GlucoTrack (GCTK) 10-Q 15 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 15, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Entity Registrant Name	Integrity Applications, Inc.
Entity Central Index Key	1,506,983
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,805,560

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents	$ 1,405,534	$ 608,701
Accounts receivable, net	69,664	18,446
Inventories	698,170	816,223
Other current assets	123,465	268,792
Total current assets	2,296,833	1,712,162
Property and Equipment, Net	242,142	220,463
Long-Term Restricted Cash	35,664	35,152
Funds in Respect of Employee Rights Upon Retirement	167,287	164,883
Total assets	2,741,926	2,132,660
Current Liabilities
Accounts payable	466,165	1,082,546
Other current liabilities	572,930	427,886
Total current liabilities	1,039,095	1,510,432
Long-Term Liabilities
Long-Term Loans from Stockholders	161,992	160,314
Liability for Employee Rights Upon Retirement	176,673	174,137
Warrants with Down-Round Protection	833,153	321,695
Total long-term liabilities	1,171,818	656,146
Total liabilities	2,210,913	2,166,578
Commitments and Contingent Liabilities
Temporary Equity
Total temporary equity	9,288,812	6,936,996
Stockholders' Deficit
Common Stock of $ 0.001 par value ("Common Stock"): 40,000,000 shares authorized as of June 30, 2016 and December 31, 2015; 5,805,560 and 5,690,097 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively	5,807	5,691
Additional paid in capital	23,652,451	22,309,742
Accumulated other comprehensive income	60,129	90,168
Accumulated deficit	(32,476,186)	(29,376,515)
Total stockholders' deficit	(8,757,799)	(6,970,914)
Total liabilities, temporary equity and stockholders' deficit	2,741,926	2,132,660
Series A Preferred Stock [Member]
Temporary Equity
Total temporary equity	221,152	221,152
Series B Preferred Stock [Member]
Temporary Equity
Total temporary equity	6,715,844	6,715,844
Series C 5.5% Convertible Preferred Stock [Member]
Temporary Equity
Total temporary equity	$ 2,351,816

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Temporary Equity
Common Stock, par value per share	$ 0.001	$ 0.001
Common Stock, shares authorized	40,000,000	40,000,000
Common Stock, shares issued	5,805,560	5,690,097
Common Stock, shares outstanding	5,805,560	5,690,097
Preferred Stock [Member]
Temporary Equity
Convertible Preferred Stock, par value per share	$ 0.001	$ 0.001
Convertible Preferred Stock, shares authorized	10,000,000	10,000,000
Series A Preferred Stock [Member]
Temporary Equity
Convertible Preferred Stock, shares issued	376	376
Convertible Preferred Stock, shares outstanding	376	376
Series B Preferred Stock [Member]
Temporary Equity
Convertible Preferred Stock, shares issued	15,031	15,031
Convertible Preferred Stock, shares outstanding	15,031	15,031
Series C 5.5% Convertible Preferred Stock [Member]
Temporary Equity
Convertible Preferred Stock, shares issued	4,425	0
Convertible Preferred Stock, shares outstanding	4,425	0

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenues	$ 381,731	$ 67,342	$ 470,878	$ 143,167
Research and development expenses	880,696	557,980	1,531,396	1,036,305
Selling, marketing and general and administrative expenses	1,084,465	605,565	1,787,309	1,083,762
Total operating expenses	1,965,161	1,163,545	3,318,705	2,120,067
Operating loss	1,583,430	1,096,203	2,847,827	1,976,900
Financing (income) expenses, net	5,568	570,603	(32,065)	1,224,437
Loss for the period	1,588,998	1,666,806	2,815,762	3,201,337
Other comprehensive (income) loss:
Foreign currency translation adjustment	8,063	(97,383)	30,039	(55,720)
Comprehensive loss for the period	$ 1,597,061	$ 1,569,423	$ 2,845,801	$ 3,145,617
Loss per share (Basic)	$ (0.30)	$ (0.33)	$ (0.54)	$ (0.64)
Loss per share (Diluted)	$ (0.30)	$ (0.33)	$ (0.54)	$ (0.64)
Common shares used in computing Basic income (loss) per share	5,742,468	5,441,253	5,716,566	5,382,682
Common shares used in computing Diluted income (loss) per share	5,742,468	5,441,253	5,716,566	5,382,682

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - 6 months ended Jun. 30, 2016 - USD ($)	Common Stock [Member]	Additional paid in capital [Member]	Accumulated other comprehensive income [Member]	Accumulated deficit [Member]	Total
Balance at Dec. 31, 2015	$ 5,691	$ 22,309,742	$ 90,168	$ (29,376,515)	$ (6,970,914)
Balance, shares at Dec. 31, 2015	5,690,097				5,690,097
Loss for the period of six months				(2,815,762)	$ (2,815,762)
Other comprehensive loss			(30,039)		(30,039)
Amounts allocated to Series C-1 and Series C-2 Warrants, net		1,164,657			1,164,657
Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection within long-term liabilities		(341,662)			(341,662)
Incremental fair market value adjustments of modified warrants issued to placement agent		211,077			211,077
Stock dividend on Series C Preferred Stock	$ 9	20,346		(20,355)
Stock dividend on Series C Preferred Stock, shares	8,563
Stock dividend on Series B Preferred Stock	$ 107	253,994		(254,101)
Stock dividend on Series B Preferred Stock, shares	106,900
Cash dividend on Series A Preferred Stock				(9,453)	(9,453)
Stock-based compensation		34,297			34,297
Balance at Jun. 30, 2016	$ 5,807	$ 23,652,451	$ 60,129	$ (32,476,186)	$ (8,757,799)
Balance, shares at Jun. 30, 2016	5,805,560				5,805,560

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Loss for the period	$ (2,815,762)	$ (3,201,337)
Adjustments to reconcile income (loss) for the period to net cash used in operating activities:
Depreciation	27,980	18,359
Stock-based compensation	34,297	12,147
Incremental fair market value adjustments of modified warrants issued to placement agent	211,077
Change in the fair value of Warrants with down-round protection	(64,212)	(91,309)
Linkage difference on principal of loans from stockholders	(639)	(1,872)
Loss on partial extinguishment of Series A Preferred Stock and Series A Warrants		1,270,971
Changes in assets and liabilities:
Increase in accounts receivable	(51,053)	(3,149)
Decrease (increase) in inventory	130,203	(51,036)
Decrease (increase) in other current assets	147,697	(17,474)
(Decrease) increase in accounts payable	(638,908)	145,388
Increase in other current liabilities	132,153	83,030
Net cash used in operating activities	(2,887,167)	(1,836,282)
Cash flows from investing activities:
Increase in funds in respect of employee rights upon retirement		(24,279)
Purchase of property and equipment	(46,397)	(18,892)
Net cash used in investing activities	(46,397)	(43,171)
Cash flows from financing activities
Cash dividend on Series A Preferred Stock	(4,753)	(47,036)
Proceeds allocated to Series C Preferred Stock, net of cash issuance expenses	2,508,321
Proceeds allocated to Series C Warrants, net of cash issuance expenses	1,242,158
Repayment of loan from stockholders		(439,939)
Net cash provided by (used in) financing activities	3,745,726	(486,975)
Effect of exchange rate changes on cash and cash equivalents	(15,329)	54,941
Increase (decrease) in cash and cash equivalents	796,833	(2,311,487)
Cash and cash equivalents at beginning of the period	608,701	5,827,560
Cash and cash equivalents at end of the period	$ 1,405,534	$ 3,516,073

