Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Ability Inc. |
Entity Central Index Key | 1,652,866 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,017 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Trading Symbol | ABIL |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 2,576,415 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 1,944 | $ 11,840 | |
Restricted deposits | 1,758 | ||
Restricted deposit for put option | 12,028 | ||
Accounts receivable | 1,975 | 3,173 | |
Inventory | 50 | 481 | |
Accumulated costs with respect to Projects in excess of progress payments | 151 | ||
Due from controlling shareholders | 196 | ||
Income tax receivable | 162 | 267 | |
Other receivables | 2,351 | 353 | |
Total Current Assets | 6,482 | 30,247 | |
NON-CURRENT ASSETS: | |||
Restricted deposit for put option | 12,143 | ||
Property and equipment, net | 1,388 | 1,588 | |
Total Non-Current Assets | 13,531 | 1,588 | |
Total Assets | 20,013 | 31,835 | |
CURRENT LIABILITIES: | |||
Accrued payroll and other compensation related accruals | 135 | 270 | |
Trade payables, accrued expenses and other accounts payable | 4,056 | 4,952 | |
Put option liability | 11,900 | ||
Income tax payable | 32 | ||
Accrued expenses and accounts payable with respect to Projects | 2,541 | 4,734 | |
Progress payments in excess of accumulated costs with respect to projects | 306 | ||
Total Current Liabilities | 7,038 | 21,888 | |
NON-CURRENT LIABILITIES: | |||
Put option liability | 12,143 | ||
Accrued severance pay | 241 | 245 | |
Total Non-Current Liabilities | 12,384 | 245 | |
Total Liabilities | 19,422 | 22,133 | |
COMMITMENTS AND CONTINGENCIES | |||
SHAREHOLDERS' EQUITY | |||
Ordinary shares $0.0001 par value, 20,000,000 shares authorized, 2,576,415 shares issued and outstanding at December 31, 2017 and 2016 | [1] | 3 | 3 |
Preferred shares $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2017 and 2016 | [1] | ||
Additional paid-in-capital | 18,560 | 18,560 | |
Accumulate deficit | (17,972) | (8,861) | |
Total Shareholders' Equity | 591 | 9,702 | |
Total Liabilities and Shareholders' Equity | $ 20,013 | $ 31,835 | |
[1] | On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares.. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value per share | $ 0.001 | $ 0.001 |
Preferred shares, authorized | 5,000,000 | 5,000,000 |
Preferred shares, outstanding | ||
Preferred shares, issued | ||
Ordinary shares, par value per share | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 20,000,000 | 20,000,000 |
Ordinary shares, shares issued | 2,576,415 | 2,576,415 |
Ordinary shares, shares outstanding | 2,576,415 | 2,576,415 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Consolidated Statements of Comprehensive Income (Loss) [Abstract] | ||||
Revenues | $ 2,972 | $ 16,508 | $ 52,151 | |
Cost of revenues | 2,957 | 8,617 | 29,654 | |
Gross profit | 15 | 7,891 | 22,497 | |
Selling and marketing expenses | 3,033 | 5,323 | 3,305 | |
General and administrative expenses | 6,016 | 9,662 | 1,317 | |
Operating income (loss) | (9,034) | (7,094) | 17,875 | |
Financial expenses (income), net | 77 | (127) | 99 | |
Income (loss) before income taxes | (9,111) | (6,967) | 17,776 | |
Income tax expenses | 1,086 | 3,023 | ||
Net and comprehensive income (loss) | $ (9,111) | $ (8,053) | $ 14,753 | |
Earnings (loss) per ordinary share - basic and diluted (U.S. dollars) | [1] | $ (3.71) | $ (3.27) | $ 6 |
[1] | On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares.. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Preferred shares | Ordinary Shares | Additional paid-in-capital | Retained earnings (accumulated deficit) | |||
Balance at Dec. 31, 2014 | $ 1,725 | $ 3 | $ 32 | $ 1,690 | ||||
Balance, shares at Dec. 31, 2014 | [1] | 2,528,415 | ||||||
Recapitalization of Cambridge accumulated deficit and issuance of ordinary shares as part of the Reverse Merger | 18,528 | 18,528 | ||||||
Dividends | (17,251) | (17,251) | ||||||
Net and comprehensive income (loss) | 14,753 | 14,753 | ||||||
Balance at Dec. 31, 2015 | 17,755 | $ 3 | 18,560 | (808) | ||||
Balance, shares at Dec. 31, 2015 | [1] | 2,528,415 | ||||||
Issuance of shares as part of the Reverse Merger | [1] | [2] | ||||||
Issuance of shares as part of the Reverse Merger, shares | [1] | 48,000 | ||||||
Net and comprehensive income (loss) | (8,053) | (8,053) | ||||||
Balance at Dec. 31, 2016 | 9,702 | $ 3 | 18,560 | (8,861) | ||||
Balance, shares at Dec. 31, 2016 | [1] | 2,576,415 | ||||||
Net and comprehensive income (loss) | (9,111) | (9,111) | ||||||
Balance at Dec. 31, 2017 | $ 591 | $ 3 | $ 18,560 | $ (17,972) | ||||
Balance, shares at Dec. 31, 2017 | [1] | 2,576,415 | ||||||
[1] | On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares.. | |||||||
[2] | Less than $0.5 thousand |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ (9,111) | $ (8,053) | $ 14,753 |
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities: | |||
Depreciation | 168 | 149 | 132 |
Amortization | 321 | 193 | |
Impairment of inventory | 201 | ||
Impairment of property and equipment | 114 | ||
Capital (gain) loss from sale of property and equipment | 30 | (10) | 18 |
Changes in operating assets and liabilities: | |||
Restricted deposits | 1,758 | (1,433) | 162 |
Accounts receivable | 1,198 | 631 | (3,756) |
Inventory | (50) | (311) | (799) |
Deferred tax | (423) | ||
Other receivables | (1,773) | 1,459 | (1,180) |
Interest earned on restricted deposit for put option | 128 | (128) | |
Accrued payroll and other compensation related accruals | (135) | 210 | (291) |
Trade payables, accrued expenses and other accounts payable | (896) | 3,108 | 1,030 |
Income tax payable | 73 | (2,674) | 2,426 |
Accrued expenses and accounts payable with respect to Projects | (2,193) | (2,233) | 2,618 |
Due to related company | (600) | 600 | |
Progress payments in excess of accumulated costs with respect to Projects (accumulated costs with respect to Projects in excess of progress payments) | 457 | (1,170) | (5,304) |
Accrued severance pay | (4) | (25) | 171 |
Total Adjustments | (918) | (2,519) | (4,596) |
Net cash provided by (used in) operating activities | (10,029) | (10,572) | 10,157 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (187) | (182) | (353) |
Proceeds from sale of property and equipment | 124 | 10 | 158 |
Loans repaid by related company, net | 709 | ||
Net cash provided by (used in) investing activities | (63) | (172) | 514 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from the Reverse Merger, net of transaction costs | 18,995 | ||
Dividends paid | (14,951) | ||
Due from / to controlling shareholders, net | 196 | 378 | (595) |
Withholding tax paid by the Company on behalf of the controlling shareholders' with respect to dividend distributed | (4,393) | ||
Withholding tax paid by the controlling shareholders' to the Company with respect to dividend distributed, to be paid by the Company to the Israel Tax Authority | 770 | ||
Net cash provided by (used in) financing activities | 196 | (3,245) | 3,449 |
Net change in cash and cash equivalents | (9,896) | (13,989) | 14,120 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 11,840 | 25,829 | 11,709 |
CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 1,944 | 11,840 | 25,829 |
Cash paid during the years for: | |||
Interest and banks' charges | 18 | 36 | 40 |
Income tax | $ 7 | $ 3,758 | $ 568 |
Organization and Business Opera
Organization and Business Operation | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Business Operation [Abstract] | |
ORGANIZATION AND BUSINESS OPERATION | NOTE 1 - ORGANIZATION AND BUSINESS OPERATION: a. General: Ability Inc. (the “Company” or “INC”) was incorporated under the laws of the Cayman Islands on September 1, 2015, originally as Cambridge Holdco Corp., an exempted company. INC was formed as a wholly-owned subsidiary of Cambridge Capital Acquisition Corporation (“Cambridge”), a special purpose acquisition corporation, incorporated under the laws of Delaware on October 1, 2013. Cambridge closed its initial public offering and a simultaneous private placement on December 23, 2013. On December 23, 2015, upon a merger of Cambridge into INC, with INC surviving the merger and becoming the public entity, INC consummated a business combination whereby it acquired Ability Computer & Software Industries Ltd., an Israeli company (“ACSI”), by way of a share exchange (the “Reverse Merger”), following which ACSI became INC’s wholly-owned subsidiary. Upon the closing of the Reverse Merger, INC’s ordinary shares and warrants began trading on the NASDAQ Capital Market under the symbols “ABIL” and “ABILW”, respectively. INC’s warrants were delisted on April 18, 2016 and since such date have traded on OTC Pink under the symbol “ABIWF”. On January 12, 2016 INC’s ordinary shares were listed for trading on the Tel Aviv Stock Exchange. The Company, ACSI and Ability Security Systems Ltd. (“ASM”) are jointly defined as the “Group”. On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, the effect of such consolidation was applied retrospectively for all amount of shares, warrants, related par value and others presented in the notes below. b. The Reverse Merger: 1) ACSI’s shareholders prior to the closing of the Reverse Merger, Anatoly Hurgin and Alexander Aurovsky, (the “Controlling Shareholders”) received in the Reverse Merger: 1,621,327 ordinary shares of INC (reflecting approximately 63% of INC’s issued and outstanding ordinary shares immediately following the Reverse Merger); $18.1 million in cash and an additional number of ordinary shares of INC to be issued upon and subject to ACSI achieving certain net income targets following the Reverse Merger, as described below (the “Net Income Shares”), as consideration for their shares of ACSI. Furthermore, of the ordinary shares received, each of the Controlling Shareholders have the right, on one occasion during the 60 day period following the third anniversary of the closing of the Reverse Merger, to put to INC all or part of his pro rata portion of 117,327 ordinary shares that he received in the share exchange for an amount in cash equal to (1) (x) the number of shares being put multiplied by (y) $101.0 per share plus (2) his pro rata portion of interest, if any, on $11.9 million deposited into an escrow account by INC to fund the payment of the purchase price for the put option if it is exercised. The put option terms were updated subsequently, see Note 3 for additional information. 2) Migdal Underwriting and Business Initiatives Ltd. (“Migdal”) received in the Reverse Merger: 48,000 ordinary shares of INC; $1.2 million in cash and up to 25,350 Net Income Shares, all in consideration for services provided by them with respect to the Reverse Merger. 3) INC acquired from the sole shareholder of ASM, Eyal Tzur, (the “ASM Former Shareholder”) 16% of the shares of ASM, a variable interest entity with ACSI as its primary beneficiary, for $0.9 million in cash and a put option to sell his remaining holdings to INC in exchange for 48,000 of INC’s ordinary shares and up to 25,350 Net Income Shares. The put option was exercised in January 2016. 4) ACSI’s transaction costs with respect to the Reverse Merger were $6.3 million and include Migdal’s service fees ($1.2 million in cash and ordinary shares valued at $4.3 million as detailed above) and other consulting expenses (the “Transaction Costs”). 5) The Controlling Shareholders, Migdal and ASM Former Shareholder are entitled to receive Net Income Shares based on ACSI’s achievement of specified net income targets in the fiscal years 2015 to 2018 as set out below: Number of the Company’s ordinary shares Year Ending December 31, Net Income Target Controlling Shareholders Migdal ASM Former Shareholder Total 2015 $ 27,000,000 338,400 10,800 10,800 360,000 2016 $ 40,000,000 173,900 5,550 5,550 185,000 2017 $ 60,000,000 188, 000 6,000 6,000 200,000 2018 $ 80,000,000 94,000 3,000 3,000 100,000 In the event that the INC fails to satisfy the net income target for any fiscal year but net income for such fiscal year is ninety percent (90%) or more of the net income target for such fiscal year, then INC is required to issue to the Controlling Shareholders, Migdal and ASM Former Shareholder, the pro rata portion of Net Income Shares relating to the percentage achieved. The net income targets for the years ended December 31, 2017, 2016 and 2015 were not achieved. 6) The remaining funds in the restricted trust account of Cambridge amounted to $81.3 million of which: $21.6 million was paid to the holders of 213,676 ordinary shares of Cambridge who elected to convert their shares into cash upon consummation of the Reverse Merger; $18.1 million and $11.9 million were paid to the Controlling Shareholders and deposited in an escrow account to secure their put option, respectively; $0.9 million was paid to ASM Former Shareholder; $7.8 million was used to pay outstanding accounts payable and accrued expenses of Cambridge; $2 million was used to pay for the Company’s Transaction Costs. The balance of $19 million was released to ACSI. c. Business operations: The Group provides advanced interception, geolocation, monitoring and cyber intelligence tools to serve the needs and increasing challenges of security and intelligence agencies, military forces, law enforcement and homeland security agencies worldwide. d. Regulatory matters: The Israeli Control Order Regarding the Engagement in Encryption Items, 1998 regulated under the Encryptions Export Control Department in the Israeli Ministry of Defense (the “IMOD”) controls development, import, export, and sale of all encrypted items (the “Decryption Regime”). The Israeli Defense Export Control Law, 2007 (the “2007 Law”) regulated under DECA (the Defense Export Control Agency in IMOD) regulates the marketing and export of defense equipment, transfer of defense know-how and the provision of defense services, taking into account national security considerations, foreign relations considerations, international obligations and other interests of the State of Israel. ACSI exports from Israel certain products and components that are not subject to Israeli export control. ASM, a wholly owned subsidiary of the Company, is an Israeli company registered with DECA as a certified exporter for the marketing and export of “controlled” products of Israeli origin, or “controlled” products that are exported from Israel. However, for the most part, the ACSI’s products are manufactured outside of Israel and therefore are not subject to the general provisions of the 2007 Law. Thus, ACSI strives to ensure that components of ACSI’s systems (that otherwise would be subject to DECA control) are sent to the customers directly by the foreign suppliers of such components, which are located outside of Israel, and are installed or integrated there by ACSI or others under its responsibility. The interception systems that contain decryption capabilities of ACSI and ASM may be subject to the Decryption Regime and therefore have obtained necessary licenses thereunder. e. ASM: ACSI and the ASM Former Shareholder were parties to a long-term agreement (the “JV Agreement”) pursuant to which ACSI contributed substantial