on Track Innovations (OTIVF) 10-Q 14 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 06, 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	Sep. 30, 2017
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		41,134,378

Interim Unaudited Condensed Con

Interim Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 6,000	$ 5,952
Short-term investments	2,667	5,585
Trade receivables (net of allowance for doubtful accounts of $638 and $720 as of September 30, 2017 and December 31, 2016, respectively)	5,470	5,620
Other receivables and prepaid expenses	3,963	1,638
Inventories	3,818	3,069
Total current assets	21,918	21,864
Long-term restricted deposit for employees benefit	494	453
Severance pay deposits	353	322
Property, plant and equipment, net	5,824	5,788
Intangible assets, net	337	278
Total Assets	28,926	28,705
Current Liabilities
Short-term bank credit and current maturities of long-term bank loans	4,389	4,369
Trade payables	6,898	6,957
Other current liabilities	2,482	2,822
Total current liabilities	13,769	14,148
Long-Term Liabilities
Long-term loans, net of current maturities	889	1,215
Accrued severance pay	914	811
Deferred tax liability	477	373
Total long-term liabilities	2,280	2,399
Total Liabilities	16,049	16,547
Commitments and Contingencies
Shareholders' Equity
Ordinary shares of NIS 0.1 par value: Authorized: 50,000,000 shares as of September 30, 2017 and December 31, 2016; issued: 42,313,077 and 42,243,075 shares as of September 30, 2017 and December 31, 2016, respectively;outstanding: 41,134,378 and 41,064,376 shares as of September 30, 2017 and December 31, 2016, respectively	1,063	1,061
Additional paid-in capital	224,676	224,415
Treasury shares at cost - 1,178,699 shares as of September 30, 2017 and December 31, 2016	(2,000)	(2,000)
Accumulated other comprehensive loss	(876)	(1,236)
Accumulated deficit	(209,986)	(210,082)
Total Equity	12,877	12,158
Total Liabilities and Equity	$ 28,926	$ 28,705

Interim Unaudited Condensed Co3

Interim Unaudited Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands	Sep. 30, 2017USD ($)shares	Sep. 30, 2017₪ / shares	Dec. 31, 2016USD ($)shares	Dec. 31, 2016₪ / shares
Statement of Financial Position [Abstract]
Allowance for doubtful accounts, net | $	$ 638		$ 720
Ordinary shares, par value | ₪ / shares		₪ 0.1		₪ 0.1
Ordinary shares, shares authorized	50,000,000		50,000,000
Ordinary shares, shares issued	42,313,077		42,243,075
Ordinary shares, shares outstanding	41,134,378		41,064,376
Treasury shares ,at cost	1,178,699		1,178,699

Interim Unaudited Condensed Co4

Interim Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016		Sep. 30, 2017		Sep. 30, 2016
Revenues
Sales	$ 3,445	$ 3,463		$ 11,871		$ 10,409
Licensing and transaction fees	1,225	2,133		3,765		4,569
Total revenues	4,670	5,596		15,636		14,978
Cost of revenues
Cost of sales	2,192	2,557		7,468		7,167
Total cost of revenues	2,192	2,557		7,468		7,167
Gross profit	2,478	3,039		8,168		7,811
Operating expenses
Research and development	823	604		2,414		2,072
Selling and marketing	1,332	1,300		4,166		3,974
General and administrative	758	787		2,553		2,613
Other expenses		83				83
Total operating expenses	2,913	2,774		9,133		8,742
Operating (loss) income from continuing operations	(435)	265		(965)		(931)
Financial expenses, net	(126)	(30)		(236)		(185)
Profit (loss) from continuing operations before taxes on income	(561)	235		(1,201)		(1,116)
Income tax	(12)	(28)		(68)		(60)
Net (loss) income from continuing operations	(573)	207		(1,269)		(1,176)
Net income (loss) from discontinued operations	1,441	(279)		1,365		1,525
Net income (loss)	868	(72)		96		349
Net loss attributable to noncontrolling interest		5				32
Net income (loss) attributable to shareholders	$ 868	$ (67)		$ 96		$ 381
Basic and diluted net gain (loss) attributable to shareholders per ordinary share
From continuing operations	$ (0.01)	$ 0.01		$ (0.03)		$ (0.03)
From discontinued operations	0.03	(0.01)		0.03		0.04
Total	$ 0.02		[1]		[1]	$ 0.01
Weighted average number of ordinary shares used in computing basic net (loss) income per ordinary share	41,122,965	40,914,258		41,099,603		40,895,268
Weighted average number of ordinary shares used in computing diluted net (loss) income per ordinary share	41,122,965	41,667,258		41,099,603		40,895,268
[1]	Less than $0.01 per ordinary share.

