July 20, 2007. Mr. Werber is a Certified Public Accountant with
over 20 years of financial management experience in privately held and publicly
traded companies, he has been with several companies serving in a Controller and
Chief Financial Officer capacity since 1986. During the past decade he
specialized in the hi-tech sector, serving in managerial positions including
Controller, VP Finance and CFO. Mr. Werber has been involved in all aspects of
corporate financial management and fund-raising activities. Mr. Werber has acted
as a Financial Services Consultant since August 2002 for small and mid-size
companies, providing a wide range of outsourcing services, from accounting and
salary processing to treasury services for government institutes such as the
Office of the Chief Scientist. Mr. Werber is also presently serving as chief
financial officer of Tissera Industries (OTCBB: TSSR) and Global Energy Inc.
(OTCBB: GEYI).

Mr. Werber received a Bachelor of Arts in Economics and
Accountancy at the Tel Aviv University, where he also completed a post-graduate
study in Accounting.

George Drazenovic  Secretary and Director

Mr. Drazenovic was appointed as our Chief Financial Officer,
Secretary, Treasurer and Director on March 23, 2006. He resigned as our Chief
Financial Office and Treasurer on August 1, 2007. Since October 18, 2006 Mr.
Drazenovic has served as the Chief Financial Officer, Treasurer, Secretary and
Director of Sun Cal Energy Inc. Since March 28, 2006 Mr. Drazanovic has served
as the Chief Financial Officer of Tornado Gold International Corporation. Since,
January 24, 2007 he has also served as a director of Tornado Gold International
Corporation. From 2001 to 2005, Mr. Drazenovic was the Financial Manager,
Engineering Services for BC Hydro. From 1995 to 2000, Mr. Drazenovic was the
Manager  Accounting for Queensboro Investments. Mr. Drazenovic earned his
Bachelor of Arts in Economics from the University of British Columbia in 1991, a
Diploma in Financial Management from the British Columbia Institute of
Technology in 1993, and a Masters of Business Administration in Finance from the
University of Notre Dame in 2001. He also obtained licensing as a Certified
General Accountant in 1997 and is a CFA Charter holder (Chartered Financial
Analyst) since 2001. Mr. Drazenovic is a member of the Certified General
Accountants of British Columbia and the Vancouver Society of Financial Analysts.

Dr. Miriam Kidron  Chief Medical and Technology Officer and
Director

Dr. Miriam Kidron was appointed as a Director of our company on
March 8, 2006. Dr. Kidron was a researcher in the Diabetes Unit at Hadassah
University Hospital in Jerusalem, Israel, where she has worked since 1985.
During this period, she was a visiting professor at the Medical school,
University of Toronto, Canada (1989-1990). Dr. Kidron earned her Ph.D. in
biochemistry from the Hebrew University, Jerusalem in 1976. Dr. Kidron earned
her Master degree in Pharmacology, Hadassah Medical School, Hebrew University,
Jerusalem. She has no prior experience in working for public companies.

Leonard Sank  Director

Leonard Sank is a South African entrepreneur and business man
  who is devoted to entrepreneurial endeavours and initiatives. Mr. Sank has played
  an important role in developing businesses. He is a director of a number of
  companies encompassing many diversified fields, including finance, motor dealerships,
  steel merchandising and trading.

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- 39 -

Mr. Sank has 20 years relevant experience where he has been involved
  in all aspects of business in a leadership role.

Significant Employees

We consider Dr. Miriam Kidron and Mr. Nadav Kidron as our
significant employees. We have only recently entered into written employment
agreements with KNRY, Ltd., an Israeli company, for the provision of services by
Dr. Miriam Kidron and Mr. Nadav Kidron as our executive officers. We do not
maintain key-person life insurance policies for any of our executive
officers.

Family Relationships

Dr. Miriam Kidron, our Chief Medical and Technology Officer and
a director, is the mother of Nadav Kidron, our President, Chief Executive
Officer and a director. Other than the family relationship between Dr. Kidron
and Mr. Kidron, there are no family relationships among our directors or
executive officers.

Committees of the Board

All proceedings of our board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the Nevada Revised Statutesand the Articles
of our company, as valid and effective as if they had been passed at a meeting
of the directors duly called and held.

