Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'BLUEPHOENIX SOLUTIONS LTD | ' |
Entity Central Index Key | '0001029581 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-K | ' |
Document Period End Date | 31-Dec-13 | ' |
Document Fiscal Period Focus | 'FY | ' |
Document Fiscal Year Focus | '2013 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Public Float | ' | $43,552,978 |
Entity Common Stock, Shares Outstanding | 11,404,460 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $2,592 | $2,560 |
Restricted cash | 35 | 33 |
Trade accounts receivable, net (Note 12A1) | 1,960 | 2,445 |
Other current assets (Note 12A2) | 239 | 581 |
Assets held for sale (Note 13) | ' | 791 |
Total current assets | 4,826 | 6,410 |
LONG TERM ASSETS: | ' | ' |
Property and equipment, net (Note 4) | 287 | 562 |
Goodwill (Note 5) | 12,501 | 12,501 |
Intangible assets and other, net (Note 6) | ' | 277 |
Total long term assets | 12,788 | 13,340 |
Total assets | 17,614 | 19,750 |
CURRENT LIABILITIES: | ' | ' |
Short-term bank credit and other (Note 8) | 40 | 217 |
Accounts payable and accruals: | ' | ' |
Trade accounts payable | 886 | 1,256 |
Deferred revenue | 719 | 712 |
Other current liabilities (Note 12A3) | 902 | 950 |
Liabilities held for sale (Note 13) | ' | 467 |
Total current liabilities | 2,547 | 3,602 |
LONG-TERM LIABILITIES: | ' | ' |
Accrued severance pay, net (Note 7) | 290 | 408 |
Loans from banks and others (Note 8) | 162 | 281 |
Derivatives liabilities - warrants | 311 | 370 |
Total long-term liabilities | 763 | 1,059 |
Total liabilities | 3,310 | 4,661 |
COMMITMENTS AND CONTINGENCIES (Note 9) | ' | ' |
Equity (Note 10): | ' | ' |
Share capital - ordinary shares of NIS 0.04 par value (authorized: December 31, 2013 and 2012 - 17,500,000 shares issued: December 31, 2013 - 11,460,530 and December 31, 2012 - 10,809,945 shares) | 105 | 97 |
Additional paid-in capital | 133,712 | 135,348 |
Accumulated other comprehensive loss | -1,537 | -1,537 |
Accumulated deficit | -116,224 | -112,192 |
Treasury shares - December 31, 2013 - 56,070 December 31, 2012 - 180,692 shares | -2,084 | -6,716 |
BluePhoenix Shareholders' Equity | 13,972 | 15,000 |
Noncontrolling interest | 332 | 89 |
Total equity | 14,304 | 15,089 |
Total liabilities and equity | $17,614 | $19,750 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | ILS | |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ' | ' |
Ordinary shares, par value per share | $0.04 | 0.04 |
Ordinary shares, shares authorized | 17,500,000 | 17,500,000 |
Ordinary shares, shares issued | 11,460,530 | 10,809,945 |
Treasury shares, shares | 56,070 | 180,692 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues (Note 12B1): | ' | ' |
Services | $8,148 | $10,103 |
Products | 389 | 521 |
Total revenues | 8,537 | 10,624 |
Cost of revenues: | ' | ' |
Services | 4,449 | 6,989 |
Products | 40 | 63 |
Total cost of revenues | 4,489 | 7,052 |
Gross profit | 4,048 | 3,572 |
Research and development costs | 1,508 | 691 |
Selling, general, and administrative expenses | 6,305 | 8,685 |
Less: Gain on sales of subsidiaries and AppBuilder | 786 | 1,195 |
Operating loss | -2,979 | -4,609 |
Financial expenses, net (Note 12B3) | 114 | 5,358 |
Other income, net | ' | -580 |
Loss before taxes on income | -3,093 | -9,387 |
Taxes on income | 297 | 221 |
Loss from continuing operation | -3,390 | -9,608 |
Net loss from discontinued operation (Note 13) | 399 | 1,469 |
Net loss | -3,789 | -11,077 |
Less: Net income attributable to noncontrolling interest | 243 | 351 |
Net loss attributable to BluePhoenix | ($4,032) | ($11,428) |
Loss per share - basic and diluted : | ' | ' |
From continued operation | ($0.34) | ($1.26) |
From discontinued operation | ($0.03) | ($0.19) |
Attributable to the shareholders | -0.37 | -1.45 |
Weighted average shares outstanding, basic and diluted | 10,770 | 7,897 |
STATEMENTS_OF_COMPREHENSIVE_LO
STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ' | ' |
Net loss | ($4,032) | ($11,428) |
Other comprehensive income | ' | ' |
Total comprehensive loss | -4,032 | -11,428 |
Comprehensive income attributable to the non-controlling Interests | ' | ' |
Comprehensive loss attributable to BluePhoenix Shareholders | ($4,032) | ($11,428) |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Share capital | Additional paid-in capital | Accumulated other comprehensive loss | Cost of Company shares held by subsidiaries | Retained earnings (Accumulated deficit) | Noncontrolling interest | |
In Thousands, except Share data | ||||||||
Beginning Balance at Dec. 31, 2011 | $15,595 | $56 | $126,544 | ($1,537) | ($9,455) | ($100,764) | $751 | |
Beginning Balance, shares at Dec. 31, 2011 | ' | 6,310,978 | ' | ' | ' | ' | ' | |
Net loss | -11,077 | ' | ' | ' | ' | -11,428 | 351 | |
Sale of subsidiary | -1,013 | ' | ' | ' | ' | ' | -1,013 | |
Stock-based compensation | 1,702 | ' | 1,702 | ' | ' | ' | ' | |
Conversions of loans and derivatives to equity, value | 9,600 | 36 | 9,564 | ' | ' | ' | ' | |
Conversions of loans and derivatives to equity, shares | ' | 3,678,392 | ' | ' | ' | ' | ' | |
Exercise of warrants | 282 | ' | [1] | 282 | ' | ' | ' | ' |
Exercise of warrants, shares | ' | 76,758 | ' | ' | ' | ' | ' | |
Vested RSUs | ' | 5 | -2,744 | ' | 2,739 | ' | ' | |
Vested RSUs, shares | ' | 563,125 | ' | ' | ' | ' | ' | |
Ending Balance at Dec. 31, 2012 | 15,089 | 97 | 135,348 | -1,537 | -6,716 | -112,192 | 89 | |
Ending Balance, shares at Dec. 31, 2012 | ' | 10,629,253 | ' | ' | ' | ' | ' | |
Net loss | -3,789 | ' | ' | ' | ' | -4,032 | 243 | |
Stock-based compensation | 599 | ' | 599 | ' | ' | ' | ' | |
Exercise of warrants | 115 | ' | [1] | 115 | ' | ' | ' | ' |
Exercise of warrants, shares | ' | 25,585 | ' | ' | ' | ' | ' | |
Issuance of shares, net | 2,290 | 7 | 2,283 | ' | ' | ' | ' | |
Issuance of shares, net, shares | ' | 625,000 | ' | ' | ' | ' | ' | |
Vested RSUs | ' | 1 | -4,633 | ' | 4,632 | ' | ' | |
Vested RSUs, shares | ' | 124,622 | ' | ' | ' | ' | ' | |
Ending Balance at Dec. 31, 2013 | $14,304 | $105 | $133,712 | ($1,537) | ($2,084) | ($116,224) | $332 | |
Ending Balance, shares at Dec. 31, 2013 | ' | 11,404,460 | ' | ' | ' | ' | ' | |
[1] | Less than $1 thousand. |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($3,789) | ($11,077) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 432 | 1,867 |
Decrease in accrued severance pay, net | -118 | -32 |
Stock-based compensation | 599 | 1,702 |
Change in fair value of derivatives and discount amortization | 17 | 4,869 |
Gain on sales of subsidiaries and Appbuilder | -414 | -426 |
Loss on sale of property and equipment | 144 | 12 |
Changes in operating assets and liabilities: | ' | ' |
Decrease in trade receivables | 681 | 611 |
Decrease (increase) in other current assets | 503 | -676 |
Decrease in trade payables | -419 | -1,268 |
Increase (decrease) in other current liabilities and deferred revenues | -388 | 126 |
Net cash used in operating activities | -2,752 | -4,292 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Restricted cash | ' | 4,077 |
Purchase of property and equipment | -19 | -111 |
Proceeds from sale of property and equipment | ' | 50 |
Proceeds from sales of subsidiaries and Appbuilder (Appendix A) | 800 | 3,959 |
Net cash provided by investing activities | 781 | 7,975 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Short term bank credit and convertible notes, net | -216 | -1,687 |
Exercise of warrants | 40 | 120 |
Issuance of shares, net | 2,290 | ' |
Repayment of long term loan | -111 | -3,553 |
Net cash provided (used in) by financing activities | 2,003 | -5,120 |
NET CASH INCREASE (DECREASE) IN CASH AND CASH EQUVIALETS | 32 | -1,437 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 2,560 | 3,997 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 2,592 | 2,560 |
Cash paid during the year for: | ' | ' |
Income taxes | 88 | 85 |
Interest | 24 | 314 |
APPENDIX A - PROCEEDS FROM SALE OF SUBSIDIARIES AND APPBUILDER: | ' | ' |
Working capital, other than cash | 14 | 1,340 |
Property and equipment | ' | 79 |
Intangible assets | ' | 377 |
Goodwill | ' | 1,737 |
Gain on sale of subsidiaries and AppBuilder | 786 | 426 |
Total | $800 | $3,959 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Summary of Significant Accounting Policies [Abstract] | ' | ||
Summary of Significant Accounting Policies | ' | ||
Note 1 - Summary of Significant Accounting Policies: | |||
A. General: | |||
The significant accounting policies, applied on a consistent basis, are as follows: | |||
1. The Company: | |||
BluePhoenix Solutions Ltd. (“BluePhoenix”) (together with its subsidiaries, the “Company” or “we”) is an Israeli corporation, which operates in one operating segment of information technology (“IT”) modernization solutions. | |||
BluePhoenix develops and markets enterprise legacy migration solutions and provides tools and professional services to international markets through several entities including wholly-owned subsidiaries located in: USA, UK, Italy, Romania and Israel. These technologies and services allow business to migrate from their legacy mainframe and distributed IT infrastructures to modern environments and programing languages. | |||
2. Accounting Principles: | |||
The consolidated financial statements are prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America. | |||
3. Functional Currency: | |||
The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the U.S. dollar (“dollar”). In addition, a substantial portion of the Company’s revenues and costs are incurred in dollars. Thus, the functional and reporting currency of the Company is considered to be the dollar. The functional currency of all subsidiaries is the US dollar therefore there is no unrealized gain/loss. | |||
Non-monetary transactions denominated in currencies other than the dollar are measured and recorded in dollar at the exchange rates prevailing at transaction date. Monetary assets and liabilities denominated in currencies other than the dollar are translated at the exchange rate on the balance sheet date. Transaction gain or losses on foreign currency translation are recorded in consolidated statement of operations. | |||
4. Use of Estimates and Assumptions in the Preparation of the Financial Statements: | |||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |||
B. Principles of Consolidation: | |||
The consolidated financial statements include the accounts of BluePhoenix and its subsidiaries in which it has a controlling interest. Acquisition of subsidiaries is accounted for under the acquisition method. All intercompany balances and transactions have been eliminated upon consolidation. Non-controlling interests are included in equity. | |||
C. | Cash and Cash Equivalents: | ||
Cash equivalents are considered by the Company to be highly-liquid investments, including inter-alia, short-term deposits with banks, which do not exceed maturities of three months at the time of deposit and which are not restricted. | |||
D. | Restricted Deposit: | ||
As of December 31, 2013, the Company’s balance sheet includes $35 thousand of restricted deposit, which was used as temporary collateral for the Company’s corporate credit card and fuel programs. These funds were segregated from the Company’s operating cash. | |||
E. | Allowance for Doubtful Accounts: | ||
The Company establishes an allowance for doubtful accounts to ensure trade and financing receivables are not overstated due to uncollectability. The allowance for doubtful accounts was based on specific receivables, which their collection, in the opinion of Company’s management, is in doubt. Trade receivables are charged off in the period in which they are deemed to be uncollectible. | |||
F. | Property and Equipment, Net: | ||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over their estimated useful lives. Annual rates of depreciation are as follows: | |||
% | |||
Computers and peripheral equipment | 20-33 (mainly 33) | ||
Office furniture and equipment | 6-15 (mainly 7) | ||
Leasehold improvements | Over the shorter of lease term or the life of the assets | ||
Motor vehicles | 15 | ||
G. | Impairment of Long-Lived Assets: | ||
The Company evaluates property and equipment and purchased intangible assets with definite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. During the Years ending December 31, 2013 and 2012, no impairments losses have been identify. | |||
H. | Goodwill and other purchased intangible assets: | ||
Goodwill and certain other purchased intangible assets have been recorded as a result of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. | |||
Goodwill is not amortized, but rather is subject to an annual impairment test. The Company is one operating segment and one reporting unit related to its overall IT modernization .The goodwill impairment tests are conducted in two steps. In the first step, the Company determines the fair value of the reporting unit. If the net book value of the reporting unit exceeds its fair value, the Company would then perform the second step of the impairment test which requires allocation of the reporting unit’s fair value of all of its assets and liabilities in a manner similar to an acquisition cost allocation, with any residual fair value being allocated to goodwill. The implied fair value of the goodwill is then compared to the carrying value to determine impairment, if any. | |||
In 2013 and 2012, the company determined the fair value of a reporting unit using the market approach which is based on the market capitalization by using the share price of the Company in the NASDAQ stock exchange and an appropriate control premium. As of December 31, 2013 and 2012 market capitalization of the Company was significantly higher than the net book value of the reporting unit and therefore there was no need to calculate a control premium or to continue to step 2. | |||
Intangible assets that are not considered to have an indefinite useful life are amortized using the straight-line basis over their estimated useful lives of between 5 to 12 years. The carrying amount of these assets is reviewed whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the assets is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset (see also Note 1G). As of December 31, 2013 the company has no other intangible assets other than goodwill. | |||
I. | Research and Development Costs: | ||
Research and development costs are charged to the statement of income as incurred. ASC No. 985, “Software”, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. | |||
Based on the Company’s product development process, technological feasibility is established when detailed program design is completed and verified. Costs incurred by the Company between completion of detailed program design and the point at which the products are ready for general release, have been insignificant. Therefore, all research and development costs have been expensed. | |||
J. | Stock-based Compensation: | ||
