10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                    

Commission File No. 333-186054

LabStyle Innovations Corp.

(Exact name of registrant as specified in its charter)

Delaware	45-2973162
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9 Halamish Street Caesarea Industrial Park, Israel	3088900
(Address of Principal Executive Offices)	(Zip Code)

+972-4-770-4055

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x   No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

¨   Large accelerated filer	¨    Accelerated filer
¨   Non-accelerated filer	x   Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x

As of May 9, 2016, the registrant had 5,581,216 shares of common stock outstanding.

When used in this quarterly report, the terms “LabStyle,” “the Company,” “we,” “our,” and “us” refer to LabStyle Innovations Corp., a Delaware corporation.

LabStyle Innovations Corp.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page
Cautionary Note Regarding Forward-Looking Statements		3
PART 1-FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	F-1
	Consolidated Balance Sheets	F-2
	Consolidated Statements of Comprehensive Loss	F-4
	Statements of Changes in Stockholders’ Equity (Deficiency)	F-5
	Consolidated Statements of Cash Flows	F-6
	Notes to Consolidated Financial Statements	F-7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	8
Item 4.	Control and Procedures	8
PART II-OTHER INFORMATION		9
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 6.	Exhibits	9
SIGNATURES		10

 2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:

•            our lack of operating history;

•            our current and future capital requirements and our ability to satisfy our capital needs through financing transactions or otherwise;

•            our ability to manufacture, market and generate sales of our Dario™ diabetes management solution;

•            our ability to maintain our relationships with key partners;

•            our ability to complete required clinical trials of our product and obtain clearance or approval from the FDA or other regulatory agencies in different jurisdictions;

•            our ability to maintain or protect the validity of our U.S. and other patents and other intellectual property;

•            our ability to launch and penetrate markets in new locations;

•            our ability to implement on-line distribution channels and to generate sales from such channels;

•            our ability to retain key executive members;

•            our ability to internally develop new inventions and intellectual property;

•            interpretations of current laws and the passages of future laws; and

•            acceptance of our business model by investors.

Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 2015 (filed on February 8, 2016) entitled “Risk Factors” as well as in our other public filings.

In light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

 3

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2016

UNAUDITED

INDEX

	Page
Consolidated Balance Sheets	F-2 - F-3
Consolidated Statements of Comprehensive Loss	F-4
Statements of Changes in Stockholders' Equity (Deficiency)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7 - F-16

F-1 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	March 31,		December 31,
	2016		2015
	Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	8,267	$	2,671
Short-term bank deposits		82		80
Inventories		1,005		601
Other accounts receivable and prepaid expenses		894		935
Total current assets		10,248		4,287
LEASE DEPOSITS		33		41
PROPERTY AND EQUIPMENT, NET		682		749
Total assets	$	10,963	$	5,077

The accompanying notes are an integral part of the consolidated financial statements.

F-2 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except stock and stock data)

	March 31,			December 31,
	2016			2015
	Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Trade payables	$	556		$	978
Deferred revenues		8			31
Other accounts payable and accrued expenses		925			681
Total current liabilities		1,489			1,690
LIABILITY RELATED TO WARRANTS		1,863			2,610
COMMITMENTS AND CONTINGENT LIABILITIES
CONVERTIBLE PREFERRED SHARES:
Series A Preferred Stock of $0.0001 par value - Authorized: 60,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None and 1,984 shares at March 31, 2016 (unaudited) and December 31, 2015, respectively; Aggregate liquidation preference of none and $3,560 at March 31, 2016 (unaudited) and December 31, 2015, respectively		-			2,357
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock of $0.0001 par value - Authorized: 160,000,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: 5,575,633 and 2,911,788 shares at March 31, 2016 (unaudited) and December 31, 2015, respectively		6			5
Preferred Stock of $0.0001 par value - Authorized: 4,940,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None at March 31, 2016 (unaudited) and December 31, 2015		-			-
Additional paid-in capital		52,603			41,769
Accumulated deficit		(44,998	)		(43,354	)
Total stockholders' equity (deficiency)		7,611			(1,580	)
Total liabilities and stockholders' equity (deficiency)	$	10,963		$	5,077

The accompanying notes are an integral part of the consolidated financial statements.

F-3 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

U.S. dollars in thousands (except stock and stock data)

	Three months ended March 31
	2016			2015
	Unaudited
Revenues	$	568		$	67
Cost of revenues		670			297
Gross loss		102			230
Operating expenses:
Research and development	$	397		$	883
Sales and marketing		519			252
General and administrative		905			412
Total operating expenses		1,821			1,547
Operating loss		1,923			1,777
Financial expenses (income), net:
Revaluation of warrants		(747	)		(150	)
Other financial expense, net		13			11
Total financial expenses (income), net		(734	)		(139	)
Net loss	$	1,189		$	1,638
Deemed dividend related to Series A Preferred Stock  exchange agreement	$	455		$	-
Net loss attributable to holders of Common Stock	$	1,644		$	1,638
Net loss per share
Basic and diluted loss per share	$	(0.33	)	$	(1.39	)
Weighted average number of Common Stock used in computing basic and diluted net loss per share		3,652,474			1,175,603

The accompanying notes are an integral part of the consolidated financial statements.

F-4 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

U.S. dollars in thousands (except stock and stock data)

	Common Stock				Additional paid-in		Accumulated			Total stockholders' equity
	Number		Amount		capital		deficit			(deficiency)
Balance as of December 31, 2014		902,068	$	2	$	30,761	$	(36,058	)	$	(5,295	)
Issuance of Common Stock and warrants in February 2015 at $3.24 per unit, net of issuance cost		627,035		1		1,955		-			1,956
Issuance of Common Stock in July and August 2015 at $5.40 per unit, net of issuance cost		480,368		1		2,324		-			2,325
Issuance of Common stock in November 2015 at $5.40 per unit, net of issuance cost		446,223		1		2,293		-			2,294
Issuance of Common stock in December 2015 at $6.16 per unit, net of issuance cost		81,222		*)-		500		-			500
Issuance of Common Stock in April, August and December 2015 to service provider		16,668		*)-		118		-			118
Issuance of Common Stock in September 2015 to employees as compensation		97,121		*)-		591		-			591
Issuance of Common Stock in September 2015 to service provider		2,778		*)-		16		-			16
Payment for executives and directors under Salary Program		55,474		*)-		304		-			304
Exercise of warrants into Common Stock in May 2015, net of issuance cost		106,881		*)-		453		-			453
Deemed dividend related to inducement of warrant exercise in May 2015		-		-		154		(154	)		-
Issuance of warrants related to warrant replacement agreement in November and December 2015		-		-		822		-			822
Receipts on account of shares		-		-		20		-			20
Conversion of Series A Preferred Stock into Common Stock		84,812		*)-		400		-			400
Exercise of warrants		10,804		*)-		60		-			60
Exercise of options		334		*)-		*)-		-			*)-
Stock-based compensation		-		-		998		-			998
Net loss		-		-		-		(7,142	)		(7,142	)
Balance as of December 31, 2015		2,911,788	$	5	$	41,769	$	(43,354	)	$	(1,580	)
Issuance of Common Stock in March 2016 Public Offering, net of issuance cost		1,333,333		1		5,037		-			5,038
Issuance of Common Stock in March 2016 Private Placement, net of issuance cost		599,999		*)-		2,500		-			2,500
Issuance of Common Stock in January 2016 to service provider		5,556		*)-		37		-			37
Payment for executives and directors under Salary Program		9,849		*)-		75		-			75
Issuance of Common Stock in March 2016 to officer		20,000		*)-		86		-			86
Exercise  of warrants into Common Stock, net of issuance cost		71,436		*)-		190		-			190
Deemed dividend related to change in the conversion terms of Series A Preferred Stock into Common Stock in March 2016		124,737		-		455		(455	)		-
Conversion of Series A Preferred Stock into Common Stock		498,935		*)-		2,277		-			2,277
Stock-based compensation		-		-		177		-			177
Net loss		-		-		-		(1,189	)		(1,189	)
Balance as of March 31, 2016 (unaudited)		5,575,633	$	6	$	52,603	$	(44,998	)	$	7,611

*) Represents an amount lower than $1.

The accompanying notes are an integral part of the consolidated financial statements.

F-5 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Three months ended March 31,
	2016			2015
	Unaudited
Cash flows from operating activities:
Net loss	$	(1,189	)	$	(1,638	)
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation and Common Stock to service providers		324			125
Depreciation		102			79
Increase is trade receivables		-			(22	)
Decrease in accounts receivables and prepaid expenses		10			22
Increase in inventories		(404	)		-
Increase (decrease) in trade payables		(422	)		145
Increase (decrease) in deferred revenues		(23	)		32
Increase (decrease) in other accounts payable and accrued expenses		244			(118	)
Decrease in fair value of warrants		(747	)		(150	)
Net cash used in operating activities	$	(2,105	)	$	(1,525	)
Cash flows from investing activities:
Proceeds of maturities of short-term bank deposit		-			(13	)
Investment in restricted cash		-			13
Maturity of (investment in) lease deposits		8			7
Purchase of property and equipment		(35	)		(36	)
Net cash used in investing activities		(27	)		(29	)
Cash flows from financing activities:
Proceeds from issuance of Common Stock and warrants, net of issuance cost		7,538			1,956
Proceeds from exercise of options and warrants		190			*)-
Net cash provided by financing activities		7,728			1,956
Increase in cash and cash equivalents		5,596			402
Cash and cash equivalents at the beginning of the period		2,671			1,453
Cash and cash equivalents at the end of the period	$	8,267		$	1,855
Non-cash investing and financing activities:
Purchase of property and equipment	$	-		$	29
Conversion of Series A Preferred Stock into Common Stock	$	2,277		$	102
Payment for directors under Salary Program	$	51		$	-

*) Represents an amount lower than $1.

The accompanying notes are an integral part of the consolidated financial statements.

F-6 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 1:- GENERAL

a. LabStyle Innovations Corp. (the “Company”) was incorporated in Delaware and commenced operations on August 11, 2011. The Company is a digital health (mHealth) company that is developing and commercializing a patented and proprietary technology providing consumers with laboratory-testing capabilities using smart phones and other mobile devices. The Company’s flagship product, Dario^TM, also referred to as the Dario^TM Smart Diabetes Management Solution, is a mobile, real-time, cloud-based, diabetes management solution based on an innovative, multi-feature software application combined with a stylish, ‘all-in-one’, pocket-sized, blood glucose monitoring device, which we call the Dario^TM Smart Meter.

b. The Company’s wholly owned subsidiary, LabStyle Innovation Ltd. (“Ltd.” or “Subsidiary”), was incorporated and commenced operations on September 14, 2011 in Israel. Its principal business activity is to hold the Company’s intellectual property and to perform research and development, manufacturing, marketing and other business activities. Ltd. has a wholly-owned subsidiary, LabStyle Innovations US LLC, a Delaware limited liability company (“LabStyle US”), which was established in 2014, however it has not started its operations to date.

c. During the three months ended March 31, 2016, the Company incurred operating losses and negative cash flows from operating activities amounting to $1,923 and $2,105, respectively. The Company will be required to obtain additional liquidity resources in order to support the commercialization of its products and maintain its research and development activities. The Company is addressing its liquidity needs by seeking additional funding from public and/or private sources and by ramping up its commercial sales. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for the short and long-term development and commercialization of its product. According to management estimates, the Company has sufficient liquidity resources to continue its planned activity into July 2017.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty

F-7 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 1:- GENERAL (Cont.)

d. On June 15, 2015, the Company held its 2015 Annual Meeting of Stockholders in which, among other matters, Company stockholders approved an amendment to the Company’s certificate of incorporation with respect to a reverse split of the Company’s issued and outstanding Common Stock in a ratio to be determined by the Company’s Board of Directors.