Our company currently does not have nominating, compensation or
audit committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the board of directors.

Our company does not have any defined policy or procedure
requirements for shareholders to submit recommendations or nominations for
directors. The board of directors believes that, given the early stages of our
development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our
company does not currently have any specific or minimum criteria for the
election of nominees to the board of directors and we do not have any specific
process or procedure for evaluating such nominees. The board of directors
assesses all candidates, whether submitted by management or shareholders, and
makes recommendations for election or appointment.

A shareholder who wishes to communicate with our board of
directors may do so by directing a written request addressed to our President at
the address appearing on the first page of this current report.

Code of Ethics

On November 29, 2007, we revoked our old code of ethics, which
was originally adopted on October 6, 2004, and adopted a new code of ethics more
suitable to our company at the present stage of our development. Our code of
ethics has the primary aims of deterring wrongdoing and promoting honest and
ethical conduct; providing full, fair, accurate, timely and understandable
disclosure in public reports; complying with applicable laws; ensuring prompt
internal reporting of code violations; and providing accountability for
adherence to the code.

Audit Committee Financial Expert

Our board of directors has determined that we have a board member,
  George Drazenovic, who qualifies as an audit committee financial expert
  as defined in Item 401(e) of Regulation S-B. However, because Mr. Drazenovic
  has recently served as the Chief Financial Officer of our company, he does not
  qualify as being independent, nor do any of our other directors,
  as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities
  Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the
  FINRA Rules.

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- 40 -

We believe that our board of directors collectively is capable
  of analyzing and evaluating our consolidated financial statements and understanding
  internal controls and procedures for financial reporting. The board of directors
  of our company does not believe that it is necessary to have an audit committee
  because our company believes that the functions of an audit committee can be
  adequately performed by our board of directors as a whole. In addition, we believe
  that retaining an independent director who would qualify as an audit committee
  financial expert would be overly costly and burdensome and is not warranted
  in our circumstances given the early stages of our development and the fact
  that we have not generated any revenues from operations to date.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors and persons who own more
than 10% of a registered class of our equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership of
our common stock and other equity securities, on Forms 3, 4 and 5 respectively.
Executive officers, directors and greater than 10% shareholders are required by
the Securities and Exchange Commission regulations to furnish us with copies of
all Section 16(a) reports they file. We are not aware of any director, executive
officer or beneficial owner of more than 10% of the outstanding common stock who
or which has not timely filed reports required by Section 16(a) of the Exchange
Act during or in respect of the fiscal year of our successor company ended
August 31, 2007, except for the following:

Name
    Number of Late Reports
    Number of Transactions Not Reported on a
      Timely Basis
    Failure to File Requested FormsNadav
      Kidron(1)
    2(2)
    2
    NilMiriam Kidron(1)
    2(2)
    2
    NilZeev
      Bronfeld(1)
    1
    1
    Nil


(1) The named officer,
director or greater than 10% shareholder, as applicable, filed a late Form 3 
Statement of Changes in Beneficial Ownership.

(2) The named officer,
director or greater than 10% shareholder, as applicable, filed a late Form 4 
Statement of Changes in Beneficial Ownership.

ITEM 10. EXECUTIVE COMPENSATION

No executive officer of our company or our subsidiary received
annual salary and bonus in excess of $100,000 for our companys fiscal year
ended August 31, 2007, 2006 and 2005. During such time we did not pay any
salaries or bonuses to any of our executive officers. As of the date of this
annual report on Form 10-KSB, we have no compensatory plan or arrangement with
respect to any officer that results or will result in the payment of
compensation in any form from the resignation, retirement or any other
termination of employment of such officers employment with our company, from a
change in control of our company or a change in such officers responsibilities
following a change in control.

