on Track Innovations (OTIVF) 10-Q 9 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 02, 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	Jun. 30, 2017
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		41,119,378

Interim Unaudited Condensed Con

Interim Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 6,242	$ 5,952
Short-term investments	3,084	5,585
Trade receivables (net of allowance for doubtful accounts of $694 and $720 as of June 30, 2017 and December 31, 2016, respectively)	6,843	5,620
Other receivables and prepaid expenses	1,554	1,638
Inventories	3,180	3,069
Total current assets	20,903	21,864
Long-term restricted deposit for employees benefit	500	453
Severance pay deposits	355	322
Property, plant and equipment, net	5,967	5,788
Intangible assets, net	351	278
Total Assets	28,076	28,705
Current Liabilities
Short-term bank credit and current maturities of long-term bank loans	4,663	4,369
Trade payables	7,104	6,957
Other current liabilities	1,991	2,822
Total current liabilities	13,758	14,148
Long-Term Liabilities
Long-term loans, net of current maturities	1,041	1,215
Accrued severance pay	918	811
Deferred tax liability	452	373
Total long-term liabilities	2,411	2,399
Total Liabilities	16,169	16,547
Commitments and Contingencies
Shareholders' Equity
Ordinary shares of NIS 0.1 par value: Authorized - 50,000,000 shares as of June 30, 2017 and December 31, 2016; issued: 42,288,077 and 42,243,075 shares as of June 30, 2017 and December 31, 2016, respectively; outstanding: 41,109,378 and 41,064,376 shares as of June 30, 2017 and December 31, 2016, respectively	1,062	1,061
Additional paid-in capital	224,603	224,415
Treasury shares at cost - 1,178,699 shares as of June 30, 2017 and December 31, 2016	(2,000)	(2,000)
Accumulated other comprehensive loss	(904)	(1,236)
Accumulated deficit	(210,854)	(210,082)
Total Equity	11,907	12,158
Total Liabilities and Equity	$ 28,076	$ 28,705

Interim Unaudited Condensed Co3

Interim Unaudited Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands	Jun. 30, 2017USD ($)shares	Jun. 30, 2017₪ / shares	Dec. 31, 2016USD ($)shares	Dec. 31, 2016₪ / shares
Statement of Financial Position [Abstract]
Allowance for doubtful accounts | $	$ 694		$ 720
Ordinary shares, par value | ₪ / shares		₪ 0.1		₪ 0.1
Ordinary shares, shares authorized	50,000,000		50,000,000
Ordinary shares, shares issued	42,288,077		42,243,075
Ordinary shares, shares outstanding	41,109,378		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				6 Months Ended
	Jun. 30, 2017		Jun. 30, 2016		Jun. 30, 2017		Jun. 30, 2016
Revenues
Sales	$ 5,646		$ 3,584	[1]	$ 8,426		$ 6,946	[1]
Licensing and transaction fees	1,300		1,226	[1]	2,540		2,436	[1]
Total revenues	6,946		4,810	[1]	10,966		9,382	[1]
Cost of revenues
Cost of sales	3,476		2,360	[1]	5,276		4,609	[1]
Total cost of revenues	3,476		2,360	[1]	5,276		4,609	[1]
Gross profit	3,470		2,450	[1]	5,690		4,773	[1]
Operating expenses
Research and development	889		747	[1]	1,591		1,468	[1]
Selling and marketing	1,492		1,321	[1]	2,834		2,674	[1]
General and administrative	939		902	[1]	1,795		1,826	[1]
Total operating expenses	3,320		2,970	[1]	6,220		5,968	[1]
Operating income (loss) from continuing operations	150		(520)	[1]	(530)		(1,195)	[1]
Financial expenses, net	(39)		(62)	[1]	(110)		(155)	[1]
Income (loss) from continuing operations before taxes on income	111		(582)	[1]	(640)		(1,350)	[1]
Income tax	(25)		(16)	[1]	(56)		(32)	[1]
Net income (loss) from continuing operations	86		(598)	[1]	(696)		(1,382)	[1]
Net income (loss) from discontinued operations	7		1,947	[1]	(76)		1,803	[1]
Net income (loss)	93		1,349		(772)		421
Net (income) loss attributable to non-controlling interest			(36)	[1]			27	[1]
Net income (loss) attributable to shareholders	$ 93		$ 1,313	[1]	$ (772)		$ 448	[1]
Basic and diluted net income (loss) attributable to shareholders per ordinary share
From continuing operations		[2]	$ (0.02)	[1]	$ (0.02)		$ (0.03)	[1]
From discontinued operations		[2]	0.05	[1]		[2]	0.04	[1]
Total		[2]	$ 0.03	[1]	$ (0.02)		$ 0.01	[1]
Weighted average number of ordinary shares used in computing basic and diluted net income (loss) per ordinary share	41,095,788		40,896,863	[1]	41,087,729		40,885,668	[1]
[1]	Reclassified to conform with the current period presentation, see Note 1C(2).
[2]	Less than $1.