In the past two years, the majority of the awards were of restricted stock units (“RSUs”). RSU’s are valued based on the market value of the underlying stock at the date of grant. The Company also has a stock option plan. Stock option awards are measured and recognized as compensation expense based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. This option pricing model requires that the Company makes several estimates, including the option’s expected life and the price volatility of the underlying stock. | |||
The Company recognizes the estimated fair value of option-based awards and RSUs, net of estimated forfeitures, as stock-based compensation costs using the accelerated vesting method. For the years ended December 31, 2013 and 2012 the Company recorded stock-based and RSUs compensation costs in the amount of $0.6 million and 1.7 million, respectively. On December 31, 2013, the total unrecognized stock-based and RSUs compensation costs amounted to $1 million, and are expected to be recognized over the next 3 years. | |||
K. | Revenue Recognition: | ||
Revenues derived from direct software license agreements are recognized in accordance with FASB ASC Topic 985 “Software” (“ASC 985”), upon delivery of the software, when collection is probable, the license fee is otherwise fixed or determinable and persuasive evidence of an arrangement exists. | |||
The Company recognizes revenues from consulting fees based on the number of hours performed. Revenues from maintenance services are recognized ratably over the term of the maintenance period. | |||
When a project involves significant production, modification or customization of software, revenue is recognized according to the percentage of completion method in accordance with the provisions of FASB ASC Topic 605-35-25. Under this method, estimated revenue is generally accrued based on costs incurred to date, as a percentage of total updated estimated costs. The Company recognizes contract losses, if any, in the period in which they first become evident. There are no rights of return, price protection or similar contingencies in the Company’s contracts. | |||
On December 31, 2013, approximately $1.2 million of the accounts receivable balance was unbilled due to the customer’s payment terms. On December 31, 2012, the amount of unbilled revenue was $786 thousand. The Company presents revenues from products and revenues from services in separate line items. | |||
The product revenues line item includes revenues generated from standalone software products. In the services revenue line item, the Company includes (i) revenues generated from maintenance and consulting fees, (ii) revenues accounted for pursuant to ASC 605-35-Tax collected from customers and remitted to governments authorities (including VAT) are presented in income statement on a net basis. | |||
L. | Advertising Costs: | ||
The Company expenses advertising costs as incurred. Advertising costs for the years ended December 31, 2013 and 2012 were $109 thousand and $10 thousand , respectively. | |||
M. | Income Taxes: | ||
Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the expected reversal dates of the specific temporary differences. | |||
The Company applied ASC Topic 740-10-05, Income Tax, which provides guidance for recognizing and measuring uncertain tax positions, it prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions. The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense. | |||
N. | Earnings (loss) Per Share: | ||
Earnings (loss) per share (“EPS”) were computed in accordance with FASB ASC Topic 260, “Earnings Per Share” (ASC 260). ASC 260 requires the presentation of both basic and diluted EPS. | |||
Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year (including fully vested RSUs), net of treasury shares. Diluted earnings per share is computed based on the weighted average number of ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year (see also Note 12C). Since the Company incurred net loss during the periods presented, no diluted EPS was presented as all the potential ordinary shares were anti-dilutive. | |||
O. | Financial Instruments: | ||
1. Concentration of credit risks: | |||
Financial instruments that have the potential to expose the Company to credit risks are mainly cash and cash equivalents, bank deposit accounts, and trade receivables. | |||
The Company holds cash and cash equivalents, and deposit accounts at large banks in Israel, the United States, and Europe, thereby substantially reducing the risk of loss. | |||
The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts and generally does not require collateral. An appropriate allowance for doubtful accounts is included in the accounts. | |||
2. Fair value measurement: | |||
The Company measures fair value and discloses fair value measurements for financial and non-financial assets and liabilities. Fair value is based on 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. | |||
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: | |||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. | |||
P. | Comprehensive Income (loss): | ||
Comprehensive income (loss), net of related taxes where applicable, includes only net income. | |||
Q. | Derivative Instruments: | ||
The Company uses foreign currency options, forward exchange contracts to assist in managing financial risks in order to minimize the currency exposure on identifiable assets and liabilities in currencies other than the functional currency. The Company does not use derivative financial instruments for speculative purposes. These instruments are recognized at fair value, with all changes in fair value recorded in current period earnings, as these transactions have not been designated by management as hedging instruments. The net loss recognized in earnings during 2012, representing the derivative instruments was $4 thousand. | |||
As of December 31, 2013 and 2012, the Company does not have open forward and option exchange contracts. | |||
The cash flows associated with the derivative are reflected as cash flows from operating activity in the statement of cash flows. | |||
R. | Treasury Shares: | ||
In the past, the Company repurchased its ordinary shares from time to time on the open market and they are currently held as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of shareholders’ equity. When treasury shares are used as consideration for share based payment the reduction is based on average purchase cost. | |||
S. | Derivative Liabilities - Warrants: | ||
In connection with , determining whether an instrument (or embedded feature) is indexed to an Entity’s own stock, “ASC 815-40-15,(formerly EITF 07-05), the Company determined that the warrants issued at several occasions (ratchet down of exercise price based upon lower exercise price in future offerings) are not indexed to the Company’s own stock and therefore should be recorded as a derivative financial liability for pursuant FASB ASC Topic 815 “Derivative and Hedging” (ASC 815-40-25). See also note 10A3 | |||
T. | Contingent Assets: | ||
The company’s accounting policy is to recognize the contingent consideration in earnings only following the contingency is being resolved in accordance with ASC 450. | |||
U. | Recently Issued Accounting Pronouncements: | ||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued guidance that requires that a non-recognized tax benefit be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This net presentation is required unless a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset to settle any additional income tax that would result from the disallowance of the unrecognized tax benefit. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company is assessing whether the adoption of this standard will have a material impact on its consolidated financial statements. | |||
In March 2013, the FASB issued guidance on accounting for the release of a cumulative translation adjustment into net income when a parent company either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets and provides guidance for the acquisition in stages of a controlling interest in a foreign entity. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company is assessing whether the adoption of this standard will have a material impact on its consolidated financial statements. |
Certain_Transactions
Certain Transactions | 12 Months Ended | |
Dec. 31, 2013 | ||
Certain Transactions [Abstract] | ' | |
Certain Transactions | ' | |
Note 2 - Certain Transactions: | ||
In order to concentrate on the Company’s core business, the Company has divested some non-core businesses. Additionally, we have entered other agreements as explained below to obtain financing. | ||
A. | Sale of BridgeQuest, Inc.: | |
In November 2012, the Company announced the initiation of the sale of the operations of BridgeQuest, Inc. and its relevant subsidiary, which was completed in February 2013. | ||
Total consideration for BridgeQuest, Inc. was $6.5 thousand. In addition, as part of the agreement, the Company expected to receive additional amounts upon collection of existing account receivables of BridgeQuest, Inc. collected by the purchaser following the transaction. BridgeQuest, Inc. met the definition of a component. Accordingly, the results of operations in the statement of operations and prior period’s results have been reclassified accordingly. | ||
As a result, the company recorded capital loss of $372 thousand (See also note 13). | ||
B. | Conversion of loans: | |
On March 19, 2012, the Company entered into a series of agreements that became effective on May 4, 2012 with three of the Company’s shareholders: Lake Union, Prescott and Columbia, or the three shareholders, which include the following: | ||
An Assignment and Assumption Agreement pursuant to which the rights and obligations of the lenders with respect to a $5 million loan granted to us in April 2011 and was due in May 2012, by a financial institution and other lenders, were purchased by the three shareholders in equal shares, subject to certain terms and conditions that will be effective following May 2012: | ||
· | Due date on May 1, 2014 with a principal of 5 $ million and a quarterly interest rate of 6% per annum. | |
· | Accrued interest can be converted every three months either by the lenders or by the company into the company’s ordinary shares. Upon conversion of the accrued interest, the number of shares will be determined according to the lower of 20-day volume weighted average price per share (three trading-days prior to the payment date- every quarter) or $3 per share. | |
· | Principal and accrued interest can be converted only by the lenders into the company’s ordinary shares within 120 days of the closing date, upon conversion, the number of shares will be determined according to the lower of 30-day volume weighted average price per share (three trading-days prior to the closing date) and $3 per share. | |
· | Following 120 days in case of no conversion of the principal, the lenders will be entitled to the issuance of 18.7% of the Company’s outstanding share capital as of the date of issuance. Following 120 days in case of no conversion of the principle the conversion rate will be changed, and the number of shares upon conversion will be based only on a price of $3 per share. | |
In addition, the three shareholders provided to us a $500 thousand bridge loan for one year bearing nominal interest of 7% per annum. The principal and the accrued interest can be converted into shares according to the lower of 30-day volume weighted average price per share prior to closing or 3$ per share. | ||
The company concluded that the conversion option is to be bifurcated and accounted for as an embedded derivative. The fair value of the derivative upon closing amounted to $3.7 million. | ||
During the second quarter of 2012 the three shareholders exercised their conversion right with respect to the two loans as abovementioned (within the 120 days period), and accordingly, the Company issued to Lake Union 1,221,027 ordinary shares, to Prescott 1,230,820 ordinary shares and to Columbia 1,226,545 ordinary shares based on the $1.56 per share which is the 30-day volume weighted average price per share prior to closing. Upon conversion the principal and accrued interest net of discount and the derivative amounted to $9.6 million were classified to equity. | ||
An additional loan of up to $1.5 million bearing an interest at a rate of 8% per annum could be extended by the three shareholders until April 3, 2013 including conversion rights, insofar as so mutually agreed by the parties. | ||
The company filed a registration statement on Form F-3 to cover the resale of the ordinary shares issued upon conversion of the abovementioned loans and interest accrued thereon. The registration statement became affective in February 2013. | ||
C. | Sale of KMS and TIS: | |
In June 2012, the company sold its holdings in BluePhoenix Knowledge Management Systems Ltd. (“KMS”), for a consideration of $550 thousand. As a result, the company recorded a loss of $1,123 thousand. As part of the loss recognized from the sale, the company realized goodwill in the amount of $391 thousand based on the relative fair value of KMS and the portion of the reported unit to be retained. | ||
In March 2012, as part of terminating the Company business in Cyprus, the Company sold the holdings in TIS together with our holdings in another subsidiary in Cyprus for a consideration of $72 thousand. As a result, the company recorded a capital loss of $30 thousand. | ||
D. | Liacom: | |
In May 2012, the Company completed the sale of its entire 51% share holdings in Liacom Systems Ltd, for an aggregate consideration of $1.75 million. This sale was part of the Company strategic plan to focus on the legacy modernization business. The proceeds from the sale were used to repay loans. Liacom met the definition of a component. Accordingly, the results of operations in the statement of operations and prior period’s results have been reclassified accordingly (see also Note 13). As part of the sale, the company realized goodwill in the amount of $1.3 million based on the relative fair value of Liacom and the portion of the reported unit to be retained. The capital loss recorded upon sale of Liacom amounted to $703 thousand and is part of the discontinued operation. | ||
E. | Sale of AppBuilder Technology: | |
In December 2011, the Company entered into an agreement with Magic Software Enterprises Ltd., pursuant to which we sold to Magic our AppBuilder technology. The net consideration for the AppBuilder was $12.5 million, of which approximately $3.8 million was deposited in escrow. The release of the escrow funds is subject to the fulfillment of certain conditions and therefore is not recorded as an asset (See also Note 1T). During 2012 and 2013, $2.7 million and $ 0.9 million were released from the escrow. |
Fair_Value_Measurement
Fair Value Measurement | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
Note 3 - Fair Value Measurement: | |||||||||||||||||
Items carried at fair value as of December 31, 2013 and 2012 are classified in the table below in one of the three categories described in Note 1O2. | |||||||||||||||||
