Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 09, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ON TRACK INNOVATIONS LTD | |
Trading Symbol | OTIV | |
Entity Central Index Key | 1,021,604 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 41,096,044 |
Interim Unaudited Condensed Con
Interim Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 6,909 | $ 5,952 |
Short-term investments | 3,934 | 5,585 |
Trade receivables (net of allowance for doubtful accounts of $720 as of March 31, 2017 and December 31, 2016) | 5,232 | 5,620 |
Other receivables and prepaid expenses | 1,832 | 1,638 |
Inventories | 3,439 | 3,069 |
Total current assets | 21,346 | 21,864 |
Long-term restricted deposit for employees benefit | 479 | 453 |
Severance pay deposits | 341 | 322 |
Property, plant and equipment, net | 5,875 | 5,788 |
Intangible assets, net | 326 | 278 |
Total Assets | 28,367 | 28,705 |
Current Liabilities | ||
Short-term bank credit and current maturities of long-term bank loans | 4,482 | 4,369 |
Trade payables | 6,540 | 6,957 |
Other current liabilities | 3,397 | 2,822 |
Total current liabilities | 14,419 | 14,148 |
Long-Term Liabilities | ||
Long-term loans, net of current maturities | 1,134 | 1,215 |
Accrued severance pay | 858 | 811 |
Deferred tax liability | 416 | 373 |
Total long-term liabilities | 2,408 | 2,399 |
Total Liabilities | 16,827 | 16,547 |
Commitments and Contingencies, see note 5 | ||
Equity | ||
Ordinary shares of NIS 0.1 par value: Authorized - 50,000,000 shares as of March 31, 2017 and December 31, 2016; issued: 42,259,743 and 42,243,075 shares as of March 31, 2017 and December 31, 2016, respectively; outstanding: 41,081,044 and 41,064,376 shares as of March 31, 2017 and December 31, 2016, respectively | 1,061 | 1,061 |
Additional paid-in capital | 224,507 | 224,415 |
Treasury shares at cost - 1,178,699 shares as of March 31, 2017 and December 31, 2016 | (2,000) | (2,000) |
Accumulated other comprehensive loss | (1,081) | (1,236) |
Accumulated deficit | (210,947) | (210,082) |
Total Equity | 11,540 | 12,158 |
Total Liabilities and Equity | $ 28,367 | $ 28,705 |
Interim Unaudited Condensed Co3
Interim Unaudited Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands | Mar. 31, 2017USD ($)shares | Mar. 31, 2017₪ / shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2016₪ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for doubtful accounts | $ | $ 720 | $ 720 | ||
Ordinary shares, par value | ₪ / shares | ₪ 0.1 | ₪ 0.1 | ||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | ||
Ordinary shares, shares issued | 42,259,743 | 42,243,075 | ||
Ordinary shares, shares outstanding | 41,081,044 | 41,064,376 | ||
Treasury shares held | 1,178,699 | 1,178,699 |
Interim Unaudited Condensed Co4
Interim Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | [1] | ||
Revenues | ||||
Sales | $ 2,780 | $ 3,362 | ||
Licensing and transaction fees | 1,240 | 1,210 | ||
Total revenues | 4,020 | 4,572 | ||
Cost of revenues | ||||
Cost of sales | 1,800 | 2,249 | ||
Total cost of revenues | 1,800 | 2,249 | ||
Gross profit | 2,220 | 2,323 | ||
Operating expenses | ||||
Research and development | 702 | 721 | ||
Selling and marketing | 1,342 | 1,353 | ||
General and administrative | 856 | 924 | ||
Total operating expenses | 2,900 | 2,998 | ||
Operating loss from continuing operations | (680) | (675) | ||
Financial expenses, net | (71) | (93) | ||
Loss from continuing operations before taxes on income | (751) | (768) | ||
Income tax | (31) | (16) | ||
Net loss from continuing operations | (782) | (784) | ||
Net loss from discontinued operations | (83) | (144) | ||
Net loss | (865) | (928) | ||
Net loss attributable to non-controlling interest | 63 | |||
Net loss attributable to shareholders | $ (865) | $ (865) | ||
Basic and diluted net loss attributable to shareholders per ordinary share | ||||
From continuing operations | $ (0.02) | $ (0.02) | ||
From discontinued operations | [2] | |||
Total | $ (0.02) | $ (0.02) | ||
Weighted average number of ordinary shares used in computing basic and diluted net loss per ordinary share | 41,079,580 | 40,874,474 | ||
[1] | Reclassified to conform with the current period presentation, see Note 1C(2). | |||
[2] | Less than $0.01 per ordinary share. |
Interim Unaudited Condensed Co5
Interim Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Total comprehensive loss: | ||
Net loss | $ (865) | $ (928) |
Foreign currency translation adjustments | 155 | 168 |
Total comprehensive loss | (710) | (760) |
Comprehensive loss attributable to the non-controlling interest | 63 | |
Total comprehensive loss attributable to shareholders | $ (710) | $ (697) |