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	6 Months Ended
	Jun. 30, 2016USD ($)
Warrants issued as consideration for placement agent services	$ 234,008
Amount of direct issuance expense allocated to Series C-1 and Series C-2 Warrants and recorded as a reduction of additional paid in capita	77,503
Amount of direct issuance expense allocated to Series C Preferred Stock and recorded as a reduction of temporary equity	156,505
Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection within long-term liabilities	341,662
Stock dividend on Series C Preferred Stock
Stock dividend on Series B Preferred Stock
Accumulated deficit [Member]
Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection within long-term liabilities
Stock dividend on Series C Preferred Stock	20,355
Stock dividend on Series B Preferred Stock	$ 254,101

GENERAL

GENERAL	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GENERAL	NOTE 1 – GENERAL A. Integrity Applications, Inc. (the "Company") was incorporated on May 18, 2010 under the laws of the State of Delaware. On July 15, 2010, Integrity Acquisition Corp. Ltd. (hereinafter: "Integrity Acquisition"), a wholly owned Israeli subsidiary of the Company, which was established on May 23, 2010, completed a merger with A.D. Integrity Applications Ltd. (hereinafter: "Integrity Israel"), an Israeli corporation that was previously held by the stockholders of the Company. Pursuant to the merger, all equity holders of Integrity Israel received the same proportional ownership in the Company as they had in Integrity Israel prior to the merger. Following the merger, Integrity Israel remained a wholly-owned subsidiary of the Company. As the merger transaction constituted a structural reorganization, the merger has been accounted for at historical cost in a manner similar to a pooling of interests. Integrity Israel was incorporated in 2001 and commenced its operations in 2002. Integrity Israel, a medical device company, focuses on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes. B. Going concern uncertainty Since its incorporation, the Company did not conduct any material operations other than those carried out by Integrity Israel. The development and commercialization of Integrity Israel's product is expected to require substantial expenditures. Integrity Israel and the Company (collectively, the "Group") have not yet generated any material revenues from operations, and therefore they are dependent upon external sources for financing their operations. As of June 30, 2016, the Group has incurred an accumulated deficit of $32,476,186, stockholders’ deficit of $8,757,799 and negative operating cash flows. These factors raise substantial doubt about the Group’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. During 2012, the Company raised a total amount of approximately $1.0 million (net of related expenses) from the issuance of Common Stock. During 2013, the Company raised funds in an approximate amount of $5.3 million (net of related cash expenses) from the issuance of units (the “Series A Units”) consisting of shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and detachable warrants to purchase shares of the Company’s Common Stock (the “Series A Warrants” or “Warrants with down round protection”). During the period between August and December 2014, the Company raised funds in an aggregate amount of approximately $7.3 million (net of related cash expenses) from the issuance of units (the “Series B Units”), each consisting of (a) one share of the Company’s newly designated Series B 5.5% Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), convertible into Common Stock at an initial conversion price of $5.80 per share, (b) a five year warrant to purchase, at an exercise price of $5.80 per share, up to such number of shares of Common Stock issuable upon conversion of such share of Series B Preferred Stock (each a “Series B-1 Warrant”) and (c) a five year warrant to purchase, at an exercise price of $10.00 per share, up to such number of shares of Common Stock issuable upon conversion of such share of Series B Preferred Stock (each a “Series B-2 Warrant” and, together with the Series B-1 Warrants, collectively, the “Series B Warrants”). During the three month period ended June 30, 2016, the Company raised funds in an aggregate amount of approximately $3.75 million (net of related cash expenses) through the issuance of 4,425 units (the “Series C Units”), each consisting of (a) one share of the Company’s newly designated Series C 5.5% Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), convertible into Common Stock at an initial conversion price of $4.50 per share, (b) a five year warrant to purchase, at an exercise price of $4.50 per share, up to such number of shares of Common Stock issuable upon conversion of such share of Series C Preferred Stock (each a “Series C-1 Warrant”) and (c) a five year warrant to purchase, at an exercise price of $7.75 per share, up to such number of shares of Common Stock issuable upon conversion of such share of Series C Preferred Stock (each a “Series C-2 Warrant” and, together with the Series C-1 Warrants, collectively, the “Series C Warrants”), as described in further detail in Note 3. Until such time as the Group generates sufficient revenue to fund its operations (if ever), the Group plans to finance its operations through the sale of equity or equity-linked securities and/or debt securities and, to the extent available, short term and long term loans. There can be no assurance that the Group will succeed in obtaining the necessary financing to continue its operations as a going concern. C. Risk factors As described in Note 1A and Note 1B above, the Group has a limited operating history and faces a number of risks and uncertainties, including risks and uncertainties regarding continuation of the development process, demand and market acceptance of the Group's products, the effects of technological changes, competition and the development of products by competitors. Additionally, other risk factors also exist, such as the ability to manage growth and the effect of planned expansion of operations on the Group's future results and the availability of necessary financing. In addition, the Group expects to continue incurring significant operating costs and losses in connection with the development of its products and marketing efforts. The Group has not yet generated material revenues from its operations to fund its activities and therefore is dependent on the receipt of additional funding from its stockholders and/ or new investors in order to continue its operations. D. Use of estimates in the preparation of financial statements The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to (i) the fair value estimate of the Warrants with down-round protection, (ii) the allocation of the proceeds and the related issuance costs of the Series C Units, and (iii) the going concern assumptions.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of presentation Accounting Principles The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. The results for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or for any other interim period or for any future period. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany balances and transactions have been eliminated in consolidation. B. Warrants with down-round protection The Company has determined its derivative warrant liability with respect to the Series A Warrants and warrants issued to Andrew Garrett, Inc., (“AGI”) as part of the Series A Unit offering, the Series B Unit offering and the Series C Unit offering to be a Level 3 fair value measurement and has used the Binomial pricing model to calculate its fair value. Because the warrants contain a down round protection feature, the probability that the exercise price of the warrants would decrease as the stock price decreased was incorporated into the valuation calculations. The key inputs used in the fair value calculations were as follows: The changes in the fair value of the Level 3 liability are as follows (in US dollars): Series A Warrants June 30, 2016 2015 Balance, Beginning of the period 321,695 2,057,618 Warrants issued as consideration for placement services 234,008 - Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection 341,662 - Exchange of Series A Warrants pursuant to the “most favored nation” provision - (1,573,435 ) Change in fair value Warrants with Down-Round Protection (64,212 ) (91,309 ) Balance, End of period 833,153 392,874 The key inputs used in the fair value calculations were as follows: June 30, 2016 2015 Dividend yield (%) - - Expected volatility (%) (*) 62.16 105.14 Risk free interest rate (%) 0.72-1.11 1.01 Expected term of options (years) (**) 1.70-5.00 2.70 Exercise price (US dollars) 4.50-7.75 5.80 Share price (US dollars) (***) 2.38 2.31 Fair value (US dollars) 0.61 1.00 (*) Due to the low trading volume of the Company’s Common Stock, the expected volatility was based on the historical volatility of the share price of other public companies that operate in the same industry sector as the Company. (**) Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the "simplified method" in accordance with Staff Accounting Bulletin No. 110. (***) The Common Stock price, per share reflects the Company’s management’s estimation of the fair value per share of Common Stock as of June 30, 2016 and 2015. In reaching its estimation for such periods, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the Series C Units and the Series B Units (See Note 3). C. Recently issued accounting pronouncements 1. Accounting Standard Update 2014-16, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity” Effective January 1, 2016, the Group adopted Accounting Standard Update 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity ("ASU 2014-16"). The amendments in ASU 2014-16 clarify how U.S. GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The amendments also clarify that, in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (i.e., the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weigh those terms and features. The assessment of the substance of the relevant terms and features should incorporate a consideration of the characteristics of the terms and features themselves; the circumstances under which the hybrid financial instrument was issued or acquired; and the potential outcomes of the hybrid financial instrument, as well as the likelihood of those potential outcomes. The amendments in ASU 2014-16 apply to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of shares. The effects of initially adopting the amendments in ASU 2014-16 were required to be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of shares as of the beginning of the fiscal year for which the amendments are effective. However, retrospective application was permitted to all relevant prior periods. Management analyzed the economic characteristics and risks of the Series A Preferred Stock and the Series B Preferred Stock (including the embedded conversion feature of each) in accordance with the provisions of ASU 2014-16 and determined that such instruments are considered as more akin to equity than debt. Accordingly, it was determined that the economic characteristics and the risks of the embedded conversion option to Common Stock and those of the Preferred Stock themselves (the 'host contract') are clearly and closely related and accordingly, the embedded conversion feature was not required to be bifurcated. As a result of the above determination, ASU 2014-16 did not impact the classification of the Series A Preferred Stock or the Series B Preferred Stock. 2. Accounting Standard Update 2014-09, “Revenue from Contracts with Customers” In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 also requires entities to disclose sufficient information, both quantitative and qualitative, to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. An entity should apply the amendments in ASU 2014-09 using one of the following two methods: 1. Retrospectively to each prior reporting period presented with a possibility to elect certain practical expedients, or, 2. Retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. If an entity elects the latter transition method, it also should provide certain additional disclosures. During 2016, the FASB issued several Accounting Standard Updates (“ASUs”) that focus on certain implementation issues of the new revenue recognition guidance including Narrow-Scope Improvements and Practical Expedients, Principal versus Agent Considerations and Identifying Performance Obligations and Licensing. For a public entity, the amendments in ASU 2014-09 (including the amendments introduced through recent ASUs) are effective for annual reporting periods beginning after December 15, 2016, including interim periods within the first annual reporting period (the first quarter of fiscal year 2017 for the Company). Early application is not permitted. The Company is in the process of assessing the impact, if any, of ASU 2014-09 (including the amendments introduced through recent ASUs) on its consolidated financial statements. 3. Accounting Standards Update 2014-15, “Presentation of Financial Statements—Going Concern” In August 2014, the FASB issued Accounting Standards Update 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 ("ASU 2014-15"). ASU 2014-15 provides guidance on management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued, when applicable). ASU 2014-15 also provides guidance related to the required disclosures as a result of management’s evaluation. The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Due to the current financial condition of the Company and the existing uncertainty regarding its ability to continue as a going concern, management does not believe that the provisions of ASU 2014-15 will have a significant effect on its evaluation of the Company’s ability to continue as a going concern. However, management is currently considering if additional disclosures will be required as a result of ASU 2014-15. 4. Accounting Standard Update 2015-11, “Simplifying the Measurement of Inventory” In July, 2015, The FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 outlines that inventory within the scope of its guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory method (RIM) are not impacted by the new guidance. Prior to the issuance of ASU 2015-11, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). For a public entity, the amendments in ASU 2015-11 are effective, in a prospective manner, for annual reporting periods beginning after December 15, 2016, including interim periods within the first such annual reporting period (the first quarter of fiscal year 2017 for the Company). Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is in the process of assessing the impact, if any, of ASU 2015-11 on its consolidated financial statements.

