RELATED PARTIES TRANSACTIONS

12 Months Ended

Dec. 31, 2014

RELATED PARTIES TRANSACTIONS [Abstract]

RELATED PARTIES TRANSACTIONS

NOTE 7 - RELATED PARTIES TRANSACTIONS

a. Appointment of CEO

In connection with the appointment of the CEO on January 3, 2013, the Company entered into an Employment Agreement (the “Employment Agreement”) with the CEO. Under the Employment Agreement, the CEO is entitled to an annual base salary of at least $450,000. The CEO is also eligible to receive an annual bonus of at least $275,000 upon the achievement of reasonable target objectives and performance goals, to be determined by the board of directors. The annual bonus amount will be less than $275,000 if the target objectives and performance goals are not met.

During the year ended June 30, 2013, the Company granted the CEO stock options to purchase 897,447 shares of the Company's common stock with an exercise price of $2.05-$4.05 per share, and 579,866 shares of restricted stock, which are subject to forfeiture until vested and vests in three equal annual installments. The fair value of the above options and restricted shares, using the Black-Scholes option-pricing model, was approximately $1,837,000 and $1,989,000, respectively.

During the year ended December 31, 2014, the Company granted the CEO stock options to purchase 399,675 shares of the Company's common stock with an exercise price of $2.97-$3.1 per share, and 182,725 shares of restricted stock, which are subject to forfeiture until vested and vests in three equal annual installments. The fair value of the above options and restricted shares, using the Black-Scholes option-pricing model, was approximately $736,000 and $554,000, respectively.

The CEO has an option to deliver a number of shares with an aggregate fair market value that equals or exceeds (to avoid the issuance of fractional shares) the required tax withholding payment resulted from the vesting of the restricted stock or from the exercise of the options. As of December 31, 2014 and 2013, 45,684 and 9,506 shares were withheld by the Company to satisfy tax withholding obligations. The payment, amounting to $115,000 and $28,000, was deducted from equity.

On or before December 31 of each calendar year, the CEO will be eligible to receive an additional grant of equity awards equal, in the aggregate, to up to 0.5% of the Company's actual outstanding shares of common stock on the date of grant, provided that the actual amount of the grant will be based on his achievement of certain performance objectives as established by the board, in its reasonable discretion, for each such calendar year. In connection with the equity compensation related to 2013 acheivements, on January 29, 2014 the CEO was granted stock options to purchase 86,325 shares of the Company's common stock and 86,325 restricted shares, (included in total options and restricted shares granted to the CEO during 2014).  In connection with the equity compensation related to 2014 acheivements, on January 26, 2015 the CEO was granted stock options to purchase 52,999 shares of the Company's common stock and 52,999 restricted shares.

If, during the term of the Employment Agreement, the CEO's employment is terminated upon certain conditions as stipulated in the agreement, the CEO will be entitled to receive certain benefits as stipulated in the agreement.

On January 29, 2014, the Company's board of directors approved an annual bonus for 2013 to the CEO in the amount of $275,000.

On January 28, 2015, the Company's board of directors approved an annual bonus for 2014 to the CEO in the amount of $69,105.

b. During the year ended December 31, 2014 and the six month period ended December 31, 2013, the year ended June 30, 2013 and the year ended June 30, 2012, the Company granted stock options to directors to purchase a total of 335,000, 125,000, 499,415 and 937,500 shares of the Company's common stock, respectively. The options have exercise prices of $3.10, $2.12, $2.75-$9 and $3.16-$10 per share, respectively, which were the fair market value of the Company's common stock on the date of each respective grant. The options are subject to a three-year vesting period with one-third of such awards vesting each year. The fair value of the above options and restricted shares, using the Black-Scholes option-pricing model, was approximately $636,000, $164,000, $982,399 and $4,072,026, respectively.

c. Balances with related parties:

	December 31,
	2014		2013
	($ in thousands)
Current liabilities:
Other accounts payable	$	241	$	355

d. Transactions with related parties:

	Year ended December 31,		6 month period ended December 31,		Year ended June 30,
	2014		2013		2013		2012
			($ in thousands)
Expenses:
Share-based compensation	$	2,502	$	1,293	$	2,973	$	9,517
Salaries and related expenses		578		557		531		305
Consulting fees		189		82		400		393
Rent income								(21	)