business efforts while ASM was responsible mainly for the regulatory aspects of pursuing business opportunities in the field of DECA controlled products. The JV Agreement could be terminated and/or the activities could be transferred to ACSI’s full ownership at any time, subject to ACSI’s exclusive discretion. ACSI and the Controlling Shareholders were significantly involved in the redesign of ASM’s operations, in such manner that in essence, the operations are conducted only in favor of ACSI (ASM had no other activities other than on behalf of ACSI). Moreover, according to the JV Agreement, ASM was required to negotiate and determine any project terms and sign contracts with the clients - all with full transparency, coordination and advance consent from ACSI, as applicable. Upon the closing of the Reverse Merger, the JV Agreement was terminated while maintaining its terms for the existing projects. As mentioned above, in January 2016, the ASM Former Shareholder exercised his put option, resulting in ASM becoming a wholly-owned subsidiary of the Company. ACSI had the power to govern ASM’s operations through the provision requiring its consent of any new client which ASM wishes to accept. ACSI was entitled to all but 3% commission (the return that ASM Former Shareholder was entitled to as a service provider) of ASM’s net results which are transferred to the Company, and was fully responsible for indemnifying ASM for any losses incurred as part of their joint operations (the ASM Former Shareholder does not have any obligation to absorb ASM’s losses) or any negative consequences with respect to the performance of a project. When the activities of ASM commenced (following conclusion of the JV Agreement) it did not have equity at risk (no equity and no subordinated loans). All the equity that ASM has achieved is based on transactions involving ACSI. There were no restrictions on ASM’s assets. Any required financial guarantees were provided by ACSI. Given ACSI’s exposure and rights to the outcome of ASM’s operations, among other factors described above, ACSI concluded that ASM was a variable interest entity (“VIE”) prior to the time the ASM Former Shareholder exercised his put option and that ACSI was its primary beneficiary. Therefore, the consolidated results for the year ended December 31, 2015 include the financial information of all three entities (the Company, ACSI and ASM). f. Going concern: As of December 31, 2017, the Company had an accumulated deficit of $17,972 thousand, cash and cash equivalents of $1,944 thousand, a negative working capital of $556 thousand and a net loss of $9,111 thousand for the year ended December 31, 2017. Due to a significant decline in revenues and an increase in legal and professional services fees, the Company has suffered losses from operations, and it has an accumulated deficit that, among other reasons, raises substantial doubt about its ability to continue as a going concern. The Company’s independent registered public accounting firm, in their report on the Company’s audited financial statements for the year ended December 31, 2017 expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon, among other things, cash flow from customers for ongoing projects, the Controlling Shareholders’ financial support of the Company, a decrease in litigation costs, the Company’s ability to remain listed on the NASDAQ Capital Market and favorable resolution of the pending lawsuits and SEC investigation. The Company expects to continue incurring losses and negative cash flows from operations in the foreseeable future. As a result of these expected losses and negative cash flows from operations, along with the Company’s current cash position, the Company only has sufficient cash on its balance sheet to finance its operations for a period of up to two months from the date of filing with the SEC of the Company’s Annual Report on Form 20-F for the year ended December 31, 2017. The accompanying consolidated financial statements do not include any adjustments that might result relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this risk and uncertainty. The net loss for the year ended December 31, 2017 includes significant legal and professional expenses. Management is investing significant marketing efforts in order to generate additional revenue and simultaneously is continuing to decrease its expenses, primarily its legal and professional services fees in order to regain profitability. Additionally, the Company plans to raise capital through the sale of equity securities or debt and settling certain of the lawsuits that are pending. There is no assurance however, that the Company will be successful in regaining profitability or obtaining the level of financing needed for its operations. If the Company is unsuccessful in generating additional revenue to support its operations or raising additional capital, it may need to further reduce activities, curtail or cease operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Basis of presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Group’s financial position, results of operations, changes in shareholders’ equity and cash flows for the periods presented. The Reverse Merger was accounted for as a reverse merger whereby the Company was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on ACSI comprising the ongoing operations of the combined company, ACSI’s senior management comprising the senior management of the combined company, and that the former shareholders of ACSI are the controlling shareholders of the Company after the Reverse Merger. The Reverse Merger was considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Reverse Merger was treated as the equivalent of ACSI issuing shares for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Merger are those of ACSI, and therefore the historical consolidated financial statements presented are the consolidated financial statements of ACSI and the ordinary shares and the corresponding capital amounts pre-merger have been retroactively restated as ordinary shares reflecting the exchange ratio in the Reverse Merger. b. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries, ACSI and ASM. All intercompany accounts and transactions have been eliminated in the consolidation. c. Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. d. Foreign currency: The currency of the primary economic environment in which the operations of the Group is conducted is the U.S. dollar (“dollar” or “$”); thus, the dollar is the functional currency of the Group. Therefore, the Group’s transactions and balances denominated in dollars are presented at their original amounts, while non-dollar transactions and balances have been re-measured to dollars and the relating gains and losses are reflected in the statements of comprehensive income (loss) as financial income or expenses, as appropriate. All amounts are presented in dollars, unless otherwise indicated, and are rounded to the nearest thousand. e. Revenue recognition: The Group generates revenues from sales of products, which include hardware, software, connection to supportive infrastructure, integration services, training and warranty, as well as revenues from Software as a Service (“SaaS”). The Group sells its products (the “Products”) and provides services (the “Services”) directly to end users and resellers and also participates as a subcontractor of prime contractors in joint projects and as a prime contractor in projects with resellers (the “Projects”). Products and Services: Revenues from sales of Products of which the final acceptance of the product is specified by the customer, and the acceptance is deemed substantive, are recognized when the Group has delivered the Products to the customer and received final acceptance, the revenue can be reliably measured and collectability of the receivables is reasonably assured. The revenues are deferred until the acceptance criteria have been met. Revenues from sales of Services are recognized ratably in the period in which the services are rendered (connection to supportive infrastructure is generally over one year). The Group provides a one year warranty for the majority of its Products. Based on the Group’s experience, the provision is de minims. Projects: Revenues from Projects are recognized upon final acceptance from the customers, as such acceptance is deemed substantive. Under such method, costs are accumulated on the balance sheet until final acceptance is received. Similarly, amounts billed to customers are also deferred until final acceptance is received. To the extent that the amount of accumulated costs exceeds the amount of advance (or progress) payments received or billed by the Group, the excess is reflected on the balance sheet as a current asset, separated from inventory. To the extent that the amount of advance (or progress) payments received or billed by the Group exceeds the amount of accumulated costs, the excess is reflected as a liability on the balance sheet. In instances where revenues are derived from sales of third-party vendors’ products or services, revenues are recognized on a gross basis and the related costs are recognized within cost of revenues, when the Group has the following indicators for gross reporting: (i) it is the primary obligor of the sales arrangements; (ii) it is subject to inventory risks of physical loss; (iii) it has latitude in establishing prices; and (iv) it has discretion in suppliers’ selection and assumes credit risks on receivables from customers. SaaS Revenues: The Group’s SaaS multiple-element arrangements are typically comprised of subscription and support fees from customers accessing the Group’s software and set-up fees. The Group does not provide the customer the contractual right to take possession of the software at any time during the hosting period under these arrangements. The Group recognizes revenue for subscription and support services over the arrangement period originating when the subscription service is made available to the customer and the contractual hosting period has commenced. Usage based fees: Revenues are recognized in the period in which subscribers use the related services. Other multiple elements arrangements: When a sale arrangement contains multiple elements, the Group allocates revenues to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor TPE is available. The Group establishes VSOE of selling price using the price charged for a deliverable when sold separately. When VSOE cannot be established, the Group attempts to establish selling price of each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Group’s go-to-market strategy typically differs from that of its peers and its offerings contain a significant differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Group is unable to reliably determine what similar competitor products’ selling prices are on a standalone basis. Therefore, the Group is typically not able to determine TPE. The best ESP is established considering several external and internal factors including, but not limited to, historical sales, pricing practices and geographies in which the Group offers its products. The determination of ESP is based on applying significant judgment to weigh such factors. f. Advertising costs: Advertising costs are expensed as incurred. In 2017, 2016 and 2015, advertising expenses were $53 thousand, $24 thousand and $26 thousand, respectively. g. Related parties: Related parties include the Controlling Shareholders and entities controlled by them. h. Fair value measurements: Fair value is defined as the price that would be received by selling an asset or paid to transfer a liability (i.e. the ‘exit price’) in an arms’ length transaction between willing market participants at the measurement date. The applicable financial accounting rules establish a hierarchy for inputs used in measuring fair value. The hierarchy is divided into three levels based on the reliability of inputs: Level 1 Level 2 Level 3 The Group’s financial assets and liabilities as of December 31, 2017 and 2016 are measured based on Level 1 inputs. i. Inventory: The inventory items consist of purchased systems and are stated at the lower of cost or market. Cost is determined using the “First-In, First-Out” method of inventory accounting. The valuation of inventory items requires the Group to make estimates regarding excess or obsolete inventories. The purchased systems are utilized typically for one of the following purposes: (i) future projects; (ii) demo; and (iii) spare parts for installed systems. The first utilization suggests that the systems should be classified as inventory while the second and third suggest it should be classified as property and equipment. In order to reflect those utilizations appropriately between the inventory and property and equipment line items, the Group performed an aggregated analysis which suggested that such systems should be classified as inventory for the first year from purchase date, on such date tested for impairment and then classified to property and equipment and amortized over four years from that date, see also below for the amortization period. j. Property and equipment, net: Property and equipment are stated at cost, less accumulated depreciation and amortization. Upon the retirement or disposition of property and equipment, the related costs and accumulated depreciation and amortization are removed and any related gain or loss is recorded in the statements of operations and comprehensive income (loss). Repairs and maintenance that do not extend the life, or improve an asset are expensed in the periods incurred. The Group evaluates its property and equipment for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. Should impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Useful life (years) Software systems (from classified date, see also above) 25 4 Vehicles 15 7 Leasehold improvements 10-20 5-10 Office furniture and equipment 7-10 10-14 Computers, electronics and related 15-33 3-7 k. Income taxes: Deferred tax asset and liability accounts’ balances are determined based on differences between the financial reporting and 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 Group accounts for deferred tax on non-distributed income that are subject to income tax once distributed and when there is an intent to distribute them. The Group applies the two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. l. Earnings (loss) per share: The Group calculates basic earnings or loss per share by dividing net income or loss by the weighted-average number of ordinary shares outstanding during the year. However, consistent with the reverse merger accounting, the calculation of the weighted-average number of ordinary shares includes 2,459,088 shares (which include also 48,000 ordinary shares that were issued to the ASM Former Shareholder upon exercise of its put option on its remaining ordinary shares of ASM) assumed to be outstanding as of January 1, 2013. Further, the outstanding shares subject to put options were excluded, consistent with the accounting treatment of a put option liability. Diluted earnings (loss) per