NOTE 9: - SHARE CAPITAL AND STOCK OPTIONS

The Company's authorized common stock consists of 100,000,000 shares with a par value of $0.00001 per share. All shares have equal voting rights and are entitled to one vote per share in all matters to be voted upon by stockholders. The shares have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by the Board of Directors out of funds legally available.

The Company's authorized preferred stock consists of 10,000,000 shares of preferred stock, par value $0.00001 per share, with series, rights, preferences, privileges and restrictions as may be designated from time to time by the Company's Board of Directors. No shares of preferred stock have been issued.

On October 18, 2010, the Company closed a private placement, pursuant to which the Company sold 4,375,000 shares of the Company's common stock at a price of $1.20 per share and warrants to purchase 2,625,000 shares of common stock, at an exercise price per share of $1.80. No separate consideration was paid for the warrants. The warrants have a term of four years and are exercisable starting six months following the issuance thereof. The aggregate gross proceeds from the sale of the shares and the warrants were $5,250.

The Company paid a transaction fee to finders in an amount of $244 in cash and issued them warrants to purchase 151,050 shares of the Company's common stock.

In connection with the purchase agreements, the Company agreed to file a resale registration statement with the Securities and Exchange Commission covering the shares and the shares of common stock issuable upon the exercise of the warrants within 60 days from closing. The registration statement was filed and on December 10, 2010 it became effective.

On February 1, 2011, the Company closed a firm commitment underwritten public offering of 11,000,000 units, with each unit consisting of one share of the Company's common stock and one warrant to purchase 0.4 shares of common stock, at a purchase price of $3.25 per unit. The warrants sold in the offering will be exercisable for a period of five years commencing six months following issuance, at an exercise price of $4.20 per share. Also, on February 1, 2011 the Company closed the exercise by the underwriters of their full overallotment option to purchase an additional 1,650,000 shares of common stock and warrants to purchase 660,000 shares of common stock. The aggregate net proceeds to the Company were $38,142, after deducting underwriting commissions and discounts and expenses payable by the Company associated with the offering.

d.	During the year ended June 30, 2011, the Company issued 90,000 shares of common stock to its investor relations consultants as compensation for their services.

From January through June 2011, a total of 769,391 warrants were exercised via "cashless" exercise, resulting in the issuance of 362,746 shares of common stock to investors of the Company. In addition 2,079,968 warrants were exercised for cash and resulted in the issuance of 2,079,968 shares of common stock by investors of the Company. The aggregate cash consideration received was $3,593.

From July 2011 through June 2012, a total of 406,783 warrants were exercised via "cashless" exercise, resulting in the issuance of 168,424 shares of common stock to investors of the Company. In addition 355,411 warrants were exercised for cash and resulted in the issuance of 355,411 shares of common stock to investors of the Company. The aggregate cash consideration received was $556.

From July 2012 through June 2013, a total of 682,213 warrants were exercised via "cashless" exercise, resulting in the issuance of 420,199 shares of common stock to investors of the Company. In addition 1,201,160 warrants were exercised for cash and resulted in the issuance of 1,201,160 shares of common stock to investors of the Company. The aggregate cash consideration received was $2009. In August, 2012, a total of 36,000 warrants were exercised via a "cashless" exercise, resulting in the issuance of 26,299 shares of common stock to consultants of the Company.

h.	As part of the agreement for building the new Company's facility with Biopharmax Group Ltd. ("Biopharmax"), the Company issued 1,500,000 shares of common stock to Biopharmax during fiscal year 2012.

On September 19, 2012, the Company closed a firm commitment underwritten public offering of 8,000,000 units, at a purchase price of $4.00 per unit, with each unit consisting of one share of the Company's common stock and one warrant to purchase 0.35 shares of common stock, at a purchase price of $5.00 per share. The warrants sold in the offering became exercisable on March 19, 2013 and expire on September 19, 2017. The Company has also granted the underwriters a 30-day option to purchase up to 1,200,000 shares of common stock and/or warrants to purchase up to 420,000 shares of common stock. As of September 24, 2012 the underwriters fully exercised their option. The aggregate net proceeds to the Company from the offering, including from the exercise in full of the option, were $34,106, before the exercise of any warrants (which has not yet occurred) and after deducting underwriting commissions and discounts and offering expenses of the Company.

The warrants can be exercised only for full shares of common stock. As to any fraction of a share which the warrant holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such fraction in an amount equal to such fraction multiplied by the fair market value less the exercise price.

j.	Options, warrants, restricted stock and restricted stock units to employees, directors and consultants:

The Company has approved two incentive option plans from 2003 and from 2005 (the "2003 Plan" and the "2005 Plan", and collectively, the "Plans"). Under these Plans, options, restricted stock and restricted stock units (the "Awards") may be granted to the Company's officers, directors, employees and consultants. Any Awards that are cancelled or forfeited before expiration become available for future grants.

