Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Entity Central Index Key | 0000761238 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2020 |
Entity File Number | 0-15375 |
Entity Registrant Name | RADA ELECTRONIC INDUSTRIES LTD. |
Entity Incorporation State Country Code | IL |
Entity Address, Address Line One | 7 Giborei Israel Street |
Entity Address, City or Town | Netanya |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 4250407 |
Title of 12(b) Security | Ordinary Shares, NIS 0.03 Par Value |
Trading Symbol | RADA |
Name of Exchange on which Security is Registered | NASDAQ |
Entity Common Stock, Shares Outstanding | 43,724,446 |
Entity Well Known Seasoned Issuer | No |
Entity Voluntary Filer | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Business Contact [Member] | |
Contact Personnel Name | Avi Israel |
Entity Address, Address Line One | 7 Giborei Israel Street |
Entity Address, City or Town | Netanya |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 4250407 |
City Area Code | 972 |
Local Phone Number | 76 538 6200 |
Contact Personnel Fax Number | 972 9 885 5885 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 36,289 | $ 13,754 |
Restricted deposits | 567 | 380 |
Trade receivables, net | 14,095 | 13,765 |
Contract assets (Note 4) | 756 | 1,269 |
Other accounts receivable and prepaid expenses (Note 5) | 1,637 | 1,673 |
Inventories, net (Note 6) | 28,783 | 17,196 |
Total current assets | 82,127 | 48,037 |
LONG-TERM ASSETS: | ||
Long-term receivables and other deposits | 230 | 97 |
Property, plant and equipment, net (Note 7) | 13,968 | 9,127 |
Operating lease right-of-use asset (Note 3) | 10,581 | 7,654 |
Total long-term assets | 24,779 | 16,878 |
Total assets | 106,906 | 64,915 |
CURRENT LIABILITIES: | ||
Short term loan | 454 | |
Trade payables | 10,603 | 7,661 |
Other accounts payable and accrued expenses (Note 8) | 9,855 | 5,572 |
Advances from customers | 2,323 | 1,563 |
Contract liabilities (Note 4) | 232 | 196 |
Operating lease short term liabilities (Note 3) | 1,885 | 1,240 |
Total current liabilities | 25,352 | 16,232 |
LONG-TERM LIABILITIES: | ||
Operating lease long-term liabilities (Note 3) | 8,732 | 6,499 |
Accrued severance-pay and other long-term liability | 789 | 764 |
Total long-term liabilities | 9,521 | 7,263 |
COMMITMENTS AND CONTINGENT LIABILITIES (Note 9) | ||
EQUITY: | ||
Share capital (Note 10) - Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at December 31, 2020 and 2019; Issued and outstanding: 43,724,446 and 38,456,693 at December 31, 2020 and at December 31, 2019 respectively. | 440 | 394 |
Additional paid-in capital | 144,944 | 120,017 |
Accumulated deficit | (73,351) | (78,991) |
Total equity | 72,033 | 41,420 |
Total liabilities and equity | $ 106,906 | $ 64,915 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Dec. 31, 2020₪ / sharesshares | Dec. 31, 2019₪ / sharesshares |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value | (per share) | ₪ 0.03 | ₪ 0.03 |
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares, shares issued | 43,724,446 | 38,456,693 |
Ordinary shares, shares outstanding | 43,724,446 | 38,456,693 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Revenues | $ 76,217 | $ 44,331 | $ 28,032 |
Cost of revenues | 47,882 | 28,394 | 17,817 |
Gross profit | 28,335 | 15,937 | 10,215 |
Operating costs and expenses: | |||
Research and development, net | 8,846 | 6,912 | 3,189 |
Marketing and selling | 5,017 | 4,044 | 2,860 |
General and administrative | 8,972 | 7,084 | 4,001 |
Net loss from sale of fixed asset | 27 | 103 | |
Total operating costs and expenses | 22,862 | 18,040 | 10,153 |
Operating income (loss) | 5,473 | (2,103) | 62 |
Financial (expenses) income, net (Note 12) | 167 | (121) | 119 |
Net income (loss) from continuing operations | 5,640 | (2,224) | 181 |
Net income (loss) from discontinued operations | (115) | (404) | |
Net income (loss) | 5,640 | (2,339) | (223) |
Net income (loss) attributable to non-controlling interest | (309) | (386) | |
Net income (loss) attributable to RADA Electronic Industries' shareholders | $ 5,640 | $ (2,030) | $ 163 |
Basic net income (loss) from continuing operations per Ordinary share | $ 0.13 | $ (0.05) | $ 0.02 |
Diluted net income (loss) from continuing operations per Ordinary share | 0.13 | (0.05) | 0.02 |
Basic and diluted net income (loss) from discontinued operations per Ordinary share | 0 | 0 | (0.01) |
Basic net income (loss) per Ordinary share | 0.13 | (0.05) | 0.01 |
Diluted net income (loss) per Ordinary share | $ 0.13 | $ (0.05) | $ 0.01 |
Weighted average number of Ordinary shares used for computing basic net income (loss) per share | 43,321,058 | 38,148,756 | 33,184,570 |
Weighted average number of Ordinary shares used for computing diluted net income (loss) per share | 44,565,379 | 38,841,866 | 33,716,931 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 5,640 | $ (2,339) | $ (223) |
Other comprehensive income (loss): | |||
Change in foreign currency translation adjustment | (251) | ||
