STOCK CAPITAL

12 Months Ended

Dec. 31, 2015

NOTE 6 - STOCK CAPITAL

STOCKHOLDERS’ RIGHTS:

Shares of common stock confer upon the holders the right to receive notice to participate and vote in the general meetings of the Company, and the right to receive dividends, if and when declared.

STOCK OPTIONS:

At the annual meeting of stockholders the Company held on September 21, 2010, the Company’s stockholders approved and ratified amendments to the Company’s 2002 Employee, Director and Consultant Stock Option Plan, or the Option Plan, to increase the number of shares of Common Stock which can be issued to employees, directors and consultants of the Company under the Option Plan from 3,500,000 shares to 10,000,000 shares.

The options vest ratably over a period of time as approved by the Board of Directors or by the compensation committee, if delegated by the Board of Directors, commencing with the date of grant. The options generally expire no later than five years from the date of grant. Any options, which are forfeited or cancelled before expiration become available for future grants.

As of December 31, 2015, an aggregate of 2,153,433 options and shares are still available for future grant under the Option Plan.

At the annual meeting of stockholders of the Company, held on September 8, 2011, the Company’s stockholders approved and ratified the InkSure Technologies Inc. 2011 Employees, Directors and Consultants Stock Plan, or the Stock Plan. The purpose of the Stock Plan is to encourage eligible employees, directors and other individuals who render services to the Company and its subsidiaries to continue their association with the Company and its subsidiaries by providing opportunities for them to participate in the ownership of the Company and in its future growth through the issuance to such persons of restricted shares of Common Stock of the Company. The total number of shares that can be issued under the Stock Plan shall be determined from time to time by the Board of Directors, provided, however, that such number, together with the number of shares that may be issued under the Option Plan, and options granted outside the Stock Plan and Option Plan, shall not exceed 10,000,000 shares. The Stock Plan shall be administered by the Board of Directors.

The following is a summary of the Company’s stock options granted among the various plans:

	YEAR ENDED DECEMBER 31,
	2015					2014
			WEIGHTED					WEIGHTED
			AVERAGE					AVERAGE
	AMOUNT OF OPTIONS		EXERCISE PRICE			AMOUNT OF OPTIONS		EXERCISE PRICE

Outstanding at beginning of year		1,590,000		$	0.16		2,800,000		$	0.16
Granted		-		$	-		-		$	-
Exercised		-		$	-		-		$	-
Forfeited		1,590,000		$	0.16		1,210,000		$	0.21
Outstanding at end of year		-		$	-		1,590,000		$	0.16
Exercisable at end of year		-		$	-		1,590,000		$	0.16

The Company did not grant any new stock options in the year ended December 31, 2015.

STOCK WARRANTS:

The Company has issued warrants, as follows:

ISSUANCE DATE

OUTSTANDING

AS OF

DECEMBER 31, 2015

EXERCISE PRICE

EXERCISABLE

AS OF

DECEMBER 31, 2014

EXERCISABLE THROUGH

January 2010 (1)

2,153,433

0.15

2,153,433

April 2018

(1)

In January 2010, the Company, together with a group of investors, or the Investors, paid to our note holders, or the Noteholders, a total of $3,000 in order to settle the entire $8,881 in convertible notes, or the Notes, that were outstanding at the time.

As a result of the convertible debt extinguishment, the Company recorded a $5,881 gain.

In addition, as part of the transaction, the Company and the Noteholders exchanged mutual releases, all of our Series B-1 and Series B-2 Warrants issued in the names of the Noteholders, which were exercisable for an aggregate of 15,000,000 shares of our common stock, were cancelled, and our Series A Warrants issued in the name of one of the Noteholders, which were exercisable for an aggregate of 3,570,337 shares of our common stock at an exercise price of $0.60 per share, were amended, such that they may be exercised for an aggregate of 2,183,000 shares of our common stock at an exercise price of $0.15 per share.

In February 2012, Noteholders exercised 29,567 warrants into 5,900 shares of common stock on a cashless basis.