Interim Unaudited Condensed Co6
Interim Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Share capital | Additional paid-in capital | Treasury Shares (at cost) | Accumulated other comprehensive Income (loss) | Accumulated deficit | Noncontrolling interest | |||
Balance at Dec. 31, 2015 | $ 12,823 | $ 1,055 | $ 225,925 | $ (2,000) | $ (1,084) | $ (209,254) | $ (1,819) | |||
Balance, Shares at Dec. 31, 2015 | 42,014,673 | |||||||||
Changes during the three month period ended | ||||||||||
Stock-based compensation related to options and shares issued to employees | 27 | 27 | ||||||||
Foreign currency translation adjustments | 168 | 168 | ||||||||
Exercise of options | [1] | [1] | ||||||||
Exercise of options, Shares | 15,000 | |||||||||
Net loss | (928) | (865) | (63) | |||||||
Balance at Mar. 31, 2016 | 12,090 | $ 1,055 | 225,952 | (2,000) | (916) | (210,119) | (1,882) | |||
Balance, Shares at Mar. 31, 2016 | 42,029,673 | |||||||||
Balance at Dec. 31, 2016 | 12,158 | $ 1,061 | 224,415 | (2,000) | (1,236) | (210,082) | ||||
Balance, Shares at Dec. 31, 2016 | 42,243,075 | |||||||||
Changes during the three month period ended | ||||||||||
Stock-based compensation | 90 | [1] | 90 | |||||||
Stock-based compensation, Shares | [2] | 15,000 | ||||||||
Foreign currency translation adjustments | 155 | 155 | ||||||||
Exercise of options | 2 | [1] | 2 | |||||||
Exercise of options, Shares | 1,668 | |||||||||
Net loss | (865) | (865) | ||||||||
Balance at Mar. 31, 2017 | $ 11,540 | $ 1,061 | $ 224,507 | $ (2,000) | $ (1,081) | $ (210,947) | ||||
Balance, Shares at Mar. 31, 2017 | 42,259,743 | |||||||||
[1] | Less than $1. | |||||||||
[2] | See Note 8C. |
Interim Unaudited Condensed Co7
Interim Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | [1] | |
Cash flows from continuing operating activities | |||
Net loss from continuing operations | $ (782) | $ (784) | |
Adjustments required to reconcile net loss to net cash used in continuing operating activities: | |||
Stock-based compensation related to options issued to employees and others | 90 | 27 | |
Accrued interest and linkage differences, net | (26) | (7) | |
Depreciation | 281 | 308 | |
Deferred tax, net | 9 | 16 | |
Changes in operating assets and liabilities: | |||
Accrued severance pay, net | 28 | (146) | |
Decrease (increase) in trade receivables, net | 423 | (1,341) | |
(Increase) decrease in other receivables and prepaid expenses | (234) | 2 | |
(Increase) decrease in inventories | (343) | 346 | |
(Decrease) increase in trade payables | (693) | 575 | |
Increase (decrease) in other current liabilities | 569 | (180) | |
Net cash used in continuing operating activities | (678) | (1,184) | |
Cash flows from continuing investing activities | |||
Purchase of property and equipment | (35) | (83) | |
Change in short-term investments, net | 1,651 | 901 | |
Proceeds from restricted deposit for employee benefits | 44 | ||
Investment in capitalized product costs | (88) | (54) | |
Net cash provided by continuing investing activities | 1,572 | 764 | |
Cash flows from continuing financing activities | |||
Increase in short-term bank credit, net | 112 | 286 | |
Proceeds from long-term bank loans | 27 | ||
Repayment of long-term bank loans | (222) | (263) | |
Proceeds from exercise of options and warrants | 2 | [2] | |
Net cash (used in) provided by continuing financing activities | (108) | 50 | |
Cash flows from discontinued operations | |||
Net cash used in discontinued operating activities | (68) | (109) | |
Net cash used in discontinued investing activities | (61) | ||
Total net cash used in discontinued operations | (68) | (170) | |
Effect of exchange rate changes on cash and cash equivalents | 239 | 143 | |
Increase (decrease) in cash and cash equivalents | 957 | (397) | |
Cash and cash equivalents at the beginning of the period | 5,952 | 5,450 | |
Cash and cash equivalents at the end of the period | 6,909 | 5,053 | |
Cash paid during the period for: | |||
Interest paid | 28 | 53 | |
Income taxes paid | $ 17 | ||
[1] | Reclassified to conform with the current period presentation, see Note 1C(2). | ||
[2] | Less than $1. |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization and Basis of Presentation [Abstract] | |