Total comprehensive income (loss) | 5,640 | (2,339) | (474) |
Less: comprehensive income (loss) attributable to non-controlling interest | (465) | ||
Comprehensive income (loss) attributable to RADA Electronic Industries' shareholders | $ 5,640 | $ (2,339) | $ (9) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Number of Ordinary Shares [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total | |
Balance at Dec. 31, 2017 | $ 335 | $ 104,923 | $ 392 | $ (77,124) | $ 659 | $ 29,185 | |
Balance, shares at Dec. 31, 2017 | [1] | 31,392,040 | |||||
Share-based compensation to employees | 898 | 898 | |||||
Exercise of warrants | $ 13 | 787 | 800 | ||||
Exercise of warrants, shares | [1] | 1,454,546 | |||||
Issuance of shares, net | $ 37 | 12,215 | 12,252 | ||||
Issuance of shares, net, shares | [1] | 4,545,454 | |||||
Exercise of Option | $ 1 | (1) | |||||
Exercise of Option, shares | [1] | 124,851 | |||||
Net income (loss) | 163 | (386) | (223) | ||||
Transaction with non-controlling interest | (254) | (546) | (800) | ||||
Other comprehensive income | (172) | (79) | (251) | ||||
Balance at Dec. 31, 2018 | $ 386 | 118,568 | 220 | (76,961) | (352) | 41,861 | |
Balance, shares at Dec. 31, 2018 | [1] | 37,516,891 | |||||
Share-based compensation to employees | 1,148 | 1,148 | |||||
Issuance of shares, net | $ 4 | 1,496 | 1,500 | ||||
Issuance of shares, net, shares | [1] | 545,455 | |||||
Exercise of Option | $ 4 | 4 | |||||
Exercise of Option, shares | [1] | 394,347 | |||||
Net income (loss) | (2,030) | (309) | (2,339) | ||||
Transaction with non-controlling interest | (1,195) | 661 | (534) | ||||
Other | (220) | (220) | |||||
Balance at Dec. 31, 2019 | $ 394 | 121,212 | (1,195) | (78,991) | 41,420 | ||
Balance, shares at Dec. 31, 2019 | [1] | 38,456,693 | |||||
Share-based compensation to employees | 1,436 | 1,436 | |||||
Issuance of shares, net | $ 41 | 23,496 | 23,537 | ||||
Issuance of shares, net, shares | [1] | 4,819,052 | |||||
Exercise of Option | $ 5 | (5) | |||||
Exercise of Option, shares | [1] | 448,701 | |||||
Net income (loss) | 5,640 | 5,640 | |||||
Balance at Dec. 31, 2020 | $ 440 | $ 146,139 | $ (1,195) | $ (73,351) | $ 72,033 | ||
Balance, shares at Dec. 31, 2020 | [1] | 43,724,466 | |||||
[1] | See Note 10a. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 5,640 | $ (2,339) | $ (223) |
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Share based compensation to employees | 1,436 | 1,148 | 898 |
Depreciation and amortization | 2,289 | 1,223 | 799 |
Net Loss from sale of fixed asset | 27 | 103 | |
Severance pay, net | (25) | 74 | (47) |
Operating lease right-of-use asset | 1,076 | 551 | |
Increase in trade receivables, net | (330) | (383) | (6,096) |
Operating lease long-term-liabilities | (1,125) | (466) | |
Increase in other accounts receivable, long term receivable and prepaid expenses | (17) | (284) | (192) |
Decrease in costs and estimated earnings in excess of billings | 995 | ||
Decrease (increase) in contract assets | 513 | (370) | (899) |
Increase (Decrease) in contract liabilities | 36 | (170) | 366 |
Increase in inventories | (12,820) | (6,613) | (3,865) |
Increase in trade payables | 1,872 | 1,439 | 2,610 |
Increase in other accounts payable, accrued expenses, long term liabilities and advances from customers | 5,042 | 2,729 | 1,693 |
Net cash provided by (used in) operating activities from continuing operations | 3,614 | (3,461) | (3,858) |
Cash flows from investing activities: | |||
Purchase of property, plant and equipment | (4,853) | (4,092) | (899) |
Construction-in-process | (94) | (459) | (308) |
Consideration from fixed asset sale | 254 | ||
Disposal of discontinued operations | (526) | ||
Increase (decrease) in long-term receivables and deposits | 17 | (56) | 5 |
Net cash used in investing activities from continuing operations | (4,930) | (5,133) | (948) |
Cash flows from financing activities: | |||
Issuance of Ordinary shares, net | 23,534 | 1,500 | 12,252 |
Exercise of warrants | 800 | ||
Short-term loan | 504 | ||
Transaction with non-controlling interest | (534) | (254) | |
Net cash provided by financing activities from continuing operations | 24,038 | 966 | 12,798 |
Net cash provided by operating activities from discontinued operations | 1,186 | ||
Net cash used in investing activities from discontinued operations | (2) | ||
Effect of exchange rate changes of discontinued operation on cash and cash equivalents | (420) | ||
Increase (decrease) in cash and cash equivalents and restricted cash | 22,722 | (7,628) | 8,756 |
Cash and cash equivalents and restricted cash at the beginning of the year | 14,134 | 21,762 | 13,006 |
Cash and cash equivalents and restricted cash at the end of the year | 36,856 | 14,134 | 21,762 |
Less cash and cash equivalents of discontinued operation at the end of the year | 526 | ||
Cash and cash equivalents of continued operation at the end of the year | 36,856 | 14,134 | 21,236 |
(a) Supplemental disclosures of cash flow activities: | |||
Net cash paid during the year for: Income taxes | 27 | 17 | 17 |