Interim Unaudited Condensed Co5

Interim Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Total comprehensive income (loss):
Net income (loss)	$ 93	$ 1,349	$ (772)	$ 421
Foreign currency translation adjustments	177	(190)	332	(22)
Total comprehensive income (loss)	270	1,159	(440)	399
Comprehensive loss (income) attributable to the non-controlling interest		(36)		27
Total comprehensive income (loss) attributable to shareholders	$ 270	$ 1,123	$ (440)	$ 426

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	Non controlling 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 six month period ended
Stock-based compensation related to options issued to employees		105				105
Foreign currency translation adjustments		(22)						(22)
Exercise of options and warrants			[1]		[1]
Exercise of options and warrants, Shares				69,402
Net income (loss)		421							448	(27)
Balance at Jun. 30, 2016		13,327		$ 1,055		226,030	(2,000)	(1,106)	(208,806)	(1,846)
Balance, Shares at Jun. 30, 2016				42,084,075
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 six month period ended
Stock-based compensation		174		$ 1		173
Stock-based compensation, Shares	[2]			30,000
Foreign currency translation adjustments		332						332
Exercise of options		15			[1]	15
Exercise of options, Shares				15,002
Net income (loss)		(772)							(772)
Balance at Jun. 30, 2017		$ 11,907		$ 1,062		$ 224,603	$ (2,000)	$ (904)	$ (210,854)
Balance, Shares at Jun. 30, 2017				42,288,077
[1]	Less than $1.
[2]	See Note 8C.

Interim Unaudited Condensed Co7

Interim Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	[1]
Cash flows from continuing operating activities
Net loss from continuing operations	$ (696)	$ (1,382)
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	174	105
Accrued interest and linkage differences, net	(47)	55
Depreciation	583	617
Deferred tax, net	21	32
Gain on sale of fixed assets	(7)
Changes in operating assets and liabilities:
Accrued severance pay, net	74	(151)
Increase in trade receivables, net	(1,151)	(1,115)
Decrease in other receivables and prepaid expenses	90	215
(Increase) decrease in inventories	(47)	590
(Decrease) increase in trade payables	(396)	290
Decrease in other current liabilities	(855)	(453)
Net cash used in continuing operating activities	(2,257)	(1,197)
Cash flows from continuing investing activities
Purchase of property and equipment, net	(98)	(139)
Change in short-term investments, net	2,500	(884)
Investment in capitalized product costs	(157)	(98)
Proceeds from restricted deposit for employee benefits	44
Advance payment from sale of property		396
Proceeds from sale of fixed assets	12
Net cash provided by (used in) continuing investing activities	2,301	(725)
Cash flows from continuing financing activities
Increase in short-term bank credit, net	213	81
Proceeds from long-term bank loans		27
Repayment of long-term bank loans	(374)	(538)
Proceeds from exercise of options and warrants	15		[2]
Net cash used in continuing financing activities	(146)	(430)
Cash flows from discontinued operations
Net cash used in discontinued operating activities	(71)	(214)
Net cash provided by discontinued investing activities		1,949
Total net cash (used in) provided by discontinued operations	(71)	1,735
Effect of exchange rate changes on cash and cash equivalents	463	(17)
Increase (decrease) in cash and cash equivalents	290	(634)
Cash and cash equivalents at the beginning of the period	5,952	5,450
Cash and cash equivalents at the end of the period	6,242	4,816
Cash paid during the period for:
Interest paid	74	118
Income taxes paid	$ 30
[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	6 Months Ended
	Jun. 30, 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. During the three month period ended June 30, 2017, we completed the liquidation of our wholly-owned subsidiaries, Softchip Israel Ltd. and Softchip Technologies (3000) Ltd., and these entities are no longer part of the Group. 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 six month period ended June 30, 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 to SuperCom Ltd. (“SuperCom”). 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 to the current period’s presentation.