Interim Unaudited Condensed Co5

Interim Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Total comprehensive income (loss):
Net income (loss)	$ 868	$ (72)	$ 96	$ 349
Foreign currency translation adjustments	28	110	360	88
Total comprehensive income	896	38	456	437
Comprehensive loss attributable to the non-controlling interest		5		32
Total comprehensive income attributable to shareholders	$ 896	$ 43	$ 456	$ 469

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 nine month period ended
Stock-based compensation		174		[1]	174
Stock-based compensation, Shares	[2]		15,000
Exercise of options and warrants		37	$ 2		35
Exercise of options and warrants, Shares			90,402
Increase in the ownership rate in subsidiaries	[3]	(69)			(1,920)				1,851
Foreign currency translation adjustments		88					88
Net income (loss)		349						381	(32)
Balance at Sep. 30, 2016		13,402	$ 1,057		224,214	(2,000)	(996)	(208,873)
Balance, Shares at Sep. 30, 2016			42,120,075
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 nine month period ended
Stock-based compensation		238	$ 2		236
Stock-based compensation, Shares	[2]		45,000
Exercise of options		25		[1]	25
Exercise of options, Shares			25,002
Foreign currency translation adjustments		360					360
Net income (loss)		96						96
Balance at Sep. 30, 2017		$ 12,877	$ 1,063		$ 224,676	$ (2,000)	$ (876)	$ (209,986)
Balance, Shares at Sep. 30, 2017			42,313,077
[1]	Less than $1.
[2]	See Note 8C.
[3]	See Note 1C(2).

Interim Unaudited Condensed Co7

Interim Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from continuing operating activities
Net loss from continuing operations	$ (1,269)	$ (1,176)
Adjustments required to reconcile net loss to net cash used in continuing operating activities:
Stock-based compensation related to options and shares issued to employees and others	238	174
Depreciation	878	911
Deferred tax, net	37	60
(Gain) loss on sale of property and equipment	(9)	83
Accrued interest and linkage differences, net	(41)	19
Changes in operating assets and liabilities:
Accrued severance pay, net	72	(152)
Decrease (increase) in trade receivables, net	187	(1,376)
(Increase) in other receivables and prepaid expenses	(435)	(16)
(Increase) decrease in inventories	(710)	246
(Decrease) increase in trade payables	(611)	1,024
(Decrease) in other current liabilities	(777)	(408)
Net cash used in continuing operating activities	(2,440)	(611)
Cash flows from continuing investing activities
Purchase of property and equipment	(160)	(185)
Proceeds from sale of property and equipment	14	1,779
Change in short-term investments, net	2,917	(502)
Investment in capitalized product costs	(185)	(139)
Proceeds from restricted deposit for employees benefit	44	142
Net cash provided by continuing investing activities	2,630	1,095
Cash flows from continuing financing activities
(Decrease) increase in short-term bank credit, net	(72)	287
Proceeds from long-term bank loans		27
Repayment of long-term bank loans	(469)	(1,368)
Proceeds from exercise of options and warrants	25	37
Net cash used in continuing financing activities	(516)	(1,017)
Cash flows from discontinued operations
Net cash used in discontinued operating activities	(86)	(183)
Net cash provided by discontinued investing activities		2,152
Total net cash (used in) provided by discontinued operations	(86)	1,969
Effect of exchange rate changes on cash and cash equivalents	460	51
Increase in cash and cash equivalents	48	1,487
Cash and cash equivalents at the beginning of the period	5,952	5,450
Cash and cash equivalents at the end of the period	6,000	6,937
Cash paid during the period for:
Interest paid	140	148
Income taxes paid	$ 31

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Sep. 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 nine-month period ended September 30, 2017, the Company completed the liquidation of its 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 nine-month period ended September 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.