On February 17, 2016, the Company’s Board of Directors approved a reverse split in a ratio of one-to-eighteen. The 2016 reverse split was implemented on February 26, 2016 (the "2016 Reverse Split"). The amount of authorized Common Stock as well as the par value for the Common Stock were not affected. Any fractional shares resulting from the 2016 Reverse Split were rounded up to the nearest whole share.

All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the 2016 Reverse Split for all periods presented.

e. In December 2015, the United States Food and Drug Administration (“FDA”) granted the Subsidiary 510(k) clearance for the Dario^TM Blood Glucose Monitoring System, including its components, the Dario Blood Glucose Meter, Dario^TM Blood Glucose Test Strips, Dario^TM Glucose Control Solutions and the Dario app on the Apple iOS 6.1 platform and higher.

f. On March 4, 2016, the Company's Common Stock and warrants were approved for listing on NASDAQ Capital Market under the symbols “DRIO” and “DRIOW,” respectively.

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 are applied consistently in these unaudited interim consolidated financial statements.

NOTE 3:- UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim consolidated financial statements as of March 31, 2016, have been prepared in accordance with U.S. generally accepted accounting principles and standards of the Public Company Accounting Oversight Board for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's consolidated financial position as of March 31, 2016, and the Company's consolidated results of operations and the Company's consolidated cash flows for the three months ended March 31, 2016. Results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

F-8 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 4:- INVENTORIES

	March 31,		December 31,
	2016		2015
	Unaudited
Raw materials	$	508	$	469
Finished products		497		132
	$	1,005	$	601

During the three months period ended March 31, 2016 and the year ended December 31, 2015, total inventory write-off expenses amounted to $94 and $193, respectively.

NOTE 5:- COMMITMENTS AND CONTINGENT LIABILITIES

From time to time the Company is involved in claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.

NOTE 6:- STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES

a. Series A Preferred Stock:

On February 18, 2016, the Company entered into a Preferred Stock Conversion Agreement (the "Preferred Stock Conversion Agreement") with the holders of the Series A Preferred Stock according to which the then currently outstanding 1,984 shares of the Series A Preferred Stock would be converted into 623,672 shares of our Common Stock, reflecting an increase of 25% in the original number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock. Accordingly, in March 2016 the Company issued to the remaining Purchasers 623,672 shares of Common Stock and recorded an increase of $2,277 to additional paid in capital, net of issuance costs. The increase of 25% in the original number of shares of Common Stock issued to holders of the Series A Preferred Stock was accounted for as change in the conversion terms in the Company's financial statements and a deemed dividend in the amount of $455 was recorded to the Statement of Changes in Equity (Deficiency).

F-9 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 6:- STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES (Cont.)

b. On April 3, 2015, the Company's Board of Directors approved the following:

1. To reserve 22,224 shares of Common Stock under the terms of an engagement agreement with a service provider (‘‘Service Provider Agreement’’) dated March 15, 2015 (the ‘‘Effective Date’’) offering investor relations services (‘‘Services’’) to the Company. The Service Provider Agreement was for a period of one year beginning with the Effective Date (the ‘‘Term’’), pursuant to which in addition to monthly retainer Company issued 5,556 shares of Common Stock on a quarterly basis over the Term in consideration for the Services. The Company recorded General and Administrative expenses amounting to $37 in connection with 5,556 shares of Common Stock that have been issued during the three month period ended March 31, 2016.

2. Issuance of restricted Common Stock (“Compensation Shares”) to directors, officers and employees of the Company as consideration for a reduction in or waiver of cash salary or fees owed to such individuals.

During the three month period ended March 31, 2016, the Company issued 9,849 Compensation Shares to certain members of the Board of Directors and officers as consideration for a waiver of cash owed to such individuals amounting to $75.

F-10 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 6:- STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES (Cont.)

c. On March 8, 2016, the Company closed a public offering (the “Public Offering”) of 1,333,333 shares of the Common Stock, at a purchase price of $4.50 per share, and 1,333,333 immediately exercisable five-year warrants (the “March 2016 Warrants”) each to purchase one share of Common Stock with an exercise price of $4.50 per share, at a purchase price of $0.01 per Warrant for a consideration of $5,038, net of issuance costs. Out of the above issuance, 111,112 shares of Common Stock were issued to the Chief Financial Officer of the Company for gross proceeds of $500.

The March 2016 Warrants are exercisable for cash or on a cashless basis if no registration statement covering the resale of the shares issuable upon exercise of the Warrants is available.

In addition, the Company granted to the underwriters in the offering a 45-day option period to purchase up to 200,000 additional shares of Common Stock and/or 200,000 warrants (the “Option Warrants”) each to purchase one share of Common Stock at the public offering price less underwriting discounts and commissions to cover over-allotments. The underwriters agreed to purchase the shares and March 2016 Warrants from the Company, with the option to purchase the option securities, pursuant to the Underwriting Agreement, at a purchase price of $4.185 per Share and $0.0093 per Warrant. On March 4, 2016, the Underwriters exercised the Option with respect to the Option Warrants. The shares, March 2016 Warrants and Option Warrants were offered, issued and sold under a prospectus filed with the Securities and Exchange Commission (the “SEC”) pursuant to an effective registration statement filed with the SEC. In connection with the Public Offering, the Company agreed to issue to the representatives of the underwriters five-year warrants (the “Representatives’ Warrants”) to purchase up to 153,333 shares of Common Stock. In connection with the Public Offering, the Representatives’ Warrants are exercisable at a per share exercise price equal to $5.625 per share of Common Stock for cash or on a cashless basis if no registration statement covering the resale of the shares issuable upon exercise of the Representatives’ Warrants is available.

On March 3, 2016, concurrent with the Public Offering, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain existing shareholders (the “Investors”) with respect to the sale in a private placement (the “Private Offering”) of 555,555 of the Company’s units (the “Units”). The purchase price per Unit was $4.50 and the total consideration amounted to $2,500, net of issuance costs. Each Unit sold in the Private Offering is comprised of (i) one share of Common Stock, and (ii) one warrant to purchase 1.2 shares of Common Stock (the “2016 Series A Warrant”) which is immediately exercisable at an exercise price of $4.50 per share of Common Stock and expires 5 years from the date of issuance. In total, in the Private Offering, the Company issued 555,555 shares of Common Stock and 2016 Series A Warrants exercisable for an aggregate of 666,666 shares of Common Stock. The 2016 Series A Warrants are exercisable for cash or on a cashless basis if no registration statement covering the resale of the shares issuable upon exercise of the 2016 Series A Warrants is available.

F-11 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 6:- STOCKHOLDERS' DEFICIENCY AND CONVERTIBLE PREFERRED SHARES (Cont.)

In connection with the Private Offering, the Company agreed to issue to two non-U.S. finders an aggregate of 44,444 restricted shares of Common Stock, 73,333 warrants to purchase Common Stock at an exercise price of $4.50 per share which expire 5 years

from the date of issuance, and 38,889 non-plan stock options which have an exercise price of $0.0001 per share and are fully vested and exercisable after the lapse of four months from the grant date.

The Public Offering and Private Offering triggered the anti-dilution mechanism of the warrants issued in the 2011-2012 Private Placement (as hereinafter defined) by adjusting the current exercise price of the warrants for the investors and placement agent to $3.59 per share and an additional 415,316 and 78,662 shares became subject to such warrants, respectively. In addition, the exercise price of the placement agent's warrants in the 2011-2012 Private Placement, was adjusted to $3.33 per share and an additional 48,054 warrants were issued.

d. In March 2016, the Company issued 20,000 shares of Common Stock under the 2012 Equity Incentive Plan to an Officer according to the Israeli sub-plan. Consequently, the Company recorded General and Administrative expenses amounting to $86.

e. Stock option compensation:

Transactions related to the grant of options to employees, directors and non-employees under the above plans during the three month period ended March 31, 2016 were as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual life		Aggregate Intrinsic value
				$		Years		$
Options outstanding at beginning of year		587,678			16.87		5.80		1.26
Options granted		-			-
Options exercised		-			-
Options expired		(153	)		35.89
Options forfeited		(8,385	)		6.90
Options outstanding at period end (unaudited)		579,140			16.86		99.31		9.33
Options vested and expected to vest at period end (unaudited)		539,074			17.49		5.54		9.33
Exercisable at period end (unaudited)		253,729			30.25		5.53		9.42

F-12 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 6:- STOCKHOLDERS' DEFICIENCY AND CONVERTIBLE PREFERRED SHARES (Cont.)

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on the last day of the first quarter of 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount is impacted by the changes in the fair market value of the Common Stock.

As of March 31, 2016, the total amount of unrecognized stock-based compensation expense was approximately $965 thousand which will be recognized over a weighted average period of 1.02 years.

The total compensation cost related to all of the Company's equity-based awards recognized during the three month period ended March 31, 2016 and 2015 was comprised as follows:

	Three months ended March 31,
	2016		2015
	Unaudited
Cost of revenues	$	9	$	41
Research and development		26		139
Sales and marketing		31		69
General and administrative		111		519
Total stock-based compensation expenses	$	177	$	768

NOTE 7:- FAIR VALUE MEASURMENTS

ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance.

ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 - quoted prices in active markets for identical assets or liabilities;

F-13 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 7:- FAIR VALUE MEASURMENTS (Cont.)

Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

a. On March 30, 2012, the Company consummated the final closing of the 2011 − 2012 Private Placement pursuant to which certain accredited investors purchased an aggregate of 27,345 shares of Common Stock and warrants to purchase 27,345 shares of Common Stock at an exercise price of $135.00 per share for total consideration of $2,461 (the “2011-2012 Private Placement”).

The placement agent for the 2011 − 2012 Private Placement and its permitted designees were granted warrants to purchase an aggregate of (i) 5,358 shares of Common Stock at the exercise price of $90.00 per share and (ii) 5,358 shares of Common Stock at the exercise price of $135.00 per share. Subsequent to the issuance of the 2011 − 2012 Private Placement warrants the original exercise price of the warrants for the investors and placement agent was adjusted from $135.00 per share to $3.59 per share and additional 950,152 and 180,557 warrants were issued, respectively. In addition, the exercise price for the placement agent warrants of the 2011 − 2012 Private Placement, with an original exercise price of $90.00 per share was adjusted to $3.33 per share and an additional 119,705 warrants were issued.

b. On September 23, 2014, the Company consummated the September 2014 Private Placement.

The warrants of the 2011-2012 Private Placement contain non-standard anti-dilution protection provisions and the warrants of the September 2014 Private Placement contain a net settlement cash feature and liquidated damages penalties and therefore the Company accounts for such warrants as a liability according to the provisions of ASC 815-40 “Contracts in entity’s own equity,” and re-measures such liability using the Binomial option-pricing model as described below.