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Jun. 30, 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 1. In May 2017, the Financial Accounting Standard Board issued Accounting Standards Update (“ASU”) 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” The ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. ASU 2017-09 is effective for all entities for annual reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect that the adoption of ASU 2017-09 will have a material impact on the Company's results of operations and financial condition. 2. In connection with other 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	6 Months Ended
	Jun. 30, 2017
Other Receivables and Prepaid Expenses [Abstract]
Other Receivables and Prepaid Expenses	Note 3 - Other Receivables and Prepaid Expenses June 30, December 31, 2017 2016 Government institutions $ 325 $ 322 Prepaid expenses 660 526 Receivables under contractual obligations to be transferred to others * 174 346 Other receivables 395 444 $ 1,554 $ 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	6 Months Ended
	Jun. 30, 2017
Other Current Liabilities [Abstract]
Other Current Liabilities	Note 4 - Other Current Liabilities June 30, December 31, 2017 2016 Employees and related expenses $ 584 $ 1,011 Accrued expenses 1,042 1,473 Customer advances 213 249 Other current liabilities 152 89 $ 1,991 $ 2,822

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 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 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 $1,710), 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. A hearing in this matter is scheduled for September 19, 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. 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. Discovery in this proceeding is currently underway. A pre-trial conference for this matter is scheduled for August 2, 2018 with trial dates to be set thereafter. 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. Masterwork submitted its answer to the Company’s complaint on April 20, 2017. On May 26, 2017, the Company amended its complaint to add USAT as a defendant, asserting claims against USAT for tortious interference with contract. On June 3, 2017, Masterwork moved to transfer the California matter to the U.S. District Court, Eastern District of Pennsylvania so that it be consolidated with the above-described USAT litigation. Masterwork’s request was granted on July 20, 2017, resulting in the transfer of this matter to the Eastern District of Pennsylvania where it is expected to be consolidated with the USAT litigation described above. Based on the advice of counsel, the Company currently believes that it and OTI America have no obligations to USAT in connection with USAT’s claims against the Company and OTI America and, similarly, that it has a meritorious claim against Masterwork and USAT. B. Guarantees As of June 30, 2017, the Company has granted performance guarantees and guarantees to secure customer advances in the sum of $347. The expiration dates of these guarantees range from October 2017 to June 2019.

Discontinued Operations

Discontinued Operations	6 Months Ended
	Jun. 30, 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 Six months ended 2017 2016 2017 2016 Revenues - 279 - 584 Expenses - (471 ) (83 ) (920 ) Other income, net 7 2,139 7 2,139 Net profit (loss) from discontinued operations 7 1,947 (76 ) 1,803