share would give effect to dilutive warrants and other potential ordinary shares outstanding during the period, considering the treasury stock method. The outstanding warrants were “out-of-the-money” and the issuance of the Net Income Shares was not probable at any given year and therefore excluded from the calculation. Basic and diluted earnings (loss) per ordinary share data were computed as follows: Year Ended December 31, 2017 2016 2015 Net income (loss) (U.S. dollars in thousands) $ (9,111 ) $ (8,053 ) $ 14,753 Weighted-average ordinary shares outstanding - basic and diluted* 2,459,088 2,459,088 2,459,088 Earnings (loss) per ordinary basic and diluted (U.S. dollars) $ (3.71 ) $ (3.27 ) $ 6.00 * On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares. m. Contingencies: The Group is involved in various commercial, government investigation and other legal proceedings that arise from time to time. The Group records accruals for these types of contingencies to the extent that the Group concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Group will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Group accrues for the minimum amount within the range. The Group records anticipated recoveries under existing insurance contracts that are virtually certain of occurring at the gross amount that is expected to be collected. Legal costs are expensed as incurred. n. Recently Issued Accounting Pronouncements: Not yet adopted in current period: 1) In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC 605”), Revenue Recognition, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. ASU 2014-09 permits the use of either a retrospective or cumulative effect transition method. The Group adopted ASU 2014-09 along with the related additional ASUs on Topic 606 (Collectively, “ASC 606”) on January 1, 2018, using the modified retrospective transition method. Contracts that are substantially completed will be excluded from the transition adjustment. The Group has reviewed all of its contracts with customers and has implemented the required process, data, and system changes to comply with the requirements of ASC 606. The Group did not have any material cumulative-effect adjustment as a result of the adoption of ASC 606. In addition, the adoption of ASC 606 will not have any material impact on the Group consolidated financial statement line items in the year of adoption. The Group will make the additional required disclosures under Topic 606, starting with the Group’s consolidated financial statements that include the initial adoption date. 2) In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a Consensus of the FASB Emerging Issues Task Force). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update also requires an entity to disclose the nature of restrictions on its cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The Group typically has restrictions on certain amounts of cash and cash equivalents, primarily consisting of amounts used to secure bank guarantees in connection with sales contract performance obligations, and expect to continue to have similar restrictions in the future. The Group currently reports changes in such restricted amounts as cash flows from operating activities on its consolidated statement of cash flows. This standard will change that presentation. The Group adopted ASU No. 2016-18 on January 1, 2018 and is currently reviewing it to assess other potential impact on its consolidated financial statements. 3) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financial or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The new guidance is effective for all periods beginning after December 15, 2018. The Group is currently evaluating the effects that the adoption of ASU No. 2016-02 will have on its consolidated financial statements. |
Restricted Deposits
Restricted Deposits | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Deposits [Abstract] | |
RESTRICTED DEPOSITS | NOTE 3 - RESTRICTED DEPOSITS: The restricted deposits as of December 31, 2016 totaled NIS 6,760 thousand ($1,758 thousand) relates to a deposit in connection with one of the legal proceedings, see Note 8.a.8. for additional information. Regarding the restricted deposit in connection with the put option provided to the Controlling Shareholders - on November 13, 2017, the Company, the Controlling Shareholders and the Bank Leumi Le-Israel Trust Company Ltd., as escrow agent entered into an amendment (the “Amendment”) to the escrow agreement among such parties dated December 23, 2015, the terms of such escrow agreement presented in Note 1.b.1. Pursuant to the Amendment, the Put Option Period will now commence on January 1, 2019 and will end on March 1, 2021. Such change resulted in a classification of the restricted deposit and the put opton liability from current assets and current liabilities to non-current assets and non-current liabilities, respectively as of December 31, 2017. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4 - PROPERTY AND EQUIPMENT, NET: Composition: December 31, 2017 2016 (U.S. dollars in thousands) Cost: Software Systems $ 1,361 $ 1,105 Vehicles 554 606 Leasehold improvements 347 355 Office furniture and equipment 121 121 Computers, electronics and related 13 13 $ 2,396 $ 2,200 Less: accumulated depreciation and amortization 1,008 612 Property and equipment, net $ 1,388 $ 1,588 |
Accumulated Costs with Respect
Accumulated Costs with Respect to Projects in Excess of Progress Payments (Progress Payments in Excess of Accumulated Costs with Respect to Projects) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | |
ACCUMULATED COSTS WITH RESPECT TO PROJECTS IN EXCESS OF PROGRESS PAYMENTS (PROGRESS PAYMENTS IN EXCESS OF ACCUMULATED COSTS WITH RESPECT TO PROJECTS) | NOTE 5 - ACCUMULATED COSTS WITH RESPECT TO PROJECTS IN EXCESS OF PROGRESS PAYMENTS (PROGRESS PAYMENTS IN EXCESS OF ACCUMULATED COSTS WITH RESPECT TO PROJECTS): Composition: December 31, 2017 2016 (U.S. dollars in thousands) Accumulated costs $ 547 $ 548 Advanced payments from customers (853 ) (397 ) Accumulated costs with respect to projects in excess of progress payments (progress payments in excess of accumulated costs with respect to projects) $ (306 ) $ 151 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Related Parties [Abstract] | |
RELATED PARTIES | NOTE 6 - RELATED PARTIES: a. Purchases from related parties, loans to related parties and due from Controlling Shareholders 1. Anatoly Hurgin owns 100% of Alan Ltd. (“Alan”) which holds a 60% interest in Active Intelligence Labs Ltd. (Israel) (“AIL”). ACSI purchased products which are integrated into its innovative tailored solutions totaling $780 thousand and $420 thousand from AIL in the years ended December 31, 2015 and 2014, respectively. The debt as of December 31, 2015 ($600 thousand) was repaid at August 2, 2016. 2. In in the years ended December 31, 2014 and 2013, ACSI granted Alan loans in the aggregate amounts of $555 thousand and $205 thousand, respectively. The loans bore annual interest of 3.3%, linked to the Israeli consumer price index, and were repaid in December 2015. 3. The amounts due from the Controlling Shareholders as of December 31, 2016 were repaid to ACSI on April 19, 2017. See Note 8.a.8. for additional information. b. Dividends: In the year ended December 31, 2011, ACSI declared dividends of NIS 10,760 thousand ($2,833 thousand) of which 15% income tax was withheld (the “Net Amount”) and NIS 1,140 thousand ($300 thousand) and NIS 474 thousand ($125 thousand) were paid to the Israel Tax Authority in the years ended December 31, 2013 and 2014, respectively. NIS 894 thousand ($197 thousand), NIS 1,379 thousand ($231 thousand), NIS 2,350 thousand ($817 thousand) and NIS 4,523 thousand ($1,163 thousand) of the Net Amount were paid to the Controlling Shareholders in the years ended December 31, 2012, in 2013, 2014 and 2015, respectively. Additionally, in the fourth and the second quarters of 2015, ACSI declared dividends of NIS 42,825 thousand ($11,000 thousand) and NIS 23,560 thousand ($6,251 thousand), respectively, of which 20% income tax was withheld and outstanding as of December 31, 2015 (income tax of NIS 13,277 thousand ($3,404 thousand) was paid to the Israel Tax Authority in January 2016), while the net amounts were paid to the Controlling Shareholders. It was agreed as part of ACSI’s tax assessments for the three years ended December 31, 2014 that were finalized on May 30, 2016 that the Controlling Shareholders withholding tax for the 2015 dividends should be NIS 16,400 thousand ($4,260 thousand). ACSI paid the difference to the Israel tax authority and the Controlling Shareholders compensated ACSI for such difference. c. Related parties’ employment agreements and compensation: 1. The Group entered into new employment agreements with each of its two Controlling Shareholders. One of the Controlling Shareholders is the Chairman of the Board of Directors and the Chief Executive Officer and the other is a member of the Board of Directors and the Chief Technology Officer. Each of the employment agreements will remain in effect unless terminated as described below. Pursuant to each employment agreement, the executive’s gross salary is NIS 120,000 ($31,200) per month commencing on January 1, 2016. Each executive is also entitled to receive social benefits: however, each of the executives agreed to a temporary 50% reduction in the salaries, effective as from May 2017. Each employment agreement provides that the executive is entitled to receive an annual performance bonus of up to NIS 360,000 ($93,600) based on annual performance goals agreed upon by the Group and the executive (such performance goals were not met during the years ended December 31, 2017 and 2016 and therefore no performance bonus was recorded or paid). Each employment agreement may be terminated by the Group or the executive upon 120 days’ prior written notice, in which case, the executive is entitled to receive salary and benefits during such 120 days and for a period of eight months thereafter. The executive will be entitled to accept new employment after the expiration of such eight month period. In addition, the Group, by resolution of the Company’s Board of Directors, may terminate the employment agreements at any time by a written notice with cause (as defined in the employment agreements). The Controlling Shareholders’ compensation related expenses in the years ended December 31, 2017, 2016 and 2015 amounted to NIS 2,391 thousand ($664 thousand), NIS 3,562 thousand ($928 thousand) and NIS 487 thousand ($125 thousand), respectively. 2. The Group entered into a new employment agreement with a Controlling Shareholder’s son commencing March 22, 2016 and was employed by the Group until June 20, 2016. Based on the agreement he was entitled to a monthly gross salary of NIS 10,000 ($2,600) and other related social benefits. |
Ordinary Shares, Preferred Shar
Ordinary Shares, Preferred Shares and Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Ordinary Shares, Preferred Shares and Warrants Abstract] | |
ORDINARY SHARES, PREFERRED SHARES AND WARRANTS | NOTE 7 - ORDINARY SHARES, PREFERRED SHARES AND WARRANTS: a. Ordinary shares: The Company is authorized to issue 20,000,000 ordinary shares with a par value of $0.001 per share, of which 2,528,415 were issued and outstanding as of December 31, 2015. During January 2016, the Company issued 48,000 ordinary shares par value $0.001 in connection with ASM Former Shareholder’s exercising his put option on his remaining shares in ASM. As a result the ordinary shares issued and outstanding as of that that date and as of December 31, 2017 and 2016 were 2,576,415. The Company is authorized to issue 5,000,000 preferred shares with a par value of $0.001 per share, of which none were issued and outstanding as of December 31, 2017 and 2016. On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018. The effect of such consolidation was applied retrospectively for all the amount of shares, warrants, related par value and others presented in this note and elsewhere in the consolidated financial statements. b. Warrants: Since its inception, Cambridge issued 855,744 warrants which were assumed by the Company in the merger (see Note 1). Each warrant entitles its holder to purchase one ordinary share at a price of $115.00 and expires on December 17, 2018. The Company may redeem the warrants in the event that the traded ordinary share price is at least $175.00 per share (for any 20 trading days within a 30-day trading period) on a “cashless basis”. On March 21, 2016, the Company received a letter from NASDAQ informing that its warrants did not meet the minimum 400 Round Lot Holder requirement for initial listing on the NASDAQ and that the Staff had determined to initiate procedures to delist the Company’s warrants from NASDAQ. As the Company did not appeal this determination, the Company’s warrants were delisted from NASDAQ on April 18, 2016 and since such date have traded on the “OTC Pink” market under the symbol “ABIWF”. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES: a. Legal proceedings: 1) SEC Investigation As the Company disclosed in its Report on Form 6-K furnished with the United States Securities and Exchange Commission (“SEC”), on February 16, 2017, the Company received a subpoena from the SEC. The subpoena requests, among other things, information regarding the transaction with Cambridge Capital Acquisition Corporation, the restatement that occurred in May 2016, and financial and business information. In furtherance of the investigation, the SEC has been obtaining testimony from the Company’s officers among others. The Company and its officers are fully cooperating with the investigation. As a result of the investigation, the Company may incur significant legal and accounting expenses. Furthermore, the Company cannot predict what, if any, actions the SEC may take against the Company or any of its officers, or the timing or duration of the investigation. 