In estimating the warrants' fair value, the Company used the following assumptions:

F-14 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 7:- FAIR VALUE MEASURMENTS (Cont.)

Investors' warrants in 2011-2012 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.42	%
Expected volatility (2)		95.76	%
Expected life (in years) (3)		0.57
Expected dividend yield (4)		0	%
Fair value per warrant	$	1.52

Placement agent's warrants 2011-2012 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.05	%
Expected volatility (2)		140.82	%
Expected life (in years) (3)		0.02
Expected dividend yield (4)		0	%
Fair value per warrant	$	0.82-1.03

Investors' warrants in September 2014 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.80	%
Expected volatility (2)		99.65	%
Expected life (in years) (3)		2.48
Expected dividend yield (4)		0	%
Fair value per warrant	$	1.80

(1) Risk-free interest rate - based on yield rates of non-index linked U.S. Federal Reserve treasury bonds.

(2) Expected volatility - was calculatedbased on actual historical stock price movements of the Company together with companies in the same industry over aterm that is equivalent to the expected term of the option.

(3) Expected life - the expected life was based on the expiration date of the warrants.

F-15 

LABSTYLE INNOVATIONS CORP. AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except stock and stock data)

NOTE 7:- FAIR VALUE MEASURMENTS (Cont.)

(4) Expected dividend yield - was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future.

The changes in Level 3 liabilities associated with the 2011-2012 Private Placement and the September 2014 Private Placement warrants are measured at fair value on a recurring basis. The following tabular presentation reflects the components of the liability associated with such warrants as of March 31, 2016:

	Fair value of liability related to warrants
Balance at December 31, 2015	$	2,610
Change in fair value of warrants during the period		(747	)
Balance at March 31, 2016 (unaudited)	$	1,863

As of March 31, 2016, there were outstanding warrants to purchase 1,340,368 shares of Common Stock from the above issuances which were recorded as a liability.

NOTE 8:- FINANCIAL EXPENSES (INCOME), NET

	Three months ended March 31,
	2016			2015
	Unaudited
Bank charges	$	4		$	4
Foreign currency translation adjustments		9			7
Change in fair value of warrants		(747	)		(150	)
Total financial expenses (income), net	$	(734	)	$	(139	)

NOTE 9:- SUBSEQUENT EVENTS

In May 2016 the Company issued 583 shares of Common Stock in connection with the exercise of 5,227 warrants on a cashless basis, that were issued as part of the 2011-2012 Private Placement discussed in Note 7a and 5,000 shares of Common Stock in connection with the exercise of 5,000 warrants that were issued as part of the Public Offering discussed in Note 6c.

F-16 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following financial data in this narrative are expressed in thousands, except for stock and stock data.

On February 26, 2016, we affected a 1-for-18 reverse stock split of our outstanding common stock, which we refer to herein as the “reverse split”. Our authorized common stock and the par value of our common stock were not impacted by the reverse split. References in this Quarterly Report to our capitalization and other matters pertaining to our common stock relate to our capitalization and common stock after giving effect to the reverse split.

The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015.

This discussion contains certain forward-looking statements that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth herein and elsewhere in this Quarterly Report and in our other filings with the Securities and Exchange Commission. See “Cautionary Note Regarding Forward Looking Statements.”

Overview

We are a digital health (mHealth) company that is developing and commercializing a patented and proprietary technology providing consumers with laboratory-testing capabilities using smart phones and other mobile devices. Our principal operating subsidiary, LabStyle Innovation Ltd., is an Israeli company with its headquarters in Caesarea, Israel. We were formed on August 11, 2011 as a Delaware corporation. Our flagship product, Dario^TM, is a mobile, real-time, cloud-based, diabetes management solution based on an innovative, multi-feature software application combined with a stylish, ‘all-in-one’, pocket-sized, blood glucose monitoring device, which we call the Dario^TM Smart Meter.

We commenced a commercial launch of the free Dario^TM application in the United Kingdom in late 2013 and commenced an initial soft launch of the full Dario^TM solution (including the app and the Smart Meter) in selected jurisdictions in March 2014 with the goal of collecting customer feedback to refine our longer-term roll-out strategy and continued to scale up launch during 2014 in the United Kingdom, the Netherlands and New Zealand, in 2015 in Australia, Israel and Canada and in 2016 in the United States, with additional launch and market penetration plans for Italy, India, Panama and Costa Rica, all of which are planned for 2016. We are consistently adding additional features and functionality in making Dario^TM Smart Diabetes Management Solution the new standard of care in diabetes data management.

In the United States we commenced commercialization in March 2016 and intend to generate demand through a digital direct to consumer marketing campaign. Customers are currently able to purchase the product directly through our e-store. Third party distribution channels are expected to go live through the second and third quarters of 2016. We plan to facilitate a subscription-based service via our proprietary store. We also intend to continue to broaden our reach via distribution agreements with national and regional durable medical equipment and pharmacy chains.

Through our Israeli subsidiary, LabStyle Innovation Ltd., our plan of operations is to continue the development of our software and hardware offerings and related technology. During 2015 and 2016, we successfully launched the Dario^TM Smart Diabetes Management Solution according to plan and are currently expanding the launch to other jurisdictions. In support of these goals, we intend to utilize our funds for the following activities:

• ramp up of mass production, marketing, distribution and sales efforts related to the Dario^TM application, Smart Meters and test strips;

• continued product development and related activities (including costs associated with application development and data storage capabilities as well as any necessary design modifications to the various elements of the Dario^TM solution);

 4

• continued work on registration of our patents worldwide;

• regulatory matters;

• professional fees associated with being a publicly reporting company; and

• general and administrative matters.

According to our management’s estimates, based on our budget and the launch of our commercial sales, we believe that we will have sufficient resources to continue our activity only into July 2017. This includes anticipated inflows from sales of Dario^TM through distribution partners and our sales in the United States. If we are unable to scale up our commercial launch of Dario^TM or meet our commercial sales targets (or if we are unable to increase our revenues), and if we are unable to obtain additional capital resources, we may be unable to continue activities, absent a material alternations in our business plans and our business might fail.

Critical Accounting Policies

Reference is made to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation of our Annual Report on Form 10-K for the year ended December 31, 2015 (filed on February 8, 2016) with respect to our Critical Accounting Policies, which have not changed.

Results of Operations

Comparison of three months ended March 31, 2016 and 2015 (in thousands except for stock and stock data)

Revenues

Revenues for the three months ended March 31, 2016 amounted to $568, compared to $67 of revenues during the three months ended March 31, 2015. The increase in revenues in the three months ended March 31, 2016 compared to the three months ended March 31, 2015 is mainly a result of revenues derived from the sales of Dario™’s Smart Meter and related disposables, through distributors and end users in Australia, the United Kingdom and Canada.

Revenues are derived from the successful launch of the Dario™’s Smart Meter and related disposables in the United Kingdom, the Netherlands, New Zealand, Australia, Israel, Canada and the United States as well as services rendered to Maccabi Healthcare. We recognize revenues on a cash basis, when all revenue recognition criteria are met, until we are able to determine the ability of the distributor to honor its commitment to complete payment.

Cost of Revenues

During the three months ended March 31, 2016 we recorded costs related to revenues in the amount of $670, out of which $32 was recorded to write off deferred inventory as a result of a legal settlement with a former distributor, $62 was recorded to cover inventory write-downs due to net realized value which was lower than original cost and $14 was recorded in respect of a write off of manufacturing equipment that was disposed during the three months ended March 31, 2016. During the three months ended March 31, 2015, we recorded costs related to revenues in the amount of $297 out of which $62 was recorded to cover inventory write-downs due to net realized value which was lower than original cost. The increase in cost of revenues during the three months ended March 31, 2016 compared to the three months ended March 31, 2015 is due to the increase in our sales in the first quarter of 2016.

Cost of revenues consists mainly of cost of device and disposables' production, employees’ salaries and related overhead costs, depreciation of production lines and related cost of equipment used in production, shipping and handling costs and inventory write-downs.

 5

Research and Development Expenses

Our research and development expenses decreased by $486, or 55%, to $397 for the three months ended March 31, 2016 compared to $883 for the three months ended March 31, 2015. This decrease was mainly due to a decrease in costs of clinical trials, regulation, product development, subcontractors and employee payroll that were incurred in 2015 as a result of clinical trials performed in the United States to satisfy the FDA product approval requirements and related regulatory prerequisites that were required from us prior to the commercial launch of the Dario^TM in the jurisdictions in which we sell the Dario^TM and its related disposables. This decrease was offset by an increase in software development costs.

Research and development expenses consist mainly of payroll expenses to personnel involved in research and development activities and expenses related to our Dario^TM software application and related Smart Meter device.

Sales and Marketing Expenses

Our sales and marketing expenses increased by $267, or 106%, to $519 for the three months ended March 31, 2016 compared to $252 for the three months ended March 31, 2015. This increase was mainly due to the commencement of our sales and marketing efforts in the United States, increase in costs of on line marketing campaigns, sales and marketing consultants and subcontractors and employee payroll.

Sales and marketing expenses consist mainly of payroll expenses, on line marketing of the Dario^TM, and marketing consultants and subcontractors.

General and Administrative Expenses

Our general and administrative expenses increased by $493, or 120%, to $905 for the three months ended March 31, 2016 compared to $412 for the three months ended March 31, 2015. This increase was mainly due to an increase in employee payroll and bonuses, legal expense recorded during the first quarter of 2016 in connection with a legal settlement with a former distributor, investor relations expenses, patent registration expenses and stock based compensation.

Our general and administrative expenses consist mainly of payroll, bonus and stock-based compensation expenses for management and employees, legal and professional expenses, investor relations expenses, patent registration expenses as well as our office rent and related expenses.

Financial Income, net

Our financial income, net for the three months ended March 31, 2016 was $734 compared to financial income of $139 for the three months ended March 31, 2015.

Financial income includes mainly the results of a revaluation of warrants to investors and a former placement agent, which are recorded as a liability and presented at fair value each reporting period.

Net loss

Net loss decreased by $449, or 27%, to $1,189 for the three months ended March 31, 2016 compared to $1,638 for the three months ended March 31, 2015. This decrease was mainly due to an increase of $595 in financial income as a result of the revaluation of warrants to certain investors and a placement agent and a decrease of $128 in our gross loss, offset by an increase of $274 in operating expenses.

Liquidity and Capital Resources

As of March 31, 2016, we had approximately $8,267 in cash and cash equivalents compared to $1,855 at March 31, 2015.

 6

We have experienced cumulative losses of $44,998 from inception (August 11, 2011) through March 31, 2016, and have a stockholders’ equity of $7,611 at March 31, 2016. In addition, we have not completed our efforts to establish a stable recurring source of revenues sufficient to cover our operating costs and expect to continue to generate losses for the foreseeable future. There is no assurance that we will be able to obtain an adequate level of financing needed for the long-term development and commercialization of our product. These conditions raise substantial doubt about our ability to continue as a “going concern”.