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 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	9 Months Ended
	Sep. 30, 2017
Other Receivables and Prepaid Expenses [Abstract]
Other Receivables and Prepaid Expenses	Note 3 - Other Receivables and Prepaid Expenses September 30, December 31, 2017 2016 Government institutions $ 476 $ 322 Prepaid expenses 412 526 Receivables under contractual obligations to be transferred to others (*) 383 346 Other receivables (see also Note 6). 2,692 444 $ 3,963 $ 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	9 Months Ended
	Sep. 30, 2017
Other Current Liabilities [Abstract]
Other Current Liabilities	Note 4 - Other Current Liabilities September 30, December 31, 2017 2016 Employees and related expenses $ 592 $ 1,011 Accrued expenses 1,430 1,473 Customer advances 224 249 Other current liabilities 236 89 $ 2,482 $ 2,822

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 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 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 (in this paragraph, together, the “Defendants”), in the Commercial Court of Paris, France (in this paragraph, the “Court”). The sum of the claim is € 1,500 (approximately $1,773), 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. On October 25, 2017, the Paris Commercial Court issued its ruling in this matter dismissing all claims against the Company but ordering Parx France to pay the plaintiff €50 plus interest in damages plus another approximately €5 in other fees and penalties. 3. On March 1, 2017, a claim (the “USAT 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 USAT Claim asserted, among other things, that products sold by the Company to USAT’s manufacturing subcontractor, Masterwork Electronics, Inc. (“Masterwork”), failed to conform to promised specifications. USAT sought 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. On March 3, 2017, the Company filed a lawsuit (the “OTI Claim”) against Masterwork in the U.S. District Court for the Northern District of California. The Company sought 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 are not conforming. On July 20, 2017, the OTI Claim was transferred to the Eastern District of Pennsylvania and on August 23, 2017, the USAT Claim and OTI Claim were consolidated into a single action. On November 1, 2017, all parties to these proceedings entered into a settlement agreement resolving their disputes and have, accordingly, dismissed all litigation on November 1, 2017. B. Guarantees As of September 30, 2017, the Company has granted performance guarantees and guarantees to secure customer advances in the sum of $352. The expiration dates of the guarantees range from October 2017 to June 2019.