Net cash paid during the year for: Interest | 18 | ||
(b) Non-cash transactions | |||
Transfer of inventory to property, plant and equipment | 1,194 | 595 | 530 |
Purchase of property, plant and equipment in credit | $ 1,068 | $ 572 | $ 136 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1:- GENERAL a. RADA Electronic Industries Ltd. (the "Company") is a global defense technology company focused on proprietary In January 2018, the Company incorporated RADA Sensors Inc. as a fully owned subsidiary of the Company. As of December 31, 2019, RADA Sensors Inc. is the holder of 100% of the interests in RADA Technologies LLC, also organized in January 2018. At the time of its organization, RADA was the owner of 75% of RADA Technologies LLC. During July 2019, the Company acquired the remaining 25% interest in RADA Technologies LLC. Since 2020, RADA Sensors Inc. is the holder of 100% of the interests in RADA Innovations LLC that began its operations in 2021. The Company is organized and operates as one operating segment. b. Discontinued operations In December 2016, the Company committed to a plan to sell its test and repair services activity (provided through the Company’s then 80% owned subsidiary, CACS) in order to focus in its core business. In October 2018, a transaction with a non-controlling interest occurred and as a result, as of December 31, 2018, the Company owned 100% of CACS, which resulted in a $254 decrease in additional paid in capital. In December 2018, the Company signed an agreement to sell its ownership interest in CACS for approximately $1,500. On March 14, 2019, the ownership was transferred to the buyer. As of December 31, 2019, the Company received 100% of the consideration, which is currently held in a trust account in China. The net consideration of $730 is recorded under other accounts receivable and prepaid expenses in the consolidated balance sheet as of December 31, 2018. In 2018, the Company recorded a provision of $159 for the expected loss resulting from the sale, which amount was included in accrued expenses in the consolidated balance sheets and in the net loss from discontinued operations in the consolidated statements of operations. In 2019, the company recorded an additional expected loss of $115, mainly due to exchange rate differences relating to the consideration held in a trust account in China, which decreased the net consideration presented under other accounts receivable and prepaid expenses in the consolidated balance sheet and was included in the net loss from discontinued operations in the consolidated statements of operations. The results of the discontinued operations in prior periods’ comparable results, assets and liabilities have been retroactively included in discontinued operations as separate line items in the statements of operations and balance sheets, are presented below: F - 12 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 1:- GENERAL (Cont.) Year ended December 31, 2020 2019 2018 Revenues $ - $ - $ 750 Cost of sales - - (787 ) Operating expenses - - (208 ) Operating loss - - (245 ) Net loss - - (245 ) Loss from sale of subsidiary - (115 ) (159 ) Net loss from discontinued operations $ - $ (115 ) $ (404 ) c. Liquidity and Capital Resources: Since incorporation, the Company has incurred an accumulated deficit of $73,351. As of December 31, 2020, the Company’s cash position (cash and cash equivalents) totalled approximately $36,289. Management believes that its cash and cash equivalents, are sufficient for the Company to meet its obligations as they come due at least for a period of twelve months from the sign off date of the consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The significant accounting policies followed in the preparation of the financial statements, applied on a consistent basis, are as follows: a. Use of estimates: The preparation of financial statements in conformity with (“US GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. F - 13 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made. b. Financial statements in U.S. dollars: The majority of the revenues of the Company are generated in U.S. dollars. In addition, financing activities are made in U.S. dollars. The Company’s management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, its functional and reporting currency is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate, in the period in which the currency exchange rate changes. The financial statements of the Company’s former foreign subsidiary (CACS), whose functional currency is not the U.S. dollar, have been translated into dollars. All balance sheet amounts have been translated using the exchange rates in effect at balance sheet date. Statement of operation amounts have been translated using the average exchange rate prevailing during the year. Such translation adjustments are reported as a separate component of accumulated other comprehensive income (loss) in equity (see also note 1b). c. Basis of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Inter-company transactions and