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 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, used the following methods and assumptions: The carrying amounts of cash and cash equivalents, short-term interest bearing investments, 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 June 30, 2017, the fair value of bank loans with fixed interest rates did not differ materially from the carrying amount. As of June 30, 2017, the Company held approximately $3,084 of short-term bank deposits (as of December 31, 2016, $5,585). As of June 30, 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	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Equity	Note 8 - Equity A. Stock option plans During the six months ended June 30, 2017 and June 30, 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 the options range from $0.44 to $1.58. Those options expire up to five years after the date of 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 six months ended June 30, 2017 and June 30, 2016, 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 six months ended June 30, 2017 and June 30, 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 six months ended June 30, 2017 and June 30, 2016, respectively, using the simplified method. 4. Expected average volatility of 74% and 72% for grants during the six months ended June 30, 2017 and June 30, 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) during the six months ended June 30, 2017 and options outstanding and options exercisable as of December 31, 2016 and June 30, 2017, are summarized in the following table: Weighted Number of average exercise options price per Outstanding – December 31, 2016 1,604,836 $ 1.36 Options granted 100,000 1.58 Options expired or forfeited (281,334 ) 1.91 Options exercised (15,002 ) 1.05 Outstanding – June 30, 2017 1,408,500 1.27 Exercisable as of: December 31, 2016 591,017 $ 1.83 June 30, 2017 538,500 $ 1.62 The weighted average fair value of options granted during the six months ended June 30, 2017 and during the six months ended June 30, 2016 is $0.93 and $0.41, respectively, per option. The aggregate intrinsic value of outstanding options as of June 30, 2017 and December 31, 2016 is approximately $414 and $909, respectively. The aggregate intrinsic value of exercisable options as of June 30, 2017 and December 31, 2016 is approximately $120 and $167, respectively. The following table summarizes information about options outstanding and exercisable (including options to non-employees) as of June 30, 2017: Options outstanding Options exercisable Number Weighted Number Weighted Outstanding average Weighted Outstanding average Weighted as of remaining Average As of remaining Average Range of June 30, contractual Exercise June 30, contractual Exercise exercise price 2017 life (years) Price 2017 life (years) Price $ 0.44- $0.90 595,000 3.25 $ 0.76 225,000 2.81 $ 0.78 1.07-1.46 425,000 4.03 1.12 50,000 1.05 1.46 1.58-1.68 115,000 4.33 1.59 10,000 2.51 1.68 2.32-2.36 233,500 1.88 2.35 233,500 1.88 2.35 3.03 40,000 2.23 $ 3.03 20,000 2.23 $ 3.03 1,408,500 3.31 538,500 2.21 As of June 30, 2017, there was approximately $408 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 1.22 years. During the six months ended June 30, 2017 and June 30, 2016, the Company recorded stock-based compensation expenses in the amount of $174 and $105, respectively, in accordance with ASC 718 “Compensation-Stock Compensation.” B. Warrants As of June 30, 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 six months ended June 30, 2017, the Company granted 30,000 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 six months ended June 30, 2017.

Operating Segments

Operating Segments	6 Months Ended
	Jun. 30, 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 June 30, 2017 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 4,682 $ 1,910 $ 354 $ 6,946 Reportable segment gross profit * 2,568 889 211 3,668 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (199 ) Stock-based compensation 1 Gross profit for the period $ 3,470 * Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. Three months ended June 30, 2016 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 3,239 $ 831 $ 740 $ 4,810 Reportable segment gross profit * 1,795 497 350 2,642 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (188 ) Stock-based compensation (4 ) Gross profit for the period $ 2,450 Six months ended June 30, 2017 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 7,423 $ 2,728 $ 815 $ 10,966 Reportable segment gross profit * 4,209 1,396 469 6,074 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (383 ) Stock-based compensation (1 ) Gross profit for the period $ 5,690 Six months ended June 30, 2016 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 6,138 $ 1,940 $ 1,304 $ 9,382 Reportable segment gross profit * 3,310 1,198 642 5,150 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (377 ) Stock-based compensation - Gross profit for the period $ 4,773 * 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)	6 Months Ended
	Jun. 30, 2017
Significant Accounting Policies [Abstract]
Recent accounting pronouncements	Recent accounting pronouncements 1. In May 2017, the Financial Accounting Standard Board issued Accounting Standards Update (“ASU”) 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” The ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. ASU 2017-09 is effective for all entities for annual reporting periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. The Company does not expect that the adoption of ASU 2017-09 will have a material impact on the Company's results of operations and financial condition. 2. In connection with other 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)	6 Months Ended
	Jun. 30, 2017
Other Receivables and Prepaid Expenses [Abstract]
Schedule of other receivables and prepaid expenses	June 30, December 31, 2017 2016 Government institutions $ 325 $ 322 Prepaid expenses 660 526 Receivables under contractual obligations to be transferred to others * 174 346 Other receivables 395 444 $ 1,554 $ 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)	6 Months Ended
	Jun. 30, 2017
Other Current Liabilities [Abstract]
Summary of other current liabilities	June 30, December 31, 2017 2016 Employees and related expenses $ 584 $ 1,011 Accrued expenses 1,042 1,473 Customer advances 213 249 Other current liabilities 152 89 $ 1,991 $ 2,822

Discontinued Operations (Tables

Discontinued Operations (Tables)	6 Months Ended
	Jun. 30, 2017
Discontinued Operations [Abstract]
Schedule of results of the discontinued operations	Three months ended Six months ended 2017 2016 2017 2016 Revenues - 279 - 584 Expenses - (471 ) (83 ) (920 ) Other income, net 7 2,139 7 2,139 Net profit (loss) from discontinued operations 7 1,947 (76 ) 1,803