RECENT EVENTS

RECENT EVENTS	6 Months Ended
	Jun. 30, 2016
EVENTS DURING THE REPORTED PERIOD [Abstract]
RECENT EVENTS	NOTE 3 – RECENT EVENTS A. During February 2016, the Company entered into an Advisory Agreement with AGI, pursuant to which the Company retained AGI on a non-exclusive basis to provide certain advisory services to the Company. As consideration for such services, the Company extended through December 31, 2019, the expiration date of 422,077 warrants issued to AGI and/or its designees in connection with the Company’s common stock offering completed in 2010 and the Series A Unit offering completed in 2012. The Advisory Agreement had an initial term of six months, subject to automatic renewal for additional 30 day terms unless terminated by either party with 30 days written notice. In April 2016, the Company and AGI amended that Advisory Agreement to extend the term of the Advisory Agreement for an additional six months. In consideration for such extension, the Company agreed to modify the terms of the 439,674 warrants issued to AGI and/or its designees in connection with the Series B Unit offering to include full-ratchet anti-dilution protection. As a result of the two agreements the Company recorded in its statement of operations for the six month and three month periods ended June 30, 2016, a one-time charge in the amount of $211,077 representing the incremental fair market value adjustments in respect of the above modified warrants issued to the placement agent. Such incremental fair market value adjustments represent the increase in the fair value of the warrants resulting from the above modifications and were recorded against stockholders’ deficit. In addition, as a result of the inclusion of anti-dilution protection, the Company classified $341,662, representing the fair market value at April 2016 of the above 439,674 warrants issued to AGI out of stockholders deficit and presented them as Warrants with down round protection within long-term liabilities. B. During the three month period ended June 30, 2016, the Company raised funds in an aggregate amount of approximately $3.75 million (net of related cash expenses) from the issuance in four separate closings of 4,425 Series C Units. As of June 30, 2016, the shares of Preferred Stock comprising the Series C Units are convertible into an aggregate of 983,386 shares of Common Stock, and the Series C Warrants comprising the Series C Units are exercisable for an aggregate of 1,966,772 shares of Common Stock, in each case subject to adjustment as described below. Pursuant to a placement agent agreement (the “Placement Agent Agreement”) with AGI, at the initial closing of the sale of the Series C Units the Company paid AGI, as a commission, an amount equal to 6% of the aggregate sales price of the Series C Units, plus 4% of the aggregate sales price as a management fee plus a non-accountable expense allowance equal to 3% of the aggregate sales price of the Series C Units. At the end of the second, third and fourth closings of the sale of the Series C Units, the Company paid AGI, as a commission, an amount equal to 10% of the aggregate sales price of the Series C Units sold in such closing, plus a non-accountable expense allowance equal to 3% of the aggregate sales price of the Series C Units sold in such closing. In addition, pursuant to the Placement Agent Agreement, the Company is required to issue to AGI: (a) 5 year warrants to purchase up to 196,678 shares of Common Stock at an exercise price of $4.50 per share and (b) 5 year warrants to purchase up to 98,339 shares of Common Stock at an exercise price of $7.75 per share. The terms of such warrants will be substantially similar to the Series C Warrants except that the warrants issued to AGI will also be exercisable on a cashless basis and will include full ratchet anti-dilution protection. Subject to certain ownership limitations described below, the Series C Preferred Stock is convertible at the option of the holder at any time and from time to time into shares of Common Stock at a conversion price of $4.50 per share (calculated by dividing the stated value per share of Preferred Stock, which is initially $1,000, by the conversion price per share). The conversion price of the Series C Preferred Stock is subject to adjustment for certain issuances of Common Stock or other securities of the Company at an effective price per share that is lower than the conversion price then in effect, as well as for stock splits, stock dividends, combinations of shares, similar recapitalization transactions and certain pro-rata distributions to common stockholders. In addition, the holders of Preferred Stock will be entitled to receive any securities or rights to acquire securities or property granted or issued by the Company pro rata to the holders of Common Stock to the same extent as if such holders had converted all of their shares of Series C Preferred Stock prior to such distribution. In the event of a fundamental transaction, such as a merger, consolidation, sale of substantially all assets and similar reorganizations or recapitalizations of the Company, the holders of Series C Preferred Stock will be entitled to receive, upon conversion of their shares of Series C Preferred Stock, any securities or other consideration received by the holders of the Common Stock pursuant to the fundamental transaction. Holders of Series C Preferred Stock are entitled to receive cumulative dividends at a rate of 5.5% per annum, based on the stated value per share of Series C Preferred Stock. Dividends on the Series C Preferred Stock are payable quarterly on March 31, June 30, September 30 and December 31 of each year, beginning on June 30, 2016, and on each conversion date (with respect to the shares of Preferred Stock being converted). For so long as required under the terms of the Certificate of Designations for the Company’s outstanding Series A Preferred Stock or Series B Preferred Stock, dividends will be payable only in shares of Common Stock. Thereafter, dividends on the Series C Preferred Stock will be payable, at the option of the Company, in cash and/or, if certain conditions are satisfied, shares of Common Stock or a combination of both. Shares of Common Stock issued as payment of dividends will be valued at the lower of (a) the then current conversion price of the Series C Preferred Stock or (b) the average of the volume weighted average price for the Common Stock on the principal trading market therefor for the 10 trading days immediately prior to the applicable dividend payment date. The Company will incur a late fee of 9% per annum, payable in cash, on dividends that are not paid within three trading days of the applicable dividend payment date. Subject to any limitations under the terms of the Certificate of Designations for the Company’s outstanding Series A Preferred Stock or Series B Preferred Stock, the Company may become obligated to redeem the Series C Preferred Stock in cash upon the occurrence of certain triggering events, including, among others, a material breach by the Company of certain contractual obligations to the holders of the Series C Preferred Stock, the occurrence of a change in control of the Company, the occurrence of certain insolvency events relating to the Company, or the failure of the Common Stock to continue to be listed or quoted for trading on one or more specified United States securities exchanges or a regulated quotation service. In addition, upon the occurrence of certain triggering events, each holder of Series C Preferred Stock will have the option to require the Company to redeem such holder’s shares of Preferred Stock for a redemption price payable in shares of Common Stock or receive an increased dividend rate of 9% on all of such holder’s outstanding Series C Preferred Stock. Subject to certain conditions contained in the Certificate of Designations, Preferences and Rights relating to the Series C Preferred Stock (the “Certificate of Designations”), the Company will have the option to force the conversion of the Series C Preferred Stock (in whole or in part) if (a) the volume weighted average price for the Common Stock on its principal trading market exceeds $7.00 for each of any 20 trading days during any 30 consecutive trading day period and the average daily dollar trading value for the Common Stock during such 30 day period exceeds $50,000 or (b) the Company receives approval to list the Common Stock on a national securities exchange. Subject to certain exceptions contained in the Certificate of Designations, if the Company fails to timely deliver certificates for shares of Common Stock issuable upon conversion of the Series C Preferred Stock (the “Conversion Shares”) and, as a result, the holder is required by its brokerage firm to purchase shares of Common Stock to deliver in satisfaction of a sale by such holder of the Conversion Shares (a “Buy-In”), the Company will be required to: (a) pay the converting holder in cash an amount equal to the amount, if any, by which such holder’s total purchase price (including