balances have been eliminated upon consolidation. d. Cash equivalents: All highly liquid investments that are readily convertible to cash and are not restricted as to withdrawal or use and the period to maturity of which did not exceed three months at time of deposit, are considered cash equivalents. e. Restricted deposit: Restricted cash is invested in short-term bank deposits (less than twelve months), which are mainly used as security for the Company’s guarantees to customers and lines of credits with banks. The deposits are in U.S. dollars and bear a variable annual interest of up to 0.43%. F - 14 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) f. Inventories: Inventories are stated at the lower of cost or market value. Inventory write-offs are provided to cover risks arising from slow-moving items, excess inventories and for market prices lower than cost (see also Note 6). Cost is determined as follows: Raw materials and components - using the FIFO cost method. Work in progress and finished goods - represents the cost of manufacturing with the addition of allocable indirect manufacturing costs. Costs incurred on long-term contracts in progress include direct labor, material, subcontractors, other direct costs and an allocation of overhead, which represent recoverable costs incurred for production. g. Property, plant and equipment: Property plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows: % Factory and other buildings 4 Machinery and equipment 7 - 33 Office furniture and equipment 6 - 33 Leasehold improvements are depreciated over the shorter of the estimated useful life or the lease period. Assets, in respect of which investment grants have been received, are presented at cost less the related grant amount. Depreciation is based on net cost. h. Impairment of long-lived assets: The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, plant and equipment”, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2020, 2019 and 2018, no impairment losses have been identified. F - 15 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) As required by ASC 820, “Fair Value Measurement”, the Company applies assumptions that market-place participations would consider in determines the fair value of long-lived assets (or asset group). i. Research and development costs: Research and development costs, net of participation grants, include costs incurred for research and development, are charged to the statement of operations as incurred. The Company received royalty-bearing grants from the Israeli Innovation Authority (“IIA”) for the purpose of partially funding research and development projects. The grants are recognized as a deduction from research and development costs incurred (see also Note 9a). j. Income taxes: The Company accounts for income taxes in accordance with ASC 740, “Income taxes”. This statement prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax based assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The Company implements a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. 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. The adoption of ASC 740-10 did not result in a change in the Company’s accumulated deficit. The Company did not record any provision in connection with ASC 740-10 as of December 31, 2020 and 2019. k. Severance pay: The Company’s agreements with most of its Israeli employees are in accordance with section 14 of the Severance Pay Law - 1963, under which the Company’s contributions for severance pay shall be instead of severance compensation. Upon release of the policy to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments will be made by the Company to the employee. F - 16 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company’s liability for severance pay for its Israeli employees that are not covered in section 14 is calculated pursuant to Israel’s Severance Pay Law - 1963, based on the most recent salary of the employees as of the balance sheet date less monthly deposits for insurance policies and/or pension funds. Employees are entitled to one month’s salary for each year of employment or a portion thereof. The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfilment of the obligations pursuant to Israeli severance pay law or labor agreements. Severance expense recorded in the statement of operations is net of interest and other income accumulated in the deposits. Severance expense for the years ended December 31, 2020, 2019 and 2018 amounted to $1,218, $951 and $33, respectively l. Accounting for share-based compensation: The Company accounts for share-based payment in accordance with ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees on the date of grant using an option-pricing model. The value of the portion of the award is recognized as an expense over the requisite service periods in the Company’s statement of operations. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The fair value for the Company’s stock options granted to employees and directors was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions: December 31, 2020 2019 Dividend yield 0 % 0 % Risk-free interest rate 0.52 % 1.81 % Expected term (in years) 4.22 4.22 Volatility 55 % 63 % The dividend yield assumption is based on the Company’s historical experience and expectation of future dividend payouts and may be subject to changes in the future. The computation of expected volatility is based on realized historical share price volatility of the Company’s Ordinary shares. F - 17 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The risk-free interest rate assumption is the implied yield currently available on the U.S treasury yield zero-coupon issues with a remaining term equal to the expected life term of the Company’s options. The expected term of the options represents the period of time that the options are expected to be outstanding and is based on the simplified method, as allowed under Staff Accounting Bulletin No. 110, which is the mid-point between the vesting date and the end of the contractual of the option. m. Fair value of financial instruments: The Company measures its financial instruments at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The carrying amount of cash and cash equivalents, restricted deposits, trade receivables, other accounts receivable, bank credit, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. F - 18 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. As of December 31, 2020, and 2019 the fair value of foreign currencies derivatives assets were 159 and 35, respectively. n. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and long-term receivables. The Company’s cash and cash equivalents and restricted deposits are mainly held in U.S. dollars with major banks in Israel. Management believes that the financial institutions that hold the Company’s investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The Company’s trade receivables are derived from sales to large and solid organizations located mainly in the United States, Asia, Latin America and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. The Company is exposed to credit losses primarily through sales to customers. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. o. Comprehensive income (loss): The Company accounts for comprehensive income in accordance with ASC 220, “Comprehensive Income”. This statement establishes standards for the reporting and display of comprehensive income and its components. Comprehensive income generally represents all changes in shareholders’ equity during the period except those resulting from investments by, or distributions to, shareholders. Accordingly, the Company presents a separate consolidated statement of comprehensive income (loss). The following table summarizes the changes in accumulated balances of other comprehensive income, net of taxes for the years ended December 31, 2018 (no other comprehensive income was recorded in 2019 and 2020): Accumulated foreign currency translation differences Balance as of December 31, 2017 $ 392 Net current period other comprehensive loss (172 ) Balance as of December 31, 2018 $ 220 F - 19 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) p. Warranty: In connection with the sale of its products, the Company provides product warranties for periods between one to two years. Based on past experience and engineering estimates, the estimated liability from these warranties are $212 and $35 as of December 31, 2020 and 2019, respectively. q. Revenue recognition: The Company generates revenues mainly from the sale of products and from long-term fixed price contracts of defense electronics as follows: data recording and management systems, inertial navigation systems for air and land applications, avionics solutions, and avionics for UAVs, and land radar for critical infrastructure protection, border surveillance, active military protection and counter-drone applications. In addition, the Company provides manufacturing, development and product support services. The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised goods or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five-step approach: a) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into a written agreement with a customer that defines each party’s rights regarding the products or services to be transferred and identifies the payment terms related to these products or services, (ii) both parties to the contract are committed to perform their respective obligations, (iii) the contract has commercial substance, and (iv) the Company determines that collection of substantially all consideration for products or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s payment history or, in the case of a new customer, published credit and financial information pertaining to the customer. b) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. F - 20 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company’s contracts contain a single performance obligation which includes the sale of product or development and manufacturing