2) Re. Ability, Inc. Securities Litigation On May 25, 2016, a purported class action lawsuit, captioned In re Ability Inc. Securities Litigation, Master File No. 16-cv-03893-VM (S.D.N.Y) was filed against the Company, Anatoly Hurgin and Avi Levin in the Southern District of New York in the United States. The complaint asserts claims pursuant to Section 10(b) and 20(a) of the Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder on behalf of a putative class of all purchasers of the Company’s ordinary shares between September 8, 2015 and April 29, 2016. The complaint broadly alleges that certain of the Company’s public statements were false, and that the Company materially overstated its income and failed to disclose that it had material weaknesses in its internal controls. The complaint does not specify the amount of damages sought. On July 25, 2016, a second purported class action lawsuit was filed against the Company, Anatoly Hurgin and Avi Levin in the Southern District of New York in the United States. The complaint asserts claims pursuant to Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder on behalf of a putative class of all purchasers of the Company’s ordinary shares between September 8, 2015 and April 29, 2016. The complaint broadly alleges that the Company’s financial statements were false and misleading and were not prepared in conformity with GAAP, nor was the financial information a fair presentation of the Company’s operations. The complaint does not specify the amount of damages sought. These two putative class actions have been consolidated into one action and co-lead plaintiffs have been appointed. In accordance with a schedule adopted by the court, co-lead plaintiffs filed an amended complaint on April 28, 2017. In the amended complaint, co-lead plaintiffs have added Benjamin Gordon and BDO Ziv Haft as defendants. The amended complaint asserts claims pursuant to Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder against all defendants, a claim pursuant to Section 20(a) of the Exchange Act against Messrs. Hurgin, Levin and Gordon, a claim pursuant to Section 11 of the Securities Act against the Company, BDO Ziv Haft and Messrs. Hurgin and Gordon, and a claim pursuant to Section 15 of the Securities Act against Messrs. Hurgin, Levin and Gordon on behalf of a putative class of all purchasers of the Company’s ordinary shares between September 8, 2015 and April 29, 2016. The amended complaint does not specify the amount of damages sought. The complaint broadly alleges that certain of the Company’s public statements were false, that it had material weaknesses in its internal controls, that its financial statements were false and misleading and were not prepared in conformity with GAAP, nor was the financial information a fair presentation of the Company’s operations, and that its registration statement contained material misstatements and omissions. On August 17, 2017, the court ordered a stipulated schedule recognizing that all parties had agreed to a mediation on October 17, 2017 and all deadlines were reset until after that mediation took place. On December 21, 2017, the Company entered into a Memorandum of Understanding (“MOU”) to memorialize an agreement in principle to settle all claims of participating class members in the class actions consolidated in the lawsuit captioned In re Ability Inc. Securities Litigation, No. 16-cv-03893 (VM), pending in the Southern District of New York (the “New York Class Action Litigation”). The MOU provides for an aggregate settlement payment of $3.0 million, which includes all plaintiffs’ attorneys’ fees and expenses, as well as any other class notice and administrative fees related to the resolution of the New York Class Action Litigation. On April 25, 2018, the motion for settlement was filed with the court. The settlement includes the dismissal of all claims against the Company and the named individuals in the New York Class Action Litigation. It is expected that $250,000 of the $3.0 million settlement amount will be funded by the Company and the remaining $2.75 million will be funded with the Company’s insurance proceeds or contributed by other defendants. The ultimate impact of this class action settlement on the Levy Litigation (Case No. 2015-CA-003339), Pottash Litigation (Case No. 502016CA013823), Hammel Litigation (Case No. 50-2018-CA-000762-MB-AG) and the Ladragor Litigation (C.A. 8482-05-16), each as further described herein, has yet to be determined, however, some or all of the claims raised in such other actions may be deemed to be resolved, settled and disposed of as part of such class action settlement. The Company intends to continue to attempt to settle and resolve the litigation. There is no assurance that the court will approve the settlement. In connection with the entry into of the MOU, the Company entered into an agreement with its insurer (the “Discharge Agreement”) pursuant to which the Company agreed to discharge the insurer from liability with respect to any U.S. claims (excluding the Ladragor Litigation in Israel) in consideration for an aggregate settlement amount of $5.0 million, of which $2.5 million is to be used for settlement of the New York Class Action Litigation and the remaining amount is to be used to cover various defense and legal costs. Accordingly, no insurance proceeds will be available for any U.S. claims other than with respect to the settlement of the New York Class Action Litigation. 3) Levy Litigation On October 15, 2015, plaintiff Brian Levy, purportedly on behalf of himself and all others similarly situated, filed a first amended class action and derivative complaint against Cambridge Holdco Corp., ACSI, the individual members of the Cambridge board of directors, and plaintiff also named Cambridge Capital Acquisition Corp. and the Company as nominal defendants in case number 2015CA003339 in the Circuit Court of the 15th Judicial Circuit in Palm Beach County, Florida. The complaint generally alleged, among other things, that the members of the Cambridge board of directors breached their fiduciary duties to Cambridge stockholders by approving the contemplated merger with ACSI, and that ACSI was aiding and abetting the Cambridge board of directors in the alleged breach of their fiduciary duties. The action sought injunctive relief, damages and reimbursement of fees and costs, among other remedies. On February 17, 2016, ACSI filed a motion and supporting memorandum of law to dismiss the plaintiff’s amended complaint on the grounds that the Court lacks personal jurisdiction over ACSI; the derivative aiding and abetting claim was extinguished by the closing of the Business Combination and the claims against ACSI are insufficiently pleaded. On September 15, 2016, the Court granted the defendants’ motion to dismiss in its entirety without prejudice, and the Judge dismissed the amended complaint. However, the court provided the plaintiff with 45 days within which to file a further amended complaint. On October 22, 2016, a second amended complaint was filed by the plaintiff. On January 17, 2017, the defendants filed a motion to dismiss the second amended complaint on multiple grounds, including various pleading deficiencies that the plaintiff has failed to adequately correct. On March 9, 2017, the plaintiff filed a response to the motion to dismiss. On June 21, 2017, the Judge entered an order (the “June 21 Order”) granting a partial motion to dismiss as to the counts against ACSI due to lack of personal jurisdiction over ACSI. ACSI was therefore dismissed from the case without prejudice, and it is unclear at this stage whether the plaintiff will attempt to bring ACSI directly back into the action in the future. On the other hand, pursuant to the Judge’s ruling, the Company still remains as a necessary party and named defendant in the case. In the June 21 Order, the Judge also partially denied the motion to dismiss the second amended complaint, and the purported class action and derivative claims against the individual defendants for alleged breach of fiduciary duties, failure to disclose and ultra vires acts still remain pending. On July 21, 2017, the Company and each of the individual defendants filed their answer and affirmative defenses raising numerous substantive and legal defenses to the alleged claims set forth in the second amended complaint. On August 7, 2017, plaintiff’s counsel filed a motion for class certification and incorporated memorandum of law. The Company and defendants filed papers in opposition to such motion, and on March 13, 2018, the Court entered an order denying plaintiff’s motion for class certification and providing that the plaintiff may attempt to file a further amended complaint within 30 days after the order denying the request for class certification. Plaintiff has now filed a verified third amended class action and derivative complaint attempting to assert the same type of claims raised in the defective second amended complaint. The Company intends to vigorously defend against such claims, and to continue to explore potential opportunities to settle and resolve the litigation. If the case does not settle, it is impossible to predict the probable outcome of these legal proceedings at this time in light of the relatively early stage of the proceedings. 4) Pottash Litigation On December 13, 2016, a complaint, captioned Pottash v. Benjamin Gordon et. al., Case No. 50-2016-CA-013823, was filed in the 15th Circuit, Palm Beach County, Florida in the United States, against the Company, its former director, Benjamin Gordon, BG Strategic Advisors, LLC, Cambridge Capital, LLC and Jonathan Morris, in his capacity as trustee of the Gordon Family 2007 Trust. On January 23, 2017, the plaintiff filed an amended complaint. On March 2, 2017, the Company filed a motion to dismiss all of the claims asserted against it in the amended complaint. On the same day, Mr. Gordon and BG Strategic Advisors also filed motions seeking the dismissal of the amended complaint in its entirety. On November 27, 2017, the plaintiff filed a second amended complaint against the Company, Benjamin Gordon and Jonathan Morris. The complaint alleges violations of Florida State securities laws, common law fraud, negligent misrepresentation and conspiracy. On January 17, 2018, the Company filed a motion to dismiss seeking the dismissal of all claims asserted against it on various legal grounds. The co-defendants also filed motions seeking dismissal of the second amended complaint. The Court will be scheduling a special set hearing on the pending motions to dismiss. The Company intends to continue vigorously defend against this action. It is impossible to predict the probable outcome of these legal proceedings at this time in light of the relatively early stage of the proceedings. 5) Hammel Litigation On January 19, 2018, a complaint, captioned Hammel v. Benjamin Gordon et. al (Case No. 50-2018-CA-000762-MB-AG), was filed in the 15th Circuit, Palm Beach County, Florida in the United States, against the Company, Benjamin Gordon and Jonathan Morris. The complaint alleges that the defendants, through a series of misrepresentations and omissions, induced the plaintiff, Robert Hammel, to invest in the stock of Cambridge. Plaintiff alleges to have lost more than $1.6 million due to the defendants’ conduct. In a summons issued in February 26, 2018, the Company was also named as one of the defendants. The Company has received a service copy of the complaint, and will be filing a motion to dismiss the claims asserted in the complaint on or before May 1, 2018. The Company intends to vigorously defend against this action. Given that these proceedings are in the preliminary stage, the timing or outcome of this matter cannot be predicted at this time. 6) Patent Infringement Litigation On October 27, 2015, ACSI received a notice alleging that its GSM interception and decryption systems allegedly fall within the claims of an Israeli patent owned by the claimant. The notice demands an accounting of all such products manufactured, exported, sold or otherwise commercialized by ACSI and/or any entity on its behalf. On November 12, 2015, a lawsuit, captioned Dr. Elad Barkan et al. v. Ability Computer & Software Industries Ltd. et al. C.C. 29551-11-15, alleging patent infringement, violation of a non-disclosure agreement, trade secret misappropriation and unjust enrichment, was filed with the Central District Court in Israel by a company and an individual against ACSI and its controlling shareholders. The amount sought in the lawsuit for registration fee purposes is NIS 5.0 million (approximately $1.4 million), however the plaintiffs have not yet quantified the amount of the compensation demanded. Furthermore, the plaintiffs demanded that ACSI and/or its controlling shareholders immediately cease any infringement of the patent as well as any further use of the claimed technology, including the further manufacture, export, sale or marketing of the alleged infringing products. On April 5, 2016, ACSI and its controlling shareholders filed a statement of defense, and on April 13, 2016 a preliminary hearing was held. On May 23, 2016, the plaintiffs filed a petition to add the Company, Ability Limited, a company wholly-owned by Anatoly Hurgin, and ASM as defendants and to amend the statement of claim. The parties then agreed to appoint a mediator in an attempt to settle the dispute out of court, and agreed, with the approval of the court, on a stay of proceedings until September 2016. However, the parties did not reach an agreement by that time. On October 9, 2016, upon the Company’s application and with the plaintiffs’ consent, the court decided to stay the proceedings until a decision is handed down on a related pending application to the Israeli Patent Registrar to revoke the patent in dispute. On August 23, 2017, the Deputy Patent Registrar decided to reject the revocation application, and on August 28, 2017 the plaintiffs informed the court of the deputy registrar’s decision, and requested to resume the proceedings and instruct the defendants (the Company and its controlling shareholders) to file their response to the petition to join the Company, Ability Limited and ASM as defendants (a response was filed on September 25, 2017, and a rejoinder was filed by the plaintiffs on October 22, 2017). On December 25, 2017, the defendants filed a petition to order the plaintiffs to deposit a guarantee for costs of the trial (a response was filed on January 14, 2018, and a rejoinder was filed on January 17, 2018). A second preliminary hearing was held on January 17, 2018, in which the court decided that the plaintiffs were allowed to amend the statement of claim without having the consent either of the defendants or of the Company, Ability Limited and ASM to the content of the amended statement of claim, and without waiving the right to request dismissal of the amended suit (partially or completely). The court also decided that the petition to order the plaintiffs to deposit a guarantee will be adjudicated after the statement of case is amended. On March 15, 2018 the plaintiffs filed an amended statement of claims against the original defendants, as well as against the Company, Ability Limited and ASM. The defendants are required to file an amended statement of defense by May 15, 2018. A third preliminary hearing was set to June 13, 2018. The Company intends to continue vigorously defend against this action. The Group believes that the suit’s probability of success, as filed, is less than even, and we intend to vigorously defend against it. In addition, after the Deputy Patent Registrar decided to reject the revocation application on August 23, 2017, the patentee, Dr. Barkan, filed an amended version of certain claims on September 28, 2017. The amendment was subject to opposition by third parties until December 28, 2017. On December 27, 2017, the Company filed with the Patent Registrar an opposition to the request to have the specification of the patent amended. On March 15, 2018, the Company filed its statement of claims, arguing that the request should be dismissed for various reasons. Dr. Barkan is required to file his statement of claims by June 15, 2018. 