Fair value measurements using input type | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents | $ | 2,592 | $ | - | $ | - | $ | 2,592 | |||||||||
Restricted cash | 35 | - | - | 35 | |||||||||||||
Derivatives liabilities - warrants | - | (311 | ) | - | (311 | ) | |||||||||||
$ | 2,627 | $ | (311 | ) | $ | - | $ | 2,316 | |||||||||
Fair value measurements using input type | |||||||||||||||||
31-Dec-12 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents | $ | 2,560 | $ | - | $ | - | $ | 2,560 | |||||||||
Restricted cash | 33 | - | - | 33 | |||||||||||||
Derivatives liabilities - warrants | - | (370 | ) | - | (370 | ) | |||||||||||
$ | 2,593 | $ | (370 | ) | $ | - | $ | 2,223 | |||||||||
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment, Net | ' | ||||||||
Note 4 - Property and Equipment, Net: | |||||||||
Composition of property and equipment, grouped by major classifications: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Cost: | |||||||||
Computers and peripheral equipment | $ | 8,601 | $ | 8,604 | |||||
Office furniture and equipment | 529 | 611 | |||||||
Leasehold improvements | 269 | 465 | |||||||
Motor vehicles | 23 | 56 | |||||||
9,422 | 9,736 | ||||||||
Accumulated Depreciation: | |||||||||
Computers and peripheral equipment | 8,354 | 8,244 | |||||||
Office furniture and equipment | 434 | 473 | |||||||
Leasehold improvements | 331 | 429 | |||||||
Motor vehicles | 16 | 28 | |||||||
9,135 | 9,174 | ||||||||
$ | 287 | $ | 562 | ||||||
Depreciation expenses totaled $155 and $276 thousand for the years ended December 31, 2013 and 2012, respectively. |
Goodwill
Goodwill | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill [Abstract] | ' | ||||||||
Goodwill | ' | ||||||||
Note 5 - Goodwill: | |||||||||
The change in the carrying amount of goodwill for the years ended December 31, 2013 and 2012 is as follows: | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Balance as of January 1. | |||||||||
Goodwill | $ | 54,316 | $ | 56,053 | |||||
Goodwill related to sale of subsidiaries | (1,737 | ) | |||||||
Accumulated impairment losses at the beginning of the period | (41,815 | ) | (41,815 | ) | |||||
12,501 | 12,501 | ||||||||
Balance as of December 31 | |||||||||
Goodwill | 54,316 | 54,316 | |||||||
Accumulated impairment losses at the end of the period | (41,815 | ) | (41,815 | ) | |||||
$ | 12,501 | $ | 12,501 | ||||||
Intangible_Assets_and_Others_N
Intangible Assets and Others, Net | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Intangible Assets and Others, Net [Abstract] | ' | ||||||||||||
Intangible Assets and Others, Net | ' | ||||||||||||
Note 6 - Intangible Assets and Others, Net: | |||||||||||||
Composition: | |||||||||||||
Useful | December 31, | ||||||||||||
life | 2013 | 2012 | |||||||||||
years | (in thousands) | ||||||||||||
Original amount: | |||||||||||||
Technology | 5 | $ | 46,266 | $ | 46,266 | ||||||||
Customer related intangible assets | 8-May | 4,968 | 4,968 | ||||||||||
51,234 | 51,234 | ||||||||||||
Accumulated amortization: | |||||||||||||
Technology | 46,266 | 46,239 | |||||||||||
Customer related intangible assets | 4,968 | 4,718 | |||||||||||
51,234 | 50,957 | ||||||||||||
$ | - | $ | 277 | ||||||||||
* | Amortization of intangible assets amounted to $277 and $1,532 thousand for the years ended December 31, 2013 and 2012, respectively. As of December 31, 2013, there will be no more additional amortization going forward as all other intangible assets were fully amortized. |
Accrued_Severance_Pay_Net
Accrued Severance Pay, Net | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Severance Pay, Net [Abstract] | ' | ||||||||
Accrued Severance Pay, Net | ' | ||||||||
Note 7 - Accrued Severance Pay, Net: | |||||||||
A. | Accrued Liability: | ||||||||
The Company is liable for severance pay to its employees pursuant to the applicable local laws prevailing in the respective countries of employment and employment agreements. For Israeli employees, the liability is partially covered by individual managers’ insurance policies under the name of the employee, for which the Company makes monthly payments. The Company may make withdrawals from the managers’ insurance policies only for the purpose of paying severance pay. | |||||||||
The amounts accrued and the amounts funded with managers’ insurance policies are as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Accrued severance pay | $ | 1,063 | $ | 1,150 | |||||
Less - amount funded | 773 | 742 | |||||||
$ | 290 | $ | 408 | ||||||
B. | Expenses: | ||||||||
The expenses related to severance pay for the years ended December 31, 2013 and 2012, were $137 and $310 thousand, respectively. |
Loans_from_Banks_and_Others
Loans from Banks and Others | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Loans from Banks and Others [Abstract] | ' | ||||||||||||||||
Loans from Banks and Others | ' | ||||||||||||||||
Note 8 - Loans from Banks and Others: | |||||||||||||||||
A. | Short Term Loans: | ||||||||||||||||
1. | The Lenders: In April 2011, the Company entered into a loan agreement with a financial institution and other lenders, referred to collectively as the lenders, pursuant to which the Company borrowed from the lenders $5 million, due within one year and bearing interest at a rate of 3.25% per annum, and an increased interest rate in case of non-compliance with the Company’s obligations to the lenders under the loan agreement. | ||||||||||||||||
The maturity date of the loan was in May 2012. In consideration for the loan, the Company issued to the lenders 169,000 ordinary shares of the Company. The shares were issued under Regulation S and were subject to a lock-up period of 90 days from the date of issuance. There is no balance account associated with the loan as of December 31, 2013. | |||||||||||||||||
In accordance with ASC 470 “Debt” the Company allocated the total proceeds between the loan and the shares based on their relative fair value at the closing date. The discount arose from this allocation amounted to $1 million at the closing and was amortized using the interest method over the term of loan. As of December 31, 2011, the unamortized discount amounted to $0.3 million. The principal of $5 million less the unamortized discount was presented on a Net basis as short term bank credit. | |||||||||||||||||
As to the assignment of the loan in March 2012 to the Company’s shareholders – see Note 2A. | |||||||||||||||||
There is no balance account associated with the loan as of December 31, 2012 and 2013. | |||||||||||||||||
B. | Long Term Loans from Banks and other | ||||||||||||||||
Composition: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
*Average Interest rate as of December 31, 2013 | Linkage | Total long-term liabilities | |||||||||||||||
net of current portion | |||||||||||||||||
% | Basis | (in thousands) | |||||||||||||||
Ministry of Production in | 0.87 | € | $ | 202 | $ | 210 | |||||||||||
Italy (Note 9 A4) | |||||||||||||||||
Due to Banks | Libor + 4.4 | $ | - | 288 | |||||||||||||
Less - current portion | (40 | ) | (217 | ) | |||||||||||||
$ | 162 | $ | 281 | ||||||||||||||
* The interest is paid on a quarterly basis. | |||||||||||||||||
C. | Long-term Loans from Banks and Other are due as follows: | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(in thousands) | |||||||||||||||||
First year (current portion) | $ | 40 | $ | 217 | |||||||||||||
Second year | 40 | 121 | |||||||||||||||
Third year | 40 | 39 | |||||||||||||||
Fourth year and thereafter | 82 | 121 | |||||||||||||||
Total | $ | 202 | $ | 498 | |||||||||||||
D. | Credit Facility | ||||||||||||||||
In October 2013, our subsidiary, BluePhoenix Solutions USA, Inc., entered into a loan agreement with Comerica Bank. As of December 31, 2013, we have not borrowed any amount under this credit facility. The principal terms of the agreement are as follows: | |||||||||||||||||
· | non-formula revolving line in the amount up to $500,000 backed by a guarantee; | ||||||||||||||||
· | borrowing base (accounts receivable based) loan in the amount up to $500,000; | ||||||||||||||||
· | both the non-formula revolving line and borrowing base loan are at market based interest rates based on Prime + a margin; and | ||||||||||||||||
· | one year commitment. | ||||||||||||||||
There are no financial covenants. There are some restrictions on cash balances to be held within banks other than Comerica. As of December 31, 2013, we were in compliance with these restrictions. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||
Commitments and Contingencies | ' | ||||||||
Note 9 - Commitments and Contingencies: | |||||||||
A. | Commitments: | ||||||||
1 | Lease. The Company leases its offices, vehicles and, other equipment under various operating lease agreements. Rent expenses for the years ended December 31, 2013 and 2012 were $253 and $760 thousand, respectively. Aggregate minimum rental commitments under non-cancelable leases as of December 31, 2013 were as follows: | ||||||||
Office Facilities | Vehicles, | ||||||||
Equipment, | |||||||||
and Other | |||||||||
(in thousands) | |||||||||
Fiscal 2014 | $ | 123 | $ | 75 | |||||
Fiscal 2015 | 25 | 19 | |||||||
Fiscal 2016 | - | 6 | |||||||
Fiscal 2017 | - | - | |||||||
$ | 148 | $ | 100 | ||||||
2 | Chief Scientist. One of the Company’s subsidiaries has entered into an agreement with the OCS; this subsidiary is obliged to pay royalties to the OCS at a rate of 3% on sales of the funded products, up to 100% of the dollar-linked grant received in respect of these products from the OCS. As of December 31, 2013, the contingent liability that was not recognized amounted to $264 thousand. | ||||||||
3 | Ministry of Production in Italy. In July 2007, the Company’s subsidiary, I-Ter, received an amount of $585,000 from the Ministry of Production in Italy for I-Ter’s Easy4Plan product. Easy4Plan is a workflow management tool designed for ISO9000 companies. 36.5% of the funds received constitute a grant, and the remaining 63.5%, is a 10-year loan to be repaid by I-Ter in annual installments until September 2018. The loan bears a minimal annual interest of 0.87% and is linked to the euro. As of December 31, 2013 the remaining loan balance was $202 thousand. | ||||||||
B. | Contingencies: | ||||||||
1. | The Company evaluates estimated losses for indemnifications due to product infringement under FASB Topic ASC 450 “Contingencies”. At this time, it is not possible to determine the maximum potential amount under these indemnification clauses due to lack of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses. Historically, the Company has not incurred material costs as a result of obligations under these agreements and has not accrued any liabilities related to such indemnification obligations in the Company’s financial statements. |
Equity
Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Equity | ' | ||||||||||||
Note 10 - Equity: | |||||||||||||
A. | Share Capital: | ||||||||||||
1. | On January 31, 1997, the Company’s ordinary shares were first offered in an initial public offering. Since this transaction, the Company’s shares have been traded in the United States on the NASDAQ Global Market. Their current symbol is “BPHX.” | ||||||||||||
In January 2001, the Company’s ordinary shares were listed for trading on the Tel-Aviv stock Exchange under the “Dual Listing” arrangement. On September 11, 2012, the Company reported the voluntary delisting of its ordinary shares from trading on the Tel Aviv Stock Exchange, which delisting became effective on December 13, 2012. | |||||||||||||
Ordinary shares confer upon their holders the rights to receive notice to participate and vote in general meeting of the Company, and the right to receive dividends if declared. In 2009, the Company’s board of directors and shareholders approved the increase of the authorized share capital to NIS40,000,000 comprised of 40,000,000 ordinary shares of NIS 0.01 par value each. | |||||||||||||
In 2012, the authorized number of shares was increased from 10,000,000 to 17,500,000 shares. | |||||||||||||
In November 2013, the Company issued 625,000 ordinary shares to Prescott Group Aggressive Small Cap Master Fund, G.P. at a price per ordinary share of $4.00 in a private placement. The Company received aggregate gross proceeds of $2.5 million. Issuance expenses amounted to $210 thousand the issuance of such shares was exempt from registration in reliance on Section 4(2) of the Securities Act for transactions not involving any public offering. There were no underwriting discounts or commissions in connection with such offering. | |||||||||||||
From and after the Closing Date until the earlier of (i) the second anniversary of the Closing Date, or (ii) to the consummation of a Qualified Financing of $5 million as set forth in the agreement if the Company, sells or issues Ordinary Shares or securities exercisable or convertible into Ordinary Shares for a price per share less than $4 than additional shares will be issued to the investors based on a Formula set forth in the agreement. The company analyzed this anti-dilution feature and concluded that (i) it is not a free standing instrument and (ii) it should be bifurcated as an embedded derivative. The Company classified the share in shareholder equity. | |||||||||||||
2. | As of December 31, 2013, the Company holds a total of 56,070 of its shares in a total consideration of $2.1 million. All of the Company’s ordinary shares have equal voting rights. However, under applicable Israeli law, the shares held by the Company have no voting rights and, therefore, are excluded from the number of its outstanding shares. Since 2010, the Company uses these treasury shares for the issuance of shares pursuant to exercise of options and vested RSUs to meet the Company’s common stock requirements for its stock benefit plans. In March 2008, the board of directors approved two buy-back programs. Under the buy-back programs, the Company may purchase its shares from time to time, subject to market conditions and other relevant factors affecting the Company. In 2009, the Company repurchased 11,249 of its shares for an aggregate amount of $1.7 million under the buy-back programs. | ||||||||||||
3. Derivative liability- warrants: | |||||||||||||
As part of a private placement transaction of shares and warrants in 2009, the Company has warrants to purchase 102,343 ordinary shares outstanding, as of December 31, 2013 with an exercise price of $1.56. The warrants are exercisable during a 5-year period from October 2009. As a result of anti-dilution protection, the warrants were not considered indexed to the Company’s own stock and (ratchet down of exercise price based upon lower exercise price in future offerings), and therefore recorded at issuance date as a derivative financial liability pursuant to FASB ASC Topic 815 “ Derivative and Hedging” (ASC 815-40-25). The Company measured the fair value of the outstanding warrants at issuance and at the balance sheet date using a Black-Scholes valuation model. The fair value of these warrants as of December 31, 2013 amounted to $311 thousand. | |||||||||||||
