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

12 Months Ended

Dec. 31, 2016

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):

		Warrants with Down-Round Protection
		December 31,
		2016				2015
Balance, Beginning of the year			321,695				2,057,618
Warrants issued as consideration for placement services			308,239				-
Amount classified out of stockholders’ deficit and presented as Warrants with Down-Round Protection			341,662				-
Exchange of Series A Warrants pursuant to the “Most favored nation” provision							(1,586,831	)
Change in fair value of Warrants with Down-Round Protection			(289,626	)			(149,092	)
Balance, End of year			681,970				321,695

Schedule of Fair Value Assumptions Used

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

		December 31, 2016				December 31, 2015
Dividend yield (%)			-				-
Expected volatility (%) (*)			56.59				105.14
Risk free interest rate (%)			0.92				0.99
Expected term of options (years) (**)			1.20				2.20
Exercise price (US dollars)			4.50				5.80
Share price (US dollars) (***)			2.38				2.31
Fair value (US dollars)			0.16				0.84

(*) 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, 2016, and 2015. In reaching its estimation for such periods, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the Series C Units at December 31, 2016, as applicable to each reporting period.

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, 2016, 2015 and 2014:

		Number				Weighted average exercise price (US$)
Year ended December 31, 2016
Balance outstanding at beginning of year			413,473				6.04
Granted			149,330				4.53
Balance outstanding at end of the year			562,803				5.64
Balance exercisable at the end of the year			334,735				5.81

		Number				Weighted average exercise price (US$)
Year ended December 31, 2015
Balance outstanding at beginning of year			450,847				5.85
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
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, 2016:

Exercise price (US$)				Outstanding at December 31, 2016				Weighted average remaining contractual life (years)				Exercise price (US$)				Exercisable at December 31, 2016				Weighted average remaining contractual life (years)
	1.72				21,758				0.60				1.72				21,758				0.60
	3.63				3,730				0.60				3.63				3,730				0.60
	6.01				4,273				1.03				6.01				4,273				1.03
	6.25				351,712				5.19				6.25				236,975				5.19
	7.00				32,000				7.50				7.00				32,000				7.50
	4.75				16,000				9.01				4.75				6,000				9.01
	4.50				79,998				9.21				4.50				30,000				9.21
	4.50				53,332				9.88				4.50				-				9.88
					562,803												334,736

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:

		2016				2015				2014
Dividend yield (%)			0				-				0
Expected volatility (%) (*)			62.16				-				105.14
Risk free interest rate (%)			1.08				-				1.61
Expected term of options (years) (**)			6				-				5-6
Exercise price (US dollars)			4.50, 4.75				-				7.00
Stock price (US dollars) (***)			2.38				-				2.31
Fair value (US dollars)			1.01, 098				-				1.59

(*) 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 for the year ended December 31, 2014 and 2016 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. In reaching its estimation for December 31, 2016, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the Series C Units.

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