NOTE 7: - SHAREHOLDERS’ EQUITY

a.Warrants:

In 2012 as part of a private placement, the Company issued warrants that were originally exercisable into Convertible Preferred Shares and prior to the Company’s IPO in 2015, were automatically converted into warrants to purchase Ordinary Shares at the share par value of NIS 0.01. The majority of the warrants that were issued prior to the IPO were exercised prior to the IPO and the remaining warrants to purchase 10,191 Ordinary Shares were exercised in April 2018.

b.Stock-based compensation:

On June 18, 2009, a Stock Option Plan (the “2009 Plan”) was adopted by the Board of Directors of the Company. The 2009 Plan was adopted in accordance with the amended sections 102 and 3(i) of Israel’s Income Tax Ordinance. Under the 2009 Plan, options to purchase Ordinary Shares of the Company may be granted to employees, advisors, directors, consultants and service providers of the Company or any subsidiary or affiliate. The default vesting schedule is up to three years, subject to the continuation of employment or service and each option granted under the 2009 Plan may be exercised into Ordinary Shares during a period of seven years from the date of grant, unless a different term is provided in the option agreement. On April 30, 2013, the 2013 Stock Incentive Sub Plan (the “2013 Sub Plan”) was adopted by the Board of Directors of the Company, which set forth the terms for the grant of stock awards to Inc.’s employees or US non-employees.

On February 20, 2015, the Company’s Board of Directors approved the replacement of the 2009 Plan and 2013 Sub Plan by adopting the Amended and Restated 2009 Stock Incentive Plan (the “Amended and Restated Plan”). This action was approved by the shareholders on March 1, 2015. The Amended and Restated Plan also allows the issuance of Restricted Stock Units (“RSUs”) and under the Amended and Restated Plan, each option may be exercised into Ordinary Shares during a period of ten years from the date of grant, unless a different term is provided in the option agreement.

Transactions related to the grant of options to employees and directors under the Amended 2009 Stock Plan during the six months ended June 30, 2018, were as follows:

	Number of		Weighted average exercise		Weighted average remaining contractual life	Aggregate intrinsic
	options		price		(years)	value
	Unaudited

Options outstanding at January 1, 2018	2,057,862		$	4.03	6.12	$	384
Options exercised	(46,220	)	3.25		—	—
Options forfeited	(136,820	)	3.97		—	—


Options outstanding at end of the period	1,874,822		4.06		5.72	1,459


Options vested at end of the period	1,267,854		$	4.20	4.13	$	904

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the deemed fair value of the Company’s Ordinary Shares on the last day of the six months period ended June 30, 2018 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 June 30, 2018. This amount is impacted by the changes in the fair market value of the Company’s shares.

A summary of RSUs activity during the six months ended June 30, 2018, were as follows:

	Number of RSU’s		Weighted average grant date fair value		Aggregate intrinsic value
	Unaudited
Unvested at January 1, 2018	247,095		$	3.32	$	914
RSUs vested	(113,658	)	3.34		511
RSUs forfeited	(19,787	)	3.16		—


Unvested at end of the period	113,650		$	3.34	$	511

113,658 RSUs vested on June 30, 2018 and the remainder will vest on the approval of the Trevyent NDA by the FDA.

On December 12, 2017, the Board of Directors reserved an additional 805,593 Ordinary Shares out of its authorized and unissued share capital for future option grants. As of June 30, 2018, the Company has 1,408,032 Ordinary Shares available for future grant under the Amended and Restated Plan.

As of June 30, 2018, the total unrecognized estimated compensation cost related to non-vested stock options granted prior to that date was $1,382, which is expected to be recognized over a weighted average period of approximately 2.12 years.

The total compensation cost related to all of the Company’s equity-based awards, recognized during the six months ended June 30, 2018 and 2017 was comprised as follows:

	Six months ended June 30,
	2018		2017
	Unaudited

Research and development	$	189	$	94
Sales and marketing	37		31
General and administrative	587		352

	$	813	$	477