Organization and Basis of Presentation | Note 1 - Organization and Basis of Presentation A. Description of business On Track Innovations Ltd. (the “Company”) was founded in 1990, in Israel. The Company and its subsidiaries (together the “Group”) are principally engaged in the field of design and development of cashless payment solutions. The Company’s shares are listed for trading on the NASDAQ Capital Market (formerly listed on the NASDAQ Global Market until April 13, 2016). B. Interim Unaudited Financial Information The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and therefore should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring adjustments, have been included. Operating results for the three month period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the assets, liabilities, revenue, costs, expenses and accumulated other comprehensive income/(loss) that are reported in the Interim Consolidated Financial Statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. C. Divestiture of operations 1. In December 2013, the Company completed the sale of certain assets, subsidiaries and intellectual property (“IP”) relating to its Smart ID division. Accordingly, the results and the cash flows of this operation for all reporting periods are presented in the statements of operations and in the statements of cash flows, respectively, as discontinued operations separately from continuing operations. 2. On September 14, 2016, the Company completed the sale of certain assets and IP related to its former parking segment. The Company has determined that the sale qualifies as a discontinued operation. Accordingly, the results and the cash flows of these operations for all reporting periods are presented in the statements of operations and in the statements of cash flows, respectively, as discontinued operations separately from continuing operations. All prior periods’ information has been reclassified to conform with current period’s presentation. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2 - Significant Accounting Policies These interim unaudited condensed consolidated financial statements have been prepared according to the same accounting policies as those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Recent accounting pronouncements In connection with recent accounting pronouncements and the Company’s assessment of the impacts they will have on the ongoing financial reporting, see Note 2W in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Other Receivables and Prepaid E
Other Receivables and Prepaid Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Other Receivables and Prepaid Expenses [Abstract] | |
Other Receivables and Prepaid Expenses | Note 3 - Other Receivables and Prepaid Expenses March 31, December 31, 2017 2016 Government institutions $ 367 $ 322 Prepaid expenses 571 526 Receivables under contractual obligations to be transferred to others * 335 346 Other receivables 559 444 $ 1,832 $ 1,638 * The Company’s subsidiary in Poland is required to collect certain fees that are to be transferred to local authorities. |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | Note 4 - Other Current Liabilities March 31, December 31, 2017 2016 Employees and related expenses $ 981 $ 1,011 Accrued expenses 1,387 1,473 Customer advances 912 249 Other current liabilities 117 89 $ 3,397 $ 2,822 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 5 - Commitments and Contingencies A. Legal claims 1. In June 2013, prior to the Company's divestiture of its SmartID division, Merwell Inc. (“Merwell”) filed a claim against the Company before an agreed-upon arbitrator alleging breach of contract in connection with certain commissions claimed to be owed to Merwell with respect to the division’s activities in Tanzania. These activities, along with all other activities of the SmartID division, were later assigned to and assumed by SuperCom Ltd. (“SuperCom”) in its purchase of the division. SuperCom undertook to indemnify the Company and hold it harmless against any liabilities the Company may incur in connection with Merwell’s consulting agreement and the arbitration. An arbitration decision was issued on February 21, 2016, awarding Merwell approximately $855 for outstanding commissions. The arbitration decision is being appealed and is thus not yet ripe for enforcement. As mentioned above, based on the agreement with SuperCom, SuperCom is liable for the costs and liabilities arising out of this claim. Therefore, the financial statements do not include any provision for this claim. 