SUMMARY COMPENSATION TABLEName and Principal Position
      Year
      Salary ($)
      Bonus ($)
      Stock Awards ($)
      Option Awards ($)
      Non-Equity Incentive Plan Compensation ($)
      Change in 
        Pension Value and Nonqualified Deferred CompensationEarnings ($)
      All Other Compensa- tion ($)
      Total ($)Nadav Kidron (1)President, Chief Executive Officer and Director
      2007 
        2006
      84,900 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      225,225 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      310,125 
        NilMiriam Kidron (2)*Chief Scientific Officer and Director*
      2007
      62,500
      Nil
      Nil
      1,573,564
      Nil
      Nil
      Nil
      1,636,064


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- 41 -

George Drazenovic(3)Secretary and
      Former CFO
    2007 2006
    80,000 Nil
    Nil Nil
    Nil Nil
    321,647 Nil
    Nil Nil
    Nil Nil
    Nil Nil
    401,647 Nil


|(1) | Nadav Kidron was appointed as out President, Chief Executive
        Officer and Director on March 8, 2006.                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                             
|(2) | Miriam Kidron was appointed as Chief Scientific Officer
        and Director on on March 8, 2006.                                                                                                                                           
|    |                                                                                                                                                                                                                                             
|(3) | George Drazenovic was appointed as our Chief Financial
        Officer, Secretary, Treasurer and a Director on March 23, 2006 and he
        resigned as the Chief Financial Officer and Treasurer of our company on
        August 1, 2007.

Director Compensation

DIRECTOR COMPENSATIONName (a)
    Fees Earned or
      Paid in Cash ($) (b)
    Stock
      Awards ($) (c)
    Option
      Awards ($) (d)
    Non-Equity
      Incentive Plan Compensation
      ($) (e)
    Non-Qualified
      Deferred Compensation Earnings
      ($) (f)
    All Other
      Compensation ($) (g)
    Total ($)
      (j)Nadav Kidron
    84,900
    Nil
    225,225
    Nil
    Nil
    Nil
    310,125Miriam Kidron
    62,500
    Nil
      1,573,564
    Nil
    Nil
    Nil
      1,636,064George
      Drazenovic
    80,000
    Nil
    321,647
    Nil
    Nil
    Nil
    401,647


Stock Option Grants

Our board of directors adopted a stock option plan on August
26, 2006. We have granted the following stock options to the executive officers
or directors from inception through August 31, 2007:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-ENDOPTION AWARDS
      STOCK AWARDSName
      Number of Securities Underlying Unexercised Options (#) Exercisable
      Number of Securities Underlying Unexercised Options (#) **Unexercisable**
      Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
      Option Exercise Price ($)
      Option Expiration Date
      Numberof Shares or Units of Stock That Have Not Vested (#)
      **Market** Value ofShares or Units of Stock That Have Not Vested ($)
      Equity Incentive Plan Awards: **Number of** Unearned Shares, Units or Other Rights That HaveNot Vested(#)
      Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights **That Have** **Not Vested** (#)Nadav 
        Kidron
      850,000
      -
      -
      $0.45
      02-Aug-12
      -
      -
      -
      -Miriam 
        Kidron
      850,000
      -
      -
      $0.45
      02-Aug-12
      -
      -
      -
      -Miriam 
        Kidron
      3,361,360
      
      
      $0.001
      14-Aug-12
      -
      -
      -
      -George 
        Drazenovic
      458,333
      41,667
      -
      $0.76
      22-Nov-09
      -
      -
      -
      -Alex Werber
      -
      -
      -
      -
      -
      -
      -
      -
      -


Notes:

(1) Nadav Kidron and Miriam Kidron became directors of our company
  on March 8, 2006.

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- 42 -

(2) George Drazenovic became CFO, secretary, treasurer and a
  director of our company on March 23, 2006 and he resigned as the Chief Financial
  Officer and Treasurer of our company on August 1, 2007.

(3) Mr. Alex Werber was appointed as the Chief Financial Officer
  and Treasurer of our company on August 1, 2007

(4) Randy White resigned from all positions as director and
  officer of our company effective March 8, 2006.

