COMMITMENTS AND CONTINGENT LIABILITIES

3 Months Ended

Mar. 31, 2018

COMMITMENTS AND CONTINGENT LIABILITIES

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 6: - COMMITMENTS AND CONTINGENT LIABILITIES

a.The Company’s lease agreement for the Israeli offices expire on December 31, 2018. The Company has an option to extend the lease term for an additional three periods of twelve months each. Inc.’s lease agreement for its U.S. offices has a four-year term ending May 2019. The Company’s total future minimum aggregate lease commitments under non-cancelable operating lease agreements as of March 31, 2018 is $413.

b.During the years 2005- 2010, the Company received grants under the royalty-bearing programs administered by the Israel Innovation Authority (the “IIA”), (previously the Office of the Chief Scientist (“OCS”)), and from the Incubator, RAD BioMed Ltd. In May 2015, the IIA 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 andall such royalties due have been paid. As of March 31, 2018, the total amount of grants received from the IIA and the Incubator, including interest, was $786 and total royalties paid were $90.

In the event that intellectual property rights are deemed to be transferred out of Israel, the grants received from the IIA 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 $1,031 as of March 31, 2018.