2. On October 3, 2013, a financial claim was filed against the Company and its then French subsidiary, Parx France (referred to in this paragraph, collectively, as the “Defendants”), in the Commercial Court of Paris, France. The sum of the claim is Euro 1,500 (approximately $1,603), and is based on the allegation that the plaintiff sustained certain losses in connection with Defendants not granting the plaintiff exclusive marketing rights to distribute and operate the Defendants’ PIAF Parking System in Paris and the Ile of France. The Company filed an initial memorandum of defense rejecting all the plaintiff’s allegations and claims. On April 26, 2017, the Commercial Court issued an order requiring the plaintiff in this proceeding to produce certain documents within 15 days and scheduling a further hearing in this matter for May 23, 2017. Based on the advice of counsel, the Company currently believes that it has no material obligations to the plaintiff and that there is no need for a provision for the claim. 3. On March 1, 2017, a claim was filed in the U.S. District Court, Eastern District of Pennsylvania against the Company and its U.S. subsidiary, OTI America Inc. by USA Technologies Inc. (“USAT”). The claim asserts, among other things, that products sold by the Company to USAT’s manufacturing subcontractor, Masterwork Electronics, Inc. (“Masterwork”), fail to conform to promised specifications in that they do not include Apple Value Added Services (“VAS”), an add-on feature to Apple Pay which was then not yet offered by the Company. USAT seeks payment of $4,913 plus interest and costs, comprised of $729 to cover payment for alternative products, and $4,184 to cover costs of replacing the allegedly non-conforming products already installed. The Company denies the claims asserted by USAT and intends to defend the complaint vigorously. Upon the request of all parties to this litigation, the Court extended the deadline for OTI America’s and our answer to USAT’s complaint to April 24, 2017 and May 8, 2017, respectively. OTI America submitted its answer to USAT’s complaint on April 24, 2017. The Company submitted its answer to USAT’s complaint on May 8, 2017. Based on the advice of counsel, the Company currently believes that it has no obligations to USAT. On March 3, 2017, the Company filed a lawsuit against Masterwork in the U.S. District Court for the Northern District of California. The Company seeks payment of $2,518 plus interest and costs as a result of Masterwork’s refusal to perform its obligations in connection with a purchase order supplied by Masterwork to the Company, based on Masterwork’s allegations that its customer, USAT, had apparently claimed that the products do not include the VAS feature requested by USAT, though such feature was not offered then by the Company and was not specified in the purchase order. The products subject to USAT’s litigation mentioned above include the products subject to the purchase order referred to in the Company’s claim against Masterwork. Upon the request of all parties to this litigation, the Court extended the deadline for Masterwork’s answer to the Company’s complaint on April 20, 2017. Masterwork submitted its answer to the Company’s complaint on April 20, 2017. A case management conference has been scheduled by the Court for June 6, 2017. B. Guarantees As of March 31, 2017, the Company has granted performance guarantees and guarantees to secure customer advances in the sum of $323. The expiration dates of the guarantees range from October 2017 to June 2019. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued operations [Abstract] | |
Discontinued operations | Note 6 - Discontinued operations As described in Note 1C, the Company divested its interest in the SmartID division and its parking segment, and presented these activities as discontinued operations. Set forth below are the results of the discontinued operations: Three months ended 2017 2016 Revenues $ - $ 305 Expenses (83) (449) Net loss from discontinued operations $ (83) $ (144) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 7 - Fair Value of Financial Instruments The Company's financial instruments consist mainly of cash and cash equivalents, short-term interest bearing investments, accounts receivable, restricted deposits for employee benefits, accounts payable and short-term and long-term loans. Fair value for the measurement of financial assets and liabilities is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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 liability. The Company utilizes a valuation hierarchy for disclosure of the inputs for fair value measurement. This hierarchy prioritizes the inputs into three broad levels as follows: ● Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. ● Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. ● Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. By distinguishing between inputs that are observable in the market place, and therefore more objective, and those that are unobservable and therefore more subjective, the hierarchy is designed to indicate the relative reliability of the fair value measurements. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company, in estimating fair value for financial instruments, determined that the carrying amounts of cash and cash equivalents, trade receivables, short-term bank credit and trade payables are equivalent to, or approximate their fair value due to the short-term maturity of these instruments. The carrying amounts of variable interest rate long-term loans are equivalent or approximate to their fair value as they bear interest at approximate market rates. As of March 31, 2017, the fair value of bank loans with fixed interest rates did not differ materially from the carrying amount. As of March 31, 2017, the Company held $3,934 of short-term bank deposits (as of December 31, 2016, $5,585). As of March 31, 2017 and December 31, 2016, short-term deposits in the amount of $1,548 have been pledged as security in respect of guarantees granted in respect of performance guarantees, loans and credit lines received from a bank and cannot be pledged to others or withdrawn without the consent of the bank. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Equity | Note 8 - Equity A. Stock option plans During the three months ended March 31, 2017 and March 31, 2016, 100,000 and 270,000 options were granted, respectively. The vesting period for the options ranges from three years to four years. The exercise prices for those options are $1.58. Those options expire up to five years after the date of the grant. Any options which are forfeited or cancelled before expiration become available for future grants under the Company’s option plan. The fair value of each option granted to employees and non-employees during the three months ended March 31, 2017 and March 31, 2016, for which the exercise price was greater than par value, was estimated on the date of grant, using the Black-Scholes model and the following assumptions: 1. Dividend yield of zero percent for all periods. 2. Risk-free interest rate of 1.35% and 1.18% for grants during the three months ended March 31, 2017 and March 31, 2016, respectively, based on U.S. Treasury yield curve in effect at the time of grant. 3. Estimated expected lives of 3.50 and 3.56 years for grants during the three months ended March 31, 2017 and March 31, 2016, respectively, using the simplified method. 4. Expected average volatility of 74% and 72% for grants during the three months ended March 31, 2017 and March 31, 2016, respectively, which represent a weighted average standard deviation rate for the price of the Company's Ordinary Shares on the NASDAQ Capital Market. The Company’s options activity (including options to non-employees) and options outstanding and options exercisable as of December 31, 2016 and March 31, 2017, are summarized in the following table: Weighted Number of options average exercise price outstanding per share Outstanding -December 31, 2016 1,604,836 $ 1.36 Options granted 100,000 1.58 Options expired or forfeited (180,667 ) 2.26 Options exercised (1,668 ) 0.74 Outstanding -March 31, 2017 1,522,501 1.27 Exercisable as of: December 31, 2016 591,017 $ 1.83 March 31, 2017 513,014 $ 1.52 The weighted average fair value of options granted during the three months ended March 31, 2017 and during the three months ended March 31, 2016 is $0.93 and $0.41, respectively, per option. The aggregate intrinsic value of outstanding options as of March 31, 2017 and December 31, 2016 is approximately $813 and $909, respectively. The aggregate intrinsic value of exercisable options as of March 31, 2017 and December 31, 2016 is approximately $213 and $166, respectively. The following table summarizes information about options outstanding and exercisable (including options to non-employees) as of March 31, 2017: Options outstanding Options Exercisable Number Weighted Number Weighted outstanding average Weighted Outstanding average Weighted Range of as of remaining Average As of remaining Average exercise March 31, contractual Exercise March 31, contractual Exercise price ($) 2017 life (years) Price ($) 2017 life (years) Price ($) 0.44-0.90 625,000 3.55 0.76 228,335 3.21 0.78 1.07-1.20 420,000 4.56 1.07 10,000 0.16 1.20 1.46 50,000 1.30 1.46 50,000 1.30 1.46 1.58-1.68 145,000 3.66 1.61 40,000 0.79 1.68 2.32-2.36 242,501 2.05 2.35 164,679 2.01 2.35 $ 3.03 40,000 2.48 $ 3.03 20,000 2.48 $ 3.03 1,522,501 3.50 513,014 2.36 As of March 31, 2017, there was approximately $496 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of approximately 1.3 years. During the three months ended March 31, 2017 and March 31, 2016, the Company recorded stock-based compensation expenses in the amount of $90 and $27, respectively, in accordance with ASC 718 “Compensation-Stock Compensation.” B. Warrants As of March 31, 2017, there are remaining 40,000 outstanding warrants with a per share exercise price of $0.95. The warrants expire during 2019. C. Shares to non-employees During the three months ended March 31, 2017, the Company granted 15,000 ordinary shares to one of its consultants. The expenses that are recognized due to this grant are immaterial and are presented within ‘stock-based compensation’ in the statement of changes in equity for the three months ended March 31, 2017. |
