Note 4 - Stockholder's Equity (Deficiency)

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE  4:– STOCKHOLDERS’ EQUITY

a. On December 30, 2005, the Company’s board of directors adopted the Varonis Systems, Inc. 2005 Stock Plan (the “2005 Stock Plan”). As of December 31, 2013, the Company had reserved 4,713,319 shares of common stock available for issuance to employees, directors, officers and consultants of the Company and its subsidiaries. The options generally vest over four years. No awards were granted under the 2005 Stock Plan subsequent to December 31, 2013, and no further awards will be granted under the 2005 Stock Plan.

On November 14, 2013, the Company’s board of directors adopted the Varonis Systems, Inc. 2013 Omnibus Equity Incentive Plan (the “2013 Plan”). As of March 31, 2015, the Company had reserved 1,904,633 shares of common stock available for issuance under the 2013 Plan to employees, directors, officers and consultants of the Company and its subsidiaries. The number of shares of common stock available for issuance under the 2013 Plan will be increased on January 1, 2016 and on each January 1 thereafter by four percent (4%) of the number of shares of common stock issued and outstanding on each December 31 immediately prior to the date of increase (rounded down to the nearest whole share), but the amount of each increase will be limited to the number of shares of common stock necessary to bring the total number of shares of Common Stock available for grant and issuance under the 2013 Plan to five percent (5%) of the number of shares of common stock issued and outstanding on each December 31. Options granted under the 2013 Plan generally vest over four years. Any award that is forfeited or canceled before expiration becomes available for future grants under the 2013 Plan.

A summary of employees’ stock options activities during the period ended March 31, 2015 is as follows:

	Period ended March 31, 2015 (unaudited)
	Number			Average exercise price		Aggregate intrinsic value (in thousands)		Average remaining contractual life (years)
Options outstanding at the beginning of the year		4,080,611		$	9.697	$	95,855		6.092
Granted		161,200		$	29.880
Exercised		(140,716	)	$	3.728
Forfeited		(58,995	)	$	28.659
Options outstanding at the end of the period		4,042,100		$	10.433	$	64,869		6.049
Vested and expected to vest		3,932,028		$	10.064	$	64,408		5.961
Options exercisable at the end of the period		2,578,803		$	3.488	$	57,852		4.326

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the option holders had all option holders exercised their options on the last date of the exercise period. Total intrinsic value of options exercised for the three month period ended March 31, 2015 was $3,747. As of March 31, 2015, there was $17,677 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. This cost is expected to be recognized over a period of approximately 3.077 years.

b. The options outstanding as of March 31, 2015 (unaudited) have been separated into ranges of exercise price as follows:

Range of exercise price	Options outstanding as of March 31, 2015		Weighted average remaining contractual life (years)		Weighted average exercise price		Options exercisable as of March 31, 2015		Weighted average remaining contractual life (years)		Weighted average exercise price of options exercisable
$0.070-0.901		517,811		2.483	$	0.812		517,811		2.483	$	0.812
$1.039-1.576		1,635,172		4.021	$	1.263		1,635,172		4.021	$	1.263
$6.230-8.800		154,818		6.645	$	6.754		126,326		6.568	$	6.761
$12.470		387,601		7.927	$	12.470		185,324		7.902	$	12.470
$21.000-24.230		1,004,548		9.233	$	21.609		66,556		8.625	$	21.756
$29.880		154,200		9.901	$	29.880		-		-		-
$39.860		187,950		8.981	$	39.860		47,614		8.981	$	39.860
		4,042,100		6.049	$	10.433		2,578,803		4.326	$	3.488

c. The fair value of stock option grants for the period ended March 31, 2015 was estimated using the following weighted average assumptions:

	Period ended March 31, 2015
	unaudited
Expected dividend yield		0	%
Expected volatility		65	%
Risk-free interest rate		1.94	%
Expected term (years)		6.25

d. Options issued to consultants:

The Company’s outstanding options granted to consultants for sales and pre-marketing services as of March 31, 2015 (unaudited) were as follows:

	Options for shares of common stock		Exercise price per share		Options exercisable		Exercisable through
	(number)				(number)
February 2013		3,500	$	12.470		1,582	February 2023
August 2013		5,000	$	21.140		1,975	August 2023
October 2013		1,084	$	24.230		276	October 2023
March 2014		16,450	$	39.860		4,115	March 2024
May 2014		8,700	$	22.010		-	May 2024
August 2014		36,250	$	21.000		-	August 2024
November 2014		12,000	$	21.660		-	November 2024
		82,984				7,948

e. Stock-based compensation expense for employees and consultants:

The Company recognized non-cash stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
	(unaudited)
	(in thousands)
Cost of revenues	$	91	$	20
Research and development		467		199
Sales and marketing		737		340
General and administrative		390		87
Total	$	1,685	$	646

f.        Restricted stock units for employees, consultants and non-employee directors:

The following provides a summary of the restricted stock unit activity for the Company for the three months ended March 31, 2015:

	Number of shares underlying outstanding restricted stock units			Weighted- average grant date fair value
Unvested balance - January 1, 2015		27,470		$	21.00
Granted		252,150		$	29.88
Vested		(2,478	)	$	21.00
Forfeited		(6,140	)	$	22.45
Unvested balance - March 31, 2015		271,002		$	29.23
Expected to vest – March 31, 2015		249,139