Aggregated Option/SAR Exercises In Last Fiscal Year and
Year-End Option/SAR Values

The following table sets forth for each Named Executive Officer
certain information concerning the number of shares subject to both exercisable
and unexercisable stock options as of August 31, 2007. The values for
in-the-money options are calculated by determining the difference between the
fair market value of the securities underlying the options as of August 31, 2007
and the exercise price of the individuals options. During the year ended August
31, 2007, no named Executive Officer exercised options.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
      ANDFY-END OPTION/SAR VALUESName
    Shares Acquired on
      Exercise (#)
    Aggregate Value Realized
      ($)
    Number of Securities Underlying
      Unexercised Options/SARs at FY-End
    Value of Unexercised In-the -Money
      Options/SARs at FY- endExercisable (#)
    Unexercisable (#)
    Exercisable ($)
    Unexercisable ($)Nadav Kidron (1)
    Nil
    Nil
    850,000
    Nil
      Nil
    NilMiriam Kidron (1)
    Nil
    Nil
      4,211,360
    Nil
      Nil
    NilGeorge Drazenovic (2)
    Nil
    Nil
    458,333
    41,667
      Nil
      NilAlex Werber (3)
    Nil
    Nil
    Nil
    Nil
    Nil
    NilRandy White (4)
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil


Notes:

(1) Nadav Kidron and Miriam Kidron became directors of our
company on March 8, 2006.

(2) George Drazenovic became CFO, secretary, treasurer and a
director of our company on March 23, 2006 and he resigned as the Chief Financial
Officer and Treasurer of our company on August 1, 2007.

(3) Mr. Alex Werber was appointed as the Chief Financial
Officer and Treasurer of our company on August 1, 2007 (4) Randy White resigned
from all positions as director and officer of our company effective March 8,
2006.

Stock Option Plan

Our board of directors adopted a stock option plan on August
26, 2006. Pursuant to this stock option plan, our company has reserved up to
3,000,000 common shares for issuance upon the exercise of any options granted
under the plan. No stock options had been granted under the plan at the end of
our most recent year ended August 31, 2006.

On November 23, 2006, we entered issued stock options to one
consultant and one director of our company, granting options to purchase an
aggregate of 750,000 shares of our common stock at an exercise price of $0.76
per share. These options will vest 1/12 every month with the first 1/12 vesting
on December 23, 2006.

On December 31, 2006, we issued stock options to an advisor of
our company, to purchase an aggregate of 100,000 shares of our common stock at
an exercise price of $0.76 per share. These options will vest 1/12 every month
with the first 1/12 vesting on January 31, 2007.

On March 18, 2007, we issued stock options to an advisor of our
  company, to purchase an aggregate of 100,000 shares of our common stock at an
  exercise price of $0.76 per share. These options will vest 1/12 every month
  with the first 1/12 vesting on April 18, 2007.

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- 43 -

On August 2, 2007, we issued stock options to two directors and
  executives of our company, to purchase an aggregate of 1,750,000 shares of our
  common stock at an exercise price of $0.45 per share. The options vested upon
  grant.

As of August 14, 2007, pursuant to our contract with Hadasit
  Medical Services and Development Ltd, Dr. Miriam Kidron was entitled to receive
  stock options to purchase up to 3,361,360 common shares at an exercise price
  of $0.001 per share. The options vested immediately.

On September 4, 2007, we issued stock options to a consultant
of our company, to purchase an aggregate of 60,000 shares of our common stock at
an exercise price of $0.45 per share. These options will vest 1/12 every month
with the first 1/12 vesting on September 30, 2007.

On September 4, 2007, we issued stock options to a consultant
of our company, to purchase an aggregate of 240,000 shares of our common stock
at an exercise price of $0.45 per share. These options will vest 1/12 every
month with the first 1/12 vesting on September 30, 2007.

On October 30, 2007, we issued stock options to an advisor of
our company, to purchase an aggregate of 100,000 shares of our common stock at
an exercise price of $0.76 per share. These options will vest 1/12 every month
with the first 1/12 vesting on November 30, 2007.

Employment Contracts, Termination of Employment and Change
In Control Arrangements

We have entered into written employment agreements with KNRY,
Ltd., an Israeli company, for the provision of services by Dr. Miriam Kidron and
Mr. Nadav Kidron as our executive officers. Copies of the employment agreements
can be found as exhibits attached to our current report on Form 8-K filed on
August 28, 2007. We also entered into a written employment agreement with Alex
Werber for him to serve as our Chief Financial Officer and Treasurer. A copy of
this employment agreement can be found as exhibit attached to our current report
on Form 8-K filed on August 3, 2007.

Directors Compensation

Directors may be paid their expenses for attending each meeting
of the directors and may be paid a fixed sum for attendance at each meeting of
the directors or a stated salary as director. No payment precludes any director
from serving our company in any other capacity and being compensated for such
service. Members of special or standing committees may be allowed like
reimbursement and compensation for attending committee meetings.