Operating segments
Operating segments | 3 Months Ended |
Mar. 31, 2017 | |
Operating Segments [Abstract] | |
Operating segments | Note 9 - Operating segments For the purposes of allocating resources and assessing performance in order to improve profitability, the Company's chief operating decision maker ("CODM") examines two segments which are the Company's strategic business units: (1) Retail and Mass Transit Ticketing; and (2) Petroleum. In addition to its two reportable segments, certain products for the medical industry and other secure smart card solutions are classified under the Company’s "Other" segment. Information regarding the results of each reportable segment is included below based on the internal management reports that are reviewed by the CODM. Three months ended March 31, 2017 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 2,741 $ 818 $ 461 $ 4,020 Reportable segment gross profit * 1,641 507 258 2,406 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (184 ) Stock-based compensation (2 ) Gross profit for the period $ 2,220 Three months ended March 31, 2016 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 2,899 $ 1,109 $ 564 $ 4,572 Reportable segment gross profit * 1,515 701 292 2,508 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (189 ) Stock-based compensation 4 Gross profit for the period $ 2,323 * Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Recent accounting pronouncements | Recent accounting pronouncements In connection with recent accounting pronouncements and the Company’s assessment of the impacts they will have on the ongoing financial reporting, see Note 2W in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Other Receivables and Prepaid18
Other Receivables and Prepaid Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Receivables and Prepaid Expenses [Abstract] | |
Schedule of other receivables and prepaid expenses | March 31, December 31, 2017 2016 Government institutions $ 367 $ 322 Prepaid expenses 571 526 Receivables under contractual obligations to be transferred to others * 335 346 Other receivables 559 444 $ 1,832 $ 1,638 * The Company’s subsidiary in Poland is required to collect certain fees that are to be transferred to local authorities. |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Current Liabilities [Abstract] | |
Summary of other current liabilities | March 31, December 31, 2017 2016 Employees and related expenses $ 981 $ 1,011 Accrued expenses 1,387 1,473 Customer advances 912 249 Other current liabilities 117 89 $ 3,397 $ 2,822 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Discontinued operations [Abstract] | |
Schedule of results of the discontinued operations | Three months ended 2017 2016 Revenues $ - $ 305 Expenses (83) (449) Net loss from discontinued operations $ (83) $ (144) |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Schedule of stock options activity | Weighted Number of options average exercise price outstanding per share Outstanding -December 31, 2016 1,604,836 $ 1.36 Options granted 100,000 1.58 Options expired or forfeited (180,667 ) 2.26 Options exercised (1,668 ) 0.74 Outstanding -March 31, 2017 1,522,501 1.27 Exercisable as of: December 31, 2016 591,017 $ 1.83 March 31, 2017 513,014 $ 1.52 |
Summary of options outstanding and exercisable | Options outstanding Options Exercisable Number Weighted Number Weighted outstanding average Weighted Outstanding average Weighted Range of as of remaining Average As of remaining Average exercise March 31, contractual Exercise March 31, contractual Exercise price ($) 2017 life (years) Price ($) 2017 life (years) Price ($) 0.44-0.90 625,000 3.55 0.76 228,335 3.21 0.78 1.07-1.20 420,000 4.56 1.07 10,000 0.16 1.20 1.46 50,000 1.30 1.46 50,000 1.30 1.46 1.58-1.68 145,000 3.66 1.61 40,000 0.79 1.68 2.32-2.36 242,501 2.05 2.35 164,679 2.01 2.35 $ 3.03 40,000 2.48 $ 3.03 20,000 2.48 $ 3.03 1,522,501 3.50 513,014 2.36 |
Operating segments (Tables)
Operating segments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Operating Segments [Abstract] | |
