COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Sep. 30, 2017

COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 4: - COMMITMENTS AND CONTINGENT LIABILITIES

a.On August 23, 2017, the Company extended its lease agreement for the Israeli offices by 12 months ending December 31, 2018. The company has an option to extend the lease term for an additional 3 periods of 12 month each. Inc.’s lease agreement for its U.S. offices has a four-year term ending May 2019. The Company’s total lease obligation as of September  30, 2017 is $614.

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 3% to 4% for the first three years and between 3.5% to 4.5% commencing the fourth year (based on the portion of manufacturing out of Israel while non-product related revenues are subject to the lower end of the ranges) and up to 150% to 300% of the amount received, linked to the LIBOR. The revenues under the Agreement with Cardiome are subject to royalties under the above programs. As of September  30, 2017, the total amount of grants received from the OCS and the Incubator, including interest, was $778 and royalties paid and accrued amounted to $29 and $14 during the nine months period ended September  30, 2017 and, 2016, respectively.

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.

c.Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. The Company had non-cancellable commitments to suppliers for purchases totaling $580 as of September 30, 2017.