B. | Share Options: | ||||||||||||
1. Employee Share Option Plans: | |||||||||||||
Stock-based compensation plans comprise employee stock option plans and restricted stock units (“RSUs”) to employees, officers and directors. The purpose of the plans is to enable the Company to attract and retain qualified personnel and to motivate such persons by providing them with an equity participation in the Company. | |||||||||||||
As of December 31, 2013, the Company has two share-based compensation plans: (a) the 1996 Share Option Plan, and (b) the 2007 Award Plan. Both plans are described below. The compensation costs that were charged to income for those plans amounted to $0.6 million and $1.7 million for 2013 and 2012, respectively. | |||||||||||||
In 1996, the Company adopted two option plans (the 1996 Share Option Plan). One of these option plans was terminated after all options granted under it were exercised. Pursuant to the other 1996 option plan, as amended, the Company reserved 1,050,000 ordinary shares for issuance to directors, officers, consultants and employees of the Company and its subsidiaries. The exercise price of the options granted under the 1996 option plan ranges from $1.8 to $24. As of December 31, 2013, 32,424 stock options remain available for future awards. | |||||||||||||
Under the 1996 option plan, unless determined otherwise by the board, options vest over a three to four years period from the date of grant and expire 10 years after grant date. Unvested options are forfeited 30-90 days following termination of employment. Any options that are forfeited before expiration become available for future grants. | |||||||||||||
The following table summarizes information about share options outstanding and exercisable as of December 31, 2013: | |||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||
Number Outstanding on December 31, 2013 | Weighted Average Remaining Contractual Life | Number Exercisable on December 31, 2013 | Exercise | ||||||||||
Price | |||||||||||||
Years | $ | ||||||||||||
300,000 | 8.32 | 175,005 | 1.8 | ||||||||||
70,000 | 9.28 | 21,389 | 3.87 | ||||||||||
40,000 | 9.39 | 7,777 | 4.15 | ||||||||||
6,250 | 5.6 | 6,250 | 10.16 | ||||||||||
6,250 | 6.25 | 6,250 | 10.2 | ||||||||||
10,000 | 5.6 | 10,000 | 11.08 | ||||||||||
7,600 | 2 | 7,600 | 20 | ||||||||||
1,489 | 0.42 | 1,489 | 24 | ||||||||||
441,589 | 235,760 | ||||||||||||
Data related to the share option plan as of December 31, 2013 and 2012 and changes during the years ended on those dates are as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Number of | Weighted Average Exercise Price | Number of | Weighted Average Exercise Price | ||||||||||
Options | Options | ||||||||||||
$ | $ | ||||||||||||
Options outstanding at the beginning of year | 351,287 | 3.48 | 283,117 | 13.4 | |||||||||
Changes during the year: | |||||||||||||
Granted | 110,000 | 3.97 | 300,000 | 1.8 | |||||||||
Exercised | - | - | |||||||||||
Forfeited | -19,698 | 12.95 | -231,830 | 13.4 | |||||||||
Options outstanding at end of year | 441,589 | 351,287 | |||||||||||
Options exercisable at year-end | 235,760 | 120,037 | |||||||||||
Weighted-average fair value of options granted during the year* | $ 2.45 | $1.13 | |||||||||||
* | The fair value of each option granted is estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yield of 0% for all years; expected volatility: 2013 – 69% and 2012 –70%; risk-free interest rate: 2013 – 1.15% and 2012 – 1.44%; and expected life: 2013 – 6.06 years and 2012 – 6.5 years. | ||||||||||||
As of December 31, 2013, the intrinsic value for outstanding options was $ 229 thousand. There were no exercise of options in 2013 and 2012. | |||||||||||||
The Company is required to assume a dividend yield as an input in the Black-Scholes model. The dividend yield assumption is based on the Company’s historical experience and expectation of future dividends payouts and may be subject to change in the future. | |||||||||||||
The Company uses historical volatility in accordance with FASB ASC Topic 718, “Compensation - stock compensation”. The computation of volatility uses historical volatility derived from the Company’s exchange-traded shares. | |||||||||||||
The risk-free interest assumption is the implied yield currently available on U.S. Treasury zero-coupon bonds, issued with a remaining term equal to the expected life term of the Company’s options. | |||||||||||||
Pre-vesting rates forfeitures are approximately 15% and were estimated based on pre-vesting for feature experience. | |||||||||||||
The Company uses the simplified method to compute the expected option term for options granted. | |||||||||||||
2. Restricted Share Units (RSU): | |||||||||||||
In 2007, the Company adopted the 2007 Award Plan (RSU plan). In 2013 and 2012, under the RSU plan, as amended, the Company granted 248,998 and 788,714 RSUs, respectively. Under the RSU plan, unless determine otherwise by the board of directors, RSUs vest over a three years period from the date of the grant. Approved for immediate vesting on grant date were 33,998 and 367,712 RSUs in 2013 and 2012, respectively. | |||||||||||||
Data related to the restricted stock units as of December 31, 2013 and 2012 and changes during the year were as follows: | |||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
RSUs outstanding at the beginning of the year | 192,923 | 57,497 | |||||||||||
Changes during the year: | |||||||||||||
Granted * | 248,998 | 788,714 | |||||||||||
Vested | (124,622 | ) | (563,125 | ) | |||||||||
Forfeited | (45,431 | ) | (90,163 | ) | |||||||||
RSUs outstanding at the end of the year | 271,868 | 192,923 | |||||||||||
Weighted Average fair value at grant date | $ | 4.09 | $ | 2.57 | |||||||||
* | The fair value of RSUs is established based on the market value of the Company’s stock on the date of the award. The Company has expensed compensation costs, net of estimated forfeitures, applying the accelerated vesting method. | ||||||||||||
C. Dividends: | |||||||||||||
The Company has not paid any cash dividends on its ordinary shares in the past and does not expect to pay cash dividends on its ordinary shares in the foreseeable future. |
Income_taxes
Income taxes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income taxes [Abstract] | ' | ||||||||
Income taxes | ' | ||||||||
Note 11 - Income taxes: | |||||||||
A. Basis of taxation: | |||||||||
The Company and its subsidiaries are subject to tax in many jurisdictions and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. The Company believes that its accruals for tax liabilities are adequate for all open years. The Company considers various factors in making these assessments, including past history, recent interpretations of tax law, and the specifics of each matter. Non-Israeli subsidiaries are taxed according to the tax laws in their respective country of residence. | |||||||||
The Company elected to compute its taxable income in accordance with Income Tax Regulations (Rules for | |||||||||
Accounting for Foreign Investors Companies and Certain Partnerships and Setting their Taxable Income), 1986. Accordingly, the Company’s taxable income or loss is calculated in U.S. dollars. Applying these regulations reduces the effect of foreign exchange rate (of NIS against the U.S. dollar) on the Company’s Israeli taxable income. | |||||||||
Taxable income of Israeli companies is subject to tax at the rate of 25% in 2012 and 2013. Commencing fiscal year 2014 the Israeli corporate rate will increase to 26.5% | |||||||||
B. Deferred tax assets and liabilities: | |||||||||
Deferred tax reflect the net tax effects of temporary differences between the carrying amounts of assets or liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2013 and 2012, the Company’s deferred taxes were in respect of the following: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Net operating losses carry forwards | $ | 29,446 | $ | 28,617 | |||||
Provisions for employee rights and other temporary differences | 74 | 70 | |||||||
Deferred tax assets before valuation allowance | 29,520 | 28,687 | |||||||
Valuation allowance | (29,520 | ) | (28,687 | ) | |||||
Deferred tax assets | - | - | |||||||
Deferred tax liability | - | - | |||||||
Deferred tax assets (liability), net | $ | - | $ | - | |||||
C. Loss before Income Taxes is composed as follows: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Domestic (Israel) | $ | (3,073 | ) | (22,124 | ) | ||||
Foreign | (20 | ) | 12,737 | ||||||
$ | (3,093 | ) | (9,387 | ) | |||||
D. Provision For Taxes: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Current: | |||||||||
Domestic (Israel) | $ | - | $ | - | |||||
Foreign | 36 | 54 | |||||||
36 | 54 | ||||||||
* Taxes related to prior years | 261 | 167 | |||||||
Deferred: | |||||||||
Deferred taxes, net | - | - | |||||||
Total provision for income taxes | $ | 297 | $ | 221 | |||||
* | In 2013 and 2012, mainly related to withholdings tax for prior years that cannot be realized due to liquidation of subsidiaries as non-future estimated taxable income. | ||||||||
E. | Uncertain Tax Position: | ||||||||
The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and have not recorded any liability associated with unrecognized tax benefits during 2013 and 2012. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit. | |||||||||
F. | A reconciliation between statutory tax to effective tax, assuming all income is taxed at the regular rates and the actual tax expense is as follows: | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Loss before income taxes, | $ | (3,096 | ) | $ | (9,387 | ) | |||
per consolidated statements of income | |||||||||
At the principal tax rate of the group | (774 | ) | (2,347 | ) | |||||
(25% in 2012 and 2013) | |||||||||
Decrease in taxes resulting from the following differences: | |||||||||
Carry-forward losses for which the Company provided | 833 | 2,465 | |||||||
valuation allowance | |||||||||
Effect of different tax rates in foreign subsidiaries | (53 | ) | (109 | ) | |||||
Taxes related to previous years | 261 | 167 | |||||||
Non-deductible expenses | 30 | 45 | |||||||
Income tax expense (benefit) in the consolidated statements | $ | 297 | $ | 221 | |||||
of income for the reported year | |||||||||
Effective tax rate | - | - | |||||||
G. Tax Losses: | |||||||||
The Company and its subsidiaries have NOL carry forwards for income tax purposes as of December 31, 2013 of approximately $86 million with no expiration date. $73 million were generated in Israel and the rest outside of Israel. | |||||||||
H. Tax Assessments: | |||||||||
The Company received final tax assessments in Israel through tax year 2008. |
Supplementary_Financial_Statem
Supplementary Financial Statement Information | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplementary Financial Statement Information [Abstract] | ' | ||||||||
Supplementary Financial Statement Information | ' | ||||||||
Note 12 - Supplementary Financial Statement Information: | |||||||||
A. Balance Sheets: | |||||||||
1. Trade Accounts Receivables: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Trade accounts receivable | $ | 2,140 | $ | 2,623 | |||||
Less allowance for doubtful accounts | (180 | ) | (178 | ) | |||||
$ | 1,960 | $ | 2,445 | ||||||
For the years ended December 31, 2013 and 2012, the Company charged expenses for doubtful accounts amounted to $2 and $178 thousand , respectively. | |||||||||
For the years ended December 31, 2013 and 2012, the Company deducted from the allowance (bad debts) $0 and $91 thousand, respectively. | |||||||||
2. Other Current Assets: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Prepaid expenses | $ | 114 | $ | 240 | |||||
Short-term lease deposits | 24 | 42 | |||||||
Government departments and agencies | 101 | 299 | |||||||
$ | 239 | $ | 581 | ||||||
3. Accounts Payable and Accruals - Other: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Government departments and agencies | $ | - | $ | 160 | |||||
Employees and wage-related liabilities | 745 | 602 | |||||||
Accrued expenses and other current liabilities | 157 | 188 | |||||||
$ | 902 | $ | 950 | ||||||
4. The Company’s Long-lived Assets are as Follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Israel | $ | 77 | $ | 342 | |||||
U.S.A. | 91 | 126 | |||||||
Europe and other | 119 | 125 | |||||||
$ | 287 | $ | 593 | ||||||
Long-lived assets information is based on the physical location of the assets at the end of each of the fiscal years. It is comprised from the Company’s property and equipment and technology intangible asset. The Company does not identify or allocate goodwill by geographic areas. | |||||||||
B. Statements of Operations: | |||||||||
1. Geographic Areas Information: | |||||||||
Sales: Classified by Geographic Areas: | |||||||||
The Company adopted FASB ASC Topic 280, “segment reporting”. The Company operates in one operating segment (see Note 1 for a brief description of the Company’s business). The total revenues are attributed to geographic areas based on the location of end customers. | |||||||||
The following present total revenues for the years ended December 31, 2013 and 2012: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
North America | $ | 4,147 | $ | 3,182 | |||||
Europe | 2,465 | 4,488 | |||||||
Israel | 1,791 | 1,382 | |||||||
Other | 134 | 1,572 | |||||||
$ | 8,537 | $ | 10,624 | ||||||
2. Principal Customers: | |||||||||
There was one customer that represented 13.9% of the Company’s total revenue in 2013. There were two customers that represented 14.3% and 11.7% of the Company’s total revenues in 2012. There were no customers that represented more than 10% of total revenues for the fiscal year 2011. | |||||||||
There is one customer that represented more than 10% of total trade receivables at December 31, 2013. There were three customers that represented more than 10% of total trade receivables at December 31, 2012. | |||||||||
3. Financial Expenses, Net: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Interest income | $ | - | $ | 8 | |||||
Foreign currency translation adjustments (see Note 1A3) | (43 | ) | (186 | ) | |||||
Interest expense | (54 | ) | (308 | ) | |||||
Forward derivatives and realized gain on marketable securities | - | (3 | ) | ||||||
Change in fair value of warrants, derivatives and discount amortization | (17 | ) | (4,869 | ) | |||||
$ | (114 | ) | $ | (5,358 | ) | ||||
C. Earnings per Share: | |||||||||
Basic and diluted loss per share (“EPS”) was computed based on the average number of shares outstanding during each year. No effect was given to potential instruments such as: share options unvested, RSUs and warrants since their inclusion would be anti-dilutive. | |||||||||
The following table sets forth the computation of basic and diluted net earnings per share attributable to BluePhoenix: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
1. Numerator: | |||||||||
Amount for basic and diluted loss per share | $ | (4,032 | ) | $ | (11,428 | ) | |||
2.* Denominator: | |||||||||
Denominator for basic net loss per share - weighted | 10,770,142 | 7,896,557 | |||||||
