Note 8 - Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 8:-       SHAREHOLDERS' EQUITY

a. Preferred shares:

There are authorized Preferred shares in the amount of 500,000 shares of Series A cumulative Redeemable Convertible Preferred shares ("Series A"), and an additional 1,500,000 Preferred shares that have been authorized, but the rights, preferences, privileges and restrictions on these shares have not been determined. DPC's Board of Directors is authorized to create a new series of Preferred shares and determine the number of shares, as well as the rights, preferences, privileges and restrictions granted to or imposed upon any series of Preferred shares. As of December 31, 2013, there were no Preferred shares issued or outstanding.

b. Common shares:

Common shares confer upon the holders the rights to receive notice to participate and vote in the general meeting of shareholders of the Company, to receive dividends, if and when declared, and to participate in a distribution of surplus of assets upon liquidation of the Company.

c. Share Option Plans:

1. Under the Company's Digital Power 2012 (As Amended), 2002, 1998 and 1996 Incentive Share Option Plans ("the Incentive Share Option Plans"), options may be granted to employees, officers, consultants, service providers and directors of the Company or its subsidiary.

2. As of December 31, 2013, the Company has authorized according to the Incentive Share Option Plans the grant of options to officers, management, other key employees and others of up to 1,373,000, 513,000, 240,000 and 1,519,000 options, respectively for the Company's Common shares. For all four Incentive Share Option Plans, the maximum term of the options is ten years from the date of grant. As of December 31, 2013, an aggregate of 1,452,630 of the Company's options are still available for future grant.

3. The options granted generally become fully vested after four years. Any options that are forfeited or cancelled before expiration become available for future grants.

 The options outstanding as of December 31, 2013 have been classified by exercise price, as follows:

Exercise Price				Options outstanding as of December 31, 2013		Weighted average remaining contractual term		Weighted average exercise price		Options exercisable as of December 31, 2013		Weighted average exercise price of options exercisable
						Years
$	0.68	-	0.84		125,763		5.41	$	0.77		103,263	$	0.79
$	1.05	-	1.19		160,000		1.38	$	1.10		157,500	$	1.10
$	1.51	-	1.69		377,000		7.04	$	1.55		254,000	$	1.54
$		1.79			50,000		5.61	$	1.79		50,000	$	1.79
					712,763		5.38	$	1.33		564,763	$	1.30

4. The total equity-based compensation expense related to all of the Company’s equity-based awards, recognized for the years ended December 31, 2013 and 2012 is comprised as follows:

	Year ended December 31,
	2013		2012
Sales and marketing expenses		3		21
General and administrative		103		111
Total equity-based compensation expense	$	106	$	132

A summary of option activity under the Company's stock option plans as of December 31, 2013 and changes during the year then ended are as follows:

	Year ended December 31, 2013
	Amount of options		Weighted average exercise price		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at the beginning of the year		832,763	$	1.30		6.08	$	1
Forfeited/Expired		120,000	$	1.14
Outstanding at the end of the year		712,763	$	1.33		5.38	$	-
Exercisable options at the end of the year		564,763	$	1.30		4.82	$	-

There is no aggregate intrinsic value (the difference between the Company's closing stock price on December 31, 2013 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 December 31, 2013 since there were no in-the-money options at December 31, 2013

As of December 31, 2013, there was $ 158 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company's stock option plans. That cost is expected to be recognized over a weighted average period of 1.58 years.

The Company applies ASC 718 and ASC 505-50, “Equity Based Payments to Non-Employees”, with respect to options and warrants issued to non-employees.

d. Warrants and options issued to service providers and consultants:

The Company's outstanding warrants and options to consultants and service providers as of December 31, 2013 are as follows:

Issuance date	Options for Common shares		Exercise price per share		Options exercisable
February 2005		20,000	$	1.19		20,000
March 2006		100,000	$	1.16		100,000
December 2010		41,500	$	1.51		31,125
		161,500				151,125

All options are exercisable for ten years from the date of grant.

In 2010, the Company granted 41,500 options to Telkoor's employees. These options vest over four years. The fair value of these options was estimated using the Black-Scholes option-pricing model with the following assumptions for 2013: risk-free interest rates of 2.43%, dividend yield of 0%, volatility of 75.6%, and the remaining contractual term of the options of 6.92 years.

Compensation (revenues) and expenses of $2 and $(10) were recognized for the years ended December 31, 2013 and 2012, respectively, in accordance with the accelerated method.

e. Employee stock ownership plan:

The Company has an employee stock ownership plan ("ESOP") covering eligible employees which it is in the process of terminating. The ESOP provided for the Employee Stock Ownership Trust ("ESOT") to distribute the Company's Common shares or cash equivalent as retirement benefits to the participants. As of December 31, 2013, the outstanding Common shares held by the ESOT amount to 157,515 shares. The Company began liquidation distributions in 2014 and expects final termination by June 30, 2014.

f. Dividends:

In the event that cash dividends are declared in the future, such dividends will be paid in U.S. dollars. The Company does not intend to pay cash dividends in the foreseeable future.