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 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 September 30, Nine months ended September 30, 2017 2016 2017 2016 Revenues - 184 - 768 Expenses (11 ) (327 ) (94 ) (1,246 ) Other (expenses) income, net 1,452(* ) (136 ) 1,459(* ) 2,003 Net profit (loss) from discontinued operations 1,441 (279 ) 1,365 1,525 (*) On August 23, 2017, a judgment was issued by the Israeli Central District Court regarding the Company’s lawsuit against Harel Insurance Company Ltd. (“Harel”) for damages incurred by the Company due to flooding in a subcontractor’s manufacturing site. The judgment determined that an amount of $1,600, net be awarded to cover the Company’s damages. On October 10, 2017, Harel submitted its appeal of the judgment to the Israeli Supreme Court as well as a request for stay of judgment. On October 30, 2017, the Court denied the requested stay. Based on the advice of counsel, the Company currently believes that there are sufficient grounds on which to uphold the District Court’s ruling and, as such, Harel’s appeal will be denied.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 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 September 30, 2017, the fair value of bank loans with fixed interest rates did not differ materially from the carrying amount. As of September 30, 2017, the Company held approximately $2,667 of short-term bank deposits (as of December 31, 2016, $5,585). As of September 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	9 Months Ended
	Sep. 30, 2017
Equity [Abstract]
Equity	Note 8 - Equity A. Stock option plans During the nine months ended September 30, 2017 and September 30, 2016, 100,000 and 270,000 options were granted, respectively. The vesting period for the options ranges from one year 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 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 nine months ended September 30, 2017 and September 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 nine months ended September 30, 2017 and September 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 nine months ended September 30, 2017 and September 30, 2016, respectively, using the simplified method. 4. Expected average volatility of 74% and 72% for grants during the nine months ended September 30, 2017 and September 30, 2016, respectively, which represent a weighted average standard deviation rate for the price of the Company's Ordinary Shares on the NASDAQ Global Market and NASDAQ Capital Market. The Company’s options activity (including options to non-employees) during the nine months ended September 30, 2017 and options outstanding and options exercisable as of December 31, 2016 and September 30, 2017, are summarized in the following table: Number of Weighted average exercise options price per outstanding share Outstanding – December 31, 2016 1,604,836 $ 1.36 Options granted 100,000 1.58 Options expired or forfeited (286,334 ) 1.89 Options exercised (25,002 ) 0.92 Outstanding – September 30, 2017 1,393,500 $ 1.27 Exercisable as of: December 31, 2016 591,017 $ 1.83 September 30, 2017 605,167 $ 1.57 The weighted average fair value of options granted during the nine months ended September 30, 2017 and during the nine months ended September 30, 2016 is $0.93 and $0.41, respectively, per option. The aggregate intrinsic value of outstanding options as of September 30, 2017 and December 31, 2016 is approximately $465 and $909, respectively. The aggregate intrinsic value of exercisable options as of September 30, 2017 and December 31, 2016 is approximately $168 and $166, respectively. The following table summarizes information about options outstanding and exercisable (including options to non-employees) as of September 30, 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 September 30, contractual Exercise September 30, contractual Exercise price 2017 life (years) Price 2017 life (years) Price $ 0.44-0.90 585,000 3.05 $ 0.77 281,667 2.78 $ 0.77 1.07-1.46 420,000 3.77 1.12 50,000 0.80 1.46 1.58-1.68 115,000 4.08 1.59 10,000 2.25 1.68 2.32-2.36 233,500 1.59 2.35 233,500 1.59 2.35 $ 3.03 40,000 1.98 $ 3.03 30,000 1.98 $ 3.03 1,393,500 3.08 605,167 2.11 As of September 30, 2017, there was approximately $354 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 1.1 year. During the nine months ended September 30, 2017 and September 30, 2016, the Company recorded stock-based compensation expenses in the amount of $238 and $174, respectively, in accordance with ASC 718 “Compensation-Stock Compensation.” B. Warrants As of September 30, 2017, there are remaining 40,000 outstanding warrants with a per share exercise price of $0.95. The warrants expire during 2019. C. During the nine months ended September 30, 2017, the Company issued 45,000 ordinary shares to one of its consultants. The expenses that are recognized due to this issuance are presented within ‘stock based compensation’ in the statement of changes in equity for the nine months ended September 30, 2017.

Operating Segments

Operating Segments	9 Months Ended
	Sep. 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 Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 917 $ 3,231 $ 522 $ 4,670 Reportable segment gross profit (*) 493 1,859 325 2,677 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (199 ) Stock-based compensation - (*) Gross profit for the period $ 2,478 Three months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 1,056 $ 3,891(** ) $ 649 $ 5,596 Reportable segment gross profit (*) 638 2,238 326 3,202 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (161 ) Stock-based compensation (2 ) (*) Gross profit for the period $ 3,039 Nine months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 3,645 $ 10,654 $ 1,337 $ 15,636 Reportable segment gross profit (*) 1,889 6,068 794 8,751 Reconciliation of reportable segment gross profit to profit for the period Depreciation (582 ) Stock-based compensation (1 ) (*) Gross profit for the period $ 8,168 Nine months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 2,996 $ 10,029(** ) $ 1,953 $ 14,978 Reportable segment gross profit (*) 1,836 5,568 968 8,372 Reconciliation of reportable segment gross profit to profit for the period Depreciation (559 ) Stock-based compensation (2 ) (*) Gross profit for the period $ 7,811 ( *) Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. ( **) The revenues from retail and mass transit ticketing segment for the three months and nine months ended September 30, 2016 include revenues derived from a litigation settlement with a perpetual license agreement. Those revenues are presented within revenues from ‘licensing and transaction fees’ in the statements of operations.