average of shares | |||||||||
Effect of dilutive securities | - | - | |||||||
Denominator for diluted net earnings per share - | 10,770,142 | 7,896,557 | |||||||
weighted average shares and assuming dilution | |||||||||
Basic and diluted loss per share attributed | $ | (0.37 | ) | $ | (1.45 | ) | |||
to BluePhoenix Shareholders | |||||||||
Discontinued_Operation
Discontinued Operation | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Discontinued Operation [Abstract] | ' | ||||||||
Discontinued operation | ' | ||||||||
Note 13 - Discontinued Operation: | |||||||||
In May 2012, the Company completed the sale of its 51% share holdings in Liacom Systems Ltd., referred to as Liacom, for an aggregate consideration of $1.75 million. This sale was part of the Company strategic plan to focus on the legacy modernization business. Liacom met the definition of a component. Accordingly, the results of operations in the statement of operations and prior periods’ results have been reclassified accordingly. The capital loss recorded upon sale of Liacom amounted to $703 thousand. | |||||||||
In February 2013, the Company completed the sale of the operations of BridgeQuest, Inc. and its relevant subsidiary. Total consideration for Bridgequest Inc. was $6.5 thousand. In addition, as part of the agreement, the Company received additional amounts upon collection of existing account receivables of BridgeQuest collected by the purchaser following the transaction. BridgeQuest met the definition of a component. Accordingly, the results of operations in the statement of operations and prior period’s results have been reclassified accordingly. As the transaction was completed following the balance sheet date, in February 2013, assets and liabilities associated with BridgeQuest were presented as held for sale in the December 31, 2012 balance sheet. | |||||||||
The following is the composition from discontinued operation: | |||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands, except per share data) | |||||||||
Revenues | $ | - | $ | 9,243 | |||||
Cost of revenues | 16 | 7, 510 | |||||||
Gross profit | (16 | ) | 1, 733 | ||||||
Research and development costs | - | 1, 118 | |||||||
Selling, general, and administrative expenses | 2 | 1,331 | |||||||
Loss on realization of shareholdings | 372 | 740 | |||||||
Operating profit | (390 | ) | (1,456 | ) | |||||
Financial expenses, net | 9 | 1 | |||||||
Loss before provision for income taxes | (399 | ) | (1,457 | ) | |||||
Provision for income taxes | - | 12 | |||||||
Net loss | $ | (399 | ) | $ | (1,469 | ) | |||
Herein are the following major classes of assets and liabilities associated with BridgeQuest as of December 31, 2012: | |||||||||
December 31, | |||||||||
2012 | |||||||||
(in thousands) | |||||||||
Assets: | |||||||||
Cash and cash equivalents | $ | 9 | |||||||
Account Receivable | 535 | ||||||||
Long term assets | 247 | ||||||||
Total Assets | 791 | ||||||||
Liabilities: | |||||||||
Account Payables | 467 | ||||||||
Long term liabilities | - | ||||||||
Total Liabilities | 467 | ||||||||
$ | 324 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Summary of Significant Accounting Policies [Abstract] | ' | ||
General | ' | ||
A. General: | |||
The significant accounting policies, applied on a consistent basis, are as follows: | |||
1. The Company: | |||
BluePhoenix Solutions Ltd. (“BluePhoenix”) (together with its subsidiaries, the “Company” or “we”) is an Israeli corporation, which operates in one operating segment of information technology (“IT”) modernization solutions. | |||
BluePhoenix develops and markets enterprise legacy migration solutions and provides tools and professional services to international markets through several entities including wholly-owned subsidiaries located in: USA, UK, Italy, Romania and Israel. These technologies and services allow business to migrate from their legacy mainframe and distributed IT infrastructures to modern environments and programing languages. | |||
2. Accounting Principles: | |||
The consolidated financial statements are prepared in accordance with accounting principles generally accepted (“GAAP”) in the United States of America. | |||
3. Functional Currency: | |||
The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the U.S. dollar (“dollar”). In addition, a substantial portion of the Company’s revenues and costs are incurred in dollars. Thus, the functional and reporting currency of the Company is considered to be the dollar. The functional currency of all subsidiaries is the US dollar therefore there is no unrealized gain/loss. | |||
Non-monetary transactions denominated in currencies other than the dollar are measured and recorded in dollar at the exchange rates prevailing at transaction date. Monetary assets and liabilities denominated in currencies other than the dollar are translated at the exchange rate on the balance sheet date. Transaction gain or losses on foreign currency translation are recorded in consolidated statement of operations. | |||
4. Use of Estimates and Assumptions in the Preparation of the Financial Statements: | |||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |||
Principles of Consolidation | ' | ||
B. | Principles of Consolidation: | ||
The consolidated financial statements include the accounts of BluePhoenix and its subsidiaries in which it has a controlling interest. Acquisition of subsidiaries is accounted for under the acquisition method. All intercompany balances and transactions have been eliminated upon consolidation. Non-controlling interests are included in equity. | |||
Cash and Cash Equivalents | ' | ||
C. | Cash and Cash Equivalents: | ||
Cash equivalents are considered by the Company to be highly-liquid investments, including inter-alia, short-term deposits with banks, which do not exceed maturities of three months at the time of deposit and which are not restricted. | |||
Restricted Deposit | ' | ||
D. | Restricted Deposit: | ||
As of December 31, 2013, the Company’s balance sheet includes $35 thousand of restricted deposit, which was used as temporary collateral for the Company’s corporate credit card and fuel programs. These funds were segregated from the Company’s operating cash. | |||
Allowance for Doubtful Accounts | ' | ||
E. | Allowance for Doubtful Accounts: | ||
The Company establishes an allowance for doubtful accounts to ensure trade and financing receivables are not overstated due to uncollectability. The allowance for doubtful accounts was based on specific receivables, which their collection, in the opinion of Company’s management, is in doubt. Trade receivables are charged off in the period in which they are deemed to be uncollectible. | |||
Property and Equipment, Net | ' | ||
F. | Property and Equipment, Net: | ||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over their estimated useful lives. Annual rates of depreciation are as follows: | |||
% | |||
Computers and peripheral equipment | 20-33 (mainly 33) | ||
Office furniture and equipment | 6-15 (mainly 7) | ||
Leasehold improvements | Over the shorter of lease term or the life of the assets | ||
Motor vehicles | 15 | ||
Impairment of Long-Lived Assets | ' | ||
G. | Impairment of Long-Lived Assets: | ||
The Company evaluates property and equipment and purchased intangible assets with definite lives for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flow and recognizes an impairment loss when the estimated undiscounted future cash flow expected to result from the use of the asset plus the net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. During the Years ending December 31, 2013 and 2012, no impairments losses have been identify. | |||
Goodwill and other purchased intangible assets | ' | ||
H. | Goodwill and other purchased intangible assets: | ||
Goodwill and certain other purchased intangible assets have been recorded as a result of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. | |||
Goodwill is not amortized, but rather is subject to an annual impairment test. The Company is one operating segment and one reporting unit related to its overall IT modernization .The goodwill impairment tests are conducted in two steps. In the first step, the Company determines the fair value of the reporting unit. If the net book value of the reporting unit exceeds its fair value, the Company would then perform the second step of the impairment test which requires allocation of the reporting unit’s fair value of all of its assets and liabilities in a manner similar to an acquisition cost allocation, with any residual fair value being allocated to goodwill. The implied fair value of the goodwill is then compared to the carrying value to determine impairment, if any. | |||
In 2013 and 2012, the company determined the fair value of a reporting unit using the market approach which is based on the market capitalization by using the share price of the Company in the NASDAQ stock exchange and an appropriate control premium. As of December 31, 2013 and 2012 market capitalization of the Company was significantly higher than the net book value of the reporting unit and therefore there was no need to calculate a control premium or to continue to step 2. | |||
Intangible assets that are not considered to have an indefinite useful life are amortized using the straight-line basis over their estimated useful lives of between 5 to 12 years. The carrying amount of these assets is reviewed whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the assets is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset (see also Note 1G). As of December 31, 2013 the company has no other intangible assets other than goodwill. | |||
Research and Development Costs | ' | ||
I. | Research and Development Costs: | ||
Research and development costs are charged to the statement of income as incurred. ASC No. 985, “Software”, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility. | |||
Based on the Company’s product development process, technological feasibility is established when detailed program design is completed and verified. Costs incurred by the Company between completion of detailed program design and the point at which the products are ready for general release, have been insignificant. Therefore, all research and development costs have been expensed. | |||
Stock-based Compensation | ' | ||
J. | Stock-based Compensation: | ||
In the past two years, the majority of the awards were of restricted stock units (“RSUs”). RSU’s are valued based on the market value of the underlying stock at the date of grant. The Company also has a stock option plan. Stock option awards are measured and recognized as compensation expense based on estimated fair values on the date of grant using the Black-Scholes option-pricing model. This option pricing model requires that the Company makes several estimates, including the option’s expected life and the price volatility of the underlying stock. | |||
The Company recognizes the estimated fair value of option-based awards and RSUs, net of estimated forfeitures, as stock-based compensation costs using the accelerated vesting method. For the years ended December 31, 2013 and 2012 the Company recorded stock-based and RSUs compensation costs in the amount of $0.6 million and 1.7 million, respectively. On December 31, 2013, the total unrecognized stock-based and RSUs compensation costs amounted to $1 million, and are expected to be recognized over the next 3 years. | |||
Revenue Recognition | ' | ||
K. | Revenue Recognition: | ||
Revenues derived from direct software license agreements are recognized in accordance with FASB ASC Topic 985 “Software” (“ASC 985”), upon delivery of the software, when collection is probable, the license fee is otherwise fixed or determinable and persuasive evidence of an arrangement exists. | |||
The Company recognizes revenues from consulting fees based on the number of hours performed. Revenues from maintenance services are recognized ratably over the term of the maintenance period. | |||
When a project involves significant production, modification or customization of software, revenue is recognized according to the percentage of completion method in accordance with the provisions of FASB ASC Topic 605-35-25. Under this method, estimated revenue is generally accrued based on costs incurred to date, as a percentage of total updated estimated costs. The Company recognizes contract losses, if any, in the period in which they first become evident. There are no rights of return, price protection or similar contingencies in the Company’s contracts. | |||
On December 31, 2013, approximately $1.2 million of the accounts receivable balance was unbilled due to the customer’s payment terms. On December 31, 2012, the amount of unbilled revenue was $786 thousand. The Company presents revenues from products and revenues from services in separate line items. | |||
The product revenues line item includes revenues generated from standalone software products. In the services revenue line item, the Company includes (i) revenues generated from maintenance and consulting fees, (ii) revenues accounted for pursuant to ASC 605-35-Tax collected from customers and remitted to governments authorities (including VAT) are presented in income statement on a net basis. | |||
Advertising Costs | ' | ||
L. | Advertising Costs: | ||
The Company expenses advertising costs as incurred. Advertising costs for the years ended December 31, 2013 and 2012 were $109 thousand and $10 thousand , respectively. | |||
Income Taxes | ' | ||
M. | Income Taxes: | ||
Deferred taxes are determined utilizing the “asset and liability” method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it’s more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the expected reversal dates of the specific temporary differences. | |||
The Company applied ASC Topic 740-10-05, Income Tax, which provides guidance for recognizing and measuring uncertain tax positions, it prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions. The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense. | |||
Earnings (Loss) Per Share | ' | ||
N. | Earnings (loss) Per Share: | ||
Earnings (loss) per share (“EPS”) were computed in accordance with FASB ASC Topic 260, "Earnings Per Share" (ASC 260). ASC 260 requires the presentation of both basic and diluted EPS. | |||
Basic net earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year (including fully vested RSUs), net of treasury shares. Diluted earnings per share is computed based on the weighted average number of ordinary shares outstanding during each year, plus dilutive potential ordinary shares considered outstanding during the year (see also Note 12C). Since the Company incurred net loss during the periods presented, no diluted EPS was presented as all the potential ordinary shares were anti-dilutive. | |||
Financial Instruments | ' | ||
O. | Financial Instruments: | ||
1. Concentration of credit risks: | |||
Financial instruments that have the potential to expose the Company to credit risks are mainly cash and cash equivalents, bank deposit accounts, and trade receivables. | |||