Since inception, we have financed our operations primarily through private placements and public offerings of our common stock and warrants to purchase shares of our common stock, receiving aggregate net proceeds totaling $38,780 as of March 31, 2016, approximately $5,038 and $2,500 of which were raised during March 2016 pursuant to a concurrent public offering and private placement, respectively, pursuant to which we issued a total of 1,333,333 and 555,555, respectively, shares of our common stock and 1,533,333 and 666,666, respectively, warrants to purchase an aggregate of 2,199,999 shares of our common stock. In connection with the public offering, we agreed to grant to the placement agent 143,333 warrants at an exercise price of $4.50, and to certain finders that assisted with the private placement 44,444 restricted shares of common stock, 38,889 non-plan stock options to purchase 38,889 shares of our common stock, and 73,333 warrants at an exercise price of $4.50 per share.

The public offering of 1,333,333 shares of common stock was at a purchase price of $4.50 per share, and we issued 1,533,333 immediately exercisable five-year warrants each to purchase one share of common stock with an exercise price of $4.50 per share, at a purchase price of $0.01 per warrant. The concurrent private offering of 555,555 of our units was at a purchase price of $4.50 per unit, each unit comprised of (i) one share of our common stock, and (ii) one warrant to purchase 1.2 shares of our common stock which is immediately exercisable at an exercise price of $4.50 per share and expires 5 years from the date of issuance.

According to our management’s estimates, based on our budget and the initial launch of our commercial sales, we believe that we will have sufficient resources to continue our activity into July 2017 without raising additional capital. This includes an amount of anticipated inflows from sales of Dario^TM through distribution partners and to direct customers.

As such, we have a significant present need for capital. If we are unable to scale up our commercial launch of Dario^TM or meet our commercial sales targets (or if we are unable to generate any revenue at all), and if we are unable to obtain additional capital resources in the near term, we may be unable to continue activities absent material alterations in our business plans and our business might fail.

Additionally, our available resources may be consumed more rapidly than we currently anticipate, resulting in the need for additional funding sooner than we expect. Should this occur, we will need to seek additional capital earlier than anticipated in order to fund (1) further development and, if needed, testing of our Dario^TM Smart Meter and its related application and data storage components, (2) our efforts to obtain regulatory clearances or approvals necessary to be able to commercially launch Dario^TM, (3) expenses which will be required in order to start and expand production of Dario^TM, (4) sales and marketing efforts and (5) general working capital. Such funding may be unavailable to us on acceptable terms, or at all. Our failure to obtain such funding when needed could create a negative impact on our stock price or could potentially lead to the failure of our company. This would particularly be the case if we are unable to commercially launch Dario^TM in the jurisdictions and in the timeframes we expect.

Cash Flows

The following tables sets forth selected cash flow information for the periods indicated:

	March 31,
	2016			2015
	$			$
Cash used in operating activities:		(2,105	)		(1,525	)
Cash used in investing activities:		(27	)		(29	)
Cash provided by financing activities:		7,728			1,956
		5,596			402

 7

Net cash used in operating activities

Net cash used in operating activities was $2,105 for the three months ended March 31, 2016 compared to $1,525 used in operations for the same period in 2015. Cash used in operations increased due to the increase in the volume of our operations.

Net cash used in investing activities

Net cash used in investing activities was $27 for the three months ended March 31, 2016 compared to $29 for the same period in 2015. Cash used in investing activities slightly decreased mainly due to production line investments that we made in the first quarter of 2015 and continue to improve our production capabilities

Net cash provided by financing activities

Net cash provided by financing activities was $7,728 for the three months ended March 31, 2016 compared to $1,956 for the same period in 2015. During the first quarter of 2016 we raised approximately $7,538 in net proceeds through our March 2016 public offering and private placement transactions. During the first quarter of 2015 we raised net proceeds in an aggregate of $1,956 through our February 2015 private placement transaction with certain institutional and accredited investors.

Off-Balance Sheet Arrangements

As of March 31, 2016, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company and therefore are not required to provide the information for this item of Form 10-Q.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Report, our Chief Executive Officer and Chief Financial Officer, or the Certifying Officers, conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, or SEC. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.

Based on their evaluation, the Certifying Officers concluded that, as of March 31, 2016, our disclosure controls and procedures were designed at a reasonable assurance level and were therefore effective.  

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 8

Limitations on the Effectiveness of Internal Controls

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

PART II- OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

As of March 31, 2016, we issued an aggregate of 29,849 shares of our common stock to certain officers and directors under our 2012 Equity Incentive Plan as equity compensation and we also issued an aggregate of 5,556 shares of our common stock to a service provider in consideration for services provided to us. We claimed exemption from registration under the Securities Act of 1933, as amended, or the Securities Act, for the foregoing transactions under Section 4(a)2 and Regulation S under the Securities Act.

In March 2016 we issued to the holders of the then currently outstanding 1,984 shares of our Series A Convertible Preferred Stock, 623,672 shares of our common stock, reflecting an increase of 25% in the original number of shares of common stock issuable upon conversion of the Series A Convertible Preferred Stock. The increase of 25% in the original number of shares of common stock issued to holders of the Series A Convertible Preferred Stock was a change in the conversion terms. We claimed exemption from registration under the Securities Act for the foregoing issuance in March 2016 under Section 4(a)2 under the Securities Act.

Item 6. Exhibits.

No.	Description of Exhibit
3.1*	Composite Copy of Certificate of Incorporation, as amended as of February 26, 2016.
3.2*	Composite Copy of Certificate of Incorporation, as amended as of February 26, 2016 (marked copy).
4.1	Warrant Agent Agreement, dated as of March 8, 2016, between LabStyle Innovations Corp. and VStock Transfer, LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 9, 2016).
4.2	Form of Representatives’ Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 9, 2016).
4.3	Form of Series A Warrant (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 9, 2016).
10.1	Form of Securities Purchase Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 9, 2016).
31.1*	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a).
31.2*	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a).
32.1**	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.
101.1*	The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii) Statements of Changes in Stockholders’ Equity (Deficiency), (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.

* Filed herewith.

** Furnished herewith.

 9

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  May 10, 2016		LabStyle Innovations Corp.
	By:		/s/ Erez Raphael
		Name:	Erez Raphael
		Title:	Chairman and Chief Executive Officer
			(Principal Executive Officer)
	By:		/s/ Zvi Ben David
		Name:	Zvi Ben David
		Title:	Chief Financial Officer, Secretary and
			Treasurer (Principal Financial Officer)

 10

EX-3.1

Exhibit 3.1 

CERTIFICATE OF INCORPORATION

OF

LABSTYLE INNOVATIONS CORP.

as amended as of February 26, 2016

The undersigned, for the purposes of forming a corporation for conducting the business and promoting the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts amendatory thereof and supplemental hereto, and generally known as the “Delaware General Corporation Law”), does hereby make, file and record this Certificate of Incorporation, and does hereby certify as follows:

FIRST: The name of the corporation is LabStyle Innovations Corp. (hereinafter sometimes referred to as the “Corporation”).

SECOND: The address of the Corporation’s registered office in the State of Delaware is 1811 Silverside Road, Wilmington, DE 19810, New Castle County; and the name of the registered agent of the Corporation in the State of Delaware at such address is Vcorp Services LLC. The Corporation shall have the authority to designate other registered offices and registered agents both in the State of Delaware and in other jurisdictions.

THIRD: The nature of the business and the purposes to be conducted and promoted by the Corporation shall be to engage in any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.

FOURTH: The capital stock of the Corporation shall be as follows:

1. Classes of Stock. The Corporation is authorized to issue two classes of shares of capital stock to be designated, respectively, common stock (“Common Stock”) and preferred stock (“Preferred Stock”). The number of shares of Common Stock authorized to be issued is one hundred sixty million (160,000,000), par value $0.0001 per share, and the number of shares of Preferred Stock authorized to be issued is five million (5,000,000), par value $0.0001 per share; the total number of shares which the Corporation is authorized to issue is one hundred sixty five million (165,000,000).

2. Common Stock. Except as otherwise provided by law or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Except as otherwise required by law or this Certificate of Incorporation of the Corporation, each holder of Common Stock is entitled to one vote for each share of Common Stock held of record by such holder with respect to all matters on which holders of Common Stock are entitled to vote. Subject to the Delaware General Corporation Law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors of the Corporation (the “Board of Directors”) in its discretion shall determine. Upon the dissolution, liquidation or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock, as such, shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them. Upon the effectiveness of the amendment to the certificate of incorporation containing this sentence (the “Split Effective Time”), each share of the Common Stock issued and outstanding immediately prior to the date and time of the filing hereof with the Secretary of State of Delaware shall be automatically changed and reclassified into a smaller number of shares such that each eighteen (18) shares of issued Common Stock immediately prior to the Split Effective Time is reclassified into one (1) share of Common Stock. Notwithstanding the immediately preceding sentence, there shall be no fractional shares issued and, in lieu thereof, a holder of Common Stock on the Split Effective Time who would otherwise be entitled to a fraction of a share as a result of the reclassification, following the Split Effective Time, shall receive a full share of Common Stock upon the surrender of such stockholders' old stock certificate. No stockholders will receive cash in lieu of fractional shares.

3. Rights, Preferences and Restrictions of Preferred Stock. The Preferred Stock may be issued from time to time in one or more series, without further stockholder approval. The Board of Directors is hereby authorized, in the resolution or resolutions adopted by the Board of Directors providing for the issue of any wholly unissued series of Preferred Stock, within the limitations and restrictions stated in this Certificate of Incorporation, to fix or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption rights and price or prices(and the method of determining such price or prices), the liquidation preferences of any wholly unissued series of Preferred Stock, the number of shares constituting any such series and the designation thereof and the restrictions on issuance of shares of the same series or of any other class or series, if any, or any of them, and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of such series then outstanding, and any other preferences, privileges and relative rights of such series as the Board of Directors may deem advisable, provided no shares of such series are then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

4. Rights and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to purchase shares of any class or series of the Corporation’s capital stock or other securities of the Corporation, and such rights, warrants and options shall be evidenced by instrument(s) approved by the Board of Directors. The Board of Directors is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock subject thereto may not be less than the par value thereof.

FIFTH: The Corporation shall have perpetual existence.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:

1. The business of the Corporation shall be conducted by the officers of the Corporation under the supervision of the Board of Directors.

2. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws of the Corporation (the “Bylaws”). No election of Directors need be by written ballot.

3. Notwithstanding any other provision of law, all action required to be taken by the stockholders of the Corporation shall be taken at a meeting duly called and held in accordance with law, the Certificate of Incorporation and the Bylaws, or by written consent signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

SEVENTH:

1. The Corporation may, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities, costs or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which a person indemnified may be entitled under any Bylaw, agreement, insurance, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

2. No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law: (i) for breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this paragraph (2) of this Article Seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment.

EIGHTH: From time to time any of the provisions of this Certificate of Incorporation may be amended, altered or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this Certificate of Incorporation are granted subject to the provisions of this Article EIGHTH.

NINTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

EX-3.2

Exhibit 3.2

CERTIFICATE OF INCORPORATION

OF

LABSTYLE INNOVATIONS CORP.

as amended as of June 16February 26, 20152016

The undersigned, for the purposes of forming a corporation for conducting the business and promoting the purposes hereinafter stated, under the provisions and subject to the requirements of the laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts amendatory thereof and supplemental hereto, and generally known as the “Delaware General Corporation Law”), does hereby make, file and record this Certificate of Incorporation, and does hereby certify as follows:

FIRST: The name of the corporation is LabStyle Innovations Corp. (hereinafter sometimes referred to as the “Corporation”).