Equity (Tables)

Equity (Tables)	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Schedule of stock options activity	Weighted Number of average exercise options price per Outstanding – December 31, 2016 1,604,836 $ 1.36 Options granted 100,000 1.58 Options expired or forfeited (281,334 ) 1.91 Options exercised (15,002 ) 1.05 Outstanding – June 30, 2017 1,408,500 1.27 Exercisable as of: December 31, 2016 591,017 $ 1.83 June 30, 2017 538,500 $ 1.62
Summary of options outstanding and exercisable	Options outstanding Options exercisable Number Weighted Number Weighted Outstanding average Weighted Outstanding average Weighted as of remaining Average As of remaining Average Range of June 30, contractual Exercise June 30, contractual Exercise exercise price 2017 life (years) Price 2017 life (years) Price $ 0.44- $0.90 595,000 3.25 $ 0.76 225,000 2.81 $ 0.78 1.07-1.46 425,000 4.03 1.12 50,000 1.05 1.46 1.58-1.68 115,000 4.33 1.59 10,000 2.51 1.68 2.32-2.36 233,500 1.88 2.35 233,500 1.88 2.35 3.03 40,000 2.23 $ 3.03 20,000 2.23 $ 3.03 1,408,500 3.31 538,500 2.21

Operating Segments (Tables)

Operating Segments (Tables)	6 Months Ended
	Jun. 30, 2017
Operating Segments [Abstract]
Schedule of information regarding results of each reportable segment	Three months ended June 30, 2017 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 4,682 $ 1,910 $ 354 $ 6,946 Reportable segment gross profit * 2,568 889 211 3,668 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (199 ) Stock-based compensation 1 Gross profit for the period $ 3,470 * Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. Three months ended June 30, 2016 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 3,239 $ 831 $ 740 $ 4,810 Reportable segment gross profit * 1,795 497 350 2,642 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (188 ) Stock-based compensation (4 ) Gross profit for the period $ 2,450 Six months ended June 30, 2017 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 7,423 $ 2,728 $ 815 $ 10,966 Reportable segment gross profit * 4,209 1,396 469 6,074 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (383 ) Stock-based compensation (1 ) Gross profit for the period $ 5,690 Six months ended June 30, 2016 Retail and Mass Transit Ticketing Petroleum Other Consolidated Revenues $ 6,138 $ 1,940 $ 1,304 $ 9,382 Reportable segment gross profit * 3,310 1,198 642 5,150 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (377 ) Stock-based compensation - Gross profit for the period $ 4,773 * 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		Jun. 30, 2017	Dec. 31, 2016
Other Receivables and Prepaid Expenses [Abstract]
Government institutions		$ 325	$ 322
Prepaid expenses		660	526
Receivables under contractual obligations to be transferred to others	[1]	174	346
Other receivables		395	444
Total other receivables and prepaid expenses		$ 1,554	$ 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	Jun. 30, 2017	Dec. 31, 2016
Other Current Liabilities [Abstract]
Employees and related expenses	$ 584	$ 1,011
Accrued expenses	1,042	1,473
Customer advances	213	249
Other current liabilities	152	89
Total other current liabilities	$ 1,991	$ 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 ($)	Jun. 30, 2017USD ($)
Commitments and Contingencies (Textual)
Guarantees to secure customer advances					$ 347
Guarantees expiration dates description					The expiration dates of these 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		$ 1,710	€ 1,500

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016		Jun. 30, 2017	Jun. 30, 2016
Discontinued Operations [Abstract]
Revenues		$ 279			$ 584
Expenses		(471)		(83)	(920)
Other income, net	$ 7	2,139		7	2,139
Net profit (loss) from discontinued operations	$ 7	$ 1,947	[1]	$ (76)	$ 1,803	[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	Jun. 30, 2017	Dec. 31, 2016
Fair Value of Financial Instruments (Textual)
Short-term bank deposits	$ 3,084	$ 5,585
Short-term bank deposit pledged as security	$ 1,548	$ 1,548

Equity (Details)