any brokerage commissions) for the shares of Common Stock so purchased exceeds the product of (i) the aggregate number of Conversion Shares due to the holder, multiplied by (ii) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions); and (b) at the option of such holder, either reissue (if surrendered) the shares of Series C Preferred Stock equal to the number of shares of Series C Preferred Stock submitted for conversion (in which case, such conversion will be deemed rescinded) or deliver to such holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements. In addition, the Company will be required to pay partial liquidated damages of $10 for each $1,000 of stated value of any shares of Series C Preferred Stock which have been converted by a holder and in respect of which the Company fails to deliver Conversion Shares by the fifth trading day following the applicable conversion date and the Company will continue to pay such partial liquidated damages for each trading day after such eighth trading day until such certificates are delivered or the holder rescinds such conversion. As long as at least 35% of the originally issued shares of Series C Preferred Stock are outstanding, without the written consent of the holders of a majority in stated value of the outstanding Series C Preferred Stock, the Company will not be permitted to, among other things, incur indebtedness or liens not permitted under the Certificate of Designations; repay, repurchase, pay dividends on or otherwise make distributions in respect of any shares of Common Stock or other securities junior to the Series C Preferred Stock; enter into certain transactions with affiliates of the Company; or enter into any agreement with respect to the foregoing. Subject to the beneficial ownership limitation described below, holders of Series C Preferred Stock will vote together with the holders of Common Stock and Series A Preferred Stock and Series B Preferred Stock on an as-converted basis. Holders will not be permitted to convert their Series C Preferred Stock if such conversion would cause such holder to beneficially own more than 4.99% of the outstanding Common Stock (subject to increase to 9.99%, at the option of the holder, upon no less than 61 days prior written notice to the Company) (the “Beneficial Ownership Limitation”). In addition, no holder may vote any shares of Series C Preferred Stock (on an as-converted to Common Stock basis) in excess of the Beneficial Ownership Limitation. Subject to certain limitations, so long as any purchaser holds any shares of Series C Preferred Stock, if (a) the Company sells any shares of Common Stock or other securities convertible into, or rights to acquire, Common Stock and (b) a purchaser then holding Series C Preferred Stock, Warrants, Conversion Shares or Warrant Shares (defined below) reasonably believes that any of the terms and conditions appurtenant to such issuance or sale are more favorable to the purchaser in such subsequent sale of securities than are the terms and conditions granted to such purchaser after taking into account all of the terms and conditions of the terms granted to the purchasers under the purchase agreement and the terms granted in such subsequent issuance or sale, including all of the components of the Series C Units and of the securities or units involved in such subsequent issuance or sale, then the purchaser will be permitted to require the Company to amend the terms of this transaction (only with respect to such purchaser) so as to match the terms of the subsequent issuance (including, for the avoidance of doubt, any terms and provisions that are or may be less favorable to such purchaser). The Series C Warrants have a five-year term commencing on their respective issuance dates. Until the end of the applicable term, each Series C Warrant will be exercisable at any time and from time to time at an exercise price of $4.50 per share (with respect to the Series C-1 Warrants) or $7.75 per share (with respect to the Series C-2 Warrants). The Series C Warrants contain adjustment provisions substantially similar to those to the adjustment provisions of the Series C Preferred Stock as described above, except that the Series C Warrants do not include dilution protection for issuances of securities at an effective price per share lower than the conversion price of such Series C Warrants. In addition, the Series C Warrants provide for protection for a Buy-In on substantially the same terms as described above with respect to the Series C Preferred Stock. No holder may exercise its Series C Warrants in excess of the Beneficial Ownership Limitation. As a result of the initial issuance and sale of the Series C Units, pursuant to the terms of the Series A Warrants, on April 8, 2016, the exercise price per share of the Series A Warrants decreased from $5.80 per share to $4.50 per share and the number of shares of Common Stock issuable upon exercise of each of the Series A Warrants, in the aggregate, increased such that the aggregate exercise price payable thereunder, after taking into account the decrease in the exercise price, will be equal to the aggregate exercise price prior to such adjustment. Also as a result of the initial issuance and sale of the Series C Units, pursuant to the terms of the certificates of designations for the Series A Preferred Stock and Series B Preferred Stock, on April 8, 2016, the conversion price per share of Series A Preferred Stock and Series B Preferred Stock decreased to $4.50 per share. Based on the terms of the purchase agreements relating to the issuance and sale of the Series A Units and the Series B Units, respectively, so long as any initial purchaser of Series A Units or Series B Units, as applicable (each, a “Purchaser”) holds any shares of Series A Preferred Stock or Series B Preferred Stock, as applicable, if (1) the Company sells any shares of Common Stock or other securities convertible into, or rights to acquire, Common Stock and (2) a Purchaser then holding Series A or Series B Preferred Stock or Warrants reasonably believes that any of the terms and conditions appurtenant to such issuance or sale are more favorable to the purchaser in such subsequent sale of securities than are the terms and conditions granted to such Purchaser, then the Purchaser will be permitted to require the Company to amend the terms of this transaction (only with respect to such Purchaser) so as to match the terms of the subsequent issuance (including, for the avoidance of doubt, any terms and provisions that are or may be less favorable to such Purchaser). Pursuant to the purchase agreements relating to the issuance and sale of the Series A Units and the Series B Units, the Company was required to and did notify the holders of the Series A Preferred Stock and Series B Preferred Stock of the closing of the sale of the Series C Units, Upon initial recognition, the Series C Preferred Stock issued together with detachable Series C Warrants (classified as equity) were measured based on the relative fair value basis and were presented net of the direct issuance expenses that were allocated to them. The Company has determined that due to the economic characteristics and risks of the Series C Preferred Stock, based on their stated or implied substantive terms and features, that such Preferred Stock, are considered as more akin to equity than debt. Accordingly, it was determined that the economic characteristics and the risks of the embedded conversion option to Common Stock and those of the Series C Preferred Stock themselves (the 'host contract') are clearly and closely related. As a result, the embedded conversion feature was not required to be bifurcated. Since at the issuance dates of the Series C Preferred Stock, the exercise price of the conversion feature (based on the effective conversion rate of the Series C Preferred Stock into Common Stock) was higher than the estimated fair value of the Company’s Common Stock, it was determined that the conversion feature was not beneficial. Also, due to the liquidation preference and certain redemption rights for the benefit of the holders of the Series C Preferred Stock, upon the occurrence of the certain contingent events, which are not considered as solely within the Company's control management determined that the Series C Preferred Stock were to be presented as temporary equity. On each balance sheet date, the Company’s management assesses the probability of redemption of the outstanding Preferred Stock. In the event that management determines such redemption to be probable as of an applicable balance sheet date, the Company will recognize a liability in an amount equal to the aggregate redemption price of the Preferred Stock. In addition, upon such determination, the difference between the amount that was allocated to the Preferred Stock (after deduction of issuance expenses) and such redemption amount will be accreted over the period beginning on the date that it becomes probable that the instrument will become redeemable and ending on the earliest redemption date.

