Note 14: Share capital

Share capital is composed as follows:

	Issued and outstanding
	Number of shares
	December 31,
	2017		2016
Ordinary shares no par value		89,478,032		87,066,446

a. Investment rounds:

In June 2015, the Company sold to investors 4,068,500 Series J Convertible Preferred shares at a price per share of $23.33, for a total consideration of $94,599 (net of issuance expenses of $319). Prior to conversion of the Series J Convertible Preferred shares into ordinary shares as a result of the IPO, such shares were senior to the other series of preferred shares on payment of the liquidation preference (equal to $23.33 per share), but otherwise had similar participating preferred rights, dividend rights and voting rights of the other series of preferred shares.

b. Rights, preferences and restrictions:

On October 7, 2015, the Company completed the IPO of its ordinary shares by issuing 7,876,195 ordinary shares (including exercise of overallotments) and raising net proceeds of $157,534, at which time the Series A through J Convertible Preferred shares converted into ordinary shares and ceased to exist. Each holder of ordinary shares is entitled to one vote per ordinary share.

c. Warrants:

As part of the Series D and E Convertible Preferred share investment agreements, the investors received warrants to purchase ordinary shares. The Company accounted for these warrants as equity instruments based on the guidance of ASC 815, “Derivatives and Hedging”, ASC 480-10, “Distinguishing Liabilities from Equity”, its related FASB staff positions, ASC 815-40 “Contracts in Entity’s Own Stock” and the AICPA Technical Practice Aid for accounting for preferred shares and warrants, including the roadmap for accounting for freestanding financial instruments indexed to, and potentially settled in, a company’s own stock.

Significant terms of the warrants to purchase ordinary shares that were issued to purchasers of the Series D and E Convertible Preferred shares are as follows as of December 31, 2017 and 2016:

	Warrants for ordinary shares
	December 31,				Exercise price
Expiration date	2017		2016		per share
July 31, 2017		-		547,478	$	3.59
January 22, 2018		203,241		554,331		3.59
July 21, 2018		304,863		831,504	$	3.59
		508,104		1,933,313

In the years ended December 31, 2017 and 2016, warrants to purchase 1,418,711 and 902,132 ordinary shares, respectively, were cashlessly exercised, resulting in the issuance of 803,138 and 864,341 ordinary shares, respectively. Also, in the year ended December 31, 2017 and 2016 warrants to purchase 6,498 and 220,316 ordinary shares, respectively, with an exercise price of $3.59 per share were exercised for cash

Pursuant to a credit facility that the Company entered into in January 2013 (the “Credit Agreement”) which was fully paid in December 2013, the Company issued to the lenders under the Credit Agreement 975,644 warrants to purchase Series H Convertible Preferred shares at an exercise price of $18.77 per share. The warrants were exercised on a cashless basis in January 2016, resulting in the issuance of 315,155 ordinary shares.

d. Share option plans and ESPP:

Until the IPO in October 2015, the Company maintained and granted option awards under the 2003 Share Option Plan (the “2003 Plan”) and the 2013 Equity Incentive Share Option Plan (the “2013 Plan”) for the Company’s officers, directors, employees and advisors. The 2003 Plan and the 2013 Plan terminated as of the IPO as to future awards, but they continue to govern option awards previously granted thereunder.

In August 2015, the Company’s board of directors adopted and established the 2015 Omnibus Incentive Plan (the “2015 Plan”). The Company’s shareholders approved the 2015 Plan in September 2015. Under the 2015 Plan, the Company can issue various types of equity compensation awards such as restricted shares, performance shares, restricted stock units (“RSUs”), performance units, long-term cash award and other share-based awards. The options granted generally have a four-year vesting period and expire ten years after the date of grant. Options granted under the 2015 Plan generally have a four-year vesting period and expire ten years after the date of grant. Options granted under the 2015 Plan that are cancelled or forfeited before expiration become available for future grants. RSUs granted under the 2015 Plan vest in equal installments over a three-year period.

On December 31, 2017, in accordance with the terms of the 2015 Plan, the number of shares available for issuance under the 2015 Plan automatically increased by 4% of the Company’s outstanding ordinary shares as of December 30, 2017. As a result, the number of shares available for issuance under the 2015 Plan increased from 19,730,105 shares to 23,302,529 shares. As of December 31, 2017, 12,971,921 ordinary shares are available for grant under the 2015 Plan.

In August, 2015, the Company’s board of directors adopted the ESPP, which was approved by the Company’s shareholders in September, 2015. The Company adopted the ESPP to encourage and enable eligible employees to acquire ownership of the Company’s ordinary shares purchased through accumulated payroll deductions on an after-tax basis. The ESPP is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the Code and the provisions of the ESPP will be construed in a manner consistent with the requirements of such section. The Company began its offerings under the ESPP on August 1, 2016. The Company issued 259,821 ordinary shares for the plan periods ended till December 31, 2017.

