Note 8 - Shareholders' Equity

12 Months Ended

Dec. 31, 2014

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, 2014, 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) ("Incentive Share Option Plan"), options may be granted to employees, officers, consultants, service providers and directors of the Company or its subsidiary.

2. As of December 31, 2014, the Company has authorized according to the Incentive Share Option Plan the grant of options to officers, management, other key employees and others of up to 1,372,630 options for the Company's Common shares. The maximum term of the options is ten years from the date of grant. As of December 31, 2014, an aggregate of 655,130 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, 2014 have been classified by exercise price, as follows:

Exercise Price					Options outstanding as of December 31, 2014		Weighted average remaining contractual term		Weighted average exercise price		Options exercisable as of December 31, 2014		Weighted average exercise price of options exercisable
							Years
$	0.68		-	0.84		55,763		4.70	$	0.73		45,763	$	0.74
$	1.05		-	1.32		80,000		4.92	$	1.21		50,000	$	1.15
$	1.51		-	1.69		1,077,000		8.29	$	1.65		339,500	$	1.54
		$	1.79			50,000		5.61	$	1.79		50,000	$	1.79
						1,262,763		7.65	$	1.57		485,263	$	1.45

4.  The total equity-based compensation expense related to all of the Company’s equity based awards, including non-employee options recognized for the years ended December 31, 2014 and 2013 is comprised as follows:

	Year ended December 31,
	2014		2013
Cost of revenues	$	4	$	1
Engineering and product development expenses		17		4
Selling and marketing expenses		7		3
General and administration expenses		219		98
Total equity-based compensation expense	$	247	$	106

 A summary of option activity under the Company's stock option plans as of December 31, 2014 and changes during the year then ended are as follows:

	Year ended December 31, 2014
	Amount of options			Weighted average exercise price		Weighted average remaining contractual term (years)		Aggregate intrinsic value
Outstanding beginning of year		712,763		$	1.33		5.38	$	-
Granted		795,000		$	1.59
Exercised		( 92,500	)	$	.93
Forfeited		( 72,500	)	$	1.66
Expired		( 80,000	)	$	1.38
Outstanding end of year		1,262,763		$	1.57		7.65	$	41.57
Exercisable end of year		485,263		$	1.45		5.26	$	34.27

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on December 31, 2014 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, 2014. This amount changes based upon the fair market value of the Company’s shares.

As of December 31, 2014, there was $ 744 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 3.35 years.

d. Options issued to non-emloyees:

The Company's outstanding options to non-employees as of December 31, 2014 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		21,500	$	1.51		21,500
		141,500				141,500

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

In 2010, the Company granted 41,500 options to Telkoor's employees of which 21,500 are outstanding at December 31, 2014. 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 2014: risk-free interest rates of 2.14%, dividend yield of 0%, volatility of 79.9%, and the remaining contractual term of the options of 5.92 years.

e. 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 the Company's common shares or cash equivalent as retirement benefits to the participants. As of July 31, 2014, the ESOT had distributed or paid the cash equivalent of all of the 167,504 shares previously held prior to plan termination.

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.