Significant Accounting Polici17

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 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)	9 Months Ended
	Sep. 30, 2017
Other Receivables and Prepaid Expenses [Abstract]
Schedule of other receivables and prepaid expenses	September 30, December 31, 2017 2016 Government institutions $ 476 $ 322 Prepaid expenses 412 526 Receivables under contractual obligations to be transferred to others (*) 383 346 Other receivables (see also Note 6). 2,692 444 $ 3,963 $ 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)	9 Months Ended
	Sep. 30, 2017
Other Current Liabilities [Abstract]
Summary of other current liabilities	September 30, December 31, 2017 2016 Employees and related expenses $ 592 $ 1,011 Accrued expenses 1,430 1,473 Customer advances 224 249 Other current liabilities 236 89 $ 2,482 $ 2,822

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2017
Discontinued Operations [Abstract]
Schedule of results of the discontinued operations	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Revenues - 184 - 768 Expenses (11 ) (327 ) (94 ) (1,246 ) Other (expenses) income, net 1,452(* ) (136 ) 1,459(* ) 2,003 Net profit (loss) from discontinued operations 1,441 (279 ) 1,365 1,525 (*) On August 23, 2017, a judgment was issued by the Israeli Central District Court regarding the Company’s lawsuit against Harel Insurance Company Ltd. (“Harel”) for damages incurred by the Company due to flooding in a subcontractor’s manufacturing site. The judgment determined that an amount of $1,600, net be awarded to cover the Company’s damages. On October 10, 2017, Harel submitted its appeal of the judgment to the Israeli Supreme Court as well as a request for stay of judgment. On October 30, 2017, the Court denied the requested stay. Based on the advice of counsel, the Company currently believes that there are sufficient grounds on which to uphold the District Court’s ruling and, as such, Harel’s appeal will be denied.

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2017
Equity [Abstract]
Schedule of stock options activity	Number of Weighted average exercise options price per outstanding share Outstanding – December 31, 2016 1,604,836 $ 1.36 Options granted 100,000 1.58 Options expired or forfeited (286,334 ) 1.89 Options exercised (25,002 ) 0.92 Outstanding – September 30, 2017 1,393,500 $ 1.27 Exercisable as of: December 31, 2016 591,017 $ 1.83 September 30, 2017 605,167 $ 1.57
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 September 30, contractual Exercise September 30, contractual Exercise price 2017 life (years) Price 2017 life (years) Price $ 0.44-0.90 585,000 3.05 $ 0.77 281,667 2.78 $ 0.77 1.07-1.46 420,000 3.77 1.12 50,000 0.80 1.46 1.58-1.68 115,000 4.08 1.59 10,000 2.25 1.68 2.32-2.36 233,500 1.59 2.35 233,500 1.59 2.35 $ 3.03 40,000 1.98 $ 3.03 30,000 1.98 $ 3.03 1,393,500 3.08 605,167 2.11

Operating Segments (Tables)

Operating Segments (Tables)	9 Months Ended
	Sep. 30, 2017
Operating Segments [Abstract]
Schedule of information regarding results of each reportable segment	Three months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 917 $ 3,231 $ 522 $ 4,670 Reportable segment gross profit (*) 493 1,859 325 2,677 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (199 ) Stock-based compensation - (*) Gross profit for the period $ 2,478 Three months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 1,056 $ 3,891(** ) $ 649 $ 5,596 Reportable segment gross profit (*) 638 2,238 326 3,202 Reconciliation of reportable segment gross profit to gross profit for the period Depreciation (161 ) Stock-based compensation (2 ) (*) Gross profit for the period $ 3,039 Nine months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 3,645 $ 10,654 $ 1,337 $ 15,636 Reportable segment gross profit (*) 1,889 6,068 794 8,751 Reconciliation of reportable segment gross profit to profit for the period Depreciation (582 ) Stock-based compensation (1 ) (*) Gross profit for the period $ 8,168 Nine months ended Petroleum Retail and Mass Transit Ticketing Other Consolidated Revenues $ 2,996 $ 10,029(** ) $ 1,953 $ 14,978 Reportable segment gross profit (*) 1,836 5,568 968 8,372 Reconciliation of reportable segment gross profit to profit for the period Depreciation (559 ) Stock-based compensation (2 ) (*) Gross profit for the period $ 7,811 ( *) Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation. ( **) The revenues from retail and mass transit ticketing segment for the three months and nine months ended September 30, 2016 include revenues derived from a litigation settlement with a perpetual license agreement. Those revenues are presented within revenues from ‘licensing and transaction fees’ in the statements of operations.