SECOND: The address of the Corporation’s registered office in the State of Delaware is 1811 Silverside Road, Wilmington, DE 19810, New Castle County; and the name of the registered agent of the Corporation in the State of Delaware at such address is Vcorp Services LLC. The Corporation shall have the authority to designate other registered offices and registered agents both in the State of Delaware and in other jurisdictions.

THIRD: The nature of the business and the purposes to be conducted and promoted by the Corporation shall be to engage in any lawful business, to promote any lawful purpose, and to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.

FOURTH: The capital stock of the Corporation shall be as follows:

1. Classes of Stock. The Corporation is authorized to issue two classes of shares of capital stock to be designated, respectively, common stock (“Common Stock”) and preferred stock (“Preferred Stock”). The number of shares of Common Stock authorized to be issued is one hundred sixty million (160,000,000), par value $0.0001 per share, and the number of shares of Preferred Stock authorized to be issued is five million (5,000,000), par value $0.0001 per share; the total number of shares which the Corporation is authorized to issue is one hundred sixty five million (165,000,000).

2. Common Stock. Except as otherwise provided by law or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Except as otherwise required by law or this Certificate of Incorporation of the Corporation, each holder of Common Stock is entitled to one vote for each share of Common Stock held of record by such holder with respect to all matters on which holders of Common Stock are entitled to vote. Subject to the Delaware General Corporation Law and the rights, if any, of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock at such times and in such amounts as the Board of Directors of the Corporation (the “Board of Directors”) in its discretion shall determine. Upon the dissolution, liquidation or winding up of the Corporation, subject to the rights, if any, of the holders of any outstanding series of Preferred Stock, the holders of the Common Stock, as such, shall be entitled to receive the assets of the Corporation available for distribution to its stockholders ratably in proportion to the number of shares held by them. Upon the effectiveness of the amendment to the certificate of incorporation containing this sentence (the “Split Effective Time”), each share of the Common Stock issued and outstanding immediately prior to the date and time of the filing hereof with the Secretary of State of Delaware shall be automatically changed and reclassified into a smaller number of shares such that each fiveeighteen (18) shares of issued Common Stock immediately prior to the Split Effective Time is reclassified into one (1) share of Common Stock. Notwithstanding the immediately preceding sentence, there shall be no fractional shares issued and, in lieu thereof, a holder of Common Stock on the Split Effective Time who would otherwise be entitled to a fraction of a share as a result of the reclassification, following the Split Effective Time, shall receive a full share of Common Stock upon the surrender of such stockholders' old stock certificate. No stockholders will receive cash in lieu of fractional shares.

3. Rights, Preferences and Restrictions of Preferred Stock. The Preferred Stock may be issued from time to time in one or more series, without further stockholder approval. The Board of Directors is hereby authorized, in the resolution or resolutions adopted by the Board of Directors providing for the issue of any wholly unissued series of Preferred Stock, within the limitations and restrictions stated in this Certificate of Incorporation, to fix or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption rights and price or prices(and the method of determining such price or prices), the liquidation preferences of any wholly unissued series of Preferred Stock, the number of shares constituting any such series and the designation thereof and the restrictions on issuance of shares of the same series or of any other class or series, if any, or any of them, and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of such series then outstanding, and any other preferences, privileges and relative rights of such series as the Board of Directors may deem advisable, provided no shares of such series are then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.

4. Rights and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to purchase shares of any class or series of the Corporation’s capital stock or other securities of the Corporation, and such rights, warrants and options shall be evidenced by instrument(s) approved by the Board of Directors. The Board of Directors is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock subject thereto may not be less than the par value thereof.

FIFTH: The Corporation shall have perpetual existence.

SIXTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation and of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:

1. The business of the Corporation shall be conducted by the officers of the Corporation under the supervision of the Board of Directors.

2. The number of directors which shall constitute the whole Board of Directors shall be fixed by, or in the manner provided in, the Bylaws of the Corporation (the “Bylaws”). No election of Directors need be by written ballot.

3. Notwithstanding any other provision of law, all action required to be taken by the stockholders of the Corporation shall be taken at a meeting duly called and held in accordance with law, the Certificate of Incorporation and the Bylaws, or by written consent signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

SEVENTH:

1. The Corporation may, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said section from and against any and all of the expenses, liabilities, costs or other matters referred to in or covered by said section, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which a person indemnified may be entitled under any Bylaw, agreement, insurance, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

2. No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law: (i) for breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this paragraph (2) of this Article Seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment.

EIGHTH: From time to time any of the provisions of this Certificate of Incorporation may be amended, altered or repealed, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner and at the time prescribed by said laws, and all rights at any time conferred upon the stockholders of the Corporation by this Certificate of Incorporation are granted subject to the provisions of this Article EIGHTH.

NINTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Rule 13a-14(a)

I, Erez Raphael, certify that:

1.        I have reviewed this Quarterly Report on Form 10-Q of LabStyle Innovations Corp.;

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016

/s/ Erez Raphael

Erez Raphael

Chairman and Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Rule 13a-14(a)

I, Zvi Ben David, certify that:

1.       I have reviewed this Quarterly Report on Form 10-Q of LabStyle Innovations Corp.;

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.       The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.      The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016

/s/ Zvi Ben David

Zvi Ben David

Chief Financial Officer, Secretary and
Treasurer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

LABSTYLE INNOVATIONS CORP.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of LabStyle Innovations Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Erez Raphael, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, that to my knowledge:

(1)       The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)       The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Erez Raphael

Erez Raphael

Chairman and Chief Executive Officer

(Principal Executive Officer)

May 10, 2016

EX-32.2

Exhibit 32.2

LABSTYLE INNOVATIONS CORP.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of LabStyle Innovations Corp. (the “Company”) on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Zvi Ben David, Chief Financial Officer, Secretary and Treasurer of the Company, certify, pursuant to 18 U.S.C. ss.1350, that to my knowledge:

(1)       The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)       The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Zvi Ben David

Zvi Ben David

Chief Financial Officer, Secretary and Treasurer

(Principal Financial Officer)

May 10, 2016

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 09, 2016
Document Information [Line Items]
Entity Registrant Name	LabStyle Innovations Corp.
Entity Central Index Key	0001533998
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	DRIO
Entity Common Stock, Shares Outstanding		5,581,216
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2016

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 8,267	$ 2,671
Short-term bank deposits	82	80
Inventories	1,005	601
Other accounts receivable and prepaid expenses	894	935
Total current assets	10,248	4,287
LEASE DEPOSITS	33	41
PROPERTY AND EQUIPMENT, NET	682	749
Total assets	10,963	5,077
CURRENT LIABILITIES:
Trade payables	556	978
Deferred revenues	8	31
Other accounts payable and accrued expenses	925	681
Total current liabilities	1,489	1,690
LIABILITY RELATED TO WARRANTS	$ 1,863	$ 2,610
COMMITMENTS AND CONTINGENT LIABILITIES
CONVERTIBLE PREFERRED SHARES:
Series A Preferred Stock of $0.0001 par value - Authorized: 60,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None and 1,984 shares at March 31, 2016 (unaudited) and December 31, 2015, respectively; Aggregate liquidation preference of none and $3,560 at March 31, 2016 (unaudited) and December 31, 2015, respectively	$ 0	$ 2,357
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common Stock of $0.0001 par value - Authorized: 160,000,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: 5,575,633 and 2,911,788 shares at March 31, 2016 (unaudited) and December 31, 2015, respectively	6	5
Preferred Stock of $0.0001 par value - Authorized: 4,940,000 shares at March 31, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None at March 31, 2016 (unaudited) and December 31, 2015	0	0
Additional paid-in capital	52,603	41,769
Accumulated deficit	(44,998)	(43,354)
Total stockholders' equity (deficiency)	7,611	(1,580)
Total liabilities and stockholders' equity (deficiency)	$ 10,963	$ 5,077

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	160,000,000	160,000,000
Common stock, shares issued	5,575,633	2,911,788
Common stock, shares, outstanding	5,575,633	2,911,788
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	4,940,000	4,940,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series A Preferred Stock [Member]
Temporary equity, par value (in dollars per share)	$ 0.0001	$ 0.0001
Temporary Equity, Shares Authorized	60,000	60,000
Temporary Equity, Shares Issued	0	1,984
Temporary Equity, Shares Outstanding	0	1,984
Temporary Equity, Liquidation Preference	$ 0	$ 3,560

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues	$ 568	$ 67
Cost of revenues	670	297
Gross loss	102	230
Operating expenses:
Research and development	397	883
Sales and marketing	519	252
General and administrative	905	412
Total operating expenses	1,821	1,547
Operating loss	1,923	1,777
Financial expenses (income), net:
Revaluation of warrants	(747)	(150)
Other financial expense, net	13	11
Total financial expenses (income), net	(734)	(139)
Net loss	1,189	1,638
Deemed dividend related to Series A Preferred Stock exchange agreement	455	0
Net loss attributable to holders of Common Stock	$ 1,644	$ 1,638
Net loss per share
Basic and diluted loss per share (in dollars per share)	$ (0.33)	$ (1.39)
Weighted average number of Common Stock used in computing basic and diluted net loss per share (in shares)	3,652,474	1,175,603