INVENTORIES

INVENTORIES	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 4 – INVENTORIES US dollars June 30, December 31, 2016 2015 (unaudited) Raw materials 181,461 205,645 Work in process 412,000 551,111 Finished products 104,709 59,467 698,170 816,223

FINANCING (INCOME) EXPENSES, NE

FINANCING (INCOME) EXPENSES, NET	6 Months Ended
	Jun. 30, 2016
Other Income and Expenses [Abstract]
FINANCING (INCOME) EXPENSES, NET	NOTE 5 – FINANCING (INCOME) EXPENSES, NET US dollars US dollars Six month period Three month period 2016 2015 2016 2015 (unaudited) (unaudited) Israeli CPI linkage difference on principal of loans from stockholders (639 ) (1,872 ) 825 1,808 Exchange rate differences 24,211 38,269 19,296 90,872 Change in fair value of Warrants with down round protection (64,212 ) (91,309 ) (20,702 ) (25,539 ) Interest expenses on credit from banks and other 8,575 8,378 6,149 5,788 Loss on partial extinguishment of Series A Preferred Stock and Series A Warrants - 1,270,971 - 497,674 (32,065 ) 1,224,437 5,568 570,603

LOSS PER SHARE

LOSS PER SHARE	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
LOSS PER SHARE	NOTE 6 – LOSS PER SHARE In periods of net loss, basic loss per share is computed by dividing net loss for the period after consideration of the effect of dividend on preferred stock by the weighted average number of shares outstanding during the period. The loss and the weighted average number of shares used in computing basic and diluted loss per share for the six and three month periods ended June 30, 2016 and 2015 are as follows: US dollars US dollars Six month period Three month period 2016 2015 2016 2015 (unaudited) (unaudited) Loss for the period (2,815,762 ) (3,201,337 ) (1,588,998 ) (1,666,806 ) Cash dividend on Series A Preferred Stock (9,453 ) (47,036 ) (4,753 ) (26,522 ) Stock dividend on Series B Preferred Stock (254,101 ) (185,795 ) (131,281 ) (102,558 ) Stock dividend on Series C Preferred Stock (20,355 ) - (20,355 ) - Loss for the period attributable to common stockholders (3,099,671 ) (3,434,168 ) (1,745,387 ) (1,795,886 ) Number of shares Number of shares Six month period Three month period 2016 2015 2016 2015 Number of shares: Common shares used in computing basic income (loss) per share 5,716,566 5,382,682 5,742,468 5,441,253 Common shares used in computing diluted income (loss) per share 5,716,566 5,382,682 5,742,468 5,441,253 Total weighted average number of common shares related to outstanding convertible Preferred Stock, options and warrants excluded from the calculations of diluted income (loss) per share (*) 11,220,345 9,367,247 12,210,613 9,537,309 (*) All outstanding convertible Preferred Stock, stock options and warrants have been excluded from the calculation of the diluted net loss per share for all the reported periods, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was anti-dilutive.

SUMMARY OF SIGNIFICANT ACCOUN14

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Accounting principles	Accounting Principles The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. The results for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the year ending December 31, 2016 or for any other interim period or for any future period.
Principles of consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany balances and transactions have been eliminated in consolidation.
Warrants with down-round protection	Warrants with down-round protection The Company has determined its derivative warrant liability with respect to the Series A Warrants and warrants issued to Andrew Garrett, Inc., (“AGI”) as part of the Series A Unit offering, the Series B Unit offering and the Series C Unit offering to be a Level 3 fair value measurement and has used the Binomial pricing model to calculate its fair value. Because the warrants contain a down round protection feature, the probability that the exercise price of the warrants would decrease as the stock price decreased was incorporated into the valuation calculations. The key inputs used in the fair value calculations were as follows: The changes in the fair value of the Level 3 liability are as follows (in US dollars): Series A Warrants June 30, 2016 2015 Balance, Beginning of the period 321,695 2,057,618 Warrants issued as consideration for placement services 234,008 - Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection 341,662 - Exchange of Series A Warrants pursuant to the “most favored nation” provision - (1,573,435 ) Change in fair value Warrants with Down-Round Protection (64,212 ) (91,309 ) Balance, End of period 833,153 392,874 The key inputs used in the fair value calculations were as follows: June 30, 2016 2015 Dividend yield (%) - - Expected volatility (%) (*) 62.16 105.14 Risk free interest rate (%) 0.72-1.11 1.01 Expected term of options (years) (**) 1.70-5.00 2.70 Exercise price (US dollars) 4.50-7.75 5.80 Share price (US dollars) (***) 2.38 2.31 Fair value (US dollars) 0.61 1.00 (*) Due to the low trading volume of the Company’s Common Stock, the expected volatility was based on the historical volatility of the share price of other public companies that operate in the same industry sector as the Company. (**) Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the "simplified method" in accordance with Staff Accounting Bulletin No. 110. (***) The Common Stock price, per share reflects the Company’s management’s estimation of the fair value per share of Common Stock as of June 30, 2016 and 2015. In reaching its estimation for such periods, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the Series C Units and the Series B Units (See Note 3).
Recently issued accounting pronouncements	Recently issued accounting pronouncements 1. Accounting Standard Update 2014-16, “Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity” Effective January 1, 2016, the Group adopted Accounting Standard Update 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity ("ASU 2014-16"). The amendments in ASU 2014-16 clarify how U.S. GAAP should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. Furthermore, the amendments clarify that no single term or feature would necessarily determine the economic characteristics and risks of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risks of the entire hybrid financial instrument. The amendments also clarify that, in evaluating the nature of a host contract, an entity should assess the substance of the relevant terms and features (i.e., the relative strength of the debt-like or equity-like terms and features given the facts and circumstances) when considering how to weigh those terms and features. The assessment of the substance of the relevant terms and features should incorporate a consideration of the characteristics of the terms and features themselves; the circumstances under which the hybrid financial instrument was issued or acquired; and the potential outcomes of the hybrid financial instrument, as well as the likelihood of those potential outcomes. The amendments in ASU 2014-16 apply to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of shares. The effects of initially adopting the amendments in ASU 2014-16 were required to be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of shares as of the beginning of the fiscal year for which the amendments are effective. However, retrospective application was permitted to all relevant prior periods. Management analyzed the economic characteristics and risks of the Series A Preferred Stock and the Series B Preferred Stock (including the embedded conversion feature of each) in accordance with the provisions of ASU 2014-16 and determined that such instruments are considered as more akin to equity than debt. Accordingly, it was determined that the economic characteristics and the risks of the embedded conversion option to Common Stock and those of the Preferred Stock themselves (the 'host contract') are clearly and closely related and accordingly, the embedded conversion feature was not required to be bifurcated. As a result of the above determination, ASU 2014-16 did not impact the classification of the Series A Preferred Stock or the Series B Preferred Stock. 2. Accounting Standard Update 2014-09, “Revenue from Contracts with Customers” In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 also requires entities to disclose sufficient information, both quantitative and qualitative, to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. An entity should apply the amendments in ASU 2014-09 using one of the following two methods: 1. Retrospectively to each prior reporting period presented with a possibility to elect certain practical expedients, or, 2. Retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. If an entity elects the latter transition method, it also should provide certain additional disclosures. During 2016, the FASB issued several Accounting Standard Updates (“ASUs”) that focus on certain implementation issues of the new revenue recognition guidance including Narrow-Scope Improvements and Practical Expedients, Principal versus Agent Considerations and Identifying Performance Obligations and Licensing. For a public entity, the amendments in ASU 2014-09 (including the amendments introduced through recent ASUs) are effective for annual reporting periods beginning after December 15, 2016, including interim periods within the first annual reporting period (the first quarter of fiscal year 2017 for the Company). Early application is not permitted. The Company is in the process of assessing the impact, if any, of ASU 2014-09 (including the amendments introduced through recent ASUs) on its consolidated financial statements. 3. Accounting Standards Update 2014-15, “Presentation of Financial Statements—Going Concern” In August 2014, the FASB issued Accounting Standards Update 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 ("ASU 2014-15"). ASU 2014-15 provides guidance on management’s responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued, when applicable). ASU 2014-15 also provides guidance related to the required disclosures as a result of management’s evaluation. The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Due to the current financial condition of the Company and the existing uncertainty regarding its ability to continue as a going concern, management does not believe that the provisions of ASU 2014-15 will have a significant effect on its evaluation of the Company’s ability to continue as a going concern. However, management is currently considering if additional disclosures will be required as a result of ASU 2014-15. 4. Accounting Standard Update 2015-11, “Simplifying the Measurement of Inventory” In July, 2015, The FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 outlines that inventory within the scope of its guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory method (RIM) are not impacted by the new guidance. Prior to the issuance of ASU 2015-11, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). For a public entity, the amendments in ASU 2015-11 are effective, in a prospective manner, for annual reporting periods beginning after December 15, 2016, including interim periods within the first such annual reporting period (the first quarter of fiscal year 2017 for the Company). Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is in the process of assessing the impact, if any, of ASU 2015-11 on its consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUN15