7) Ladragor Litigation On May 4, 2016, the Company was served with a lawsuit and a motion for the certification of the lawsuit as class action, captioned Ladragror v. Ability Inc. et al. C.A. 8482-05-16, in the Tel Aviv District Court in Israel, filed, against the Company, Anatoly Hurgin, Alexander Aurovsky, and Benjamin Gordon and Mitchell Gordon. The claim alleges, among other things, that the Company misled the public in our public filings with regard to its financial condition and included misleading information (or omitted to include relevant information) in its financial statements published in connection with the January 12, 2016 listing of shares for trading on the Tel Aviv Stock Exchange. In addition, the claim alleges that the defendant directors breached their fiduciary duty under Israeli law towards the Company and its public shareholders. The claim alleges that the plaintiff suffered personal damages of NIS 137.7 (approximately $39.7), and estimates that its shareholders suffered damages of approximately NIS 23.3 million (approximately $6.72 million). On September 15, 2016, the Company filed a motion for a stay of proceedings, due to other pending class action lawsuits in the United States that also relate (among other things) to the stated causes of action and based on similar claims. The Court required the parties to update the Court on the status of the United States class actions by March 15, 2017. On March 15, 2017, the plaintiff filed an update and requested that proceedings be stayed until the completion of the internal investigation of the audit committee. On the same day, the Company filed a separate update with respect to the United States class actions, together with a motion for a stay of proceedings pending resolution of the consolidated United States class actions. On March 16, 2017, the Court held that the plaintiff must respond to the motion to stay proceedings pending resolution of the consolidated United States class actions. On March 26, 2017, the plaintiff filed a partial response, requesting an extension until May 15, 2017 to file a full response, alleging that the publication of the Company’s annual financial statements, together with the findings of the internal investigation, would affect its position on its motion to stay proceedings. On May 23, 2017, the Court granted the plaintiff the requested extension. On May 15, 2017, the plaintiff filed a motion asking for an additional three month extension to file a full response, among other things, as the Company had not filed its annual financial statements or published the findings of the internal investigation. On August 14, 2017, the Company and Messrs. Hurgin and Aurovsky filed a notice regarding their counsel substitution. In light of this, the judge decided on August 27, 2017 to recuse herself from the case. On August 21, 2017, the plaintiff filed a motion and an updated notice in which he claimed that the Company had not yet published the report of the internal investigation, and hence the reasons for granting him a continuance to file his response to the motion to stay of proceedings are still relevant. The plaintiff also informed the Court that in the U.S. proceedings, the parties agreed to mediation, and the mediation meeting was scheduled in October 2017. The plaintiff asked the Court to file an update notice in 90 days. On August 28, 2017, the Court ordered the parties to file an update notice on September 28, 2017. On September 28, 2017 and November 7, 2017 the plaintiff, the Company, and Messrs. Hurgin and Aurovsky updated the Court that the mediation process in the U.S. was still pending. On November 8, 2017, the Court ordered the parties to file an update notice in 90 days. On February 7, March 7 and April 12, 2018, the parties updated the Court that they are holding negotiations in order to settle the case, and requested extensions for filing the update notice. The parties are required to file the abovementioned notice on May 8, 2018. The Company intends to attempt to settle and resolve the litigation. If the case does not settle, the Company intends to continue vigorously defend against this action. Given that the proceeding is currently suspended, the timing or outcome of this matter cannot be predicted at this time. As referenced above in Note 8.a.2, the Ladragor Litigation is not subject to the Discharge Agreement. 8) Israeli Arbitration In January 2015, ACSI, Messrs. Anatoly Hurgin and Alexander Aurovsky, and a third party plaintiff entered into an arbitration process, following a claim filed with the Tel Aviv Magistrates Court in October 2014 by the plaintiff against ACSI and its former shareholders, claiming a right to review ACSI’s accounts and reserving the right to file a monetary claim. On September 14, 2016, the plaintiff presented the defendants with a settlement proposal for the resolution of all claims against the defendants and any entity affiliated with them in exchange of the full and final payment of an amount of NIS 8,450,000 (approximately $2,437,265), which was subsequently approved by the Company’s Board of Directors. On or about the time of the Board of Director's meeting at which (among things) the settlement proposal was approved, the plaintiff made claims that the proposal did not include VAT and that a settlement agreement has not been entered into between the parties. This dispute was referred to a new arbitration process, at the conclusion of which, a settlement was reached, according to which the parties agreed that the plaintiff would receive a total of NIS 8,142,000 (approximately $2,348,428), plus VAT. Thereafter, on February 20, 2017, such settlement was approved by the arbitrator and was made an arbitral award. Following the arbitral award and according to the determination of the Company’s Board of Directors, ACSI appointed an independent legal expert acting as an arbitrator to make a final determination as to the allocation of the settlement amount between the Company and Messrs. Hurgin and Aurovsky. On March 30, 2017, and as clarified on April 13, 2017, the legal expert determined that the Company shall be required to pay 70% of the settlement amount and the VAT and the remaining 30% of the settlement amount shall be paid by Messrs. Hurgin and Aurovsky. During the year ended December 31, 2017, the Company paid the entire settlement amount which was recorded during the year ended December 31, 2016 and in connection therewith, on April 19, 2017, each of Messrs. Hurgin and Aurovsky paid to the Company NIS 376,410 (approximately $98,000), or a total of NIS 752,820 (approximately $196,000) constituting their portion of the settlement amount. b. Lease commitments: The Group has the following lease agreements: 1) A 5 year lease agreement, with respect to an office space, expiring on November 30, 2017, with an option to extend for an additional five years. The monthly rent is NIS 25 thousand ($7 thousand) linked to the Israeli consumer products index. A 2.5 year lease agreement with respect to an office space, expiring on November 30, 2017, with an option to extend for an additional five years. The monthly rent is NIS 16 thousand ($4 thousand) linked to the Israeli consumer products index. Both options were exercised for additional five years up to November 30, 2022 based on an aggregate monthly rent of NIS 44 (approximately $13 thousand). 2) In the years ended December 31, 2017, 2016 and 2015, the rent expenses amounted to $130 thousand, $152 thousand and $128 thousand, respectively. c. Agreement with a Provider: On October 20, 2015 (the “Effective Date”), ACSI entered into an agreement with an unrelated company which is a service provider and an owner and licensor of telecommunications solutions (the “Provider”). The Provider granted ACSI an exclusive and non-transferable right and license for three years to market, promote, advertise, sell and distribute the Provider’s products directly to customers worldwide, in consideration for 50% of ACSI’s net income relating to those sales. The agreement sets minimum annual sales at $10 million. In case ACSI does not satisfy this minimum commitment at the end of any contract year, ACSI is required to pay the Provider a 15% penalty against the shortfall amount (maximum $1.5 million per year). In order to secure minimum sales and penalty, it was also agreed that ACSI pay the Provider monthly payments of $125 thousand. During the year ended December 31, 2015, ACSI paid the Provider $375 thousand. Those payments were recorded as prepayments in other receivables in the consolidated balance sheet as of December 31, 2015, as ACSI believed it will satisfy those sales. During the year ended December 31, 2016, ACSI continued to pay the monthly payments and paid the Provider an aggregated amount of $1,500 thousand. Those payments (along with the $375 thousand that were paid during the year ended December 31, 2015 and recorded initially as part of the balance sheet) were recorded as part of the selling and marketing expenses since ACSI succeeded to sell only one of the Provider products during the year ended December 31, 2016. The Provider waived its rights to the 50% net income share in connection with that sole 2016 sale in order to support his product marketing efforts in the relevant region. During the year ended December 31, 2016, ACSI and the Provider agreed that ACSI will be able to utilize the monthly payments through the entire agreement period and not only on an annual basis. d. Resignation and appointment of independent directors: On April 9, 2017, the Company received letters from each of Amnon Dick, Efraim Halevy, Amos Malka, Meir Moshe and Shalom Singer, representing all of the Company’s independent directors, tendering their resignation as a member of the Company’s Board of Directors and committees thereof, effective immediately (each, a “Resignation Letter” and collectively, the “Resignation Letters”). At the time of their resignations, Mr. Dick was the Chairman of the Board of Directors and a member of the Company’s audit committee and compensation committee; Mr. Halevy was a member of the Company’s nominating committee; Mr. Malka was a member of the Company’s compensation committee; Mr. Moshe was the Chairman of the Company’s audit committee and Chairman of its nominating committee; and Mr. Singer was the Chairman of the Company’s compensation committee and a member of its audit committee and nominating committee. Each of Messrs. Dick, Malka, Moshe and Singer stated in his respective Resignation Letter that his resignation was due to his approach to risk assessment and management of the Company’s affairs not being aligned with that of the Controlling Shareholders, which made him unable to contribute to the Company in a productive way. Each noted that, in view of the various challenges that the Company is currently facing, a shared vision and broad cooperation among the Company’s Controlling Shareholders and directors is required and that in view of the foregoing, and especially as he served as a director for only a few months, he does not believe it would be appropriate to continue to serve as a director of the Company Mr. Halevy did not state any reason for his resignation in his Resignation Letter. Following the resignation of the former independent directors, on May 15, 2017 the Company appointed Levi Ilsar, Brigadier General (Ret.) Eli Polak and Nimrod Schwartz to serve as independent directors on the Company’s Board of Directors and the audit, compensation and nominating committees thereof, in each case effective as of May 17, 2017. However, on June 29, 2017, Levi Ilsar, Eli Polak and Nimrod Schwartz, representing all of the Company’s independent directors, tendered their written resignations with immediate effect. Each of Messrs. Ilsar, Polak and Schwartz stated in his respective resignation notice that his resignation was due, among other things, to the lack of cooperation by management which prevented him from fulfilling his duties as an independent director. On July 5, 2017, the Company’s Board of Directors appointed three new independent directors, Avraham Dan, Naftali Granot and Limor Beladev, effective immediately. On July 24, 2017 and October 15, 2017, the Company’s Board of Directors appointed additional independent directors, Brigadier General (Ret.) Yair Cohen and Joseph Tenne, respectively, effective immediately. e. Other: During the first quarter of 2015, through an internal investigation conducted by ACSI, it was discovered that ACSI was a victim of fraud from an outside, unrelated third party. The fraud resulted in an unauthorized outgoing transfer to the third party by ACSI in the amount of $462 thousand. While ACSI reported the fraud to the police and to its bank, there can be no assurance that the funds will be recovered. Accordingly, the wire transfer amount has been recorded within general and administrative expenses in the statement of operations and comprehensive income for the year ended December 31, 2015. |
Revenue Classified by Geographi
Revenue Classified by Geographical Area | 12 Months Ended |
Dec. 31, 2017 | |
Revenue Classified by Geographical Area [Abstract] | |
REVENUE CLASSIFIED BY GEOGRAPHICAL AREA | NOTE 9 - REVENUE CLASSIFIED BY GEOGRAPHICAL AREA: Year Ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Asia $ 555 $ 9,230 $ 8,373 Latin America 754 5,320 34,603 Europe 210 1,750 495 Israel* 1,325 - 8,365 Other 128 208 315 $ 2,972 $ 16,508 $ 52,151 * Sales in Israel during the years ended December 31, 2017, 2016 and 2015 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 45%, 0% and 16% of revenues during such periods, respectively. |
General and Administrative Expe
General and Administrative Expenses | 12 Months Ended |
Dec. 31, 2017 | |
General and Administrative Expenses [Abstract] | |