XML

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) - USD ($) $ in Thousands	Total		Common Stock [Member]		Additional Paid-in Capital [Member]		Accumulated deficit [Member]
Balance at Dec. 31, 2014	$ (5,295)		$ 2		$ 30,761		$ (36,058)
Balance (in shares) at Dec. 31, 2014			902,068
Issuance of Common Stock and warrants in February 2015 at $3.24 per unit, net of issuance cost	1,956		$ 1		1,955		0
Issuance of Common Stock and warrants in February 2015 at $3.24 per unit, net of issuance cost (in shares)			627,035
Issuance of Common Stock in July and August 2015 at $5.40 per unit, net of issuance cost	2,325		$ 1		2,324		0
Issuance of Common Stock in July and August 2015 at $5.40 per unit, net of issuance cost (in shares)			480,368
Issuance of Common stock in November 2015 at $5.40 per unit, net of issuance cost	2,294		$ 1		2,293		0
Issuance of Common stock in November 2015 at $5.40 per unit, net of issuance cost (in shares)			446,223
Issuance of Common stock in December 2015 at $6.16 per unit, net of issuance cost	500		$ 0	[1]	500		0
Issuance of Common stock in December 2015 at $6.16 per unit, net of issuance cost (in shares)			81,222
Issuance of Common Stock in April, August and December 2015 to service provider	118		$ 0	[1]	118		0
Issuance of Common Stock in April, August and December 2015 to service provider (in shares)			16,668
Issuance of Common Stock in September 2015 to employees as compensation	591		$ 0	[1]	591		0
Issuance of Common Stock in September 2015 to employees as compensation (in shares)			97,121
Issuance of Common Stock in September 2015 to service provider	16		$ 0	[1]	16		0
Issuance of Common Stock in September 2015 to service provider (in shares)			2,778
Payment for executives and directors under Salary Program	304		$ 0	[1]	304		0
Payment for executives and directors under Salary Program (in shares)			55,474
Exercise of warrants into Common Stock, net of issuance cost	453		$ 0	[1]	453		0
Exercise of warrants into Common Stock, net of issuance cost (in shares)			106,881
Deemed dividend related to inducement of warrant exercise in May 2015	0		$ 0		154		(154)
Issuance of warrants related to warrant replacement agreement in November and December 2015	822		0		822		0
Receipts on Account of shares	20		0		20		0
Conversion of Series A Preferred Stock into Common Stock	400		$ 0	[1]	400		0
Conversion of Series A Preferred Stock into Common Stock (in shares)			84,812
Exercise of warrants	60		$ 0	[1]	60		0
Exercise of warrants (in shares)			10,804
Exercise of options	0	[1]	$ 0	[1]	0	[1]	0
Exercise of options (in shares)			334
Stock-based compensation	998		$ 0		998		0
Net loss	(7,142)		0		0		(7,142)
Balance at Dec. 31, 2015	(1,580)		$ 5		41,769		(43,354)
Balance (in shares) at Dec. 31, 2015			2,911,788
Issuance of Common Stock in March 2016 Public Offering, net of issuance cost	5,038		$ 1		5,037		0
Issuance of Common Stock in March 2016 Public Offering, net of issuance cost (in shares)			1,333,333
Issuance of Common Stock in March 2016 Private Placement, net of issuance cost	2,500		$ 0	[1]	2,500		0
Issuance of Common Stock in March 2016 Private Placement, net of issuance cost (in shares)			599,999
Issuance of Common Stock in January 2016 to service provider	37		$ 0	[1]	37		0
Issuance Of Common Stock In January 2016 To Service Provider Shares			5,556
Payment for executives and directors under Salary Program	75		$ 0	[1]	75		0
Payment for executives and directors under Salary Program (in shares)			9,849
Issuance of Common Stock in March 2016 to officer	86		$ 0	[1]	86		0
Issuance of Common Stock in March 2016 to officer (in shares)			20,000
Exercise of warrants into Common Stock, net of issuance cost	190		$ 0	[1]	190		0
Exercise of warrants into Common Stock, net of issuance cost (in shares)			71,436
Deemed dividend related to change in the conversion terms of Series A Preferred Stock into Common Stock in March 2016	0		$ 0		455		(455)
Deemed dividend related to change in the conversion terms of Series A Preferred Stock into Common Stock in March 2016 (in shares)			124,737
Conversion of Series A Preferred Stock into Common Stock	2,277		$ 0	[1]	2,277		0
Conversion of Series A Preferred Stock into Common Stock (in shares)			498,935
Stock-based compensation	177		$ 0		177		0
Net loss	(1,189)		0		0		(1,189)
Balance at Mar. 31, 2016	$ 7,611		$ 6		$ 52,603		$ (44,998)
Balance (in shares) at Mar. 31, 2016			5,575,633

[1] Represents an amount lower than $1.

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STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) (Parenthetical)	12 Months Ended
	Dec. 31, 2015 $ / shares
Issuance Of Common Stock and Warrants In February 2015	$ 3.24
Issuance Of Common Stock In July And August 2015	5.40
Issuance Of Common Stock November 2015	5.40
Issuance Of Common Stock December 2015	$ 6.16

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (1,189)	$ (1,638)
Adjustments required to reconcile net loss to net cash used in operating activities:
Stock-based compensation and Common Stock to service providers	324	125
Depreciation	102	79
Increase is trade receivables	0	(22)
Decrease in accounts receivables and prepaid expenses	10	22
Increase in inventories	(404)	0
Increase (decrease) in trade payables	(422)	145
Increase (decrease) in deferred revenues	(23)	32
Increase (decrease) in other accounts payable and accrued expenses	244	(118)
Decrease in fair value of warrants	(747)	(150)
Net cash used in operating activities	(2,105)	(1,525)
Cash flows from investing activities:
Proceeds of maturities of short-term bank deposit	0	(13)
Investment in restricted cash	0	13
Maturity of (investment in) lease deposits	8	7
Purchase of property and equipment	(35)	(36)
Net cash used in investing activities	(27)	(29)
Cash flows from financing activities:
Proceeds from issuance of Common Stock and warrants, net of issuance cost	7,538	$ 1,956
Proceeds from exercise of options and warrants	190		[1]
Net cash provided by financing activities	7,728	$ 1,956
Increase in cash and cash equivalents	5,596	402
Cash and cash equivalents at the beginning of the period	2,671	1,453
Cash and cash equivalents at the end of the period	8,267	1,855
Non-cash investing and financing activities:
Purchase of property and equipment	0	29
Conversion of Series A Preferred Stock into Common Stock	2,277	102
Payment for directors under Salary Program	$ 51	$ 0

[1] Represents an amount lower than $1.

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GENERAL

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1:- GENERAL

a. LabStyle Innovations Corp. (the “Company”) was incorporated in Delaware and commenced operations on August 11, 2011. The Company is a digital health (mHealth) company that is developing and commercializing a patented and proprietary technology providing consumers with laboratory-testing capabilities using smart phones and other mobile devices. The Company’s flagship product, Dario^TM, also referred to as the Dario^TM Smart Diabetes Management Solution, is a mobile, real-time, cloud-based, diabetes management solution based on an innovative, multi-feature software application combined with a stylish, ‘all-in-one’, pocket-sized, blood glucose monitoring device, which we call the Dario^TM Smart Meter.

b. The Company’s wholly owned subsidiary, LabStyle Innovation Ltd. (“Ltd.” or “Subsidiary”), was incorporated and commenced operations on September 14, 2011 in Israel. Its principal business activity is to hold the Company’s intellectual property and to perform research and development, manufacturing, marketing and other business activities. Ltd. has a wholly-owned subsidiary, LabStyle Innovations US LLC, a Delaware limited liability company (“LabStyle US”), which was established in 2014, however it has not started its operations to date.

c. During the three months ended March 31, 2016, the Company incurred operating losses and negative cash flows from operating activities amounting to $1,923 and $2,105, respectively. The Company will be required to obtain additional liquidity resources in order to support the commercialization of its products and maintain its research and development activities. The Company is addressing its liquidity needs by seeking additional funding from public and/or private sources and by ramping up its commercial sales. There are no assurances, however, that the Company will be able to obtain an adequate level of financial resources that are required for the short and long-term development and commercialization of its product. According to management estimates, the Company has sufficient liquidity resources to continue its planned activity into July 2017.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty

d. On June 15, 2015, the Company held its 2015 Annual Meeting of Stockholders in which, among other matters, Company stockholders approved an amendment to the Company’s certificate of incorporation with respect to a reverse split of the Company’s issued and outstanding Common Stock in a ratio to be determined by the Company’s Board of Directors.

On February 17, 2016, the Company’s Board of Directors approved a reverse split in a ratio of one-to-eighteen. The 2016 reverse split was implemented on February 26, 2016 (the "2016 Reverse Split"). The amount of authorized Common Stock as well as the par value for the Common Stock were not affected. Any fractional shares resulting from the 2016 Reverse Split were rounded up to the nearest whole share.

All Common Stock, warrants, options and per share amounts set forth herein are presented to give retroactive effect to the 2016 Reverse Split for all periods presented.

e. In December 2015, the United States Food and Drug Administration (“FDA”) granted the Subsidiary 510(k) clearance for the Dario^TM Blood Glucose Monitoring System, including its components, the Dario Blood Glucose Meter, Dario^TM Blood Glucose Test Strips, Dario^TM Glucose Control Solutions and the Dario app on the Apple iOS 6.1 platform and higher.

f. On March 4, 2016, the Company's Common Stock and warrants were approved for listing on NASDAQ Capital Market under the symbols “DRIO” and “DRIOW,” respectively.

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SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the audited annual consolidated financial statements of the Company as disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 are applied consistently in these unaudited interim consolidated financial statements.

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UNAUDITED INTERIM FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Text Block]

NOTE 3:- UNAUDITED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim consolidated financial statements as of March 31, 2016, have been prepared in accordance with U.S. generally accepted accounting principles and standards of the Public Company Accounting Oversight Board for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair presentation of the Company's consolidated financial position as of March 31, 2016, and the Company's consolidated results of operations and the Company's consolidated cash flows for the three months ended March 31, 2016. Results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

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INVENTORIES

3 Months Ended

Mar. 31, 2016

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

NOTE 4:- INVENTORIES

	March 31,		December 31,
	2016		2015
	Unaudited
Raw materials	$	508	$	469
Finished products		497		132
	$	1,005	$	601

During the three months period ended March 31, 2016 and the year ended December 31, 2015, total inventory write-off expenses amounted to $94 and $193, respectively.

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COMMITMENTS AND CONTINGENT LIABILITIES

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 5:- COMMITMENTS AND CONTINGENT LIABILITIES

From time to time the Company is involved in claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.

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STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 6:- STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES

a. Series A Preferred Stock:

On February 18, 2016, the Company entered into a Preferred Stock Conversion Agreement (the "Preferred Stock Conversion Agreement") with the holders of the Series A Preferred Stock according to which the then currently outstanding 1,984 shares of the Series A Preferred Stock would be converted into 623,672 shares of our Common Stock, reflecting an increase of 25% in the original number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock. Accordingly, in March 2016 the Company issued to the remaining Purchasers 623,672 shares of Common Stock and recorded an increase of $2,277 to additional paid in capital, net of issuance costs. The increase of 25% in the original number of shares of Common Stock issued to holders of the Series A Preferred Stock was accounted for as change in the conversion terms in the Company's financial statements and a deemed dividend in the amount of $455 was recorded to the Statement of Changes in Equity (Deficiency).

b. On April 3, 2015, the Company's Board of Directors approved the following:

1. To reserve 22,224 shares of Common Stock under the terms of an engagement agreement with a service provider (‘‘Service Provider Agreement’’) dated March 15, 2015 (the ‘‘Effective Date’’) offering investor relations services (‘‘Services’’) to the Company. The Service Provider Agreement was for a period of one year beginning with the Effective Date (the ‘‘Term’’), pursuant to which in addition to monthly retainer Company issued 5,556 shares of Common Stock on a quarterly basis over the Term in consideration for the Services. The Company recorded General and Administrative expenses amounting to $37 in connection with 5,556 shares of Common Stock that have been issued during the three month period ended March 31, 2016.

2. Issuance of restricted Common Stock (“Compensation Shares”) to directors, officers and employees of the Company as consideration for a reduction in or waiver of cash salary or fees owed to such individuals.

During the three month period ended March 31, 2016, the Company issued 9,849 Compensation Shares to certain members of the Board of Directors and officers as consideration for a waiver of cash owed to such individuals amounting to $75.

c. On March 8, 2016, the Company closed a public offering (the “Public Offering”) of 1,333,333 shares of the Common Stock, at a purchase price of $4.50 per share, and 1,333,333 immediately exercisable five-year warrants (the “March 2016 Warrants”) each to purchase one share of Common Stock with an exercise price of $4.50 per share, at a purchase price of $0.01 per Warrant for a consideration of $5,038, net of issuance costs. Out of the above issuance, 111,112 shares of Common Stock were issued to the Chief Financial Officer of the Company for gross proceeds of $500.

The March 2016 Warrants are exercisable for cash or on a cashless basis if no registration statement covering the resale of the shares issuable upon exercise of the Warrants is available.

