SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2014

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

The Company has determined its derivative warrant liability to be a Level 3 fair value measurement and has used the Binomial pricing model to calculate its fair value. Because the warrants contain a price protection feature, the probability that the exercise price of the warrants would decrease as the stock price decreased was incorporated into the valuation calculations. The key inputs used in the fair value calculations were as follows:

	March 31, 2014
Dividend yield (%)		-
Expected volatility (%) (*)		105.14
Risk free interest rate (%)		1.36
Expected term of options (years) (**)		3.95
Exercise price (US dollars)		6.96
Share price (US dollars) (***)		8.50
Fair value (US dollars)		6.29

(*)

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 per share of the Company's Common Stock as of March 31, 2014 was based on the management's estimate which was based among other factors on the price per share of the Company's Common Stock, as reported on the OTC Bulletin Board, during the reported period.