Note 9: Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Notes

Note 9: Stockholders' Equity

NOTE 9: STOCKHOLDERS' EQUITY

Share capital

As discussed in note 4, the merger is accounted for as a reverse merger with Techcare as the legal acquirer and Novomic as the accounting acquirer. Under the reverse merger, the U.S. dollar amount for common stocks is based on the nominal value and the stocks issued by Techcare (reflecting the legal structure of Techcare as the legal acquirer) on the merger date plus subsequent common stocks issued by the Company. Historical shareholders' equity reflects the accounting acquirer's share number and U.S. dollar amount adjusted for the exchange ratio determined in the reverse merger.

The amounts in additional paid-in capital represent that of Novomic and include the fair value of common stocks deemed for accounting purposes to have been issued by Techcare on the merger date. The Novomic additional paid-in capital was also adjusted for the difference between the common stock issued as part of the merger and the historical Novomic common shares including the elimination of Novomic's treasury stock.

Common stock confer upon their holders the right to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends if declared. Also, upon completion of the merger, the Company's stockholders' approved the authorization of ten million (10,000,000) shares of preferred stock, which may be issued in one or more classes or series, having such designations, preferences, privileges and rights as the Board of Directors may determine. No preferred stock was issued during the year ended December 31, 2016.

On October21, 2016, the Company effected a 1 for 30reverse stock split. All stock information in this report has been retrospectively adjusted to reflect the reverse stock split.

Stock-Based Compensation

Stock based awards are accounted for using the fair value method in accordance with ASC 718, Shared Based Payment. The Company's primary type of stock based compensation consists of stock options to directors,

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employees, officers, consultants, and advisors. The Company uses Black-Scholes option pricing model in valuing options.

A summary of the stock option activity (including reflecting historical Novomic share option awards and a conversion rate of 1 Ordinary Share of Novomic into 622 common stock of the Company upon the merger date, as well as the change in the exercise price) for the years ended December 31, 2016 and 2015:

	Year ended December 31, 2016
	Number of Options	Weighted Average Exercise Price
		U.S Dollar
Options outstanding at December 31, 2015	1,666,617	0.0004
Granted	-	-
Options outstanding at December 31, 2016*	1,666,617	0.0001
Options exercisable at December 31, 2016	1,666,617	0.0001

Options outstanding at January 1, 2015	322,010	0.0004
Granted	1,344,607	0.0004
Options outstanding at December 31, 2015	1,666,617	0.0004
Options exercisable at December 31, 2015	1,666,617	0.0004

The options granted in 2015 were fully vested on the date of the grant and exercisable for 7 years from the date of the grant.  The following assumptions were applied in determining the options’ fair value on their grant date:

Risk-free interest rate	1.54%
Expected shares price volatility	70%
Expected option term (years)	4
Dividend yield	-
Weighted average grant date fair value	$0.36

The Company based the risk-free interest rate on the U.S. Treasury yield curve. The expected term in years represents the period of time that the awards granted are expected to be outstanding. The assumption for dividend yield is zero because the Company has not historically paid dividends nor does it expect to do so in the foreseeable future.  The volatility was based on the historical stock volatility of several peer companies, as the Company has limited trading history to use the volatility of its own common stock. Stock-based compensation expense included in the Company’s statements of operations were allocated as follows:

		December 31, 2016		December 31, 2015
		US dollars
Research and development		173,334		112,790
General and administrative		268,269		174,567
	$	*441,603	$	287,357

* See note 4 for further details regarding stock-based awards modification related to the reverse merger.