WARRANT WITH DOWN-ROUND PROTECTION, TEMPORARY EQUITY AND SHARE CAPITAL (Tables)

12 Months Ended

Dec. 31, 2013

WARRANT WITH DOWN-ROUND PROTECTION, TEMPORARY EQUITY AND SHARE CAPITAL [Abstract]

The following tables present a summary of the status of the grants to employees, officers and directors as of December 31, 2013 and 2012:

	Number			Weighted average exercise price (US$)
Year ended December 31, 2013
Balance outstanding at beginning of year		471,854			5.47
Granted		-			-
Exercised		-			-
Forfeited		(57,007	)		3.48
Balance outstanding at end of the year		414,847			5.74
Balance exercisable at the end of the year		298,910			5.55

	Number		Weighted average exercise price (US$)
Year ended December 31, 2012
Balance outstanding at beginning of year		454,354		5.44
Granted		17,500		6.25
Exercised		-		-
Forfeited		-		-
Balance outstanding at end of the year		471,854		5.47
Balance exercisable at the end of the year		321,039		3.12

Schedule of Stock Grants, by Exercise Price Range

The following tables summarize information about options outstanding at December 31, 2013:

Exercise price (US$)		Outstanding at December 31, 2013		Weighted average remaining contractual life (years)		Weighted average exercise price		Exercisable at December 31, 2013		Weighted average remaining contractual life (years)

	1.72		40,408		3.75		1.72		40,408		3.75
	3.49		4,486		1.92		3.48		4,486		1.92
	3.63		4,849		3.75		3.63		4,849		3.75
	5.52		1,119		5.20		5.52		1,119		5.20
	6.03		4,273		5.00		6.03		4,273		5.00
	6.25		359,712		8.25		6.25		243,775		8.25
			414,847						298,910

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:

	2013		2012		2011
Dividend yield (%)		-		0		0
Expected volatility (%) (*)		-		50		50
Risk free interest rate (%)		-		2		2
Expected term of options (years) (**)		-		6		5-6
Exercise price (US dollars)		-		6.25		6.25
Stock price (US dollars) (***)		-		6.25		6.25
Fair value (US dollars)		-		3.08		3.08

(*)

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 fair value of the share was based on the most recent share prices, as applicable to each grant.

Schedule of Fair Value Assumptions Used

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

	December 31, 2013
Dividend yield (%)		-
Expected volatility (%) (*)		105.14
Risk free interest rate (%)		1.36
Expected term of options (years) (**)		4.20
Exercise price (US dollars)		6.96
Share price (US dollars) (***)		8.50
Fair value (US dollars)		6.405

(*)

(**)

(***)

The fair value per share of the Company's Common Stock as of December 31, 2013 was based on the management's estimate which was based among other factors on the closing price per share of the Company's Common Stock on December 27, 2013, as reported on the OTC Bulletin Board, the last reported sale of Common Stock in 2103.