The Company holds cash and cash equivalents, and deposit accounts at large banks in Israel, the United States, and Europe, thereby substantially reducing the risk of loss. | |||
The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts and generally does not require collateral. An appropriate allowance for doubtful accounts is included in the accounts. | |||
2. Fair value measurement: | |||
The Company measures fair value and discloses fair value measurements for financial and non-financial assets and liabilities. Fair value is based on 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. | |||
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: | |||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||
In determining fair value, the Company utilizes valuation techniques that maximize the use of observableinputs and minimize the use of observable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. | |||
Comprehensive Income (loss) | ' | ||
P. | Comprehensive Income (loss): | ||
Comprehensive income (loss), net of related taxes where applicable, includes only net income. | |||
Derivative Instruments | ' | ||
Q. | Derivative Instruments: | ||
The Company uses foreign currency options, forward exchange contracts to assist in managing financial risks in order to minimize the currency exposure on identifiable assets and liabilities in currencies other than the functional currency. The Company does not use derivative financial instruments for speculative purposes. These instruments are recognized at fair value, with all changes in fair value recorded in current period earnings, as these transactions have not been designated by management as hedging instruments. The net loss recognized in earnings during 2012, representing the derivative instruments was $4 thousand. | |||
As of December 31,2013 and 2012, the Company does not have open forward and option exchange contracts. | |||
The cash flows associated with the derivative are reflected as cash flows from operating activity in the statement of cash flows. | |||
Treasury Shares | ' | ||
R. | Treasury Shares: | ||
In the past, the Company repurchased its ordinary shares from time to time on the open market and they are currently held as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of shareholders' equity. When treasury shares are used as consideration for share based payment the reduction is based on average purchase cost. | |||
Derivative Liabilities - Warrants | ' | ||
S. | Derivative Liabilities - Warrants: | ||
In connection with , determining whether an instrument (or embedded feature) is indexed to an Entity’s own stock, “ASC 815-40-15,(formerly EITF 07-05), the Company determined that the warrants issued at several occasions (ratchet down of exercise price based upon lower exercise price in future offerings) are not indexed to the Company’s own stock and therefore should be recorded as a derivative financial liability for pursuant FASB ASC Topic 815 “Derivative and Hedging” (ASC 815-40-25). See also note 10A3 | |||
Contingent Assets | ' | ||
T. | Contingent Assets: | ||
The company’s accounting policy is to recognize the contingent consideration in earnings only following the contingency is being resolved in accordance with ASC 450. | |||
Recently Issued Accounting Pronouncements | ' | ||
U. | Recently Issued Accounting Pronouncements: | ||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued guidance that requires that a non-recognized tax benefit be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. This net presentation is required unless a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset to settle any additional income tax that would result from the disallowance of the unrecognized tax benefit. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company is assessing whether the adoption of this standard will have a material impact on its consolidated financial statements. | |||
In March 2013, the FASB issued guidance on accounting for the release of a cumulative translation adjustment into net income when a parent company either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets and provides guidance for the acquisition in stages of a controlling interest in a foreign entity. This guidance is effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company is assessing whether the adoption of this standard will have a material impact on its consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Summary of Significant Accounting Policies [Abstract] | ' | ||
Schedule of Depreciation Rates | ' | ||
% | |||
Computers and peripheral equipment | 20-33 (mainly 33) | ||
Office furniture and equipment | 6-15 (mainly 7) | ||
Leasehold improvements | Over the shorter of lease term or the life of the assets | ||
Motor vehicles | 15 | ||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Summary of Fair Value Measurements | ' | ||||||||||||||||
Fair value measurements using input type | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents | $ | 2,592 | $ | - | $ | - | $ | 2,592 | |||||||||
Restricted cash | 35 | - | - | 35 | |||||||||||||
Derivatives liabilities - warrants | - | (311 | ) | - | (311 | ) | |||||||||||
$ | 2,627 | $ | (311 | ) | $ | - | $ | 2,316 | |||||||||
Fair value measurements using input type | |||||||||||||||||
31-Dec-12 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Cash and cash equivalents | $ | 2,560 | $ | - | $ | - | $ | 2,560 | |||||||||
Restricted cash | 33 | - | - | 33 | |||||||||||||
Derivatives liabilities - warrants | - | (370 | ) | - | (370 | ) | |||||||||||
$ | 2,593 | $ | (370 | ) | $ | - | $ | 2,223 | |||||||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Cost: | |||||||||
Computers and peripheral equipment | $ | 8,601 | $ | 8,604 | |||||
Office furniture and equipment | 529 | 611 | |||||||
Leasehold improvements | 269 | 465 | |||||||
Motor vehicles | 23 | 56 | |||||||
9,422 | 9,736 | ||||||||
Accumulated Depreciation: | |||||||||
Computers and peripheral equipment | 8,354 | 8,244 | |||||||
Office furniture and equipment | 434 | 473 | |||||||
Leasehold improvements | 331 | 429 | |||||||
Motor vehicles | 16 | 28 | |||||||
9,135 | 9,174 | ||||||||
$ | 287 | $ | 562 | ||||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Goodwill [Abstract] | ' | ||||||||
Schedule of Goodwill | ' | ||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Balance as of January 1. | |||||||||
Goodwill | $ | 54,316 | $ | 56,053 | |||||
Goodwill related to sale of subsidiaries | (1,737 | ) | |||||||
Accumulated impairment losses at the beginning of the period | (41,815 | ) | (41,815 | ) | |||||
12,501 | 12,501 | ||||||||
Balance as of December 31 | |||||||||
Goodwill | 54,316 | 54,316 | |||||||
Accumulated impairment losses at the end of the period | (41,815 | ) | (41,815 | ) | |||||
$ | 12,501 | $ | 12,501 | ||||||
Intangible_Assets_and_Others_N1
Intangible Assets and Others, Net (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Intangible Assets and Others, Net [Abstract] | ' | ||||||||||||
Schedule of Intangible Assets and Others, Net | ' | ||||||||||||
Composition: | |||||||||||||
Useful | December 31, | ||||||||||||
life | 2013 | 2012 | |||||||||||
years | (in thousands) | ||||||||||||
Original amount: | |||||||||||||
Technology | 5 | $ | 46,266 | $ | 46,266 | ||||||||
Customer related intangible assets | 8-May | 4,968 | 4,968 | ||||||||||
51,234 | 51,234 | ||||||||||||
Accumulated amortization: | |||||||||||||
Technology | 46,266 | 46,239 | |||||||||||
Customer related intangible assets | 4,968 | 4,718 | |||||||||||
51,234 | 50,957 | ||||||||||||
$ | - | $ | 277 | ||||||||||
* | Amortization of intangible assets amounted to $277 and $1,532 thousand for the years ended December 31, 2013 and 2012, respectively. As of December 31, 2013, there will be no more additional amortization going forward as all other intangible assets were fully amortized. |
Accrued_Severance_Pay_Net_Tabl
Accrued Severance Pay, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Accrued Severance Pay, Net [Abstract] | ' | ||||||||
Schedule of Accrued Severance Pay Liability | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Accrued severance pay | $ | 1,063 | $ | 1,150 | |||||
Less - amount funded | 773 | 742 | |||||||
$ | 290 | $ | 408 | ||||||
Loans_from_Banks_and_Others_Ta
Loans from Banks and Others (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Loans from Banks and Others [Abstract] | ' | ||||||||||||||||
Schedule of Long-Term Debt | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
*Average Interest rate as of December 31, 2013 | Linkage | Total long-term liabilities | |||||||||||||||
net of current portion | |||||||||||||||||
% | Basis | (in thousands) | |||||||||||||||
Ministry of Production in | 0.87 | € | $ | 202 | $ | 210 | |||||||||||
Italy (Note 9 A4) | |||||||||||||||||
Due to Banks | Libor + 4.4 | $ | - | 288 | |||||||||||||
Less - current portion | (40 | ) | (217 | ) | |||||||||||||
$ | 162 | $ | 281 | ||||||||||||||
* The interest is paid on a quarterly basis. | |||||||||||||||||
Maturities of Long-Term Debt | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(in thousands) | |||||||||||||||||
First year (current portion) | $ | 40 | $ | 217 | |||||||||||||
Second year | 40 | 121 | |||||||||||||||
Third year | 40 | 39 | |||||||||||||||
Fourth year and thereafter | 82 | 121 | |||||||||||||||
Total | $ | 202 | $ | 498 | |||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||
Schedule of Minimum Future Lease Payments | ' | ||||||||
Office Facilities | Vehicles, | ||||||||
Equipment, | |||||||||
and Other | |||||||||
(in thousands) | |||||||||
Fiscal 2014 | $ | 123 | $ | 75 | |||||
Fiscal 2015 | 25 | 19 | |||||||
Fiscal 2016 | - | 6 | |||||||
Fiscal 2017 | - | - | |||||||
$ | 148 | $ | 100 | ||||||
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Equity [Abstract] | ' | ||||||||||||
Schedule of Share Options Outstanding and Exercisable | ' | ||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||
Number Outstanding on December 31, 2013 | Weighted Average Remaining Contractual Life | Number Exercisable on December 31, 2013 | Exercise | ||||||||||
Price | |||||||||||||
Years | $ | ||||||||||||
300,000 | 8.32 | 175,005 | 1.8 | ||||||||||
70,000 | 9.28 | 21,389 | 3.87 | ||||||||||
40,000 | 9.39 | 7,777 | 4.15 | ||||||||||
6,250 | 5.6 | 6,250 | 10.16 | ||||||||||
6,250 | 6.25 | 6,250 | 10.2 | ||||||||||
10,000 | 5.6 | 10,000 | 11.08 | ||||||||||
7,600 | 2 | 7,600 | 20 | ||||||||||
1,489 | 0.42 | 1,489 | 24 | ||||||||||
441,589 | 235,760 | ||||||||||||
Schedule of Share Option Activity | ' | ||||||||||||
2013 | 2012 | ||||||||||||
Number of | Weighted Average Exercise Price | Number of | Weighted Average Exercise Price | ||||||||||
Options | Options | ||||||||||||
$ | $ | ||||||||||||
Options outstanding at the beginning of year | 351,287 | 3.48 | 283,117 | 13.4 | |||||||||
Changes during the year: | |||||||||||||
Granted | 110,000 | 3.97 | 300,000 | 1.8 | |||||||||
Exercised | - | - | |||||||||||
Forfeited | -19,698 | 12.95 | -231,830 | 13.4 | |||||||||
Options outstanding at end of year | 441,589 | 351,287 | |||||||||||
Options exercisable at year-end | 235,760 | 120,037 | |||||||||||
Weighted-average fair value of options granted during the year* | $ 2.45 | $1.13 | |||||||||||
* | The fair value of each option granted is estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yield of 0% for all years; expected volatility: 2013 – 69% and 2012 –70%; risk-free interest rate: 2013 – 1.15% and 2012 – 1.44%; and expected life: 2013 – 6.06 years and 2012 – 6.5 years. | ||||||||||||
Schedule of Restricted Share Unit Activity | ' | ||||||||||||
Year ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
RSUs outstanding at the beginning of the year | 192,923 | 57,497 | |||||||||||
Changes during the year: | |||||||||||||
Granted * | 248,998 | 788,714 | |||||||||||
Vested | (124,622 | ) | (563,125 | ) | |||||||||
Forfeited | (45,431 | ) | (90,163 | ) | |||||||||
RSUs outstanding at the end of the year | 271,868 | 192,923 | |||||||||||
Weighted Average fair value at grant date | $ | 4.09 | $ | 2.57 | |||||||||
* | The fair value of RSUs is established based on the market value of the Company’s stock on the date of the award. The Company has expensed compensation costs, net of estimated forfeitures, applying the accelerated vesting method. |
Income_taxes_Tables
Income taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Income taxes [Abstract] | ' | ||||||||
Summary of Deferred Tax Assets and Liabilities | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Net operating losses carry forwards | $ | 29,446 | $ | 28,617 | |||||
Provisions for employee rights and other temporary differences | 74 | 70 | |||||||
Deferred tax assets before valuation allowance | 29,520 | 28,687 | |||||||
Valuation allowance | (29,520 | ) | (28,687 | ) | |||||
Deferred tax assets | - | - | |||||||
Deferred tax liability | - | - | |||||||
Deferred tax assets (liability), net | $ | - | $ | - | |||||
Schedule of Loss before Income Taxes | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Domestic (Israel) | $ | (3,073 | ) | (22,124 | ) | ||||
Foreign | (20 | ) | 12,737 | ||||||
$ | (3,093 | ) | (9,387 | ) | |||||
Schedule of Provision (Benefit) for Income Taxes | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Current: | |||||||||
Domestic (Israel) | $ | - | $ | - | |||||
Foreign | 36 | 54 | |||||||
36 | 54 | ||||||||
* Taxes related to prior years | 261 | 167 | |||||||
Deferred: | |||||||||
Deferred taxes, net | - | - | |||||||
Total provision for income taxes | $ | 297 | $ | 221 | |||||
* | In 2013 and 2012, mainly related to withholdings tax for prior years that cannot be realized due to liquidation of subsidiaries as non-future estimated taxable income. | ||||||||
Schedule of reconciliation theoretical tax expense | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Loss before income taxes, | $ | (3,096 | ) | $ | (9,387 | ) | |||
per consolidated statements of income | |||||||||
At the principal tax rate of the group | (774 | ) | (2,347 | ) | |||||
(25% in 2012 and 2013) | |||||||||
Decrease in taxes resulting from the following differences: | |||||||||
Carry-forward losses for which the Company provided | 833 | 2,465 | |||||||
valuation allowance | |||||||||
Effect of different tax rates in foreign subsidiaries | (53 | ) | (109 | ) | |||||
Taxes related to previous years | 261 | 167 | |||||||
Non-deductible expenses | 30 | 45 | |||||||
Income tax expense (benefit) in the consolidated statements | $ | 297 | $ | 221 | |||||
of income for the reported year | |||||||||
Effective tax rate | - | - |
Supplementary_Financial_Statem1
Supplementary Financial Statement Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Supplementary Financial Statement Information [Abstract] | ' | ||||||||
Schedule of Trade Accounts Receivable | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Trade accounts receivable | $ | 2,140 | $ | 2,623 | |||||
Less allowance for doubtful accounts | (180 | ) | (178 | ) | |||||
$ | 1,960 | $ | 2,445 | ||||||
Schedule of Other Current Assets | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Prepaid expenses | $ | 114 | $ | 240 | |||||