In addition, the Company granted to the underwriters in the offering a 45-day option period to purchase up to 200,000 additional shares of Common Stock and/or 200,000 warrants (the “Option Warrants”) each to purchase one share of Common Stock at the public offering price less underwriting discounts and commissions to cover over-allotments. The underwriters agreed to purchase the shares and March 2016 Warrants from the Company, with the option to purchase the option securities, pursuant to the Underwriting Agreement, at a purchase price of $4.185 per Share and $0.0093 per Warrant. On March 4, 2016, the Underwriters exercised the Option with respect to the Option Warrants. The shares, March 2016 Warrants and Option Warrants were offered, issued and sold under a prospectus filed with the Securities and Exchange Commission (the “SEC”) pursuant to an effective registration statement filed with the SEC. In connection with the Public Offering, the Company agreed to issue to the representatives of the underwriters five-year warrants (the “Representatives’ Warrants”) to purchase up to 153,333 shares of Common Stock. In connection with the Public Offering, the Representatives’ Warrants are exercisable at a per share exercise price equal to $5.625 per share of Common Stock for cash or on a cashless basis if no registration statement covering the resale of the shares issuable upon exercise of the Representatives’ Warrants is available.

On March 3, 2016, concurrent with the Public Offering, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain existing shareholders (the “Investors”) with respect to the sale in a private placement (the “Private Offering”) of 555,555 of the Company’s units (the “Units”). The purchase price per Unit was $4.50 and the total consideration amounted to $2,500, net of issuance costs. Each Unit sold in the Private Offering is comprised of (i) one share of Common Stock, and (ii) one warrant to purchase 1.2 shares of Common Stock (the “2016 Series A Warrant”) which is immediately exercisable at an exercise price of $4.50 per share of Common Stock and expires 5 years from the date of issuance. In total, in the Private Offering, the Company issued 555,555 shares of Common Stock and 2016 Series A Warrants exercisable for an aggregate of 666,666 shares of Common Stock. The 2016 Series A Warrants are exercisable for cash or on a cashless basis if no registration statement covering the resale of the shares issuable upon exercise of the 2016 Series A Warrants is available.

In connection with the Private Offering, the Company agreed to issue to two non-U.S. finders an aggregate of 44,444 restricted shares of Common Stock, 73,333 warrants to purchase Common Stock at an exercise price of $4.50 per share which expire 5 years

from the date of issuance, and 38,889 non-plan stock options which have an exercise price of $0.0001 per share and are fully vested and exercisable after the lapse of four months from the grant date.

The Public Offering and Private Offering triggered the anti-dilution mechanism of the warrants issued in the 2011-2012 Private Placement (as hereinafter defined) by adjusting the current exercise price of the warrants for the investors and placement agent to $3.59 per share and an additional 415,316 and 78,662 shares became subject to such warrants, respectively. In addition, the exercise price of the placement agent's warrants in the 2011-2012 Private Placement, was adjusted to $3.33 per share and an additional 48,054 warrants were issued.

d. In March 2016, the Company issued 20,000 shares of Common Stock under the 2012 Equity Incentive Plan to an Officer according to the Israeli sub-plan. Consequently, the Company recorded General and Administrative expenses amounting to $86.

e. Stock option compensation:

Transactions related to the grant of options to employees, directors and non-employees under the above plans during the three month period ended March 31, 2016 were as follows:

	Number of options		Weighted average exercise price		Weighted average remaining contractual life		Aggregate Intrinsic value
			$		Years		$
Options outstanding at beginning of year		587,678		16.87		5.80		1.26
Options granted		-		-
Options exercised		-		-
Options expired		(153)		35.89
Options forfeited		(8,385)		6.90
Options outstanding at period end (unaudited)		579,140		16.86		99.31		9.33
Options vested and expected to vest at period end (unaudited)		539,074		17.49		5.54		9.33
Exercisable at period end (unaudited)		253,729		30.25		5.53		9.42

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on the last day of the first quarter of 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount is impacted by the changes in the fair market value of the Common Stock.

As of March 31, 2016, the total amount of unrecognized stock-based compensation expense was approximately $965 thousand which will be recognized over a weighted average period of 1.02 years.

The total compensation cost related to all of the Company's equity-based awards recognized during the three month period ended March 31, 2016 and 2015 was comprised as follows:

	Three months ended March 31,
	2016		2015
	Unaudited
Cost of revenues	$	9	$	41
Research and development		26		139
Sales and marketing		31		69
General and administrative		111		519
Total stock-based compensation expenses	$	177	$	768

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FAIR VALUE MEASURMENTS

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 7:- FAIR VALUE MEASURMENTS

ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance.

ASC 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1 - quoted prices in active markets for identical assets or liabilities;

Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

a. On March 30, 2012, the Company consummated the final closing of the 2011 - 2012 Private Placement pursuant to which certain accredited investors purchased an aggregate of 27,345 shares of Common Stock and warrants to purchase 27,345 shares of Common Stock at an exercise price of $135.00 per share for total consideration of $2,461 (the “2011-2012 Private Placement”).

The placement agent for the 2011 - 2012 Private Placement and its permitted designees were granted warrants to purchase an aggregate of (i) 5,358 shares of Common Stock at the exercise price of $90.00 per share and (ii) 5,358 shares of Common Stock at the exercise price of $135.00 per share. Subsequent to the issuance of the 2011 - 2012 Private Placement warrants the original exercise price of the warrants for the investors and placement agent was adjusted from $135.00 per share to $3.59 per share and additional 950,152 and 180,557 warrants were issued, respectively. In addition, the exercise price for the placement agent warrants of the 2011 - 2012 Private Placement, with an original exercise price of $90.00 per share was adjusted to $3.33 per share and an additional 119,705 warrants were issued.

b. On September 23, 2014, the Company consummated the September 2014 Private Placement.

The warrants of the 2011-2012 Private Placement contain non-standard anti-dilution protection provisions and the warrants of the September 2014 Private Placement contain a net settlement cash feature and liquidated damages penalties and therefore the Company accounts for such warrants as a liability according to the provisions of ASC 815-40 “Contracts in entity’s own equity,” and re-measures such liability using the Binomial option-pricing model as described below.

In estimating the warrants' fair value, the Company used the following assumptions:

Investors' warrants in 2011-2012 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.42	%
Expected volatility (2)		95.76	%
Expected life (in years) (3)		0.57
Expected dividend yield (4)		0	%
Fair value per warrant	$	1.52

Placement agent's warrants 2011-2012 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.05	%
Expected volatility (2)		140.82	%
Expected life (in years) (3)		0.02
Expected dividend yield (4)		0	%
Fair value per warrant	$	0.82-1.03

Investors' warrants in September 2014 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.80	%
Expected volatility (2)		99.65	%
Expected life (in years) (3)		2.48
Expected dividend yield (4)		0	%
Fair value per warrant	$	1.80

(1) Risk-free interest rate - based on yield rates of non-index linked U.S. Federal Reserve treasury bonds.

(2) Expected volatility - was calculated based on actual historical stock price movements of the Company together with companies in the same industry over a term that is equivalent to the expected term of the option. 

(3) Expected life - the expected life was based on the expiration date of the warrants.

(4) Expected dividend yield - was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future.

The changes in Level 3 liabilities associated with the 2011-2012 Private Placement and the September 2014 Private Placement warrants are measured at fair value on a recurring basis. The following tabular presentation reflects the components of the liability associated with such warrants as of March 31, 2016:

	Fair value of liability related to warrants
Balance at December 31, 2015	$	2,610
Change in fair value of warrants during the period		(747	)
Balance at March 31, 2016 (unaudited)	$	1,863

As of March 31, 2016, there were outstanding warrants to purchase 1,340,368 shares of Common Stock from the above issuances which were recorded as a liability.

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FINANCIAL EXPENSES (INCOME), NET

3 Months Ended

Mar. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

NOTE 8:- FINANCIAL EXPENSES (INCOME), NET

	Three months ended  March 31,
	2016		2015
	Unaudited
Bank charges	$	4	$	4
Foreign currency translation adjustments		9		7
Change in fair value of warrants		(747)		(150)
Total financial expenses (income), net	$	(734)	$	(139)

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 9:- SUBSEQUENT EVENTS

In May 2016 the Company issued 583 shares of Common Stock in connection with the exercise of 5,227 warrants on a cashless basis, that were issued as part of the 2011-2012 Private Placement discussed in Note 7a and 5,000 shares of Common Stock in connection with the exercise of 5,000 warrants that were issued as part of the Public Offering discussed in Note 6c.

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2016

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	March 31,		December 31,
	2016		2015
	Unaudited
Raw materials	$	508	$	469
Finished products		497		132
	$	1,005	$	601

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STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Transactions related to the grant of options to employees, directors and non-employees under the above plans during the three month period ended March 31, 2016 were as follows:

	Number of options		Weighted average exercise price		Weighted average remaining contractual life		Aggregate Intrinsic value
			$		Years		$
Options outstanding at beginning of year		587,678		16.87		5.80		1.26
Options granted		-		-
Options exercised		-		-
Options expired		(153)		35.89
Options forfeited		(8,385)		6.90
Options outstanding at period end (unaudited)		579,140		16.86		99.31		9.33
Options vested and expected to vest at period end (unaudited)		539,074		17.49		5.54		9.33
Exercisable at period end (unaudited)		253,729		30.25		5.53		9.42

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

The total compensation cost related to all of the Company's equity-based awards recognized during the three month period ended March 31, 2016 and 2015 was comprised as follows:

	Three months ended March 31,
	2016		2015
	Unaudited
Cost of revenues	$	9	$	41
Research and development		26		139
Sales and marketing		31		69
General and administrative		111		519
Total stock-based compensation expenses	$	177	$	768

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FAIR VALUE MEASURMENTS (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The changes in Level 3 liabilities associated with the 2011-2012 Private Placement and the September 2014 Private Placement warrants are measured at fair value on a recurring basis. The following tabular presentation reflects the components of the liability associated with such warrants as of March 31, 2016:

	Fair value of liability related to warrants
Balance at December 31, 2015	$	2,610
Change in fair value of warrants during the period		(747	)
Balance at March 31, 2016 (unaudited)	$	1,863

Investors Warrants [Member] | Private Placement Warrants 2011-2012 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

Investors' warrants in 2011-2012 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.42	%
Expected volatility (2)		95.76	%
Expected life (in years) (3)		0.57
Expected dividend yield (4)		0	%
Fair value per warrant	$	1.52

Investors Warrants [Member] | September 2014 Private Placement [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

Investors' warrants in September 2014 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.80	%
Expected volatility (2)		99.65	%
Expected life (in years) (3)		2.48
Expected dividend yield (4)		0	%
Fair value per warrant	$	1.80

(1) Risk-free interest rate - based on yield rates of non-index linked U.S. Federal Reserve treasury bonds.

(2) Expected volatility - was calculated based on actual historical stock price movements of the Company together with companies in the same industry over a term that is equivalent to the expected term of the option. 

(3) Expected life - the expected life was based on the expiration date of the warrants.

(4) Expected dividend yield - was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future.

