COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies

Commitments and Contingent Liabilities

NOTE 6: - COMMITMENTS AND CONTINGENT LIABILITIES

a.The Company’s lease agreement for its Israeli offices had a 3-year term ending June 30, 2015. The lease was amended to extend the term by additional 6 months, and on July 22, 2015, the Company exercised an option to extend the lease term for an additional 24 months ending, December 31, 2017. Inc.’s lease agreement for its U.S. offices had a 17-month term ending February 28, 2015 continued on a month-to -month basis through July 31, 2015. On May 1, 2015, Inc. signed a lease agreement for a period of three years, which term was increased to four years in an amendment dated May 29, 2015.

b.During the years 2005-2010, the Company received grants under the royalty-bearing programs administered by the Office of the Chief Scientist (“OCS”), and from the Incubator, RAD BioMed Ltd. In May 2015, the OCS approved the Company’s request to transfer manufacturing rights outside of Israel, noting that the Company would be required to pay an increased royalty rate without providing any specifics. Therefore if income will be generated from the funded research program, the Company will be obligated to pay royalties on such revenue at a rate between 4% and 4.5% up to between 150% to 300% of the amount received from the grants, linked to the LIBOR. As of September 30, 2015, the total amount of grants received from the OCS and the Incubator is $741 including interest.

The revenues under the Agreement with Cardiome are subject to royalties under the above programs. Royalty expenses relating to the OCS in connection to the aforesaid Agreement for the nine months period ended September 30, 2015 were $18.

In the event that intellectual property rights are deemed to be transferred out of Israel, the grants received from the OCS and the Incubator may become a loan to be repaid immediately at up to 600% of the grants amounts. Currently, the Company’s management believes no intellectual property has been transferred out of Israel and disclosure of the Company’s know how is made solely in connection with the transfer of manufacturing rights of the Company’s products to subcontractors. Accordingly, no provision has been recorded in such respect.