Short-term lease deposits | 24 | 42 | |||||||
Government departments and agencies | 101 | 299 | |||||||
$ | 239 | $ | 581 | ||||||
Schedule of Accounts Payable and Accruals - Other | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Government departments and agencies | $ | - | $ | 160 | |||||
Employees and wage-related liabilities | 745 | 602 | |||||||
Accrued expenses and other current liabilities | 157 | 188 | |||||||
$ | 902 | $ | 950 | ||||||
Schedule of Long-Lived Assets by Geographic Area | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Israel | $ | 77 | $ | 342 | |||||
U.S.A. | 91 | 126 | |||||||
Europe and other | 119 | 125 | |||||||
$ | 287 | $ | 593 | ||||||
Schedule of Sales by Geographic Area | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
North America | $ | 4,147 | $ | 3,182 | |||||
Europe | 2,465 | 4,488 | |||||||
Israel | 1,791 | 1,382 | |||||||
Other | 134 | 1,572 | |||||||
$ | 8,537 | $ | 10,624 | ||||||
Schedule of Financial Expenses, Net | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
Interest income | $ | - | $ | 8 | |||||
Foreign currency translation adjustments (see Note 1A3) | (43 | ) | (186 | ) | |||||
Interest expense | (54 | ) | (308 | ) | |||||
Forward derivatives and realized gain on marketable securities | - | (3 | ) | ||||||
Change in fair value of warrants, derivatives and discount amortization | (17 | ) | (4,869 | ) | |||||
$ | (114 | ) | $ | (5,358 | ) | ||||
Summary of Computation of Basic and Diluted Earnings per Share | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands) | |||||||||
1. Numerator: | |||||||||
Amount for basic and diluted loss per share | $ | (4,032 | ) | $ | (11,428 | ) | |||
2.* Denominator: | |||||||||
Denominator for basic net loss per share - weighted | 10,770,142 | 7,896,557 | |||||||
average of shares | |||||||||
Effect of dilutive securities | - | - | |||||||
Denominator for diluted net earnings per share - | 10,770,142 | 7,896,557 | |||||||
weighted average shares and assuming dilution | |||||||||
Basic and diluted loss per share attributed | $ | (0.37 | ) | $ | (1.45 | ) | |||
to BluePhoenix Shareholders | |||||||||
Discontinued_Operation_Tables
Discontinued Operation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Discontinued Operation Additional Disclosures [Abstract] | ' | ||||||||
Discontinued Operation | ' | ||||||||
Year ended December 31, | |||||||||
2013 | 2012 | ||||||||
(in thousands, except per share data) | |||||||||
Revenues | $ | - | $ | 9,243 | |||||
Cost of revenues | 16 | 7, 510 | |||||||
Gross profit | (16 | ) | 1, 733 | ||||||
Research and development costs | - | 1, 118 | |||||||
Selling, general, and administrative expenses | 2 | 1,331 | |||||||
Loss on realization of shareholdings | 372 | 740 | |||||||
Operating profit | (390 | ) | (1,456 | ) | |||||
Financial expenses, net | 9 | 1 | |||||||
Loss before provision for income taxes | (399 | ) | (1,457 | ) | |||||
Provision for income taxes | - | 12 | |||||||
Net loss | $ | (399 | ) | $ | (1,469 | ) | |||
Major classes of assets and liabilities | ' | ||||||||
December 31, | |||||||||
2012 | |||||||||
(in thousands) | |||||||||
Assets: | |||||||||
Cash and cash equivalents | $ | 9 | |||||||
Account Receivable | 535 | ||||||||
Long term assets | 247 | ||||||||
Total Assets | 791 | ||||||||
Liabilities: | |||||||||
Account Payables | 467 | ||||||||
Long term liabilities | - | ||||||||
Total Liabilities | 467 | ||||||||
$ | 324 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Computer and peripheral equipment [Member] | Minimum [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 20.00% |
Computer and peripheral equipment [Member] | Maximum [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 33.00% |
Computer and peripheral equipment [Member] | Majority [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 33.00% |
Office furniture and equipment [Member] | Minimum [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 6.00% |
Office furniture and equipment [Member] | Maximum [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 15.00% |
Office furniture and equipment [Member] | Majority [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 7.00% |
Leasehold improvements [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate, description | 'Over the shorter of lease term or the life of the assets |
Motor vehicles [Member] | ' |
Accounting Policies [Line Items] | ' |
Annual depreciation rate | 15.00% |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Accounting Policies (Textual) | ' | ' |
Restricted deposit of company | $35,000 | ' |
Stock-based Compensation | 599,000 | 1,702,000 |
Unrecognized stock-based compensation costs | 1,000,000 | ' |
Unrecognized compensation cost, recognition period | '3 years | ' |
Unbilled accounts receivable | 1,200,000 | 786,000 |
Advertising costs | 109,000 | 10,000 |
Loss from derivatives not designated as hedging instruments | $4,000 | ' |
Minimum [Member] | ' | ' |
Accounting Policies (Textual) | ' | ' |
Finite-lived intangible asset, useful life | '5 years | ' |
Maximum [Member] | ' | ' |
Accounting Policies (Textual) | ' | ' |
Finite-lived intangible asset, useful life | '12 years | ' |
Certain_Transactions_Details
Certain Transactions (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | 31-May-12 | Feb. 28, 2013 | 31-May-12 | Apr. 30, 2011 | Dec. 31, 2013 | Jun. 30, 2012 | Jun. 30, 2012 | Jun. 30, 2012 | |
TIS [Member] | Appbuilder Technology [Member] | Appbuilder Technology [Member] | Appbuilder Technology [Member] | Bluephoenix Knowledge Management Systems Ltd [Member] | Liacom Systems Ltd [Member] | Bridge Quest Inc [Member] | Three Shareholders Assignment And Assumption Debt [Member] | Three Shareholders Assignment And Assumption Debt [Member] | Bridge Loan [Member] | Lake Union [Member] | Prescott [Member] | Columbia [Member] | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total consideration for sale of subsidiary | ' | ' | ' | $72,000 | $12,500,000 | ' | ' | $550,000 | $1,750,000 | $6,500 | ' | ' | ' | ' | ' | ' |
Escrowed funds related to business acquisition | ' | ' | ' | ' | 3,800,000 | 900,000 | 2,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | 5,000,000 | 500,000 | ' | ' | ' |
Stated interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' |
Interest rate, description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Accrued interest can be converted every three months either by the lenders or by the company into the company's ordinary shares. Upon conversion of the accrued interest, the number of shares will be determined according to the lower of 20-day volume weighted average price per share (three trading-days prior to the payment date- every quarter) or $3 per share. | ' | ' | ' | ' | ' |
Additional loans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' |
Debt conversion, shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,221,027 | 1,230,820 | 1,226,545 |
Due date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-May-14 | 31-May-12 | ' | ' | ' | ' |
Gain on sales of subsidiaries and AppBuilder | -786,000 | -1,195,000 | -4,000,000 | -30,000 | ' | ' | ' | -1,123,000 | -703,000 | -372,000 | ' | ' | ' | ' | ' | ' |
Increase (decrease) in goodwill | ' | ' | ' | ' | ' | ' | ' | 391,000 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' |
Interest disposed of during period | ' | ' | ' | ' | ' | ' | ' | ' | 51.00% | ' | ' | ' | ' | ' | ' | ' |
Debt conversion, shares issued, value | $9,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | $2,592 | $2,560 |
Restricted cash | 35 | 33 |
Derivatives liabilities - warrants | -311 | -370 |
Total fair value of assets | 2,316 | 2,223 |
Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | 2,592 | 2,560 |
Restricted cash | 35 | 33 |
Derivatives liabilities - warrants | ' | ' |
Total fair value of assets | 2,627 | 2,593 |
Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | ' | ' |
Restricted cash | ' | ' |
Derivatives liabilities - warrants | -311 | -370 |
Total fair value of assets | -311 | -370 |
Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Cash and cash equivalents | ' | ' |
Restricted cash | ' | ' |
Derivatives liabilities - warrants | ' | ' |
Total fair value of assets | ' | ' |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Cost | $9,422 | $9,736 |
Accumulated Depreciation | 9,135 | 9,174 |
Depreciation expenses | 287 | 562 |
Computer and peripheral equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Cost | 8,601 | 8,604 |
Accumulated Depreciation | 8,354 | 8,244 |
Office furniture and equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Cost | 529 | 611 |
Accumulated Depreciation | 434 | 473 |
Leasehold improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Cost | 269 | 465 |
Accumulated Depreciation | 331 | 429 |
Motor vehicles [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Cost | 23 | 56 |
Accumulated Depreciation | $16 | $28 |
Property_and_Equipment_Net_Det1
Property and Equipment, Net (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Property Plant And Equipment, Net (Textual) | ' | ' |
Depreciation expenses | $155 | $276 |
Goodwill_Details
Goodwill (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 |
Goodwill [Line Items] | ' | ' |
Goodwill, gross - Balance as of January 1 | $56,053 | $54,316 |
Goodwill related to sale of subsidiaries | -1,737 | ' |
Accumulated impairment losses at the beginning of the period | -41,815 | -41,815 |
Goodwill - Balance as of January 1 | 12,501 | 12,501 |
Goodwill, gross - Balance at December 31 | 54,316 | 54,316 |
Accumulated impairment losses at the end of the period | -41,815 | -41,815 |
Goodwill - Balance as of December 31 | $12,501 | $12,501 |
Intangible_Assets_and_Others_N2
Intangible Assets and Others, Net (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Original amount | $51,234 | $51,234 |
Accumulated amortization | 51,234 | 50,957 |
Intangible assets, net | ' | 277 |
Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '5 years | ' |
Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '12 years | ' |
Customer related intangible assets [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Original amount | 4,968 | 4,968 |
Accumulated amortization | 4,968 | 4,718 |
Customer related intangible assets [Member] | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '5 years | ' |
Customer related intangible assets [Member] | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Finite-lived intangible asset, useful life | '8 years | ' |
Technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Original amount | 46,266 | 46,266 |
Accumulated amortization | $46,266 | $46,239 |
Finite-lived intangible asset, useful life | '5 years | ' |
Intangible_Assets_and_Others_N3
Intangible Assets and Others, Net (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets and Others, Net [Abstract] | ' | ' |
Amortization of intangible assets | $277 | $1,532 |
Accrued_Severance_Pay_Net_Deta
Accrued Severance Pay, Net (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued Severance Pay, Net [Abstract] | ' | ' |
Accrued severance pay | $1,063 | $1,150 |
Less - amount funded | 773 | 742 |
Accrued severance pay, noncurrent | $290 | $408 |
Accrued_Severance_Pay_Net_Deta1
Accrued Severance Pay, Net (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Accrued Severance Pay, Net [Abstract] | ' | ' |
Severance Costs | $137 | $310 |
Loans_from_Banks_and_Others_De
Loans from Banks and Others (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Debt Instrument [Line Items] | ' | ' | |
Long-term debt | $202 | $210 | |
Less - current portion | -40 | -217 | |
Long-term debt, noncurrent | 162 | 281 | |
Ministry of Production in Italy [Member] | ' | ' | |
Debt Instrument [Line Items] | ' | ' | |
Long-term debt | 202 | 210 | |
Debt instrument, average spread interest rate during the period | 0.87% | [1] | ' |
Due To Banks [Member] | ' | ' | |
Debt Instrument [Line Items] | ' | ' | |
Long-term debt | $0 | $288 | |
Debt Instrument, Description of Variable Rate Basis | 'Libor | ' | |
Debt instrument, average spread interest rate during the period | 4.40% | [1] | ' |
[1] | The interest is paid on a quarterly basis. |
Loans_from_Banks_and_Others_De1
Loans from Banks and Others (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Loans from Banks and Others [Abstract] | ' | ' |
First year (current portion) | $40 | $217 |
Second year | 40 | 121 |
Third year | 40 | 39 |
Fourth year and thereafter | 82 | 121 |
Total | $202 | $210 |
Loans_from_Banks_and_Others_De2
Loans from Banks and Others (Details Textual) (Short Term Bank Credit One [Member], USD $) | 1 Months Ended | |
Apr. 30, 2011 | Dec. 31, 2011 | |
Short Term Bank Credit One [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt instrument, face amount | $5,000,000 | ' |
Stated interest rate | 3.25% | ' |
Maturity date | 31-May-12 | ' |
Stock issued to lenders as consideration | 169,000 | ' |
Lock-up period | '90 days | ' |
Unamortized discount amount | ' | 300,000 |
Short term loan, Description | 'The principal of $5 million less the unamortized discount was presented on a Net basis as short term bank credit. | ' |
Discount from allocation of short term loan | $1,000,000 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Office Facilities [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Fiscal 2014 | $123 |
Fiscal 2015 | 25 |
Fiscal 2016 | ' |
Fiscal 2017 | ' |
Total payments due | 148 |
Vehicles, Equipment, and Other [Member] | ' |
Operating Leased Assets [Line Items] | ' |
Fiscal 2014 | 75 |
Fiscal 2015 | 19 |
Fiscal 2016 | 6 |
Fiscal 2017 | ' |
Total payments due | $100 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2007 | Dec. 31, 2013 | |
Ministry of Production in Italy [Member] | Ministry of Production in Italy [Member] | |||
Other Commitments [Line Items] | ' | ' | ' | ' |
Rent expense | $253,000 | $760,000 | ' | ' |
Royal commitment, percent of funded product sales | 3.00% | ' | ' | ' |
Royalty commitment, maximum percent of grant linked to product sales | 100.00% | ' | ' | ' |
Contingent liability, maximum potential royalty payment | 264,000 | ' | ' | ' |
Proceeds from issuance of debt and other | ' | ' | 585,000 | ' |
Percent of proceeds considered long-term debt | ' | ' | 63.50% | ' |
Percent of proceeds considered a grant | ' | ' | 36.50% | ' |
Maturity date | ' | ' | 30-Sep-18 | ' |
Debt instrument, minimum interest rate | ' | ' | 0.87% | ' |
Long-term debt | $202,000 | $210,000 | ' | $202,000 |
Equity_Details_1
Equity (Details 1) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 441,589 |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 235,760 |
$ 1.80 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 300,000 |
Weighted Average Remaining Contractual Life | '8 years 3 months 26 days |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 175,005 |
Exercise Price | $1.80 |
$ 3.87 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 70,000 |
Weighted Average Remaining Contractual Life | '9 years 3 months 11 days |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 21,389 |