GENREAL AND ADMINISTRATIVE EXPENSES | NOTE 10 – GENERAL AND ADMINISTRATIVE EXPENSES: Year Ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Legal fees* $ 2,741 $ 3,849 $ 36 Professional services fees 2,126 2,821 339 Settlement in connection in one of the legal proceedings (see Note 8.a.8.) - 1,664 - Salaries and related 620 681 224 Fraud from an unrelated third party (see Note 8e) - - 462 Impairment of fixed assets - 114 - Office maintenance (including rent) 76 98 59 Others 453 435 197 $ 6,016 $ 9,662 $ 1,317 * The 2017 legal fees includes a deduction of $2 million legal fees refund in connection with the 2016 directors and officers insurance policy based on a settlement agreement. Such amount was received on February 23, 2018 and presented within the other receivables as of December 31, 2017. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES: a. Tax rates The Israeli corporate tax rates applicable to ACSI and ASM: 2015 - 26.5% 2016 – 25% 2017 – 24% 2018 and thereafter – 23% b. “Approved Enterprise” status ACSI was granted an ‘approved enterprise’ status for the 10 years ended December 31, 2014, under the Israeli Law for the Encouragement of Capital Investments, 1959 (the “Encouragement Law”). The tax benefit is a reduced corporate income tax rate on non-distributed income generated in approved areas (“Approved Income”). Distributed Approved Income is subject to 25% corporate income tax at the company level and 15% withholding income tax at the shareholder level. As of December 31, 2011, upon a tax assessment by the Israel Tax Authority, all of the accumulated Approved Income was distributed as dividends to the Controlling Shareholders and the applicable income tax was applied. As ACSI distributes its Approved Income to its Controlling Shareholders, a deferred tax liability was recorded on the non-distributed Approved Income as generated, on the difference of the reduced corporate income tax rate applied and the regular corporate tax rates, as well as related deferred income tax expenses. On May 30, 2016, ACSI and the Israel Tax Authority signed a tax assessment agreement for the three years ended December 31, 2014 according to which all of the accumulated Approved Income was distributed as dividends to the Controlling Shareholders and the applicable income tax were applied. As part of that tax assessment ACSI was also required to pay $1.1 million in excess accrued tax provision for that period; such additional tax was recorded as part of the 2016 income tax. ACSI has final tax assessments for the years up to 2014 inclusive. c. “Preferred Enterprise” status: Commencing January 1, 2015, ACSI has elected the “Preferred Enterprise” program under the amendment of the Encouragement Law, whereby ACSI is subject to corporate income tax rate on non-Preferred Income and 16% reduced income tax rate on its Preferred Income generated in all areas other than Development Area A. As part of the tax assessment for the three years ended December 31, 2014 as mentioned above, it was agreed that ACSI will be subject to a 14.6% (based on blended tax rates) for the tax years 2015 and 2016 and a reduced tax rate, not yet determined (but up to 16%) in the tax year 2017 and thereafter. d. Income tax expenses: Year Ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Current $ - $ 32 $ 3,446 Previous year - 1,054 - Deferred - - (423 ) Income tax expenses $ - $ 1,086 $ 3,023 e. Deferred income taxes: In assessing the realization of deferred tax assets, the Group considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. As described in Note 1. regarding the substantial doubt about the Group’s ability to continue as a going concern, the Group applied a full valuation allowance for its deferred tax assets. Composition: December 31, 2017 2016 (U.S. dollars in thousands) Net and comprehensive loss $ 3,271 $ 1,338 Temporary difference of expense in connection with the working capital received as part of the reverse merger - 271 Temporary differences of expense in connection with employees benefits 41 42 Deferred tax assets before valuation allowance 3,312 1,651 Valuation allowance (3,312 ) (1,651 ) $ - $ - f. Reconciliation of income tax expenses: As the Company and ASM stand-alone net results during the years ended December 31, 2017 and 2016 are relatively immaterial and zero during the year ended December 31, 2015, the Group’s overall effective tax rate is attributable to Israeli income tax and therefore a reconciliation between the theoretical income tax, assuming corporate tax rates and the actual income tax expenses (benefit) as reported in the consolidated statements of comprehensive income (loss) is calculated based on the Israeli corporate tax rates and is as follows: Year ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Income (loss) before income tax $ (9,111 ) $ (6,967 ) $ 17,776 Israeli corporate income tax rate 25 % 25 % 26.5 % Theoretical income tax expenses (benefit) (2,278 ) (1,742 ) 4,711 Valuation allowance for deferred tax 2,278 1,109 - Tax rates differences - 725 (1,659 ) Previous year - 1,054 - Other, net - (60 ) (29 ) Income tax expenses $ - $ 1,086 $ 3,023 g. Uncertain tax positions: The following is a roll-forward of the total amounts of the Group’s unrecognized tax benefits at the beginning and at the end of the years ended December 31, 2017, 2016 and 2015: Year ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Balance at beginning of year $ - $ - $ - Increase as a result of tax position taken in prior period - 1054 - Decrease due to settlement with the Israeli tax authorities - (1054 ) - Balance at end of year $ - $ - $ - |
Concentration Risk
Concentration Risk | 12 Months Ended |
Dec. 31, 2017 | |
Concentration Risk [Abstract] | |
CONCENTRATION RISK | NOTE 12 - CONCENTRATION RISK: Major customers and vendors are defined as those from whom the Group derives at least 10% of its revenues and cost of revenues, respectively. During the years ended December 31, 2017, 2016 and 2015, revenues from the major customers reflected 89% (three customers), 79% (two customers) and 91% (three customers) of the total consolidated revenues, respectively. During the years ended December 31, 2017, 2016 and 2015, the cost of revenues from major vendors reflected 17% (one vendor), 72% (three vendors) and 70% (three vendors) of the total consolidated cost of revenues, respectively. As of December 31, 2017, accounts receivables from one of the Group’s customers represented 99% of total accounts receivables. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 - SUBSEQUENT EVENTS: On February 21, 2018, the Controlling Shareholders executed an Undertaking for the benefit of the Group. According to the Undertaking, the Controlling Shareholders agreed to make available to ACSI from, March 1, 2018, a $3.0 million line of credit or loan in favor of the Group. On April 11, 2018, the Group obtained a six-month line of credit from an Israeli commercial bank in the amount of NIS 11 million (approximately $3.1 million). For additional information, see Note 1.f. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation | a. Basis of presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Group’s financial position, results of operations, changes in shareholders’ equity and cash flows for the periods presented. The Reverse Merger was accounted for as a reverse merger whereby the Company was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on ACSI comprising the ongoing operations of the combined company, ACSI’s senior management comprising the senior management of the combined company, and that the former shareholders of ACSI are the controlling shareholders of the Company after the Reverse Merger. The Reverse Merger was considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Reverse Merger was treated as the equivalent of ACSI issuing shares for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Merger are those of ACSI, and therefore the historical consolidated financial statements presented are the consolidated financial statements of ACSI and the ordinary shares and the corresponding capital amounts pre-merger have been retroactively restated as ordinary shares reflecting the exchange ratio in the Reverse Merger. |
Principles of consolidation | b. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries, ACSI and ASM. All intercompany accounts and transactions have been eliminated in the consolidation. |
Use of estimates | c. Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Foreign currency | c. Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Revenue recognition | e. Revenue recognition: The Group generates revenues from sales of products, which include hardware, software, connection to supportive infrastructure, integration services, training and warranty, as well as revenues from Software as a Service (“SaaS”). The Group sells its products (the “Products”) and provides services (the “Services”) directly to end users and resellers and also participates as a subcontractor of prime contractors in joint projects and as a prime contractor in projects with resellers (the “Projects”). Products and Services: Revenues from sales of Products of which the final acceptance of the product is specified by the customer, and the acceptance is deemed substantive, are recognized when the Group has delivered the Products to the customer and received final acceptance, the revenue can be reliably measured and collectability of the receivables is reasonably assured. The revenues are deferred until the acceptance criteria have been met. Revenues from sales of Services are recognized ratably in the period in which the services are rendered (connection to supportive infrastructure is generally over one year). The Group provides a one year warranty for the majority of its Products. Based on the Group’s experience, the provision is de minims. Projects: Revenues from Projects are recognized upon final acceptance from the customers, as such acceptance is deemed substantive. Under such method, costs are accumulated on the balance sheet until final acceptance is received. Similarly, amounts billed to customers are also deferred until final acceptance is received. To the extent that the amount of accumulated costs exceeds the amount of advance (or progress) payments received or billed by the Group, the excess is reflected on the balance sheet as a current asset, separated from inventory. To the extent that the amount of advance (or progress) payments received or billed by the Group exceeds the amount of accumulated costs, the excess is reflected as a liability on the balance sheet. In instances where revenues are derived from sales of third-party vendors’ products or services, revenues are recognized on a gross basis and the related costs are recognized within cost of revenues, when the Group has the following indicators for gross reporting: (i) it is the primary obligor of the sales arrangements; (ii) it is subject to inventory risks of physical loss; (iii) it has latitude in establishing prices; and (iv) it has discretion in suppliers’ selection and assumes credit risks on receivables from customers. SaaS Revenues: The Group’s SaaS multiple-element arrangements are typically comprised of subscription and support fees from customers accessing the Group’s software and set-up fees. The Group does not provide the customer the contractual right to take possession of the software at any time during the hosting period under these arrangements. The Group recognizes revenue for subscription and support services over the arrangement period originating when the subscription service is made available to the customer and the contractual hosting period has commenced. Usage based fees: Revenues are recognized in the period in which subscribers use the related services. Other multiple elements arrangements: When a sale arrangement contains multiple elements, the Group allocates revenues to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor-specific objective evidence (“VSOE”), if available, third party evidence (“TPE”) if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor TPE is available. The Group establishes VSOE of selling price using the price charged for a deliverable when sold separately. When VSOE cannot be established, the Group attempts to establish selling price of each element based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Group’s go-to-market strategy typically differs from that of its peers and its offerings contain a significant differentiation such that the comparable pricing of products with similar functionality cannot be obtained. Furthermore, the Group is unable to reliably determine what similar competitor products’ selling prices are on a standalone basis. Therefore, the Group is typically not able to determine TPE. The best ESP is established considering several external and internal factors including, but not limited to, historical sales, pricing practices and geographies in which the Group offers its products. The determination of ESP is based on applying significant judgment to weigh such factors. |
Advertising costs | f. Advertising costs: Advertising costs are expensed as incurred. In 2017, 2016 and 2015, advertising expenses were $53 thousand, $24 thousand and $26 thousand, respectively. |
Related parties | g. Related parties: Related parties include the Controlling Shareholders and entities controlled by them. |
Fair value measurements | h. Fair value measurements: Fair value is defined as the price that would be received by selling an asset or paid to transfer a liability (i.e. the ‘exit price’) in an arms’ length transaction between willing market participants at the measurement date. The applicable financial accounting rules establish a hierarchy for inputs used in measuring fair value. The hierarchy is divided into three levels based on the reliability of inputs: Level 1 Level 2 Level 3 The Group’s financial assets and liabilities as of December 31, 2017 and 2016 are measured based on Level 1 inputs. |
Inventory | i. Inventory: The inventory items consist of purchased systems and are stated at the lower of cost or market. Cost is determined using the “First-In, First-Out” method of inventory accounting. The valuation of inventory items requires the Group to make estimates regarding excess or obsolete inventories. The purchased systems are utilized typically for one of the following purposes: (i) future projects; (ii) demo; and (iii) spare parts for installed systems. The first utilization suggests that the systems should be classified as inventory while the second and third suggest it should be classified as property and equipment. In order to reflect those utilizations appropriately between the inventory and property and equipment line items, the Group performed an aggregated analysis which suggested that such systems should be classified as inventory for the first year from purchase date, on such date tested for impairment and then classified to property and equipment and amortized over four years from that date, see also below for the amortization period. |
Property and equipment, net | j. Property and equipment, net: Property and equipment are stated at cost, less accumulated depreciation and amortization. Upon the retirement or disposition of property and equipment, the related costs and accumulated depreciation and amortization are removed and any related gain or loss is recorded in the statements of operations and comprehensive income (loss). Repairs and maintenance that do not extend the life, or improve an asset are expensed in the periods incurred. The Group evaluates its property and equipment for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. Should impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Useful life (years) Software systems (from classified date, see also above) 25 4 Vehicles 15 7 Leasehold improvements 10-20 5-10 Office furniture and equipment 7-10 10-14 Computers, electronics and related 15-33 3-7 |
Income taxes | k. Income taxes: Deferred tax asset and liability accounts’ balances are determined based on differences between the financial reporting and 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 Group accounts for deferred tax on non-distributed income that are subject to income tax once distributed and when there is an intent to distribute them. The Group applies the two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. |
