NOTE 7:—WARRANTS TO PURCHASE ORDINARY SHARES

As discussed in Note 1e, the Warrants to purchase Ordinary Shares issued in the Private Placement are eligible also for "cashless exercise" in case the underlying Ordinary Shares are not registered for resale. In addition, the Warrants contain non-standard "full ratchet" anti-dilution protections upon issuance of securities at a price below the then-existing exercise price and are subject to certain net settlement cash features in case of failure to timely deliver registered Ordinary Shares upon exercise. Therefore, these warrants are accounted for and recorded as a liability according to the provisions of ASC 815-40, "Derivatives and Hedging—Contracts in Entity's Own Equity" and measured using the following assumptions of the Monte Carlo option pricing model:

	August 4, 2016			December 31, 2016
Risk-free interest rate(1)		1.03	%		1.84	%
Expected volatility(2)		72.7	%		65.5	%
Expected life (in years)(3)		5.0			4.59
Expected dividend yield(4)		0	%		0	%
Fair value per warrant:	$	1.46		$	1.08


(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 share price movements of companies in the same industry over a term that is equivalent to the expected term of the warrants.
(3)	Expected life was based on the contractual term 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 Company re-measured these warrants at fair value of $7,078 as of December 31, 2016, and recorded $2,491 of financial income as a result of the change in the warrants' fair value.