Exercise Price | $3.87 |
$ 4.15 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 40,000 |
Weighted Average Remaining Contractual Life | '9 years 4 months 21 days |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 7,777 |
Exercise Price | $4.15 |
$ 10.16 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 6,250 |
Weighted Average Remaining Contractual Life | '5 years 7 months 6 days |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 6,250 |
Exercise Price | $10.16 |
$ 10.20 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 6,250 |
Weighted Average Remaining Contractual Life | '6 years 3 months |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 6,250 |
Exercise Price | $10.20 |
$ 11.08 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 10,000 |
Weighted Average Remaining Contractual Life | '5 years 7 months 6 days |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 10,000 |
Exercise Price | $11.08 |
$ 20.00 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 7,600 |
Weighted Average Remaining Contractual Life | '2 years |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 7,600 |
Exercise Price | $20 |
$ 24.00 [Member] | ' |
Options Outstanding | ' |
Number Outstanding on December 31, 2013 | 1,489 |
Weighted Average Remaining Contractual Life | '5 months 1 day |
Options Exercisable | ' |
Number exercisable on December 31, 2013 | 1,489 |
Exercise Price | $24 |
Equity_Details_2
Equity (Details 2) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Number of Options | ' | ' | ||
Options outstanding at beginning of year | 351,287 | 283,117 | ||
Granted | 110,000 | 300,000 | ||
Exercised | ' | ' | ||
Forfeited | -19,698 | -231,830 | ||
Options outstanding at end of year | 441,589 | 351,287 | ||
Options exercisable at year-end | 235,760 | 120,037 | ||
Weighted Average Exercise Price | ' | ' | ||
Options outstanding at beginning of year | $3.48 | $13.40 | ||
Granted | $3.97 | $1.80 | ||
Forfeited | $12.95 | $13.40 | ||
Options outstanding at end of year | ' | $3.48 | ||
Weighted Average Fair Value | ' | ' | ||
Weighted-average fair value of options granted during the year | $2.45 | [1] | $1.13 | [1] |
[1] | The fair value of each option granted is estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted average assumptions: dividend yield of 0% for all years; expected volatility: 2013 - 69% and 2012 - 70%; risk-free interest rate: 2013 - 1.15% and 2012 - 1.44%; and expected life: 2013 - 6.06 years and 2012 - 6.5 years. |
Equity_Details_3
Equity (Details 3) (Restricted Share Units (RSU) [Member], USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Restricted Share Units (RSU) [Member] | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
RSUs outstanding at the beginning of the year | 192,923 | 57,497 | ||
Granted | 248,998 | [1] | 788,714 | [1] |
Vested | -124,622 | -563,125 | ||
Forfeited | -45,431 | -90,163 | ||
RSUs outstanding at the end of the year | 271,868 | 192,923 | ||
Weighted Average fair value at grant date | $4.09 | $2.57 | ||
[1] | The fair value of RSUs is established based on the market value of the Company's stock on the date of the award. The Company has expensed compensation costs, net of estimated forfeitures, applying the accelerated vesting method. |
Equity_Details_Textual
Equity (Details Textual) | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||
Nov. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | |
USD ($) | USD ($) | USD ($) | USD ($) | ILS | ILS | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | ||
USD ($) | ||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ordinary shares, shares authorized | ' | 17,500,000 | 17,500,000 | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' |
Ordinary shares, par value per share | ' | $0.04 | ' | ' | 0.04 | ' | 0.01 | ' | ' | ' | ' | ' |
Ordinary shares, shares outstanding | ' | ' | 15,089 | ' | ' | 6,310,978 | ' | 11,404,460 | 10,629,253 | 6,310,978 | 5,930,048 | 5,805,778 |
NASDAQ minimum bid requirement, per share | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury stock, shares held by company | ' | 56,070 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury stock, total consideration | ' | $2,084,000 | $6,716,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock repurchase program, shares repurchased | ' | ' | ' | 11,249 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock repurchase program, value of shares repurchased | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants outstanding | ' | 102,343 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | 1.56 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants, contractual term | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | ' | 311,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued during period, new issues | ' | ' | ' | ' | ' | ' | ' | 625,000 | ' | ' | ' | ' |
Issuance expenses | 210,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares, net | ' | $2,290,000 | ' | ' | ' | ' | ' | $7,000 | ' | ' | ' | ' |
Equity_Details_Textual_1
Equity (Details Textual 1) (USD $) | 12 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 1996 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ||
Stock-based compensation | 599 | 1,702 | ' | ||
Exercise price for options under plan | 3.97 | 1.8 | ' | ||
Intrinsic value of options outstanding | 229 | 229 | ' | ||
Additional paid-in capital [Member] | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ||
Stock-based compensation | 599 | 1,702 | ' | ||
Stock Options [Member] | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ||
Stock options remain available for future awards | 32,424 | ' | ' | ||
Ordinary shares reserved for future issuance | ' | ' | 1,050,000 | ||
Shares outstanding, remaining contractual life | '10 years | ' | ' | ||
Dividend yield | 0.00% | 0.00% | ' | ||
Expected volatility | 69.00% | 70.00% | ' | ||
Risk-free interest rate | 1.15% | 1.44% | ' | ||
Expected life | '6 years 22 days | '6 years 6 months | ' | ||
Pre-vesting forfeiture rate | 15.00% | ' | ' | ||
Stock Options [Member] | Minimum [Member] | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ||
Exercise price for options under plan | 1.8 | ' | ' | ||
Vesting period of shares under plan | '3 years | ' | ' | ||
Unvested options, term for forfeiture, post employment | '30 days | ' | ' | ||
Stock Options [Member] | Maximum [Member] | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ||
Exercise price for options under plan | 24 | ' | ' | ||
Vesting period of shares under plan | '4 years | ' | ' | ||
Unvested options, term for forfeiture, post employment | '90 days | ' | ' | ||
Restricted Share Units (RSU) [Member] | ' | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ||
Vesting period of shares under plan | '3 years | ' | ' | ||
Shares granted | 248,998 | [1] | 788,714 | [1] | ' |
Shares approved for immediate vesting on grant date | 33,998 | 367,712 | ' | ||
[1] | The fair value of RSUs is established based on the market value of the Company's stock on the date of the award. The Company has expensed compensation costs, net of estimated forfeitures, applying the accelerated vesting method. |
Income_taxes_Details
Income taxes (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Income taxes [Abstract] | ' | ' |
Net operating losses carry forwards | $29,446 | $28,617 |
Provisions for employee rights and other temporary differences | 74 | 70 |
Deferred tax assets before valuation allowance | 29,520 | 28,687 |
Valuation allowance | -29,520 | -28,687 |
Deferred tax assets | ' | ' |
Deferred tax liability | ' | ' |
Deferred tax assets (liability), net | ' | ' |
Income_taxes_Details_1
Income taxes (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income taxes [Abstract] | ' | ' |
Domestic (Israel) | ($3,073) | ($22,124) |
Foreign | -20 | 12,737 |
Loss before taxes on income | ($3,093) | ($9,387) |
Income_taxes_Details_2
Income taxes (Details 2) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Current: | ' | ' | ||
Domestic (Israel) | ' | ' | ||
Foreign | 36 | 54 | ||
Current tax provision (benefit) | 36 | 54 | ||
Taxes related to prior yearsDeferred | 261 | [1] | 167 | [1] |
Deferred taxes, net | ' | ' | ||
Total provision(benefit) for income taxes | $297 | $221 | ||
[1] | In 2013 and 2012, mainly related to withholdings tax for prior years that cannot be realized due to liquidation of subsidiaries. |
Income_taxes_Details_3
Income taxes (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income taxes [Abstract] | ' | ' |
Loss before income taxes, per consolidated statements of income | ($3,093) | ($9,387) |
Theoretical income tax benefit(25% in 2012 and 2013) | -774 | -2,347 |
Decrease in taxes resulting from the following differences: | ' | ' |
Carry - forward losses for which the Company providedvaluation allowance | 833 | 2,465 |
Effect of different tax rates in foreign subsidiaries | -53 | -109 |
Taxes related to previous years | 261 | 167 |
Non-deductible expenses | 30 | 45 |
Income tax expense (benefit) in the consolidated statementsof income for the reported year | $297 | $221 |
Effective tax rate | ' | ' |
Income_taxes_Details_Textual
Income taxes (Details Textual) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes [Line Items] | ' | ' |
Corporate income tax rate | 25.00% | 25.00% |
Net operating loss carry forwards | $86 | ' |
Israel [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Net operating loss carry forwards | $73 | ' |
Israel [Member] | Subsequent Event [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Corporate income tax rate | 26.50% | ' |
Supplementary_Financial_Statem2
Supplementary Financial Statement Information (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Supplementary Financial Statement Information [Abstract] | ' | ' |
Trade accounts receivable | $2,140 | $2,623 |
Less allowance for doubtful accounts | -180 | -178 |
Trade accounts receivable, net | $1,960 | $2,445 |
Supplementary_Financial_Statem3
Supplementary Financial Statement Information (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Supplementary Financial Statement Information [Abstract] | ' | ' |
Prepaid expenses | $114 | $240 |
Short-term lease deposits | 24 | 42 |
Government departments and agencies | 101 | 299 |
Other current assets, total | $239 | $581 |
Supplementary_Financial_Statem4
Supplementary Financial Statement Information (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Supplementary Financial Statement Information [Abstract] | ' | ' |
Government departments and agencies | ' | $160 |
Employees and wage-related liabilities | 745 | 602 |
Accrued expenses and other current liabilities | 157 | 188 |
Accounts payable and accruals, total | $902 | $950 |
Supplementary_Financial_Statem5
Supplementary Financial Statement Information (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long - lived Assets | $287 | $593 |
Israel [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long - lived Assets | 77 | 342 |
U.S.A. [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long - lived Assets | 91 | 126 |
Europe And Other [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Long - lived Assets | $119 | $125 |
Supplementary_Financial_Statem6
Supplementary Financial Statement Information (Details 4) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenues | $8,537 | $10,624 |
North America [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenues | 4,147 | 3,182 |
Europe [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenues | 2,465 | 4,488 |
Israel [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenues | 1,791 | 1,382 |
Other [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Revenues | $134 | $1,572 |
Supplementary_Financial_Statem7
Supplementary Financial Statement Information (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Supplementary Financial Statement Information [Abstract] | ' | ' |
Interest income | $0 | $8 |
Foreign currency translation adjustments (see Note 1A3) | -43 | -186 |
Interest expense | -54 | -308 |
Forward derivatives and realized gain on marketable securities | ' | -3 |
Change in fair value of derivatives and discount amortization | -17 | -4,869 |
Financial expenses, net | ($114) | ($5,358) |
Supplementary_Financial_Statem8
Supplementary Financial Statement Information (Details 6) (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | ' | ' |
Amount for basic and diluted loss per share | ($4,032) | ($11,428) |
Denominator: | ' | ' |
Denominator for basic net loss per share - weighted average of shares | 10,770,142 | 7,896,557 |
Effect of dilutive securities | ' | ' |
Denominator for diluted net earnings per share - weighted average shares and assuming dilution | 10,770,142 | 7,896,557 |
Basic and diluted loss per share attributed to BluePhoenix Shareholders | ($0.37) | ($1.45) |
Supplementary_Financial_Statem9
Supplementary Financial Statement Information (Details Textual) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Expenses for doubtful accounts | 2 | 178 | ' |
Allowance deducted from bad debts | 0 | 91 | ' |
Total revenue [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Concentration risk, Percentage | 13.90% | ' | 10.00% |
Total number of customers | '1 | '2 | '0 |
Trade Receivable [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Concentration risk, Percentage | 10.00% | 10.00% | ' |
Total number of customers | '1 | '3 | ' |
Customers One [Member] | Total revenue [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Concentration risk, Percentage | ' | 14.30% | ' |
Customer Two [Member] | Total revenue [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Concentration risk, Percentage | ' | 11.70% | ' |
Discontinued_Operation_Details
Discontinued Operation (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Revenues | ' | $9,243 |
Cost of revenues | 16 | 7,510 |
Gross profit | -16 | 1,733 |
Research and development costs | ' | 1,118 |
Selling, general, and administrative expenses | 2 | 1,331 |
Loss on realization of shareholdings | 372 | 740 |
Operating profit | -390 | -1,456 |
Financial expenses (income), net | 9 | 1 |
Loss before provision for income taxes | -399 | -1,457 |
Provision for income taxes | ' | 12 |
Net loss | ($399) | ($1,469) |
Discontinued_Operation_Details1
Discontinued Operation (Details 1) (Bridge Quest [Member], USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Bridge Quest [Member] | ' | ' |
Assets: | ' | ' |
Cash and cash equivalents | ' | $9 |
Account Receivable | ' | 535 |
Long term assets | ' | 247 |
Total Assets | ' | 791 |
Liabilities: | ' | ' |
Account Payables | ' | 467 |
Long term liabilities | ' | ' |
Total Liabilities | ' | 467 |
Net Assets | ' | $324 |
Discontinued_Operation_Details2
Discontinued Operation (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 28, 2013 | 31-May-12 | |
Bridge Quest [Member] | Liacom Systems Ltd [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' |
Interest disposed of during period | ' | ' | ' | ' | 51.00% |
Total consideration for sale of subsidiary | ' | ' | ' | $6,500 | $1,750,000 |
Gain on sales of subsidiaries and AppBuilder | ($786,000) | ($1,195,000) | ($4,000,000) | ($372,000) | ($703,000) |