Equity (Details) - $ / shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 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	(281,334)
Options exercised	(15,002)
Outstanding - Ending Balance	1,408,500
Exercisable	538,500		591,017
Weighted average exercise price per share
Outstanding - Beginning Balance	$ 1.36
Options granted	1.58
Options expired or forfeited	1.91
Options exercised	1.05
Outstanding - Ending Balance	1.27
Exercisable	$ 1.62		$ 1.83

Equity (Details 1)

Equity (Details 1)	6 Months Ended
	Jun. 30, 2017$ / sharesshares
Options outstanding
Number outstanding | shares	1,408,500
Weighted average remaining contractual life (years)	3 years 3 months 22 days
Options exercisable
Number outstanding | shares	538,500
Weighted average remaining contractual life (years)	2 years 2 months 16 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	595,000
Weighted average remaining contractual life (years)	3 years 2 months 30 days
Weighted Average Exercise Price	$ 0.76
Options exercisable
Number outstanding | shares	225,000
Weighted average remaining contractual life (years)	2 years 9 months 22 days
Weighted Average Exercise Price	$ 0.78
1.07-1.46 [Member]
Range of exercise price
Exercise price, lower limit	1.07
Exercise price, upper limit	$ 1.46
Options outstanding
Number outstanding | shares	425,000
Weighted average remaining contractual life (years)	4 years 11 days
Weighted Average Exercise Price	$ 1.12
Options exercisable
Number outstanding | shares	50,000
Weighted average remaining contractual life (years)	1 year 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	115,000
Weighted average remaining contractual life (years)	4 years 3 months 29 days
Weighted Average Exercise Price	$ 1.59
Options exercisable
Number outstanding | shares	10,000
Weighted average remaining contractual life (years)	2 years 6 months 3 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	233,500
Weighted average remaining contractual life (years)	1 year 10 months 17 days
Weighted Average Exercise Price	$ 2.35
Options exercisable
Number outstanding | shares	233,500
Weighted average remaining contractual life (years)	1 year 10 months 17 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 2 months 23 days
Weighted Average Exercise Price	$ 3.03
Options exercisable
Number outstanding | shares	20,000
Weighted average remaining contractual life (years)	2 years 2 months 23 days
Weighted Average Exercise Price	$ 3.03

Equity (Details Textual)

Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Equity (Textual)
Vesting period description	The vesting period for the options ranges from three years to four years. The exercise prices for the options range from $0.44 to $1.58. Those options expire up to five years after the date of grant.
Options granted	100,000	270,000
Dividend yield	0.00%	0.00%
Risk-free interest rate	1.35%	1.18%
Estimated expected lives	3 years 6 months	3 years 6 months 21 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	$ 414		$ 909
Aggregate intrinsic value of exercisable options	120		$ 167
Unrecognized compensation cost	$ 408
Unrecognized compensation cost, weighted-average period	1 year 2 months 19 days
Share based compensation expenses	$ 174	$ 105
Warrants expire	2,019
Outstanding warrants	40,000
Share exercise price	$ 0.95
Granted ordinary shares of stock based compensation	30,000

Operating Segments (Details)

Operating Segments (Details) - USD ($) $ in Thousands		3 Months Ended			6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016		Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Revenues		$ 6,946	$ 4,810	[1]	$ 10,966	$ 9,382	[1]
Reportable segment gross profit	[2]	3,668	2,642		6,074	5,150
Reconciliation of reportable segment gross profit to gross profit for the period
Depreciation		(199)	(188)		(383)	(377)
Stock-based compensation		1	(4)		(1)
Gross profit for the period		3,470	2,450	[1]	5,690	4,773	[1]
Retail and Mass Transit Ticketing [Member]
Segment Reporting Information [Line Items]
Revenues		4,682	3,239		7,423	6,138
Reportable segment gross profit	[2]	2,568	1,795		4,209	3,310
Petroleum [Member]
Segment Reporting Information [Line Items]
Revenues		1,910	831		2,728	1,940
Reportable segment gross profit	[2]	889	497		1,396	1,198
Other [Member]
Segment Reporting Information [Line Items]
Revenues		354	740		815	1,304
Reportable segment gross profit	[2]	$ 211	$ 350		$ 469	$ 642
[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)	6 Months Ended
	Jun. 30, 2017Segments
Operating Segments (Textual)
Number of reportable segments	2