Placement Agent Warrants [Member] | Private Placement Warrants 2011-2012 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block]

Placement agent's warrants 2011-2012 Private Placement:

	March 31, 2016
Risk-free interest rate (1)		0.05	%
Expected volatility (2)		140.82	%
Expected life (in years) (3)		0.02
Expected dividend yield (4)		0	%
Fair value per warrant	$	0.82-1.03

XML

FINANCIAL EXPENSES (INCOME), NET (Tables)

3 Months Ended

Mar. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of Other Nonoperating Income (Expense) [Table Text Block]

	Three months ended  March 31,
	2016		2015
	Unaudited
Bank charges	$	4	$	4
Foreign currency translation adjustments		9		7
Change in fair value of warrants		(747)		(150)
Total financial expenses (income), net	$	(734)	$	(139)

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GENERAL (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Organization And Presentation Of Financial Statements [Line Items]
Operating Income (Loss)	$ 1,923	$ 1,777
Net Cash Provided by (Used in) Operating Activities	$ 2,105	$ 1,525

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INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Raw materials	$ 508	$ 469
Finished products	497	132
Inventory, Net	$ 1,005	$ 601

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INVENTORIES (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Inventory [Line Items]
Inventory Write-down	$ 94	$ 193

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STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable at end of year, Weighted average remaining contractual life	5 years 6 months 11 days
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding at beginning of year, Number of options	587,678
Options granted, Number of options	0
Options exercised, Number of options	0
Options expired, Number of options	(153)
Options forfeited, Number of options	(8,385)
Options outstanding at end of year, Number of options	579,140	587,678
Options vested and expected to vest at end of year, Number of options	539,074
Exercisable at end of year, Number of options	253,729
Options outstanding at beginning of year, Weighted average exercise price	$ 16.87
Options granted, Weighted average exercise price	0
Options exercised, Weighted average exercise price	0
Options expired, Weighted average exercise price	35.89
Options forfeited, Weighted average exercise price	6.9
Options outstanding at end of year, Weighted average exercise price	16.86	$ 16.87
Options vested and expected to vest at end of year, Weighted average exercise price	17.49
Exercisable at end of year, Weighted average exercise price	$ 30.25
Options outstanding at, Weighted average remaining contractual life	99 years 3 months 22 days	5 years 9 months 18 days
Options vested and expected to vest at end of year, Weighted average remaining contractual life	5 years 6 months 14 days
Options outstanding, Aggregate Intrinsic value	$ 9,330	$ 1,260
Options vested and expected to vest at end of year, Aggregate Intrinsic value	9,330
Exercisable at end of year, Aggregate Intrinsic value	$ 9,420

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STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expenses	$ 177	$ 768
Cost of revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expenses	9	41
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expenses	26	139
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expenses	31	69
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expenses	$ 111	$ 519

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STOCKHOLDERS' EQUITY (DEFICIENCY) AND CONVERTIBLE PREFERRED SHARES (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended		3 Months Ended		12 Months Ended
		Mar. 31, 2016	Feb. 18, 2016	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Apr. 30, 2015	Mar. 30, 2012
Class of Stock [Line Items]
Stock Issued During Period, Value, New Issues				$ 5,038
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		$ 965		$ 965
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				1 year 7 days
Stock Issued During Period, Value, Conversion of Convertible Securities				$ 2,277	$ 102	$ 400
General and Administrative Expense				905	$ 412
Stock Issued During Period, Value, Share-based Compensation, Gross				75		$ 304
Deemed Dividend Related To Change In Conversion Term Of Series A Preferred Stock, Value				0
Preferred Stock Conversion Agreement [Member]
Class of Stock [Line Items]
Stock Issued During Period, Value, Conversion of Convertible Securities			$ 2,277
Percentage Of Increase In Original Common Stock Shares			25.00%
Deemed Dividend Related To Change In Conversion Term Of Series A Preferred Stock, Value			$ 455
Series A Preferred Stock [Member] | Preferred Stock Conversion Agreement [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities			1,984
Service Provider Agreement [Member]
Class of Stock [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance							22,224
General and Administrative Expense				$ 37
Two Non-US Finder [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		73,333		73,333
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 4.50		$ 4.50
Exercisable Term		5 years
Two Non-US Finder [Member] | Non-Plan Stock Option [Member]
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares		38,889
Shares Issued, Price Per Share		$ 0.0001		$ 0.0001
Common Stock [Member]
Class of Stock [Line Items]
Stock Issued During Period, Value, New Issues				$ 1
Stock Issued During Period, Shares, New Issues				1,333,333
Stock Issued During Period, Shares, Conversion of Convertible Securities				498,935		84,812
Stock Issued During Period, Value, Conversion of Convertible Securities	[1]			$ 0		$ 0
Stock Issued During Period, Shares, Share-based Compensation, Gross				9,849		55,474
Stock Issued During Period, Value, Share-based Compensation, Gross	[1]			$ 0		$ 0
Deemed Dividend Related To Change In Conversion Term Of Series A Preferred Stock, Value				$ 0
Common Stock [Member] | Preferred Stock Conversion Agreement [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities			623,672
Common Stock [Member] | Service Provider Agreement [Member]
Class of Stock [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance		5,556		5,556
U.S. Members of the Board of Director [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross				9,849
Stock Issued During Period, Value, Share-based Compensation, Gross				$ 75
Officer [Member] | Equity Incentive Plan 2012 [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues		20,000
Share-based Compensation, Total		$ 86
Restricted Stock [Member] | Service Provider Agreement [Member]
Class of Stock [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance							5,556
Restricted Stock [Member] | Two Non-US Finder [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues		44,444
Private Placement [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights								$ 90.00
Private Placement [Member] | Investor [Member]
Class of Stock [Line Items]
Units Issued during Period		555,555
Issuance of Units Purchase Price Per Unit		$ 4.50
Proceeds From Issue of Units		$ 2,500
Private Placement [Member] | Investor [Member] | Series A Warrants 2016 [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues		555,555
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		666,666		666,666
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 4.50		$ 4.50
Exercisable Term		5 years
Private Placement [Member] | Common Stock [Member] | Investor [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights								$ 135.00
Second Private Placement 2011-2012 [Member] | Placement Agent Warrants [Member]
Class of Stock [Line Items]
Stock Issued During Period Warrants Exercised		48,054		48,054
2011-2012 Private Placement | Placement Agent Warrants [Member]
Class of Stock [Line Items]
Warrants Exercise Price Per Share Adjusted		$ 3.59		$ 3.59
Stock Issued During Period Warrants Exercised		415,316		415,316
2011-2012 Private Placement | Placement Agent Warrants One [Member]
Class of Stock [Line Items]
Warrants Exercise Price Per Share Adjusted		$ 3.33		$ 3.33
Stock Issued During Period Warrants Exercised		78,662		78,662
Public Offering [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues		1,333,333
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,333,333		1,333,333
Proceeds from Warrant Exercises		$ 5,038
Exercisable Term		5 years
Shares Issued, Price Per Share		$ 4.50		$ 4.50
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right		1		1
Public Offering [Member] | March 2016 Warrants [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 4.50		$ 4.50
Shares Issued, Price Per Share		$ 0.01		$ 0.01
Public Offering [Member] | Chief Financial Officer [Member]
Class of Stock [Line Items]
Stock Issued During Period, Value, New Issues		$ 500
Stock Issued During Period, Shares, New Issues		111,112
Over-Allotment Option [Member]
Class of Stock [Line Items]
Stock Issued During Period, Shares, New Issues		200,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		200,000		200,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.0093		$ 0.0093
Exercisable Term		5 years
Shares Issued, Price Per Share		$ 4.185		$ 4.185
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right		153,333		153,333
Over-Allotment Option [Member] | Replacememnt Agreement [Member]
Class of Stock [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 5.625		$ 5.625

[1] Represents an amount lower than $1.

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FAIR VALUE MEASURMENTS (Details)	3 Months Ended
	Mar. 31, 2016 $ / shares
Investors Warrants [Member] | Private Placement Warrants 2011-2012 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate	0.42%	[1]
Expected volatility	95.76%	[2]
Expected life (in years)	6 months 25 days	[3]
Expected dividend yield	0.00%	[4]
Fair value per warrant	$ 1.52
Investors Warrants [Member] | September 2014 Private Placement [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate	0.80%	[1]
Expected volatility	99.65%	[2]
Expected life (in years)	2 years 5 months 23 days	[3]
Expected dividend yield	0.00%	[4]
Fair value per warrant	$ 1.8
Placement Agent Warrants [Member] | Private Placement Warrants 2011-2012 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate	0.05%	[1]
Expected volatility	140.82%	[2]
Expected life (in years)	7 days	[3]
Expected dividend yield	0.00%	[4]
Placement Agent Warrants [Member] | Private Placement Warrants 2011-2012 [Member] | Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair value per warrant	$ 1.03
Placement Agent Warrants [Member] | Private Placement Warrants 2011-2012 [Member] | Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair value per warrant	$ 0.82

[1] Risk-free interest rate - based on yield rates of non-index linked U.S. Federal Reserve treasury bonds.

[2] Expected volatility - was calculated based on actual historical stock price movements of the Company together with companies in the same industry over a term that is equivalent to the expected term of the option.

[3] Expected life - the expected life was based on the expiration date of the warrants.

[4] Expected dividend yield - was based on the fact that the Company has not paid dividends to its shareholders in the past and does not expect to pay dividends to its shareholders in the future.

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FAIR VALUE MEASURMENTS (Details 1) - Private Placement [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Balance at December 31, 2015	$ 2,610
Change in fair value of warrants during the period	(747)
Balance at March 31, 2016 (unaudited)	$ 1,863

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FAIR VALUE MEASURMENTS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended
	Mar. 30, 2012	Mar. 31, 2016
Private Placement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 90.00
2011-2012 Placement Agent And Investor [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Exercise Price Of Warrants Adjusted	3.33
2011-2012 Placement Agent And Investor [Member] | Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Exercise Price Of Warrants Adjusted	$ 3.59
2011-2012 Investor [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stock To Be Issued Upon Conversion Of Warrants Additional Issue	950,152
2011-2012 Placement agent $5.00 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stock To Be Issued Upon Conversion Of Warrants Additional Issue	119,705
2011-2012 Placement agent $7.50 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stock To Be Issued Upon Conversion Of Warrants Additional Issue	180,557
Placement Agents [Member] | Private Placement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Exercise Price Of Warrants 1	$ 5,358
Warrants Issued	90.00
Placement Agents [Member] | 2011-2012 Placement Agent [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 135.00
Common Stock [Member] | Placement Agents [Member] | Private Placement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stock To Be Issued Upon Conversion Of Warrants1	5,358
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 135.00
Common Stock [Member] | Investor [Member] | Private Placement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Stock To Be Issued Upon Conversion Of Warrants	27,345
Proceeds from Issuance of Private Placement (in dollars)	$ 2,461
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 135.00
Warrants Issued	27,345
Warrants Measured At Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Outstanding warrants		1,340,368

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FINANCIAL EXPENSES (INCOME), NET (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Selected Statements Of Operations Data [Line Items]
Bank charges	$ 4	$ 4
Foreign currency translation adjustments	9	7
Change in fair value of warrants	(747)	(150)
Total financial expenses (income), net	$ (734)	$ (139)

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SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member]	1 Months Ended
	May. 31, 2016 shares
Warrant [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues	5,000
Number of Warrants Exercised	5,000
Private Placement [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues	583
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	5,227