Other Receivables and Prepaid23

Other Receivables and Prepaid Expenses (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Other Receivables and Prepaid Expenses [Abstract]
Government institutions		$ 476	$ 322
Prepaid expenses		412	526
Receivables under contractual obligations to be transferred to others	[1]	383	346
Other receivables (see also Note 6).		2,692	444
Total other receivables and prepaid expenses		$ 3,963	$ 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	Sep. 30, 2017	Dec. 31, 2016
Other Current Liabilities [Abstract]
Employees and related expenses	$ 592	$ 1,011
Accrued expenses	1,430	1,473
Customer advances	224	249
Other current liabilities	236	89
Total other current liabilities	$ 2,482	$ 2,822

Commitments and Contingencies (

Commitments and Contingencies (Details) € in Thousands, $ in Thousands	Mar. 01, 2017USD ($)	Oct. 03, 2013USD ($)	Oct. 03, 2013EUR (€)	Oct. 25, 2017EUR (€)	Jun. 30, 2013USD ($)	Sep. 30, 2017USD ($)
Commitments and Contingencies (Textual)
Guarantees to secure customer advances						$ 352
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
Payment of interest plus and cost	$ 2,518
Subsequent Event [Member]
Commitments and Contingencies (Textual)
Payment of interest plus and cost | €				€ 50
Other fees and penalties | €				€ 5
Merwell Inc. [Member]
Commitments and Contingencies (Textual)
Outstanding commissions arbitration					$ 855
French subsidiary [Member]
Commitments and Contingencies (Textual)
Financial claim field		$ 1,773	€ 1,500

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2017		Sep. 30, 2016	Sep. 30, 2017		Sep. 30, 2016
Discontinued Operations [Abstract]
Revenues			$ 184			$ 768
Expenses	(11)		(327)	(94)		(1,246)
Other (expenses) income, net	1,452	[1]	(136)	1,459	[1]	2,003
Net profit (loss) from discontinued operations	$ 1,441		$ (279)	$ 1,365		$ 1,525
[1]	On August 23, 2017, a judgment was issued by the Israeli Central District Court regarding the Company's lawsuit against Harel Insurance Company Ltd. ("Harel") for damages incurred by the Company due to flooding in a subcontractor's manufacturing site. The judgment determined that an amount of $1,600, net be awarded to cover the Company's damages. On October 10, 2017, Harel submitted its appeal of the judgment to the Israeli Supreme Court as well as a request for stay of judgment. On October 30, 2017, the Court denied the requested stay. Based on the advice of counsel, the Company currently believes that there are sufficient grounds on which to uphold the District Court's ruling and, as such, Harel's appeal will be denied.

Discontinued Operations (Deta27

Discontinued Operations (Details Textual) $ in Thousands	1 Months Ended
	Aug. 23, 2017USD ($)
Discontinued Operations (Textual)
Judgment determined amount	$ 1,600

Fair Value of Financial Instr28

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value of Financial Instruments (Textual)
Short-term bank deposits	$ 2,667	$ 5,585
Short-term bank deposit pledged as security	$ 1,548	$ 1,548

Equity (Details)

Equity (Details) - Stock option plans [Member] - $ / shares	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Number of options outstanding
Outstanding - Beginning Balance	1,604,836
Options granted	100,000
Options expired or forfeited	(286,334)
Options exercised	(25,002)
Outstanding - Ending Balance	1,393,500
Exercisable	605,167	591,017
Weighted average exercise price per share
Outstanding - Beginning Balance	$ 1.36
Options granted	1.58
Options expired or forfeited	1.89
Options exercised	0.92
Outstanding - Ending Balance	1.27
Exercisable	$ 1.57	$ 1.83

Equity (Details 1)

