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Share Based Payment
 12 Months Ended
Dec. 31, 2018
Share Based Payment  
SHARE BASED PAYMENT

NOTE 12 - SHARE BASED PAYMENT:

 

a.The Company maintains a share-based payment plan to Employees, Directors and Consultants (the “Plan”). According to the Plan, the options vest over a period of up to 4 years, and their term period is ten years. Nevertheless, the board of director is qualified to resolve on different vesting terms. Below is a summary of the Company’s grants under the Plan during 2016, 2017 and 2018:

 

Date of grant  Options amount   Exercise price   Fair value at the date of grant   Volatility   Risk free interest   Expected term 
       NIS / $   in thousand $           In years 
January 18, 2016   443,4601 2   0.3985 $    1,002    59.22%   3.08%   10 
August 28, 2016   779,296    5.137 NIS    607    59.22%   1.62%   10 
August 28, 2016   50,000    5.137 NIS    26    59.22%   0.96%   3 
September 15, 2016   171,4083   4.887 NIS    102    59.22%   1.99%   10 
March 29, 2017   747,8964   6.371-6.588 NIS    655    47.40%   2.31%   10 
July 24, 2017   641,744    6.976 NIS    784    68.07%   2.05%   10 
August 8, 2017   100,000    7.50 NIS    85    68.03%   1.95%   0.5 
August 29, 2017   500,000    5.655 NIS    473    68.17%   1.81%   10 
November 27, 2017   305,008    4.30 NIS    163    65.80%   1.98%   10 
June 20, 2018   670,048    1.49-2.97 NIS    130    75.50%   2.24%   10 
June 20, 2018   230,000    1.43 NIS    72    75.30%   2.24%   10 

 

* The early exercise multiple used in the valuations for grants during 2016, 2017 and 2018 is 2.5 for each offeree

 

** Volatility until March 29, 2017 grant is based on volatility data of share price of software companies for periods matching the expected term of the option until exercise. As of July 24, 2017 grant, Volatility is based on volatility data of the traded share price of the Company.

 

 
1Originally 1,178,000 were granted by Safe-T, and then were replaced with 443,460 options of the Company
2Outofwhich 143,322 options were granted to the CEO and 12,799 options to an employee, who is a relative of the Chairman of the Board of Directors
3Outofwhich 131,840 options granted to the Company’s CEO, 28,240 options granted to a member of the Company’s Board of Directors and 11,328 options granted to an employee, who is a relative of the Chairman of the Board of Directors.
4Outofwhich 100,000 options were granted to the Company’s CEO at an exercise price of 6.588 NIS and approved by the Company’s shareholders on August 8, 2017.

 

On June 20, 2018, the Company’s Board of Directors approved the reduction of the exercise price of 1,733,504 options that were granted as of August 28, 2016, until August 29, 2017, to employees and consultants at exercise prices which ranged between NIS 4.887 to NIS 6.976. The new exercise price was set at NIS 4.50. The reduction was approved also by the tax authorities subject to renewed tax lock-up period of 24 months. The move was subject to the grantees approval - such approval was received only with respect to 1,381,152 options, while the rest of the options maintained their original terms.

 

The fair value of the options just prior to the date of the change, which was computed according to the binomial model, amounted to $228 thousand, and $249 thousand immediately after the date of the change, such that the incremental value resulted is $21 thousand. This value is based on the following assumptions: expected volatility of 75.48%, risk free interest ranges between 2.00% and 2.13%, expected term until exercise of 8.19-9.20 years and an early exercise multiple of 2.5 for each offeree. Volatility is based on volatility data of share price of software companies for periods matching the expected term of the option until exercise.

 

b.Movement in the number of share options outstanding and their related weighted average exercise prices are as follows:

 

   2018   2017   2016 
   Number   Average   Number   Average   Number   Average 
   of   exercise   of   Exercise   of   Exercise 
   options   price   options   Price   options   Price 
       $       $       $ 
Outstanding at beginning of year:   4,055,260    1.26    2,384,909    0.84    1,099,240    0.49 
Granted   900,048    0.46    2,194,648    1.70    1,444,164    1.07 
Exercised   (179,257)   0.57    (159,648)   0.51    (4,235)   0.40 
Forfeited   (955,356)   1.23    (351,810)   1.52    (78,734)   0.51 
Expired   (348,148)   1.13    (12,839)   1.12    (75,526)   0.46 
Outstanding at end of year   3,472,547    1.11    4,055,260    1.26    2,384,909    0.84 
Exercisable at end of year   1,879,377    0.89    1,552,660    0.74    1,061,645    0.55 

 

c.The following table summarizes information about exercise price and the remaining contractual life of options outstanding at the end of 2018, 2017 and 2016:

 

 

   

2018

  

2017

   2016 
        Weighted       Weighted       Weighted 
    Number   average   Number   average   Number   average 
    outstanding   remaining   outstanding   remaining   outstanding   remaining 
Exercise   at   contractual   at   contractual   at   contractual 
Prices   end of year   Life   end of year   Life   end of year   Life 
$       Years       Years       Years 
 0.40    295,392    5.39    336,802    6.32    382,475    7.23 
 0.40    322,783    6.25    341,606    7.25    351,606    8.26 
 0.40    261,634    7.05    372,310    8.05    407,698    9.05 
 0.41    370,016    9.48    -    -    -    - 
 0.41    200,000    9.48    -    -    -    - 
 0.61    18,823    6.01    162,694    7.01    248,458    8.01 
 0.82    100,000    9.48    -    -    -    - 
 1.22    270,000    8.91    305,008    9.91    -    - 
 1.24    431,408    7.66    -    -    -    - 
 1.24    155,561    7.71    -    -    -    - 
 1.24    322,896    8.24    -    -    -    - 
 1.24    230,016    8.56    -    -    -    - 
 1.24    100,000    8.32    -    -    -    - 
 1.24    150,000    8.66    -    -    -    - 
 1.28    -    -    162,912    8.71    171,408    9.71 
 1.37    3,393    7.66    614,288    8.66    773,264    9.66 
 1.58    50,000    8.66    450,000    9.67    -    - 
 1.73    50,000    0.66    50,000    1.66    50,000    2.66 
 1.76    28,125    8.25    547,896    9.25    -    - 
 1.83    -    -    100,000    9.32    -    - 
 1.94    112,500    8.56    611,744    9.57    -    - 
      3,472,547         4,055,260         2,384,909      

 

d.Expenses recognized in the financial statements

 

The costs, which were recognized in the Company’s financial statements in respect of services received from its employees and consultants are presented in the table below:

 

   Year ended December 31, 
   2018   2017   2016 
   U.S. dollars in thousands 
Share-based payment plans   381    1,318    1,818 

 

The plans are intended to be governed under rules set for that purpose in the Company’s options plan. The exercise prices of the options that are exercisable into shares as of December 31, 2018 range between $0.4 to $1.94.