Annual report pursuant to Section 13 and 15(d)

STOCK BASED COMPENSATION

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STOCK BASED COMPENSATION
12 Months Ended
Nov. 30, 2018
STOCK BASED COMPENSATION [Text Block]

NOTE 15– STOCK-BASED COMPENSATION

a. Global Share Incentive Plan

     On May 11, 2017, the annual meeting of the Company’s stockholders approved the 2017 Equity Incentive Plan (the “2017 Plan”) under which, the Company had reserved a pool of 1,750,000 shares of the Company’s common stock, which may be issued at the discretion of the Company's board of directors from time to time. Under this Plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the Company's board of directors for each grant. The maximum contractual life term of the options is 10 years.  As of November 30, 2018, total options granted under this plan are 1,040,942 , and the total options that are available for grants under this plan are 709,058 .

     On May 23, 2012, the Company's board of directors adopted the Global Share Incentive Plan 2012 (the “2012 Plan") under which, the Company had reserved a pool of 1,000,000 shares of the Company’s common stock, which may be issued at the discretion of the Company's board of directors from time to time. Under this plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the Company's board of directors for each grant. The maximum contractual life term of the options is 10 years. As of November 30, 2018, total options granted under this plan are 699,991 , and the total options that are available for grants under this plan are 300,009 .

b. Options Granted to Employees and Directors

     Below is a table summarizing all of the options grants to employees and made during the years ended November 30, 2018, and 2017:

  Year of No. of options Exercise price Vesting period Fair value at grant Expiration
  grant granted     (in thousands) period
Employees 2018 762,400 $4.42 -$8.91 vest immediately- 4 years $4,233 10 years
Directors 2018 113,800 $5.99 1 year $507 10 years
Directors 2017 166,668 $4.80 2 years $558 10 years
Employees 2017 525,005 $4.8,$7.2 vest immediately- 4 years $1,915 10 years

     The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based on historical volatility of the Company, by statistical analysis of the weekly share price for past periods based on expected term. The expected option term is calculated using the simplified method , as the Company concludes that its historical share option exercise experience does not provide a reasonable basis to estimate its expected option term. The fair value of each option grant is based on the following assumptions:

    Year Ended November 30,
  2018 2017
Value of one common share $4.42 -$8.7 $4.68,$7.2
Dividend yield 0% 0%
Expected stock price volatility 88%- 98% 93.8%- 95.4%
Risk free interest rate 2.33%- 3.2% 1.89%- 1.76%
Expected term (years) 4.13 - 10 5

     A summary of the Company's stock options granted to employees and directors as of November 30, 2018 and 2017 and changes for the years then ended is presented below:

    2018     2017  
          Weighted           Weighted  
          Average           Average  
          Exercise           Exercise  
    Number of     Price     Number of     Price  
    Options     $     Options     $  
Options outstanding at the beginning of the year   1,605,055     3.11     978,853     1.92  
Changes during the year:                        
     Granted   876,200     7.13     691,673     5.28  
     Expired   (61,463 )   5.26     (38,106 )   7.58  
     Forfeited   (43,365 )   4.68     (27,365 )   4.8  
Options outstanding at end of the year   2,376,427     4.51     1,605,055     3.11  
Options exercisable at end of the year   1,504,542     2.91     1,135,107     2.57  

     The following table presents summary information concerning the options granted and exercisable to employees and directors outstanding as of November 30, 2018:

          Weighted                    
          Average     Aggregate           Aggregate  
Exercise   Number of     Remaining     Intrinsic     Number of     Exercisable  
Price   Outstanding     Contractual     Value     Exercisable     Options  
$   Options     Life     $     Options     Value $  
                (in thousands)           (in thousands)  
0.0012   462,015     4.78     2,776     462,015     1  
0.012   278,191     3.18     1,669     278,191     3  
4.42   50,000     9.02     79     37,500     166  
4.8   524,999     8.03     635     440,104     2,112  
5.99   384,050     9.35     8     32,750     196  
6   33,334     5.67     -     33,334     200  
7.2   83,334     8.51     -     83,334     600  
8.36   250,000     9.58     -           -  
8.43   160,994     9.46     -     14,492     156  
8.91   30,500     9.55     -     3,813     34  
9   20,834     4.63     -     20,834     188  
9.48   58,908     3.61     -     58,908     558  
10.2   39,268     3.51     -     39,267     401  
    2,376,427     7.15     5,167     1,504,542     4,598  

     Costs incurred with respect to stock-based compensation for employees and directors for the years ended November 30, 2018 and 2017 were $2,426 thousand and $1,536 thousand, respectively. As of November 30, 2018, there was $3,783 thousand of unrecognized compensation costs related to non-vested employees and directors stock options, to be recorded over the next 3.89 years.

c. Options Granted to Consultants and service providers

     Below is a table summarizing all the compensation granted to consultants and service providers during the years ended November 30, 2018 and 2017:

          Fair value at  
  Year of No. of options Exercise   grant Expiration
  grant granted price Vesting period ( in thousands ) period
Non-employees 2018 102,763 $4.42 -$8.34 vest immediately- 4 years $444 10 years
Non-employees 2017 16,668 $4.8 Quarterly over a period of one year $68 10 years

     The fair value of options granted during 2018 and 2017 to consultants and service providers, was computed using the Black-Scholes model. The fair value of each stock option grant is estimated at the date of grant using a Black Scholes option pricing model. The volatility is based on historical volatility of the Company, by statistical analysis of the weekly share price for past periods based on the expected term period, the expected term is the contractual term of each grant. The expenses are subsequently adjusted to fair value at the end of each reporting period until such options vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period. The underlying data used for computing the fair value of the options are as follows:

    Year Ended November 30,  
    2018     2017   
Value of one common share $ 4.42 -$8.34   $ 3.6 -$7.44  
Dividend yield   0%     0%  
Expected stock price volatility   91%- 95%     87%- 95%  
Risk free interest rate   2.33%- 3.20%     1.19%- 1.89%  
Expected term (years)   9.79 - 10     4 - 5  

     A summary of the status of the stock options granted to consultants and service providers as of November 30, 2018, and 2017 and changes for the years then ended is presented below:

    2018     2017  
          Weighted           Weighted  
          Average           Average  
          Exercise           Exercise  
    Number of     Price     Number of     Price  
    Options     $     Options     $  
Options outstanding at the beginning of the year   399,380     7.47     441,621     6.24  
Changes during the year:                        
   Granted   102,763     4.92     16,668     4.80  
   Expired   -     -     (58,909 )   8.28  
   Forfeited   (15,500 )   -     -     -  
   Cancelled   (16,669 )   7.02              
Options outstanding at end of the year   469,974     5.75     399,380     7.47  
Options exercisable at end of the year   436,640     5.75     379,712     5.76  

     The following table presents summary information concerning the options granted and exercisable to consultants and service providers outstanding as of November 30, 2018 (in thousands, except per share data):

          Weighted                    
          Average     Aggregate     Number of     Aggregate  
Exercise   Number of     Remaining     Intrinsic     Exercisable     Exercisable  
Price   Outstanding     Contractual     Value*     Options     Options  
$   Options     Life     $           Value $  
                (in thousands)           (in thousands)  
3.36   136,775     7.41     362     136,775     460  
3.6   83,334     7.25     201     83,334     300  
4.42   10,325     9.02     16     10,325     46  
4.8   16,667     8.03     20     16,667     80  
5.3   35,000     9.79     25     20,000     106  
5.99   25,005     9.9           13,337     80  
6   90,000     5.67           90,000     540  
6.4   8,333     9.13           1,667     11  
7.32   8,334     3.98           8,334     61  
8.34   8,600     9.61           8,600     72  
11.52   8,334     4.35           8,334     96  
16.8   39,267     3.37           39,267     660  
    469,974     6.83     624     436,640     2,512  

     Costs incurred with respect to options granted to consultants and service providers for the year ended November 30, 2018 and 2017 was $331 thousand and $322 thousand, respectively. As of November 30, 2018, there was $157 thousand of unrecognized compensation costs related to non-vested consultants and service providers, to be recorded over the next 3.13 years.

d. Warrants and Shares Issued to Non-Employees

1) During the year ended November 30, 2018, the Company granted to several consultants 78,782 warrants each exercisable between $6.24 and $15.41 per share for three years. The fair value of those warrants as of the date of grant using the Black-Scholes valuation model was $350 thousand. The warrants granted as a success fee with respect to private placement and the issuance of convertible loans.

2) In December 2017, the Company entered into investor relations services, marketing and related services agreements. Under the terms of the agreement, the Company agreed to grant the consultants a total of 195,000 shares of restricted common stock, out of which the first 50,000 shares will vest after 30 days from the signing date, and 145,000 shares are to vest monthly over 15 months commencing February 2018. As of November 30, 2018, 140,000 shares were vested. The fair value of the shares as of the date of grant was $1,439 thousand.

3) In January 2018, the Company entered into a consulting agreement with a financial advisor for a period of one year. Under the terms of the agreement, the consultant was entitled to receive $60 thousand and 19,000 units of the Company securities. Each unit is comprised of (i) one share of the Company’s common stock and (ii) a three-year warrant to purchase up to an additional one share of the Company’s Common Stock at a per share exercise price of $6.24. The fair value of the units as of the date of grant was $171 thousand, out of which $62 thousand reflect the fair value of the warrants using the Black-Scholes valuation model. In July 2018, the board approved an additional issuance of 6,629 shares and three-year warrants to purchase up to 6,629 shares of the Company’s Common Stock at a per share exercise price of $6.24. The fair value of the units as of the date of grant was $88 thousand.

4) During the year ended November 30, 2017, the Company granted to several consultants 53,148 warrants each exercisable at $6.24 or $10.20 per share for three years. The fair value of those options as of the date of grant using the Black-Scholes valuation model was $211 thousand, out of which $169 thousand is related to 38,001 warrants granted as a success fee with respect to the issuance of the convertible notes.