Family Relationships

Dr. Miriam Kidron is Mr. Nadav Kidrons mother. Other than
that, none of the directors or officers of our company are related by blood or
marriage.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of the directors or executive officers of our company or
any associate or affiliate of our company during the last two fiscal years, is
or has been indebted to our company by way of guarantee, support agreement,
letter of credit or other similar agreement or understanding currently
outstanding.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS

The following table sets forth, as of November 29, 2007, certain
  information with respect to the beneficial ownership of our common stock by
  each stockholder known by us to be the beneficial owner of more than 5% of our
  common stock and by each director, nominee and named executive officer of our
  company and our wholly-owned operating subsidiary, and by the directors and
  executive officers of our company as a group. Each person has sole voting and
  investment power with respect to the shares of common stock, except as otherwise
  indicated. Beneficial ownership consists of a direct interest in the shares
  of common stock, except as otherwise indicated.

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- 44 -

Title of Class of
      Shares
    Name and Address of
      Beneficial Owner
    Amount and Nature of
      Beneficial Ownership
    Percentage of
      Class1Directors and Officerscommon shares
    Nadav Kidron 2 Elza St.
      Jerusalem, Israel
    (3) 11,221,735
    24.38%common shares
    Miriam Kidron 2 Elza St.
      Jerusalem, Israel
    (3) 850,000
    1.85%common shares
    George Drazenovic 700-205 5th
      Avenue SW Calgary, AB
    (3) 500,000
    1.09%common shares
    Leonard Sank 3 Blair Road
      Camps Bay 8005 Cape Town, South Africa
    (3) 3,250,000
    7.06%Directors and Executive
      Officers as a GroupHolders of More than 5%CEDE & CO. P.O. Box 222
      Bowling Green Station, New York, New York, U.S.A. 10274
    16,876,478
    36.66%Zeev Bronfeld 6 Uri St.,
      Tel-Aviv, Israel
    6,158,517
    13.38%Hadassit Medical Research
      Services and Development Ltd. Floor 2 1/2, Mother & Child
      Center, Hadassah Ein Karem, P.O. Box 12000, Jerusalem 91120,
      Israel
    4,141,532
    8%


|(1) | Beneficial ownership is determined in accordance with SEC
      rules and generally includes voting or investment power with respect to
      securities. Shares of common stock subject to options, warrants and
      convertible preferred stock currently exercisable or convertible, or
      exercisable or convertible within sixty (60) days, would be counted as
      outstanding for computing the percentage of the person holding such
      options or warrants but not counted as outstanding for computing the
      percentage of any other person.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(2) | Based on 46,034,804 common shares issued and outstanding
      as of November 29, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(3) | Includes options exercisable within 60
  days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Changes in Control

We are unaware of any contract, or other arrangement or
provision of our Articles of Incorporation or Bylaws, the operation of which may
at a subsequent date result in a change of control of our company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as disclosed herein, there have been no transactions or
  proposed transactions in which the amount involved exceeds the lesser of $120,000
  or one percent of the average of our total assets at year-end for the last three
  completed fiscal years in which any of our directors, executive officers or
  beneficial holders of more than 5% of the outstanding shares of our common stock,
  or any of their respective relatives, spouses, associates or affiliates, has
  had or will have any direct or material indirect interest.