Equity (Details 1)	9 Months Ended
	Sep. 30, 2017$ / sharesshares
Options outstanding
Number outstanding | shares	1,393,500
Weighted average remaining contractual life (years)	3 years 29 days
Options exercisable
Number outstanding | shares	605,167
Weighted average remaining contractual life (years)	2 years 1 month 9 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	585,000
Weighted average remaining contractual life (years)	3 years 18 days
Weighted Average Exercise Price	$ 0.77
Options exercisable
Number outstanding | shares	281,667
Weighted average remaining contractual life (years)	2 years 9 months 11 days
Weighted Average Exercise Price	$ 0.77
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	420,000
Weighted average remaining contractual life (years)	3 years 9 months 7 days
Weighted Average Exercise Price	$ 1.12
Options exercisable
Number outstanding | shares	50,000
Weighted average remaining contractual life (years)	9 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	115,000
Weighted average remaining contractual life (years)	4 years 29 days
Weighted Average Exercise Price	$ 1.59
Options exercisable
Number outstanding | shares	10,000
Weighted average remaining contractual life (years)	2 years 2 months 30 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 7 months 2 days
Weighted Average Exercise Price	$ 2.35
Options exercisable
Number outstanding | shares	233,500
Weighted average remaining contractual life (years)	1 year 7 months 2 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)	1 year 11 months 23 days
Weighted Average Exercise Price	$ 3.03
Options exercisable
Number outstanding | shares	30,000
Weighted average remaining contractual life (years)	1 year 11 months 23 days
Weighted Average Exercise Price	$ 3.03

Equity (Details Textual)

Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Equity (Textual)
Warrants expire	2,019
Outstanding warrants	40,000
Share exercise price	$ 0.95
Issued ordinary shares of consultants	45,000
Stock-based compensation expenses	$ 238	$ 174
Stock option plans [Member]
Equity (Textual)
Vesting period description	The vesting period for the options ranges from one year to four years. The exercise prices for the options range from $0.44 to $1.58.
Options granted	100,000	270,000
Dividend yield	0.00%	0.00%
Risk-free interest rate	1.18%	1.35%
Estimated expected lives	3 years 6 months 21 days	3 years 6 months
Expected average volatility	72.00%	74.00%
Weighted average fair value of options granted	$ 0.93	$ 0.41
Aggregate intrinsic value of outstanding options	$ 465		$ 909
Aggregate intrinsic value of exercisable options	168		$ 166
Unrecognized compensation cost	$ 354
Unrecognized compensation cost, weighted-average period	1 year 1 month 6 days

Operating Segments (Details)

Operating Segments (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016		Sep. 30, 2017	Sep. 30, 2016
Segment Reporting Information [Line Items]
Revenues		$ 4,670	$ 5,596		$ 15,636	$ 14,978
Reportable segment gross profit	[1]	2,677	3,202		8,751	8,372
Reconciliation of reportable segment gross profit to gross profit for the period
Depreciation		(199)	(161)		(582)	(559)
Stock-based compensation			(2)		(1)	(2)
Gross profit for the period		2,478	3,039		8,168	7,811
Retail and Mass Transit Ticketing [Member]
Segment Reporting Information [Line Items]
Revenues		3,231	3,891	[2]	10,654	10,029	[2]
Reportable segment gross profit	[1]	1,859	2,238		6,068	5,568
Petroleum [Member]
Segment Reporting Information [Line Items]
Revenues		917	1,056		3,645	2,996
Reportable segment gross profit	[1]	493	638		1,889	1,836
Other [Member]
Segment Reporting Information [Line Items]
Revenues		522	649		1,337	1,953
Reportable segment gross profit	[1]	$ 325	$ 326		$ 794	$ 968
[1]	Gross profit as reviewed by the CODM, represents gross profit, adjusted to exclude depreciation and stock-based compensation.
[2]	The revenues from retail and mass transit ticketing segment for the three months and nine months ended September 30, 2016 include revenues derived from a litigation settlement with a perpetual license agreement. Those revenues are presented within revenues from 'licensing and transaction fees' in the statements of operations.

Operating Segments (Details Tex

Operating Segments (Details Textual)	9 Months Ended
	Sep. 30, 2017Segments
Operating Segments (Textual)
Number of reportable segments	2