Note 4 - Accounting for Stock-based Compensation

6 Months Ended

Jun. 30, 2014

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

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

NOTE 4:- ACCOUNTING FOR STOCK-BASED COMPENSATION

a. Stock option plans:

1. Under the Company's stock option plans, options may be granted to employees, officers, consultants, service providers and directors of the Company or its subsidiary.

2. As of June 30, 2014, 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, respectively, for the Company’s Common shares. For all four Incentive Option Plans, the maximum term of the options is ten years from date of grant. As of June 30, 2014, an aggregate of 787,630 shares of the Company’s common stock are still available for future grant.

3. The options granted generally become fully exercisable after four years and expire no later than 10 years from the date of the option grant. Any options that are forfeited or cancelled before expiration become available for future grants. A summary of the Company’s employee share option activity (except options to consultants and service providers) and related information is as follows:

	Six months ended June 30, 2014
	Amount of options		Weighted average exercise price		Weighted average remaining contractual term (years)		Aggregate intrinsic value (*)
Outstanding at the beginning of the period		712,763	$	1.33		5.38	$	-
Outstanding at the end of the period		1,287,763	$	1.57		8.16	$	30
Exercisable options at the end of the period		397,263	$	1.44		5.55	$	19

(*) Calculation of aggregate intrinsic value is based on the share price of the Company's common stock as of June 30, 2014 ($ 1.16 per share).

a. Stock option plans (cont.):

4. Under the provisions of ASC 718, the fair value of each option is estimated on the date of grant using a Black-Sholes option valuation model that uses the assumptions such as stock price on the date of the grant, exercise price, risk-free interest rate, expected volatility, expected life and expected dividend yield of the option. Expected volatility is based exclusively on historical volatility of the entity's stock as allowed by ASC 718. The Company uses historical information with respect to the employee options exercised to estimate the expected term of options granted, representing the period of time that options granted are expected to be outstanding. The risk-free interest rate of period within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Options for 750,000 shares of the Company’s common shares were granted during the first six months of 2014 (April 2, 2014). No options were granted during the first six months of 2013.

The total employee's equity-based compensation expense related to all of the Company's equity-based awards, recognized for the six months and three months ended June 30, 2014 and 2013 is comprised as follows:

	Six months ended				Three months ended
	June 30, 2014		June 30, 2013		June 30, 2014		June 30, 2013
	Unaudited		Unaudited		Unaudited		Unaudited
Sales and marketing expenses		5		2		4		2
Research and development		7		--		6		--
General and administrative		74		53		54		26
Total employees equity-based compensation expense		86		55		64		28

As of June 30, 2014, there was $ 932 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the stock option plans. That cost is expected to be recognized over a period of the next 3.5 years.

b. Employee Stock Ownership Plan: The Company had an Employee Stock Ownership Plan (ESOP) until July 31, 2014 at which time it was entirely liquidated after a decision to terminate the plan as of July 31, 2013 was previously made. The ESOP provided for the Employee Stock Ownership Trust ("ESOT") to distribute shares or cash equivalents of the Company's Common shares as retirement benefits to the participants. As of July 30, 2014, the ESOT had distributed all of the 167,504 shares of common stock previously held prior to plan termination.