COMMON STOCK, PREFERRED STOCK AND WARRANTS WITH-DOWN ROUND PROTECTION (Tables)

12 Months Ended

Dec. 31, 2015

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' DEFICIT

Schedule of Changes in Fair Value of Level 3 Liability

The changes in the fair value of the Level 3 liability are as follows (in US dollars):

	Series A Warrants
	December 31,
	2015			2014

Balance, Beginning of the year		2,057,618			8,216,705
Classification from stockholders deficit		-			400,671
Exchange of Series A Warrants pursuant to the “Most favored nation” provision		(1,586,831	)		-
Change in fair value of Series A Warrants		(149,092	)		(6,559,758	)
Balance, End of year		321,695			2,057,618

Schedule of Fair Value Assumptions Used

The key inputs used in the fair value calculations were as follows:

	December 31, 2015		December 31, 2014
Dividend yield (%)		-		-
Expected volatility (%) (*)		105.14		105.14
Risk free interest rate (%)		0.99		1.14
Expected term of options (years) (**)		2.20		3.20
Exercise price (US dollars)		5.80		5.80
Share price (US dollars) (***)		2.31		2.31
Fair value (US dollars)		0.84		1.13

(*)

Due to the low trading volume of the Company’s Common Stock, the expected volatility was based on the historical volatility of the share price of other public companies that operate in the same industry sector as the Company.

(**)

Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the "simplified method" in accordance with Staff Accounting Bulletin No. 110.

(***)

The Common Stock price, per share reflects the Company’s management’s estimation of the fair value per share of Common Stock as of December 31, 2015 and 2014. In reaching its estimation for December 31, 2015 and 2014, management considered, among other things, a valuation prepared by a third-party valuation firm following the 2014 Offering.

Schedule of Stock Grants Activity

The following tables present a summary of the status of the grants to employees, officers and directors as of December 31, 2015 and 2014:

	Number			Weighted average exercise price (US$)
Year ended December 31, 2015
Balance outstanding at beginning of year		450,847			5.85
Granted		-			-
Exercised		(19,769	)		1.82
Forfeited		(17,605	)		6.01
Balance outstanding at end of the year		413,473			6.04
Balance exercisable at the end of the year		293,736			5.95

	Number			Weighted average exercise price (US$)
Year ended December 31, 2014
Balance outstanding at beginning of year		414,847			5.74
Granted		44,000			7.00
Exercised		-			-
Forfeited		(8,000	)		6.25
Balance outstanding at end of the year		450,847			5.85
Balance exercisable at the end of the year		302,360			5.58

Schedule of Stock Grants, by Exercise Price Range

The following tables summarize information about options outstanding at December 31, 2015:

Exercise price (US$)		Outstanding at December 31, 2015		Weighted average remaining contractual life (years)		Weighted average exercise price		Exercisable at December 31, 2015		Weighted average remaining contractual life (years)

	1.72		21,758		1.60		1.72		21,758		1.60
	3.63		3,730		1.60		3.63		3,730		1.60
	6.01		4,273		2.04		6.03		4,273		2.04
	6.25		351,712		6.20		6.25		236,975		6.20
	7.00		32,000		8.5		7.00		27,000		8.50
			413,473						293,736

Schedule of Assumptions Used to Value Options

The fair value of options granted was estimated at the dates of grant using the Black-Scholes option pricing model. The following are the data and assumptions used:

	2015		2014		2013
Dividend yield (%)		-		0		-
Expected volatility (%) (*)		-		105.14		-
Risk free interest rate (%)		-		1.61		-
Expected term of options (years) (**)		-		5-6		-
Exercise price (US dollars)		-		7.00		-
Stock price (US dollars) (***)		-		2.31		-
Fair value (US dollars)		-		1.59		-

(*)

(**)

(***)

The Common Stock price, per share for the year ended December 31, 2014 reflects the Company’s management’s estimation of the fair value per share of Common Stock. In reaching its estimation for December 31, 2014, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the 2014 Offering.