Earnings (loss) per share | l. Earnings (loss) per share: The Group calculates basic earnings or loss per share by dividing net income or loss by the weighted-average number of ordinary shares outstanding during the year. However, consistent with the reverse merger accounting, the calculation of the weighted-average number of ordinary shares includes 2,459,088 shares (which include also 48,000 ordinary shares that were issued to the ASM Former Shareholder upon exercise of its put option on its remaining ordinary shares of ASM) assumed to be outstanding as of January 1, 2013. Further, the outstanding shares subject to put options were excluded, consistent with the accounting treatment of a put option liability. Diluted earnings (loss) per share would give effect to dilutive warrants and other potential ordinary shares outstanding during the period, considering the treasury stock method. The outstanding warrants were “out-of-the-money” and the issuance of the Net Income Shares was not probable at any given year and therefore excluded from the calculation. Basic and diluted earnings (loss) per ordinary share data were computed as follows: Year Ended December 31, 2017 2016 2015 Net income (loss) (U.S. dollars in thousands) $ (9,111 ) $ (8,053 ) $ 14,753 Weighted-average ordinary shares outstanding - basic and diluted* 2,459,088 2,459,088 2,459,088 Earnings (loss) per ordinary basic and diluted (U.S. dollars) $ (3.71 ) $ (3.27 ) $ 6.00 * On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares. |
Contingencies | m. Contingencies: The Group is involved in various commercial, government investigation and other legal proceedings that arise from time to time. The Group records accruals for these types of contingencies to the extent that the Group concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Group will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Group accrues for the minimum amount within the range. The Group records anticipated recoveries under existing insurance contracts that are virtually certain of occurring at the gross amount that is expected to be collected. Legal costs are expensed as incurred. |
Recently Issued Accounting Pronouncements | n. Recently Issued Accounting Pronouncements: Not yet adopted in current period: 1) In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC 605”), Revenue Recognition, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. ASU 2014-09 permits the use of either a retrospective or cumulative effect transition method. The Group adopted ASU 2014-09 along with the related additional ASUs on Topic 606 (Collectively, “ASC 606”) on January 1, 2018, using the modified retrospective transition method. Contracts that are substantially completed will be excluded from the transition adjustment. The Group has reviewed all of its contracts with customers and has implemented the required process, data, and system changes to comply with the requirements of ASC 606. The Group did not have any material cumulative-effect adjustment as a result of the adoption of ASC 606. In addition, the adoption of ASC 606 will not have any material impact on the Group consolidated financial statement line items in the year of adoption. The Group will make the additional required disclosures under Topic 606, starting with the Group’s consolidated financial statements that include the initial adoption date. 2) In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a Consensus of the FASB Emerging Issues Task Force). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This update also requires an entity to disclose the nature of restrictions on its cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU No. 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted, including adoption in an interim period. The Group typically has restrictions on certain amounts of cash and cash equivalents, primarily consisting of amounts used to secure bank guarantees in connection with sales contract performance obligations, and expect to continue to have similar restrictions in the future. The Group currently reports changes in such restricted amounts as cash flows from operating activities on its consolidated statement of cash flows. This standard will change that presentation. The Group adopted ASU No. 2016-18 on January 1, 2018 and is currently reviewing it to assess other potential impact on its consolidated financial statements. 3) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financial or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The new guidance is effective for all periods beginning after December 15, 2018. The Group is currently evaluating the effects that the adoption of ASU No. 2016-02 will have on its consolidated financial statements. |
Organization and Business Ope21
Organization and Business Operation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Business Operation [Abstract] | |
Schedule of net income shares based on achievement of specified net income targets | Number of the Company’s ordinary shares Year Ending December 31, Net Income Target Controlling Shareholders Migdal ASM Former Shareholder Total 2015 $ 27,000,000 338,400 10,800 10,800 360,000 2016 $ 40,000,000 173,900 5,550 5,550 185,000 2017 $ 60,000,000 188, 000 6,000 6,000 200,000 2018 $ 80,000,000 94,000 3,000 3,000 100,000 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment depreciation rates and estimated useful lives | % Useful life (years) Software systems (from classified date, see also above) 25 4 Vehicles 15 7 Leasehold improvements 10-20 5-10 Office furniture and equipment 7-10 10-14 Computers, electronics and related 15-33 3-7 |
Schedule of basic and diluted earnings (loss) per ordinary share | Year Ended December 31, 2017 2016 2015 Net income (loss) (U.S. dollars in thousands) $ (9,111 ) $ (8,053 ) $ 14,753 Weighted-average ordinary shares outstanding - basic and diluted* 2,459,088 2,459,088 2,459,088 Earnings (loss) per ordinary basic and diluted (U.S. dollars) $ (3.71 ) $ (3.27 ) $ 6.00 * On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment | December 31, 2017 2016 (U.S. dollars in thousands) Cost: Software Systems $ 1,361 $ 1,105 Vehicles 554 606 Leasehold improvements 347 355 Office furniture and equipment 121 121 Computers, electronics and related 13 13 $ 2,396 $ 2,200 Less: accumulated depreciation and amortization 1,008 612 Property and equipment, net $ 1,388 $ 1,588 |
Accumulated Costs with Respec24
Accumulated Costs with Respect to Projects in Excess of Progress Payments (Progress Payments in Excess of Accumulated Costs with Respect to Projects) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | |
Schedule of progress payments in excess of accumulated costs with respect to projects | December 31, 2017 2016 (U.S. dollars in thousands) Accumulated costs $ 547 $ 548 Advanced payments from customers (853 ) (397 ) Accumulated costs with respect to projects in excess of progress payments (progress payments in excess of accumulated costs with respect to projects) $ (306 ) $ 151 |
Revenue Classified by Geograp25
Revenue Classified by Geographical Area (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Revenue Classified by Geographical Area [Abstract] | |
Schedule of revenue composition | Year Ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Asia $ 555 $ 9,230 $ 8,373 Latin America 754 5,320 34,603 Europe 210 1,750 495 Israel* 1,325 - 8,365 Other 128 208 315 $ 2,972 $ 16,508 $ 52,151 * Sales in Israel during the years ended December 31, 2017, 2016 and 2015 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 45%, 0% and 16% of revenues during such periods, respectively. |
General and Administrative Ex26
General and Administrative Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
General and Administrative Expenses [Abstract] | |
Schedule of general and administrative expenses | Year Ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Legal fees* $ 2,741 $ 3,849 $ 36 Professional services fees 2,126 2,821 339 Settlement in connection in one of the legal proceedings (see Note 8.a.8.) - 1,664 - Salaries and related 620 681 224 Fraud from an unrelated third party (see Note 8e) - - 462 Impairment of fixed assets - 114 - Office maintenance (including rent) 76 98 59 Others 453 435 197 $ 6,016 $ 9,662 $ 1,317 * The 2017 legal fees includes a deduction of $2 million legal fees refund in connection with the 2016 directors and officers insurance policy based on a settlement agreement. Such amount was received on February 23, 2018 and presented within the other receivables as of December 31, 2017. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Schedule of income tax expenses (benefit) | Year Ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Current $ - $ 32 $ 3,446 Previous year - 1,054 - Deferred - - (423 ) Income tax expenses $ - $ 1,086 $ 3,023 |
Schedule of deferred income tax | December 31, 2017 2016 (U.S. dollars in thousands) Net and comprehensive loss $ 3,271 $ 1,338 Temporary difference of expense in connection with the working capital received as part of the reverse merger - 271 Temporary differences of expense in connection with employees benefits 41 42 Deferred tax assets before valuation allowance 3,312 1,651 Valuation allowance (3,312 ) (1,651 ) $ - $ - |
Schedule of reconciliation of income tax expenses | Year ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Income (loss) before income tax $ (9,111 ) $ (6,967 ) $ 17,776 Israeli corporate income tax rate 25 % 25 % 26.5 % Theoretical income tax expenses (benefit) (2,278 ) (1,742 ) 4,711 Valuation allowance for deferred tax 2,278 1,109 - Tax rates differences - 725 (1,659 ) Previous year - 1,054 - Other, net - (60 ) (29 ) Income tax expenses $ - $ 1,086 $ 3,023 |
Schedule of unrecognized tax benefits | Year ended December 31, 2017 2016 2015 (U.S. dollars in thousands) Balance at beginning of year $ - $ - $ - Increase as a result of tax position taken in prior period - 1054 - Decrease due to settlement with the Israeli tax authorities - (1054 ) - Balance at end of year $ - $ - $ - |
Organization and Business Ope28
Organization and Business Operation (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
2015 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 27,000,000 |
Number of the Company's ordinary shares | 360,000 |
2015 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 338,400 |
2015 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 10,800 |
2015 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 10,800 |
2016 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 40,000,000 |
Number of the Company's ordinary shares | 185,000 |
2016 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 173,900 |
2016 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 5,550 |
2016 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 5,550 |
2017 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 60,000,000 |
Number of the Company's ordinary shares | 200,000 |
2017 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 188,000 |
2017 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 6,000 |
2017 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 6,000 |
2018 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 80,000,000 |
Number of the Company's ordinary shares | 100,000 |
2018 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 94,000 |
2018 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 3,000 |
2018 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 3,000 |
Organization and Business Ope29
Organization and Business Operation (Details Textual) ₪ in Thousands, $ in Thousands | Apr. 11, 2018ILS (₪) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 11, 2018USD ($) | Apr. 11, 2018ILS (₪) | Dec. 31, 2014USD ($) |
Organization and Business Operation (Textual) | |||||||
Escrow deposit | $ 11,900 | ||||||
Reverse merger transaction cost | 6,300 | ||||||
Restricted trust amount | 81,300 | ||||||
Conversion of stock, amount | $ 21,600 | ||||||
Conversion of stock, shares | shares | 213,676 | ||||||
Transaction cost | $ 2,000 | ||||||
Accounts payable and accrued expenses | $ 70 | ||||||
Working capital | 19,000 | ||||||
Accumulated deficit | (17,972) | (8,861) | |||||
Cash and cash equivalents | 1,944 | 11,840 | $ 25,829 | $ 11,709 | |||
Net loss | $ (9,111) | $ (8,053) | $ 14,753 | ||||
Description of line of credit or loan | On February 21, 2018 the Controlling Shareholders executed an irrevocable undertaking (the "Undertaking") for the benefit of the Group. According to the Undertaking, the Controlling Shareholders agreed to make available to ACSI from, March 1, 2018, a $3.0 million line of credit or loan in favor of the Group. | ||||||
Accounts payable and accrued expenses | $ 7,800 | ||||||
Line of credit interest rate | 0.50% | ||||||
Negative working capital | $ 556 | ||||||
Forecast [Member] | |||||||
Organization and Business Operation (Textual) | |||||||
Line of credit | $ 3,100 | ₪ 11,000 | |||||
Semi-annual bank commission | ₪ | ₪ 27,500 | ||||||
Controlling Shareholders [Member] | |||||||
Organization and Business Operation (Textual) | |||||||
Stock issued in reverse merger | shares | 1,621,327 | ||||||
Equity interest in acquired | 63.00% | ||||||
Reverse merger, description | One occasion during the 60 day period following the third anniversary of the closing of the Reverse Merger, to put to INC all or part of his pro rata portion of 117,327 ordinary shares that he received in the share exchange for an amount in cash equal to (1) (x) the number of shares being put multiplied by (y) $101.0 per share plus (2) his pro rata portion of interest, if any, on $11.9 million deposited into an escrow account by INC to fund the payment of the purchase price for the put option if it is exercised. | ||||||
Service fees | $ 18,100 | ||||||
Migdal [Member] | |||||||
Organization and Business Operation (Textual) | |||||||
Stock issued in reverse merger | shares | 48,000 | ||||||
Service fees | $ 1,200 | ||||||
Net income shares | shares | 253,500 | ||||||
Reverse merger transaction cost | $ 4,300 | ||||||
ASM Former Shareholder [Member] | |||||||
Organization and Business Operation (Textual) | |||||||
Stock issued in reverse merger | shares | 48,000 | ||||||
Equity interest in acquired | 16.00% | ||||||
Service fees | $ 900 | ||||||
Net income shares | shares | 253,500 | ||||||
Commission percentage | 3.00% |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Software Systems [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 25.00% |
Property and Equipment, Useful life (years) | 4 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 15.00% |
Property and Equipment, Useful life (years) | 7 years |
Leasehold improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 10.00% |
Property and Equipment, Useful life (years) | 5 years |
Leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 20.00% |
Property and Equipment, Useful life (years) | 10 years |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 7.00% |
Property and Equipment, Useful life (years) | 10 years |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 10.00% |
Property and Equipment, Useful life (years) | 14 years |
Computers, electronics and related [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 15.00% |
Property and Equipment, Useful life (years) | 3 years |
Computers, electronics and related [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 33.00% |
Property and Equipment, Useful life (years) | 7 years |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Summary of Significant Accounting Policies [Abstract] | ||||
