NOTE 6 - COMMITMENTS: a. In March 2011, the Subsidiary sold shares of its investee company, Entera, to D.N.A, retaining 117,000 ordinary shares after a stock split which was performed by Entera in July 2018. In consideration for the shares sold to D.N.A, the Company received, among other payments, ordinary shares of D.N.A (see also note 3). As part of this agreement, the Subsidiary entered into a patent transfer agreement according to which the Subsidiary assigned to Entera all of its right, title and interest in and to the patent application that it has licensed to Entera since August 2010. Under this agreement, the Subsidiary is entitled to receive from Entera royalties of 3% of Enteras net revenues (as defined in the agreement) and a license back of that patent application for use in respect of diabetes and influenza. As of August 31, 2018, Entera had not yet realized any revenues and had not paid any royalties to the Subsidiary. In addition, as part of a consulting agreement with a third party, dated February 15, 2011, the Subsidiary is obliged to pay this third party royalties of 8% of the net royalties received in respect of the patent that was sold to Entera in March 2011. b. On January 3, 2017, the Subsidiary entered into a lease agreement for its office facilities in Israel. The lease agreement is for a period of 60 months commencing October 1, 2016. The annual lease payment was New Israeli Shekel (NIS) 119,000 ($33) from October 2016 through September 2018 and NIS 132,000 ($37) from October 2018 through September 2021, and is linked to the increase in the Israeli consumer price index (CPI) (as of August 31, 2018, the future lease payments until the expiration of the lease agreement will be $113, based on the exchange rate as of August 31, 2018). As security for its obligation under this lease agreement, the Company provided a bank guarantee in an amount equal to three monthly lease payments. The lease expenses for the years ended August 31, 2018, 2017 and 2016 were $32, $32 and $23, respectively. c. On March 3, 2016, the Subsidiary entered into an agreement with a vendor for process development and production of its capsules and on November 24, 2016, April 3, 2017 and July 10, 2017 into amendments to such agreement in an amount of up to Swiss Franc (CHF) 1,000,000 ($1,035), CHF 665,000 ($675) of which was recognized in research and development expenses through August 31, 2018. d. On May 11, 2016, the Subsidiary entered into a Master Service Agreement with a vendor to retain its services for a pre-clinical toxicology trial for an oral GLP-1 analog capsule for type 2 diabetes patients. As consideration for its services, the Subsidiary will pay the vendor a total amount of $1,283 during the term of the engagement and based on achievement of certain milestones, of which $1,275 was recognized in research and development expenses through August 31, 2018. e. On June 13, 2016, the Subsidiary entered into a four-year service agreement with a third party and on December 19, 2016, this agreement and all of the third party rights and obligations thereunder were assigned to another third party. This agreement is required by the License Agreement as described in note 1 and will support the Companys research and development. The Subsidiary is obligated to pay the third party a total amount of up to 2,360,000 ($2,730), of which 1,569,215 ($1,806) was recognized in research and development expenses through August 31, 2018. f. On July 24, 2016, the Subsidiary entered into a General Technical Agreement with a vendor, for the scale-up process development and production of one of its oral capsule ingredients in the amount of $4,300 that will be paid over the term of the engagement and based on the achievement of certain development milestones, $4,087 of which was recognized in research and development expenses through August 31, 2018. This agreement is part of the requirements of the License Agreement as described in note 1. g. On February 21, 2017, the Subsidiary entered into an agreement with a vendor to retain its services for a pre-clinical toxicology trial for an oral insulin capsule for type 2 and type 1 diabetes patients. As consideration for its services, the Subsidiary will pay the vendor a total of up to $952 during the term of the engagement and based on achievement of certain milestones, of which $857 was recognized in research and development expenses through August 31, 2018. h. On May 3, 2017, the Company entered into a consulting agreement with a third party advisor for a period of one year, pursuant to which such advisor provided investor relations services and received a monthly cash fee and 10,000 shares of the Companys common stock that were issued in four equal quarterly installments commencing August 1, 2017. As of August 31, 2018, the Company had issued to such advisor 10,000 shares. The fair value of the shares at the grant date was $81. On April 8, 2018, the Company entered into a consulting agreement with the same third party advisor for a period of one year, pursuant to which such advisor will provide investor relations services and will be entitled to receive a monthly cash fee and 10,000 shares of the Companys common stock that will be issued in four equal quarterly installments commencing August 1, 2018. As of August 31, 2018, the Company had issued to such advisor 2,500 shares. The fair value of the shares at the grant date was $13. i. On June 5, 2017, the Subsidiary entered into a clinical research agreement with a vendor, for the conduct of its clamp clinical trial for an oral insulin capsule for type 1 diabetes patients. As consideration for its services, the Subsidiary will pay the vendor a total amount of $958 during the term of the engagement and based on achievement of certain milestones, $446 of which was recognized in research and development expenses through August 31, 2018. j. On December 18, 2017, the Subsidiary entered into an agreement with a vendor for the process development and production of one of its oral capsule ingredients in the amount of $2,905 that will be paid over the term of the engagement and based on the achievement of certain development milestones, $846 of which was recognized in research and development expenses through August 31, 2018. k. On February 14, 2018, the Subsidiary entered into a Clinical Research Organization Services Agreement with a third party, effective as of November 1, 2017, to retain it as a clinical research organization (CRO) for the Subsidiarys three-month dose-ranging clinical trial for its oral insulin capsule for type 2 diabetes patients. As consideration for its services, the Subsidiary will pay the CRO a total amount of $7,030 during the term of the engagement and based on achievement of certain milestones, $2,229 of which was recognized in research and development expenses through August 31, 2018. l. On May 21, 2018, the Subsidiary entered into a CRO Services Agreement with a third party to retain it as a CRO for the Subsidiarys food effect clinical trial for its oral insulin capsule. As consideration for its services, the Subsidiary will pay the CRO a total amount of $1,166 during the term of the engagement and based on achievement of certain milestones, $532 of which was recognized in research and development expenses through August 31, 2018. m. On July 4, 2018, the Subsidiary entered into an agreement with a vendor to retain its services for a pre-clinical six months toxicology trial for its oral insulin capsule. As consideration for its services, the Subsidiary will pay the vendor a total of up to $971 during the term of the engagement and based on achievement of certain milestones, of which $189 was recognized in research and development expenses through August 31, 2018. n. On July 15, 2018, the Company entered into a consulting agreement with a third party advisor for a period of one year, pursuant to which such advisor will provide investor relations services and will be entitled to receive a monthly cash fee and shares of the Companys common stock that will be issued in four quarterly installments in an amount equal to $25 per quarter, pursuant to and in accordance with the terms of the agreement, commencing July 15, 2018. As of August 31, 2018, the Company had issued to such advisor 4,180 shares. o. Grants from the Israel Innovation Authority (IIA) Under the terms of the Companys funding from the IIA, royalties of 3% are payable on sales of products developed from a project so funded, up to a maximum amount equaling 100%-150% of the grants received (dollar linked) with the addition of interest at an annual rate based on LIBOR. Following an amendment to applicable regulations that was published by the IIA, the royalties rate that the Company is obligated to pay to the IIA was reduced from 3.5% to 3%, and the difference in the amount of $86 was recognized as a reduction in cost of revenue in fiscal 2018. At the time the grants were received, successful development of the related projects was not assured. The total amount that was received through August 31, 2018 was $2,194. As of August 31, 2018, the royalty expenses which are related to the funded project were recognized in cost of revenues in prior periods. For the years ended August 31, 2018, 2017 and 2016, no grants from the IIA were recognized.