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- 45 -

ITEM 13. EXHIBITS

Exhibits required by Item 601 of Regulation S-B

(3)
    Articles of Incorporation and By-laws3.1
    Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2, filed on November 29, 2002).3.2
    Bylaws (incorporated by reference from our Current Report
      on Form 8-K filed on April 10, 2006).3.3
    Articles of Merger filed with the Nevada Secretary of
      State on March 29, 2006 (incorporated by reference to our Current Report
      on Form 8-K filed on April 10, 2006).(4)
    Instruments defining rights of security holders,
      including indentures4.1
    Specimen Stock Certificate (incorporated by reference
      from our Registration Statement on Form SB-2, filed on November 29, 2002).(10)
    Material Contracts10.1
    Form of Securities Purchase Agreement for February 6,
      2006 private placement (incorporated by reference from our current report
      on Form 8-K filed February 6, 2006)10.2
    Agreement between our company and Hadasit Medical
      Services and Development Ltd. dated February 17, 2006 concerning the
      acquisition of U.S. patent application 60/718716 (incorporated by
      reference from our current report on Form 8-K filed February 17, 2006).10.3
    Consulting Agreement between our company and Dr. Miriam
      Kidron (incorporated by reference from our current report on Form 8-K
      filed February 17, 2006).10.4
    Agreement between our company and Swiss Caps Ag dated
      October 30, 2006 (incorporated by reference from our current report on
      Form 8-K filed October 26, 2006).10.5
    Stock Option Plan dated October 15, 2006 (incorporated by
      reference from our current report on Form 8-K filed on November 28, 2006).10.6
    Stock Option Agreement dated November 23, 2006
      (incorporated by reference from our current report on Form 8-K filed on
      November 28, 2006).10.7
    Form of subscription agreement and warrant certificate
      (incorporated by reference from our current report on Form 8-K filed on
      June 18, 2007)10.8
    Encorium Proposal dated April 27, 2007 (incorporated by
      reference from our current report on Form 8-K filed on June 19, 2007)10.9
    Employment Agreement dated August 1, 2007 between Oramed
      Pharmaceuticals Inc. and Alex Werber (incorporated by reference from our
      current report on Form 8-K filed on August 3, 2007)10.10
    Form of Shares for Services agreement (incorporated by
      reference from our current report on Form 8-K filed on August 3, 2007)10.11
    Employment Agreement dated August 1, 2007 between Oramed
      Pharmaceuticals Inc. and Nadav Kidron (incorporated by reference from our
      current report on Form 8-K filed on August 28, 2007)


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- 46 -

10.12
    Employment Agreement dated August 1, 2007 between Oramed
      Pharmaceuticals Inc. and Dr. Miriam Kidron (incorporated by reference from
      our current report on Form 8-K filed on August 28, 2007)12.13
    Investor Relations Agreement dated August 27, 2007
      between Oramed Pharmaceuticals Inc. and The Investor Relations Group Inc.
      (incorporated by reference from our current report on Form 8-K filed on
      September 10, 2007)(31)
    Section 302 Certification31.1*
    Certification Statement of the
          Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
          Act of 200231.2*
    Certification Statement of the
          Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002(32)
    Section 906 Certification32.1*
    Certification Statement of the
          Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act Of 200232.2*
    Certification Statement of the
          Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted
          pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002


* Filed herewith

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES AUDIT FEES

Audit Fees

The aggregate fees billed for the fiscal years ended August 31,
2007 and August 31, 2006 for professional services rendered by the principal
accountant for the audit of our annual consolidated financial statements and
review of the consolidated financial statements included in our Form 10-KSB or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for these fiscal periods were
estimated at $31,500 and $9,000, respectively.

Audit Related Fees

None.

Tax Fees

None.

All Other Fees

None.

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- 47 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, we have duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

ORAMED PHARMACEUTICALS INC.

|By:                                                | /s/ *Nadav Kidron* | 
|-------------------------------------------------- | ------------------ | 
|Nadav Kidron                                       |                   
|President, Chief Executive Officer and Director    |                   
|(Principal Executive Officer)                      |                   
|Date: December 12, 2007                            |                   
|                                                   |                   
|                                                   |                   
|By:                                                | /s/ *Alex Werber*  | 
|Alex Werber, Chief Financial Officer and Treasurer |                   
|(Principal Financial Officer)                      |                   
|Date: December 12, 2007                            |                   

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|Signature               |  | Title                                           | Date             
|----------------------- |  | ----------------------------------------------- | -----------------
|                        |  |                                                 |                  
|/s/ *Nadav Kidron*      |  |                                                 |                  
|Nadav Kidron            |  | President, Chief Executive Officer and Director | December 12, 2007
|                        |  |                                                 |                  
|/s/ *George Drazenovic* |  |                                                 |                  
|George Drazenovic       |  | Secretary and Director                          | December 12, 2007
|                        |  |                                                 |                  
|/s/ *Miriam Kidron*     |  |                                                 |                  
|Miriam Kidron           |  | Chief Technology Officer and Director           | December 12, 2007

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