Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Significant Accounting Policies [Abstract] | |
Use of estimates | |
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| a. | Use of estimates: | | | |
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The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
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Financial statements in U.S. dollars | |
| b. | Financial statements in U.S. dollars: | | | |
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The accompanying financial statements have been prepared in U.S. dollars, the functional and reporting currency of the Company. |
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Although the majority of the Company and its Subsidiary's operations are conducted in Israel, most of their expenses are in U.S dollar. Therefore, the Company's management believes that the U.S dollars is the functional currency of the primary economic environment in which the Company and its Subsidiary operate. |
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Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with ASC 830-10, "Foreign Currency Matters". All transactions gains and losses of the re-measurement of monetary balance sheets items are reflected in the consolidated statements of comprehensive loss as financial income or expenses, as appropriate. |
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Principles of consolidation | |
| c. | Principles of consolidation: | | | |
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The consolidated financial statements include the accounts of the Company and its Subsidiary. Intercompany transactions and balances have been eliminated upon consolidation. |
Cash equivalents | | d. | Cash equivalents: | | | |
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Cash equivalents include short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less from time of deposit. |
Prepaid expenses | |
| e. | Prepaid expenses: | | | |
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All prepaid expenses are composed of clinical trials drug-kits which expense based on a percentage of completion method of the related clinical trials. |
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Investment in Parent company | |
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| f. | Investment in Parent company: | | | |
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In accordance with ASC320, the accounting for the Company's investment in the equity securities depend on the remaining period of the tradability restriction in its respective market of the shares (as described in Note 1b). |
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Shares that are restricted for less than one year re-measured to reflect fair value at each cutoff date. These securities are classified as available-for-sale securities carried at fair value, with unrealized gains and losses reported as a separate component of stockholders' equity under accumulated other comprehensive income in the consolidated balance sheets. Realized gains and losses on sales of available-for-sale securities are included as financials income, net in the consolidated statements of comprehensive loss. As of December 31, 2014, there are no restrictions on selling such shares. |
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The Company recognizes an impairment charge when a decline in the fair value of its investments in securities is below the cost basis of such securities is judged to be other than temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company's intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment recognized as part of financial income, net, net in the statement of comprehensive loss and is limited to the amount related to credit losses, while impairment related to other factors recognized in other comprehensive loss. As of December 2014 and 2013 no impairment was recognized. |
Property and equipment, net | g. | Property and equipment, net: | | | | |
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| | Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates: | | | |
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| Computer equipment | | | 33 | |
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Impairment of long-lived assets | |
| h. | Impairment of long-lived assets: | | | |
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The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment", whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2014 and 2013, no impairment losses have been identified. |
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Research and development expenses | |
| i. | Research and development expenses: | | | |
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All research and development costs are charge to expense as incurred. |
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Accounting for stock-based compensation | |
| j. | Accounting for stock-based compensation: | | | |
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The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statements of comprehensive loss. |
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The Company recognizes compensation expenses for the value of its awards granted based on the accelerated recognition method over the requisite service period of each of the awards, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. |
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The Company estimates the fair value of stock options granted using the binomial option pricing-model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the early exercise multiply. Expected volatility was calculated based upon historical volatilities of similar entities in the related sector index. The early exercise multiply is representing the value of the underlying stock as a multiple of the exercise price of the option which, if achieved, results in exercise of the option. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. |
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The Company applies ASC 505-50, "Equity-Based Payments to Non-Employees" with respect to options and warrants issued to non-employees. |
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| k. | Basic and diluted net loss per share: | | | |
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| | Basic net loss per share is computed based on the weighted average number of shares of Common Stock, par value $0.001 per share (the "Common Stock") outstanding during each period. Diluted net loss per share is computed based on the weighted average number of shares of Common Stock outstanding during each period, plus dilutive potential Common Stock considered outstanding during the period, in accordance with ASC topic 260, "Earnings Per Share" ("ASC 260"). | | | |
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The total weighted average number of shares related to the outstanding warrants and options excluded from the calculations of diluted net loss per share due to their anti-dilutive effect was 1,453,638 and 1,437,315 for the years ended December 31, 2014 and 2013, respectively. |
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Basic and diluted net loss per share | k. | Basic and diluted net loss per share: | | | | |
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Basic net loss per share is computed based on the weighted average number of shares of Common Stock outstanding during each period. Diluted net loss per share is computed based on the weighted average number of shares of Common Stock outstanding during each period, plus dilutive potential Common Stock considered outstanding during the period, in accordance with ASC topic 260, "Earnings Per Share" ("ASC 260"). |
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The total weighted average number of shares related to the outstanding warrants and options excluded from the calculations of diluted net loss per share due to their anti-dilutive effect was 1,453,638 and 1,437,315 for the years ended December 31, 2014 and 2013, respectively. |
Income taxes | |
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| l. | Income taxes: | | | |
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The Company and its Subsidiary account for income taxes and uncertain tax positions in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on the differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiary provide a full valuation allowance, to reduce deferred tax assets to the amounts that are more likely-than-not to be realized. |
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The Company implements a two-step approach to recognize and to measure uncertain tax positions in accordance with ASC 740. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. As of December 31, 2014 and 2013, no liability for unrecognized tax benefits was recorded as a result of the implementation of ASC 740. |
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Concentrations of credit risk | |
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| m. | Concentrations of credit risk: | | | |
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Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, investment in Parent company and prepaid expenses. |
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Cash and cash equivalents are deposited with a major bank in Israel. The Company's management believes that the financial institution that holds the Company's investments is an institution with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. |
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Fair value of financial instruments | |
| n. | Fair value of financial instruments: | | | |
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The carrying amounts of the Company's financial instruments, including cash and cash equivalents, investment in Parent company, prepaid expenses, accounts receivable, other accounts payable and accrued expenses, approximate fair value because of their generally short-term maturities. |
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The Company adopted ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to release a liability in an orderly transaction between market participants. |
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As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: |
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| Level 1 - | Observable input that reflects quoted prices (unadjusted) for identical assets or liabilities in active markets. | | | |
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| Level 2 - | Include other inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings. | | | |
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| Level 3 - | Unobservable inputs which are supported by little or no market activity. | | | |
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| | The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | | | |
Impact of recently issued Accounting Standards | |
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| o. | Impact of recently issued Accounting Standards: | | | |
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In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. Although the Company has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Act of 2012, since early adoption is permitted the Company chose to early adopt the update effective June 30, 2014 consolidated financial statement. |
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In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity s Ability to Continue as a Going Concern, which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern. The pronouncement is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. |
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