Schedule of information regarding results of each reportable segment | Three months ended March 31, 2017 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 2,741 $ 818 $ 461 $ 4,020 Reportable segment gross profit * 1,641 507 258 2,406 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (184 ) Stock-based compensation (2 ) Gross profit for the period $ 2,220 Three months ended March 31, 2016 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 2,899 $ 1,109 $ 564 $ 4,572 Reportable segment gross profit * 1,515 701 292 2,508 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (189 ) Stock-based compensation 4 Gross profit for the period $ 2,323 * Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. |
Other Receivables and Prepaid23
Other Receivables and Prepaid Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |
Other Receivables and Prepaid Expenses [Abstract] | |||
Government institutions | $ 367 | $ 322 | |
Prepaid expenses | 571 | 526 | |
Receivables under contractual obligations to be transferred to others | [1] | 335 | 346 |
Other receivables | 559 | 444 | |
Total other receivables and prepaid expenses | $ 1,832 | $ 1,638 | |
[1] | The Company's subsidiary in Poland is required to collect certain fees that are to be transferred to local authorities. |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Other Current Liabilities [Abstract] | ||
Employees and related expenses | $ 981 | $ 1,011 |
Accrued expenses | 1,387 | 1,473 |
Customer advances | 912 | 249 |
Other current liabilities | 117 | 89 |
Total other current liabilities | $ 3,397 | $ 2,822 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Thousands, $ in Thousands | Mar. 01, 2017USD ($) | Oct. 03, 2013USD ($) | Oct. 03, 2013EUR (€) | Jun. 30, 2013USD ($) | Mar. 31, 2017USD ($) |
Commitments and Contingencies (Textual) | |||||
Guarantees to secure customer advances | $ 323 | ||||
Guarantees expiration dates description | The expiration dates of the guarantees range from October 2017 to June 2019. | ||||
Total of interest and costs and cover payment for alternative products | $ 4,913 | ||||
Cover payment for alternative products | 4,184 | ||||
Interest and costs, comprised amount | 729 | ||||
Collection of Accounts Receivables plus interest and cost | $ 2,518 | ||||
Merwell Inc. [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Outstanding commissions arbitration | $ 855 | ||||
French subsidiary [Member] | |||||
Commitments and Contingencies (Textual) | |||||
Financial claim field | $ 1,603 | € 1,500 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Discontinued operations [Abstract] | |||
Revenues | $ 305 | ||
Expenses | (83) | (449) | |
Net loss from discontinued operations | $ (83) | $ (144) | [1] |
[1] | Reclassified to conform with the current period presentation, see Note 1C(2). |
Fair Value of Financial Instr27
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value of Financial Instruments (Textual) | ||
Short-term bank deposits | $ 3,934 | $ 5,585 |
Short-term bank deposit pledged as security | $ 1,548 | $ 1,548 |
Equity (Details)
Equity (Details) - $ / shares | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Number of options outstanding | |||
Options granted | 100,000 | 270,000 | |
Stock option plans [Member] | |||
Number of options outstanding | |||
Outstanding - Beginning Balance | 1,604,836 | ||
Options granted | 100,000 | ||
Options expired or forfeited | (180,667) | ||
Options exercised | (1,668) | ||
Outstanding - Ending Balance | 1,522,501 | ||
Exercisable | 513,014 | 591,017 | |
Weighted average exercise price per share | |||
Outstanding - Beginning Balance | $ 1.36 | ||
Options granted | 1.58 | ||
Options expired or forfeited | 2.26 | ||
Options exercised | 0.74 | ||
Outstanding - Ending Balance | 1.27 | ||
Exercisable | $ 1.52 | $ 1.83 |
Equity (Details 1)
Equity (Details 1) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Options outstanding | |
Number outstanding | shares | 1,522,501 |
Weighted average remaining contractual life (years) | 3 years 6 months |
Options exercisable | |
Number outstanding | shares | 513,014 |
Weighted average remainging cotractual life (years) | 2 years 4 months 10 days |
0.44-0.90 [Member] | |
Range of exercise price | |
Exercise price, lower limit | $ 0.44 |
Exercise price, upper limit | $ 0.90 |
Options outstanding | |
Number outstanding | shares | 625,000 |
Weighted average remaining contractual life (years) | 3 years 6 months 18 days |
Weighted Average Exercise Price | $ 0.76 |
Options exercisable | |
Number outstanding | shares | 228,335 |
Weighted average remainging cotractual life (years) | 3 years 2 months 16 days |