Under the ESPP, initially an aggregate of 830,000 ordinary shares could be purchased by eligible employees who become participants in the ESPP; which amount shall be automatically increased on December 31 of each year during the term of the ESPP to an amount equal to 1% of the total number of ordinary shares outstanding on December 30 of such year unless otherwise determined by the board of directors. As of December 31, 2017, 2,277,705 ordinary shares are available for offering under the ESPP.

The fair value of share-based awards was estimated using the Black-Scholes model for all equity grants. For market condition awards, the Company also applied the Monte-Carlo simulation model, with the following underlying assumptions:

	Year ended December 31,
	2017	2016	2015
Stock Option Plans
Expected term (years)	5.50-6.25	6.25	6.25
Expected volatility	56.74%-59.45%	58.4%-61.70%	59.0%-65.80%
Risk-free interest rate	1.97%-2.23%	1.23%-1.88%	1.74%-2.05%
Dividend yield	0.00%	0.00%	0.00%
ESPP
Expected term (years)	0.50	0.42		-
Expected volatility	76.37%-82.00%	70.45%		-
Risk-free interest rate	0.62%-1.13%	0.4%		-
Dividend yield	0.00%	0.00%		-

A summary of the status of the Company’s options to purchase ordinary shares as of December 31, 2017 and changes during the year ended on that date is presented below:

	Year ended December 31, 2017
	Number of options			Weighted average exercise price		Aggregate intrinsic value
Outstanding at beginning of year		11,377,354		$	9.76
Granted		5,381,613		$	10.53
Exercised		(1,442,522	)	$	2.64
Forfeited and cancelled		(510,418	)	$	12.54
Outstanding at end of year		14,806,027		$	10.64	$	145,755
Exercisable options		6,389,813		$	8.64		75,547

A summary of the status of the Company’s RSUs as of December 31, 2017 and changes during the year ended on that date is presented below:

	Year ended December 31, 2017
	Number of RSUs			Weighted average grant date fair value price		Aggregate intrinsic value
Unvested at beginning of year	-			$	-
Granted		1,661,619			9.64
Vested	-				-
Forfeited and cancelled		(10,400	)		7.15
Unvested as of December 31, 2017		1,651,219		$	9.66	$	33,354

The total equity-based compensation expense related to all of the Company’s equity-based awards recognized for the years ended December 31, 2017, 2016 and 2015, was comprised as follows:

	Year ended December 31,
	2017		2016		2015
Cost of revenues	$	467	$	623	$	174
Research, development and clinical trials		3,587		3,155		2,529
Sales and marketing		3,784		5,111		2,496
General and administrative		19,278		12,552		6,661
Total share-based compensation expense	$	27,116	$	21,441	$	11,860

As of December 31, 2017, there were unrecognized compensation costs of $39,253, which are expected to be recognized over a weighted average period of approximately 2.86 years.

The weighted average grant date fair values of the Company’s options granted during the years ended December 31, 2017, 2016 and 2015 were $10.53, $7.37 and $10.64 per share, respectively.

The weighted average grant date fair values of the Company’s options forfeited and cancelled during the years ended December 31, 2017, 2016 and 2015 were $ 12.54, $9.72 and $5.73, respectively.

The aggregate intrinsic values for the options exercised during the years ended December 31, 2017, 2016 and 2015 were $17,945, $7,673 and $3,546, respectively. The aggregate intrinsic value is calculated as the difference between the per share exercise price and the deemed fair value of the Company’s ordinary shares for each share subject to an option multiplied by the number of shares subject to options at the date of exercise. The Company deemed the fair value of the Company’s ordinary shares to be $20.20, $7.85 and $22.36 per share as of December 31, 2017, 2016, and 2015, respectively.

The options outstanding as of December 31, 2017 are as follows:

Exercise price	Number of options outstanding		Weighted average remaining contractual term		Number of options exercisable		Weighted average remaining contractual term
$			(years)				(years)
0.23 - 1.00		338,906		1.95		338,906		1.95
1.01 - 7.00		2,627,476		4.29		2,491,388		4.05
7.01 - 11.00		4,395,057		7.56		1,589,345		5.20
11.01 - 16.00		5,260,210		8.21		1,305,796		6.94
16.01 - 20.00		351,750		9.57		-		-
20.01 - 27.50		1,832,628		8.15		664,378		7.83
		14,806,027		7.20		6,389,813		5.21