As of June 30, 2013, the number of shares of common stock authorized for issuance under the 2005 Plan amounted to 12,418,480. 1,596,169 shares are still available for future grant under the 2005 Plan as of June 30, 2013. Under the 2003 Plan, 20,500 options are authorized for issuance, and 19,244 options are still available for future grant as of June 30, 2013.

a.	Options to employees and directors:

The Company accounted for its options to employees and directors under the fair value method in accordance with ASC 718. A summary of the Company's share option activity for options granted to employees and directors under the Plans is as follows:

	Year ended June 30, 2013
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options outstanding at beginning of period		2,082,172			3.87
Options exercised		(120,068	)		1.22
Options forfeited		(3,948	)		4.4
Options outstanding at end of the period		1,958,156			4.03		3.97		1,054
Options exercisable at the end of the period		1,958,156			4.03		3.97		1,054
Options vested		1,958,156			4.03		3.97		1,054

Intrinsic value of exercisable options (the difference between the Company's closing stock price on the last trading day in the period and the exercise price, multiplied by the number of in-the-money options) represents the amount that would have been received by the employees and directors option holders had all option holders exercised their options on June 30, 2013. This amount changes based on the fair market value of the Company's common stock.

k.	Options, warrants, restricted stock and restricted stock units to employees, directors and consultants (cont.):

Compensation expenses related to options granted to employees and directors were recorded as follows:

	Year ended June 30,
	2013		2012		2011
Research and development expenses	$	-	$	-	$	2
General and administrative expenses		-		-		2
	$	-	$	-	$	4

b.	Options and warrants to non-employees:

A summary of the Company's activity related to options and warrants to consultants is as follows:

	Year ended June 30, 2013
	Number			Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms (in years)		Aggregate Intrinsic Value Price
Options and warrants outstanding at beginning of period		382,000			3.86
Options and warrants exercised		(66,500	)		1.13
Options and warrants outstanding at end of the period		315,500			4.44		4.03		425

Options and warrants exercisable at the end of the period		312,500			4.48		3.99		416

Options and warrants vested and expected to vest		315,500			4.44		4.03		425

Compensation expenses related to options and warrants granted to consultants were recorded as follows:

	Year ended June 30,
	2013		2012		2011
Research and development expenses	$	-	$	19	$	32
General and administrative expenses		26		37		73
	$	26	$	56	$	105

Future expenses related to options and warrants granted to consultants for an average time of approximately 6 months are $1.7.

c.	Restricted stock and restricted stock units to employees and directors:

On June 5, 2013, the Company's Compensation Committee approved a grant of a total of 180,574 restricted stock units to the Company's employees.

On June 27, 2013, the Company's Compensation Committee approved a grant of a total of 1,055,000 restricted stock units to the Company's employees and directors.

In addition, the Company granted a total of 13,000 restricted stock units to several employees during the year ended June 30, 2013.

The following table summarizes the activities for unvested restricted stock units and restricted stock granted to employees and directors for the year ended June 30, 2013:

	Number
Unvested at the beginning of period		2,085,276
Granted		1,248,574
Forfeited		(90,213	)
Vested		(1,583,112	)
Unvested at the end of the period		1,660,525
Expected to vest after June 30, 2013		1,637,130

Compensation expenses related to restricted stock and restricted stock units granted to employees and directors were recorded as follows:

	Year ended June 30,
	2013		2012		2011
Research and development expenses	$	711	$	1,163	$	1,027
General and administrative expenses		1,529		3,487		1,717
	$	2,240	$	4,650	$	2,744

Future expenses related to restricted stock and restricted stock units granted to employees and directors for an average time of approximately two years is $3,812.

d.	Restricted stock and restricted stock units to consultants:

During the year ended June 30, 2013, the Company granted restricted stock to several consultants and service providers.

The following table summarizes the activities for unvested restricted stock units and restricted stock granted to consultants for the year ended June 30, 2013:

	Number
Unvested at the beginning of period		66,000
Granted		123,206
Forfeited		(21,978	)
Vested		(167,228	)
Unvested at the end of the period		-

Compensation expenses related to restricted stock and restricted stock units granted to consultants were recorded as follows:

	Year ended June 30,
	2013		2012		2011
Research and development expenses	$	255	$	201	$	294
General and administrative expenses		278		20		178
	$	533	$	221	$	472

l.	Summary of warrants and options:

A summary of all the warrants and options outstanding as of June 30, 2013 is presented in this table:

Warrants / Options	Exercise Price per Share		Options and Warrants for Common Stock		Options and Warrants Exercisable		Weighted Average Remaining Contractual Terms(in years)
Warrants:	$	1.00		1,977,245		1,977,245		0.41
	$	1.28		50,000		50,000		0.81
	$	1.40 - $ 1.50		1,606,226		1,606,226		1.28
	$	1.60		181,221		181,221		1.78
	$	1.80 - $ 1.91		2,455,003		2,455,003		0.92
	$	4.20		5,060,000		5,060,000		3.09
	$	5.00		3,220,000		3,220,000		4.22
Total warrants				14,549,695		14,549,695

Options:	$	0.00		99,500		96,500		6.37
	$	0.62		406,000		406,000		5.25
	$	1.04		37,500		37,500		5.16
	$	2.97		20,000		20,000		4.86
	$	3.50		900,000		900,000		3.56
	$	3.72 - $ 3.80		31,550		31,550		3.44
	$	4.00		42,500		42,500		3.30
	$	4.38 - $ 4.40		452,856		452,856		3.96
	$	6.80		36,250		36,250		4.37
	$	8.20		40,000		40,000		2.63
	$	20.00		142,500		142,500		2.98
Total options				2,208,656		2,205,656

Total warrants and options				16,758,351		16,755,351

This summary does not include 1,660,525 restricted stock units that are not vested as of June 30, 2013.