Weighted Average Exercise Price | $ 0.78 |
1.07-1.20 [Member] | |
Range of exercise price | |
Exercise price, lower limit | 1.07 |
Exercise price, upper limit | $ 1.20 |
Options outstanding | |
Number outstanding | shares | 420,000 |
Weighted average remaining contractual life (years) | 4 years 6 months 22 days |
Weighted Average Exercise Price | $ 1.07 |
Options exercisable | |
Number outstanding | shares | 10,000 |
Weighted average remainging cotractual life (years) | 1 month 28 days |
Weighted Average Exercise Price | $ 1.20 |
1.46 [Member] | |
Range of exercise price | |
Exercise price | $ 1.46 |
Options outstanding | |
Number outstanding | shares | 50,000 |
Weighted average remaining contractual life (years) | 1 year 3 months 18 days |
Weighted Average Exercise Price | $ 1.46 |
Options exercisable | |
Number outstanding | shares | 50,000 |
Weighted average remainging cotractual life (years) | 1 year 3 months 18 days |
Weighted Average Exercise Price | $ 1.46 |
1.58-1.68 [Member] | |
Range of exercise price | |
Exercise price, lower limit | 1.58 |
Exercise price, upper limit | $ 1.68 |
Options outstanding | |
Number outstanding | shares | 145,000 |
Weighted average remaining contractual life (years) | 3 years 7 months 28 days |
Weighted Average Exercise Price | $ 1.61 |
Options exercisable | |
Number outstanding | shares | 40,000 |
Weighted average remainging cotractual life (years) | 9 months 15 days |
Weighted Average Exercise Price | $ 1.68 |
2.32-2.36 [Member] | |
Range of exercise price | |
Exercise price, lower limit | 2.32 |
Exercise price, upper limit | $ 2.36 |
Options outstanding | |
Number outstanding | shares | 242,501 |
Weighted average remaining contractual life (years) | 2 years 18 days |
Weighted Average Exercise Price | $ 2.35 |
Options exercisable | |
Number outstanding | shares | 164,679 |
Weighted average remainging cotractual life (years) | 2 years 4 days |
Weighted Average Exercise Price | $ 2.35 |
3.03 [Member] | |
Range of exercise price | |
Exercise price | $ 3.03 |
Options outstanding | |
Number outstanding | shares | 40,000 |
Weighted average remaining contractual life (years) | 2 years 5 months 23 days |
Weighted Average Exercise Price | $ 3.03 |
Options exercisable | |
Number outstanding | shares | 20,000 |
Weighted average remainging cotractual life (years) | 2 years 5 months 23 days |
Weighted Average Exercise Price | $ 3.03 |
Equity (Details Textual)
Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Equity [Abstract] | |||
Vesting period description | The vesting period for the options ranges from three years to four years. The exercise prices for those options are $1.58. Those options expire up to five years after the date of the grant. | ||
Options granted | 100,000 | 270,000 | |
Risk-free interest rate | 1.35% | 1.18% | |
Estimated expected lives | 3 years 6 months | 3 years 6 months 22 days | |
Expected average volatility | 74.00% | 72.00% | |
Weighted average fair value of options granted | $ 0.93 | $ 0.41 | |
Aggregate intrinsic value of outstanding options | $ 813 | $ 909 | |
Aggregate intrinsic value of exercisable options | 213 | $ 166 | |
Unrecognized compensation cost | $ 496 | ||
Unrecognized compensation cost, weighted-average period | 1 year 3 months 18 days | ||
Share based compensation expenses | $ 90 | $ 27 | |
Warrants expire | 2,019 | ||
Outstanding warrants | 40,000 | ||
Share exercise price | $ 0.95 | ||
Granted ordinary shares of stock based compensation | 15,000 |
Operating segments (Details)
Operating segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 4,020 | $ 4,572 | [1] | |
Reportable segment gross profit | [2] | 2,406 | 2,508 | |
Reconciliation of reportable segment gross profit to gross profit for the period | ||||
Depreciation | (184) | (189) | ||
Stock-based compensation | (2) | 4 | ||
Gross profit for the period | 2,220 | 2,323 | [1] | |
Petroleum [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 818 | 1,109 | ||
Reportable segment gross profit | [2] | 507 | 701 | |
Retail and Mass Transit Ticketing [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,741 | 2,899 | ||
Reportable segment gross profit | [2] | 1,641 | 1,515 | |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 461 | 564 | ||
Reportable segment gross profit | [2] | $ 258 | $ 292 | |
[1] | Reclassified to conform with the current period presentation, see Note 1C(2). | |||
[2] | Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. |
Operating segments (Details Tex
Operating segments (Details Textual) | 3 Months Ended |
Mar. 31, 2017Segments | |
Operating Segments (Textual) | |
Number of reportable segments | 2 |