Net income (loss) (U.S. dollars in thousands) | $ (9,111) | $ (8,053) | $ 14,753 | |
Weighted-average ordinary shares outstanding - basic and diluted | [1] | 2,459,088 | 2,459,088 | 2,459,088 |
Earnings (loss) per ordinary basic and diluted (U.S. dollars) | [1] | $ (3.71) | $ (3.27) | $ 6 |
[1] | On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares.. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Summary of Significant Accounting Policies (Textual) | ||||
Advertising expenses | $ 53 | $ 24 | $ 26 | |
Weighted-average number of ordinary shares | [1] | 2,459,088 | 2,459,088 | 2,459,088 |
Shares issued to former shareholder included in computation of weighted-average number of ordinary shares | 48,000 | |||
[1] | On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018, which was applied retrospectively for the calculation of the basic and diluted earnings (loss) per ordinary share. Refer to Note 7.b. for warrants assumed by the Company which may result in an additional outstanding ordinary shares.. |
Restricted Deposits (Details)
Restricted Deposits (Details) - Dec. 31, 2016 ₪ in Thousands, $ in Thousands | USD ($) | ILS (₪) |
Restricted Deposits (Textual) | ||
Restricted deposits | $ 1,758 | ₪ 6,760 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,396 | $ 2,200 |
Less: accumulated depreciation and amortization | 1,008 | 612 |
Property and equipment, net | 1,388 | 1,588 |
Software Systems [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,361 | 1,105 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 554 | 606 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 347 | 355 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 121 | 121 |
Computers, electronics and related [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 13 | $ 13 |
Accumulated Costs with Respec35
Accumulated Costs with Respect to Projects in Excess of Progress Payments (Progress Payments in Excess of Accumulated Costs with Respect to Projects) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | ||
Accumulated costs | $ 547 | $ 548 |
Advanced payments from customers | (853) | (397) |
Accumulated costs with respect to projects in excess of progress payments (progress payments in excess of accumulated costs with respect to projects) | $ (306) | $ 151 |
Related Parties (Details)
Related Parties (Details) ₪ in Thousands, $ in Thousands | Aug. 02, 2016USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Dec. 31, 2016USD ($) | Dec. 31, 2016ILS (₪) | Dec. 31, 2015USD ($) | Dec. 31, 2015ILS (₪) | May 30, 2016USD ($) | May 30, 2016ILS (₪) | Jan. 31, 2016USD ($) | Jan. 31, 2016ILS (₪) | Dec. 31, 2015ILS (₪) | Jun. 30, 2015USD ($) | Jun. 30, 2015ILS (₪) | Dec. 31, 2014USD ($) | Dec. 31, 2014ILS (₪) | Dec. 31, 2013USD ($) | Dec. 31, 2013ILS (₪) | Dec. 31, 2012USD ($) | Dec. 31, 2012ILS (₪) | Dec. 31, 2011ILS (₪) |
Related Parties (Textual) | ||||||||||||||||||||||
Acquisition cost | $ 2,000 | |||||||||||||||||||||
Compensation related expenses | $ 620 | $ 681 | $ 224 | |||||||||||||||||||
Repayment of debt | 600 | |||||||||||||||||||||
Temporary reduction salaries percentage | 50.00% | 50.00% | ||||||||||||||||||||
Employment agreements and compensation [Member] | ||||||||||||||||||||||
Related Parties (Textual) | ||||||||||||||||||||||
Gross salary | $ 31,200 | ₪ 120,000 | ||||||||||||||||||||
Compensation related expenses | 664 | 2,391 | $ 928 | ₪ 3,562 | 125 | ₪ 487 | ||||||||||||||||
Annual performance bonus | $ 93,600 | ₪ 360,000 | ||||||||||||||||||||
Dividends [Member] | ||||||||||||||||||||||
Related Parties (Textual) | ||||||||||||||||||||||
Dividends paid | $ 2,833 | 11,000 | $ 3,404 | ₪ 13,277 | ₪ 42,825 | $ 6,251 | ₪ 23,560 | $ 125 | ₪ 474 | $ 300 | ₪ 1,140 | ₪ 10,760 | ||||||||||
Income tax rate dividend percent | 15.00% | 20.00% | 20.00% | |||||||||||||||||||
Controlling Shareholders [Member] | ||||||||||||||||||||||
Related Parties (Textual) | ||||||||||||||||||||||
Description of acquired entity | Anatoly Hurgin owns 100% of Alan Ltd. ("Alan") which holds a 60% interest in Active Intelligence Labs Ltd. (Israel) ("AIL"). | Anatoly Hurgin owns 100% of Alan Ltd. ("Alan") which holds a 60% interest in Active Intelligence Labs Ltd. (Israel) ("AIL"). | ||||||||||||||||||||
Ownership percentage | 100.00% | |||||||||||||||||||||
Acquisition cost | $ 780 | 420 | ||||||||||||||||||||
Loans aggregated amount | 555 | 205 | ||||||||||||||||||||
Interest rate | 3.30% | 3.30% | ||||||||||||||||||||
Repayments of related party | $ 600 | |||||||||||||||||||||
Controlling Shareholders [Member] | Employment agreements and compensation [Member] | ||||||||||||||||||||||
Related Parties (Textual) | ||||||||||||||||||||||
Compensation related expenses | $ 2,600 | ₪ 10,000 | ||||||||||||||||||||
Controlling Shareholders [Member] | Dividends [Member] | ||||||||||||||||||||||
Related Parties (Textual) | ||||||||||||||||||||||
Dividends paid | $ 1,163 | $ 4,260 | ₪ 16,400 | ₪ 4,523 | $ 817 | ₪ 2,350 | $ 231 | ₪ 1,379 | $ 197 | ₪ 894 |
Ordinary Shares, Preferred Sh37
Ordinary Shares, Preferred Shares and Warrants (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jan. 31, 2016 | |
Ordinary Shares and Warrants (Textual) | |||
Ordinary shares, shares authorized | 20,000,000 | 20,000,000 | |
Ordinary shares, par value per share | $ 0.001 | $ 0.001 | |
Ordinary shares, shares issued | 2,576,415 | 2,576,415 | |
Ordinary shares, shares outstanding | 2,576,415 | 2,576,415 | |
Preferred shares, par value per share | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Warrant [Member] | |||
Ordinary Shares and Warrants (Textual) | |||
Warrant issued | 855,744 | ||
Share price | $ 115 | ||
Warrants, Expiration date | Dec. 17, 2018 | ||
Warrant, Description | The Company may redeem the warrants in the event that the traded ordinary share price is at least $175.00 per share (for any 20 trading days within a 30-day trading period) on a "cashless basis". | ||
ASM Former Shareholder [Member] | |||
Ordinary Shares and Warrants (Textual) | |||
Ordinary shares, par value per share | $ 0.001 | ||
Ordinary shares, shares issued | 48,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Apr. 19, 2017USD ($) | Apr. 19, 2017ILS (₪) | Apr. 13, 2017 | Sep. 14, 2016USD ($) | Sep. 14, 2016ILS (₪) | May 04, 2016USD ($) | May 04, 2016ILS (₪) | Nov. 12, 2015USD ($) | Nov. 12, 2015ILS (₪) | Oct. 20, 2015USD ($) | Jan. 19, 2018USD ($) | Dec. 21, 2017USD ($) | Mar. 30, 2017 | Mar. 31, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Commitment and Contigencies (Textual) | ||||||||||||||||||
Settlement amount | $ 2,437,265 | ₪ 8,450,000 | ||||||||||||||||
Aggregate settlement payment | $ 5,000,000 | |||||||||||||||||
Remaining proceeds or contributed by other defendants | 2,500,000 | |||||||||||||||||
Received an excess amount | $ 1,664,000 | |||||||||||||||||
Lawsuit amount for registration fee | $ 1,400,000 | ₪ 5,000,000 | ||||||||||||||||
Monthly rent | $ 44,000 | ₪ 13,000 | ||||||||||||||||
Lease renewed date | Nov. 30, 2022 | Nov. 30, 2022 | ||||||||||||||||
Rent expenses | $ 130,000 | 152,000 | 128,000 | |||||||||||||||
Right and license term | 3 years | 5 years | 5 years | |||||||||||||||
Percentage of net income | 50.00% | 50.00% | 50.00% | |||||||||||||||
Minimum annual sales | $ 10,000,000 | |||||||||||||||||
Percentage of penalty | 15.00% | |||||||||||||||||
Shortfall amount | $ 1,500,000 | |||||||||||||||||
Secure minimum sales and penalty | $ 125,000 | |||||||||||||||||
Prepayments in other current assets | 375,000 | |||||||||||||||||
Unauthorized outgoing transfer | $ 462,000 | |||||||||||||||||
Monthly payments | 1,500,000 | 375,000 | ||||||||||||||||
Shareholders suffered damages cost | $ 39.7 | ₪ 137.7 | ||||||||||||||||
Legal settlement, percentage | 30.00% | 70.00% | ||||||||||||||||
Plaintiff Received | $ 2,348,428 | ₪ 8,142,000 | ||||||||||||||||
Plaintiff fees | $ 2,126,000 | $ 2,821,000 | $ 339,000 | |||||||||||||||
Subsequent event [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Plaintiff fees | $ 1,600,000 | |||||||||||||||||
5 Year Lease Agreement [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Monthly rent | $ 7,000 | ₪ 25,000 | ||||||||||||||||
Office space, expiring date | Nov. 30, 2017 | Nov. 30, 2017 | ||||||||||||||||
2.5 year Lease Agreement [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Monthly rent | $ 4,000 | ₪ 16,000 | ||||||||||||||||
Office space, expiring date | Nov. 30, 2017 | Nov. 30, 2017 | ||||||||||||||||
1 Year Lease Agreement [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Monthly rent | $ 1,000 | ₪ 5,000 | ||||||||||||||||
Lease renewed date | Aug. 15, 2019 | Aug. 15, 2019 | ||||||||||||||||
Majority Shareholder [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Shareholders suffered damages cost | $ 6,720,000 | ₪ 23,300,000 | ||||||||||||||||
Memorandum of Understanding [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Settlement amount | $ 3,000,000 | |||||||||||||||||
Aggregate settlement payment | 3,000,000 | |||||||||||||||||
Expected litigation settlement | 250,000 | |||||||||||||||||
Remaining proceeds or contributed by other defendants | $ 2,750,000 | |||||||||||||||||
Hurgin [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Settlement amount | $ 98,000 | ₪ 376,410 | ||||||||||||||||
Aurovsky [Member] | ||||||||||||||||||
Commitment and Contigencies (Textual) | ||||||||||||||||||
Settlement amount | $ 196,000 | ₪ 752,820 |
Revenue Classified by Geograp39
Revenue Classified by Geographical Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | $ 2,972 | $ 16,508 | $ 52,151 | |
Asia [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | 555 | 9,230 | 8,373 | |
Latin America [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | 754 | 5,320 | 34,603 | |
Europe [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | 210 | 1,750 | 495 | |
Israel [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | [1] | 1,325 | 8,365 | |
Other [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | $ 128 | $ 208 | $ 315 | |
[1] | Sales in Israel during the years ended December 31, 2017, 2016 and 2015 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 45%, 0% and 16% of revenues during such periods, respectively. |
Revenue Classified by Geograp40
Revenue Classified by Geographical Area (Details Textual) | 12 Months Ended |
Dec. 31, 2017 | |
Israel [Member] | |
Revenue Classified by Geographical Area (Textual) | |
Revenue percentage, Description | Sales in Israel during the years ended December 31, 2017, 2016 and 2015 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 45%, 0% and 16% of revenues during such periods, respectively. |
General and Administrative Ex41
General and Administrative Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
General and Administrative Expenses [Abstract] | ||||
Legal fees | [1] | $ 2,741 | $ 3,849 | $ 36 |
Professional services fees | 2,126 | 2,821 | 339 | |
Settlement in connection in one of the legal proceedings (see Note 8.a.8.) | 1,664 | |||
Salaries and related | 620 | 681 | 224 | |
Fraud from an unrelated third party (see Note 8e) | 462 | |||
Impairment of fixed assets | 114 | |||
Office maintenance (including rent) | 76 | 98 | 59 | |
Others | 453 | 435 | 197 | |
Total general and administrative expenses | $ 6,016 | $ 9,662 | $ 1,317 | |
[1] | The 2017 legal fees includes a deduction of $2 million legal fees refund in connection with the 2016 directors and officers insurance policy based on a settlement agreement. Such amount was received on February 23, 2018 and presented within the other receivables as of December 31, 2017. |
General and Administrative Ex42
General and Administrative Expenses (Details Textual) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
General and Administrative Expenses (Textual) | |
Deduction of legal fees | $ 2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Current | $ 32 | $ 3,446 | |
Previous year | 1,054 | ||
Deferred | (423) | ||
Income tax expenses | $ 1,086 | $ 3,023 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes [Abstract] | ||
Net and comprehensive loss | $ 3,271 | $ 1,338 |
Temporary difference of expense in connection with the working capital received as part of the reverse merger | 271 | |
Temporary differences of expense in connection with employees benefits | 41 | 42 |
Deferred tax assets before valuation allowance | 3,312 | 1,651 |
Valuation allowance | (3,312) | (1,651) |
Deferred tax |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Income (loss) before income tax | $ (9,111,000) | $ (6,967,000) | $ 17,776,000 |
Israeli corporate income tax rate | 25.00% | 25.00% | 26.50% |
Theoretical income tax expenses (benefit) | $ (2,278,000) | $ (1,742,000) | $ 4,711,000 |
Valuation allowance for deferred tax | 2,278,000 | 1,109,000 | |
Tax rates differences | 725,000 | (1,659,000) | |
Previous year | 1,054,000 | ||
Other, net | 0 | (60,000) | (29,000) |
Income tax expenses | $ 1,086,000 | $ 3,023,000 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Unrecognized tax benefits | |||
Balance at beginning of year | |||
Increase as a result of tax position taken in prior period | 1,054 | ||
Decrease due to settlement with the Israeli tax authorities | (1,054) | ||
Balance at end of year |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes (Textual) | ||||
Israeli corporate income tax rate | 24.00% | 25.00% | 26.50% | |
Corporate income tax percentage | 25.00% | |||
Withholding income tax percentage | 15.00% | |||
Payaments of accrued tax provision | $ 1.1 | |||
Description of income taxes | As part of the tax assessment for the three years ended December 31, 2014 as mentioned above, it was agreed that ACSI will be subject to a 14.6% (based on blended tax rates) for the tax years 2015 and 2016 and a reduced tax rate, not yet determined (but up to 16%) in the tax year 2017 and thereafter. | |||
Subsequent event [Member] | ||||
Income Taxes (Textual) | ||||
Israeli corporate income tax rate | 23.00% |
Concentration Risk (Details)
Concentration Risk (Details) | 12 Months Ended | ||
Dec. 31, 2017CustomersVendors | Dec. 31, 2016CustomersVendors | Dec. 31, 2015CustomersVendors | |
Revenue [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, Percentage | 10.00% | ||
Revenue [Member] | Major Customers [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, Percentage | 89.00% | 79.00% | 91.00% |
Number of customers | 3 | 2 | 3 |
Cost of Revenues [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, Percentage | 10.00% | ||
Cost of Revenues [Member] | Major Vendors [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, Percentage | 17.00% | 72.00% | 70.00% |
Number of vendors | Vendors | 1 | 3 | 3 |
Accounts Receivable [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, Percentage | 99.00% | ||
Number of customers | 1 |
Subsequent Events (Details)
Subsequent Events (Details) ₪ in Millions, $ in Millions | Apr. 11, 2018USD ($) | Apr. 11, 2018ILS (₪) | Mar. 01, 2018USD ($) |
Forecast [Member] | |||
Subsequent Events (Textual) | |||
Line of credit or loan amount | $ 3.1 | ₪ 11 | |
Subsequent event [Member] | |||
Subsequent Events (Textual) | |||
Line of credit or loan amount | $ 3 |