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Schedule of Changes in Fair Value of Level 3 Liability	The changes in the fair value of the Level 3 liability are as follows (in US dollars): Series A Warrants June 30, 2016 2015 Balance, Beginning of the period 321,695 2,057,618 Warrants issued as consideration for placement services 234,008 - Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection 341,662 - Exchange of Series A Warrants pursuant to the “most favored nation” provision - (1,573,435 ) Change in fair value Warrants with Down-Round Protection (64,212 ) (91,309 ) Balance, End of period 833,153 392,874
Schedule of Warrant Inputs	The key inputs used in the fair value calculations were as follows: June 30, 2016 2015 Dividend yield (%) - - Expected volatility (%) (*) 62.16 105.14 Risk free interest rate (%) 0.72-1.11 1.01 Expected term of options (years) (**) 1.70-5.00 2.70 Exercise price (US dollars) 4.50-7.75 5.80 Share price (US dollars) (***) 2.38 2.31 Fair value (US dollars) 0.61 1.00 (*) Due to the low trading volume of the Company’s Common Stock, the expected volatility was based on the historical volatility of the share price of other public companies that operate in the same industry sector as the Company. (**) Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the "simplified method" in accordance with Staff Accounting Bulletin No. 110. (***) The Common Stock price, per share reflects the Company’s management’s estimation of the fair value per share of Common Stock as of June 30, 2016 and 2015. In reaching its estimation for such periods, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the Series C Units and the Series B Units (See Note 3).

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory	US dollars June 30, December 31, 2016 2015 (unaudited) Raw materials 181,461 205,645 Work in process 412,000 551,111 Finished products 104,709 59,467 698,170 816,223

FINANCING (INCOME) EXPENSES, 17

FINANCING (INCOME) EXPENSES, NET (Tables)	6 Months Ended
	Jun. 30, 2016
Other Income and Expenses [Abstract]
Schedule of Financing (Income) Expenses, Net	US dollars US dollars Six month period Three month period 2016 2015 2016 2015 (unaudited) (unaudited) Israeli CPI linkage difference on principal of loans from stockholders (639 ) (1,872 ) 825 1,808 Exchange rate differences 24,211 38,269 19,296 90,872 Change in fair value of Warrants with down round protection (64,212 ) (91,309 ) (20,702 ) (25,539 ) Interest expenses on credit from banks and other 8,575 8,378 6,149 5,788 Loss on partial extinguishment of Series A Preferred Stock and Series A Warrants - 1,270,971 - 497,674 (32,065 ) 1,224,437 5,568 570,603

LOSS PER SHARE (Tables)

LOSS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Schedule of Loss and Weighted Average Number of Shares	The loss and the weighted average number of shares used in computing basic and diluted loss per share for the six and three month periods ended June 30, 2016 and 2015 are as follows: US dollars US dollars Six month period Three month period 2016 2015 2016 2015 (unaudited) (unaudited) Loss for the period (2,815,762 ) (3,201,337 ) (1,588,998 ) (1,666,806 ) Cash dividend on Series A Preferred Stock (9,453 ) (47,036 ) (4,753 ) (26,522 ) Stock dividend on Series B Preferred Stock (254,101 ) (185,795 ) (131,281 ) (102,558 ) Stock dividend on Series C Preferred Stock (20,355 ) - (20,355 ) - Loss for the period attributable to common stockholders (3,099,671 ) (3,434,168 ) (1,745,387 ) (1,795,886 ) Number of shares Number of shares Six month period Three month period 2016 2015 2016 2015 Number of shares: Common shares used in computing basic income (loss) per share 5,716,566 5,382,682 5,742,468 5,441,253 Common shares used in computing diluted income (loss) per share 5,716,566 5,382,682 5,742,468 5,441,253 Total weighted average number of common shares related to outstanding convertible Preferred Stock, options and warrants excluded from the calculations of diluted income (loss) per share (*) 11,220,345 9,367,247 12,210,613 9,537,309 (*) All outstanding convertible Preferred Stock, stock options and warrants have been excluded from the calculation of the diluted net loss per share for all the reported periods, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was anti-dilutive.

GENERAL (Details)

GENERAL (Details) - USD ($)	1 Months Ended	3 Months Ended	5 Months Ended	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2015
Class of Stock [Line Items]
Accumulated deficit	$ 32,476,186	$ 32,476,186					$ 29,376,515
Stockholders' deficit	$ 8,757,799	$ 8,757,799					$ 6,970,914
Proceeds from issuance of Common Stock, net of issuance expenses						$ 1,000,000
Proceeds from convertible preferred stock and warrants					$ 5,300,000
Series B-1 Warrant [Member]
Class of Stock [Line Items]
Warrants term				5 years
Warrant exercise price			$ 5.80	$ 5.80
Series B-2 Warrant [Member]
Class of Stock [Line Items]
Warrants term				5 years
Warrant exercise price			$ 10	$ 10
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Proceeds from convertible preferred stock and warrants			$ 7,300,000
Dividend rate			5.50%
Par value per share			$ 0.001	0.001
Conversion price			$ 5.80	$ 5.80
April 2016 to June 2016 Offering [Member]
Class of Stock [Line Items]
Shares convertible into	983,386
Number of shares covered by warrants	1,966,772	1,966,772
Proceeds from issuance of Series C Units		$ 3,750,000
Number of units sold		4,425
April 2016 to June 2016 Offering [Member] | Series C-1 Warrant [Member]
Class of Stock [Line Items]
Warrants term		5 years
Warrant exercise price	$ 4.50	$ 4.50
April 2016 to June 2016 Offering [Member] | Series C-2 Warrant [Member]
Class of Stock [Line Items]
Warrants term		5 years
Warrant exercise price	7.75	$ 7.75
April 2016 to June 2016 Offering [Member] | Series C 5.5% Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Dividend rate		5.50%
Par value per share	0.001	$ 0.001
Conversion price	$ 4.50	$ 4.50
Number of convertible preferred shares offered per unit sold	1	1

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Changes in Fair Value of Level 3 Liability) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Accounting Policies [Abstract]
Balance, Beginning of the period	$ 321,695	$ 2,057,618
Warrants issued as consideration for placement services	234,008
Amount classified out of stockholders deficit and presented as Warrants with Down-Round Protection	341,662
Exchange of Series A Warrants pursuant to the 'most favored nation' provision		(1,573,435)
Change in fair value Warrants with Down-Round Protection	(64,212)	(91,309)
Balance, End of period	$ 833,153	$ 392,874

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Warrant Inputs) (Details) - $ / shares		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Common Stock [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Share price	[1]	$ 2.38	$ 2.31
Warrant [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Dividend yield
Expected volatility	[2]	62.16%	105.14%
Risk free interest rate			1.01%
Expected term of options	[3]		2 years 8 months 12 days
Exercise price			$ 5.80
Fair value		$ 0.61	$ 1
Warrant [Member] | Minimum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate		0.72%
Expected term of options	[3]	1 year 8 months 12 days
Exercise price		$ 4.50
Warrant [Member] | Maximum [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk free interest rate		1.11%
Expected term of options	[3]	5 years
Exercise price		$ 7.75
[1]	The Common Stock price, per share reflects the Company's management's estimation of the fair value per share of Common Stock as of June 30, 2016 and 2015. In reaching its estimation for such periods, management considered, among other things, a valuation prepared by a third-party valuation firm following the issuance of the Series C Units and the Series B Units (See Note 3).
[2]	Due to the low trading volume of the Company's Common Stock, the expected volatility was based on the historical volatility of the share price of other public companies that operate in the same industry sector as the Company.
[3]	Due to the fact that the Company does not have sufficient historical exercise data, the expected term was determined based on the "simplified method" in accordance with Staff Accounting Bulletin No. 110.

RECENT EVENTS (Details)

RECENT EVENTS (Details) - USD ($)	1 Months Ended		3 Months Ended	6 Months Ended
	Jun. 30, 2016	Feb. 29, 2016	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015
Class of Stock [Line Items]
Incremental fair market value adjustments of modified warrants issued to placement agent				$ 211,077
Advisory Agreement with Andrew Garrett, Inc.[Member]
Class of Stock [Line Items]
Number of prior warrants provided to Andrew Garrett, Inc. from the company's common stock offering completed in 2010, that were subsequently extended		422,077
Number of prior warrants provided to Andrew Garrett, Inc. in connection with the Series B Unit offering, that were subsequently extended				439,674
Amount company expects it will classify as the fair market value at the time the warrants are issued				$ 341,662
Advisory Agreement with Andrew Garrett, Inc.[Member] | Placement Agent Warrants Tranche One [Member]
Class of Stock [Line Items]
Warrant exercise price	$ 7.75		$ 7.75	$ 7.75
Warrants term			5 years
Number of common stock shares callable by warrants	98,339		98,339	98,339
Advisory Agreement with Andrew Garrett, Inc.[Member] | Placement Agent Warrants Tranche Two [Member]
Class of Stock [Line Items]
Warrant exercise price	$ 4.50		$ 4.50	$ 4.50
Warrants term			5 years
Number of common stock shares callable by warrants	196,678		196,678	196,678
Advisory Agreement with Andrew Garrett, Inc.[Member] | Initial Closing [Member]
Class of Stock [Line Items]
Commission fee to agent expressed as percentage of aggregate sales price of the Units			6.00%
Managment fee percentage commission to agent			4.00%
Non-accountable expense allowance fee to agent expressed as percentage of aggregate sales price of the Units			3.00%
Advisory Agreement with Andrew Garrett, Inc.[Member] | Second Closing [Member]
Class of Stock [Line Items]
Commission fee to agent expressed as percentage of aggregate sales price of the Units			10.00%
Non-accountable expense allowance fee to agent expressed as percentage of aggregate sales price of the Units			3.00%
April 2016 to June 2016 Offering [Member]
Class of Stock [Line Items]
Proceeds from issuance of Series C Units			$ 3,750,000
Number of units sold			4,425
Shares convertible into	983,386
Number of common stock shares callable by warrants	1,966,772		1,966,772	1,966,772

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 181,461	$ 205,645
Work in progress	412,000	551,111
Finished products	104,709	59,467
Total	$ 698,170	$ 816,223

FINANCING (INCOME) EXPENSES, 24

FINANCING (INCOME) EXPENSES, NET (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Income and Expenses [Abstract]
Israeli CPI linkage difference on principal of loans from stockholders	$ 825	$ 1,808	$ (639)	$ (1,872)
Exchange rate differences	19,296	90,872	24,211	38,269
Change in fair value of Warrants with down round protection	(20,702)	(25,539)	(64,212)	(91,309)
Interest expenses on credit from banks and other	6,149	5,788	8,575	8,378
Loss on partial extinguishment of Series A Preferred Stock and Series A Warrants		497,674		1,270,971
Financing (income) expenses, net	$ 5,568	$ 570,603	$ (32,065)	$ 1,224,437

LOSS PER SHARE (Details)

LOSS PER SHARE (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Class of Stock [Line Items]
Loss for the period		$ (1,588,998)	$ (1,666,806)	$ (2,815,762)	$ (3,201,337)
Cash dividend				(9,453)
Loss for the period attributable to common stockholders		$ (1,745,387)	$ (1,795,886)	$ (3,099,671)	$ (3,434,168)
Number of shares:
Common shares used in computing Basic income (loss) per share		5,742,468	5,441,253	5,716,566	5,382,682
Common shares used in computing Diluted income (loss) per share		5,742,468	5,441,253	5,716,566	5,382,682
Total weighted average number of common shares related to outstanding convertible preferred stock, options and warrants excluded from the calculations of diluted loss per share	[1]	12,210,613	9,537,309	11,220,345	9,367,247
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Cash dividend		$ (4,753)	$ (26,522)	$ (9,453)	$ (47,036)
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Stock dividend		(131,281)	(102,558)	(254,101)	(185,795)
Series C 5.5% Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Stock dividend		$ (20,355)		$ (20,355)
[1]	All outstanding convertible Preferred Stock, stock options and warrants have been excluded from the calculation of the diluted net loss per share for all the reported periods, because the effect of the common shares issuable as a result of the exercise or conversion of these instruments was anti-dilutive.