services and the sale of products that are not separately identifiable and, therefore, not distinct. In situations where the Company’s contract includes distinct goods or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct goods or services. When contracts are modified to account for changes in contract specifications and requirements, the Company consider whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at a relative stand-alone selling price, they are accounted for as a new contract and performance obligation, which are recognized prospectively. c) Determine the transaction price The transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. The Company doesn’t usually grant its customers with a right to return the products sold. However, in some cases, the arrangements may include penalties if the Company fails to deliver future goods on time. The above is accounted for as variable considerations, which may be considered as adjustments to the transaction price. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient and the contracts have no significant financing component. d) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Stand-alone selling price is the price at which the Company would sell a promised good or service separately to a customer. Stand-alone selling prices are established at contract inception and subsequent changes in transaction price are allocated on the same basis as at contract inception. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative stand-alone selling price basis unless a portion of the variable consideration related to the contract is allocated entirely to a performance obligation. F - 21 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) e) Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. The Company generally satisfies performance obligations once the customer has obtained the legal title to the items purchased or service provided. Revenues from long-term and short-term fixed price contracts are usually recognized over time based on the cost-to-cost input method that best depicts the transfer of control over the performance obligation to the customer. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. For contracts with an estimated amortization period of less than one year, the Company elected the practical expedient and expenses incremental costs immediately. The cost estimation process is based upon the professional knowledge and experience of the Company’s engineers, program managers, and financial professionals. Factors considered in estimating the work to be completed and ultimate contract recovery include the availability, productivity, and cost of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any performance delays, the availability and timing of funding from the customer, and the recoverability of any claims included in the estimates to complete. Changes in estimates of sales, costs, and profits on a performance obligation are recognized using the cumulative catch-up method of accounting, which recognizes in the current period the cumulative effect of the changes in current and prior periods. When estimates of total costs to be incurred exceed estimates of total revenue to be earned on a performance obligation related to a complex, construction-type contract, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. F - 22 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) Contract Assets Contract Liabilities r. Basic and diluted net income (loss) per share: Basic net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year in accordance with ASC 260, “Earnings per share”. s. Derivatives and hedging: The Company accounts for derivatives and hedging based on ASC 815, “Derivatives and hedging”, as amended and related Interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for fair value hedge transactions) or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings (for cash flow hedge transactions). If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities. F - 23 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with payroll expenses mainly incurred in NIS. Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as financial expenses, net. As of December 31, 2020 and 2019, the fair value of the outstanding forward contracts was $159 and $35, which were recorded in other receivables against financial income, respectively. t. Reclassifications: Certain financial statement data for prior years has been reclassified to conform to current year financial statement presentation. u. New accounting pronouncements not yet effective: In January 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. This guidance will be effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company do not expect the adoption of this guidance to have a material impact on its consolidated financial statements. v. Recently Adopted Accounting Pronouncements: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The new accounting standard was effective for the fiscal year beginning on January 1, 2020, including interim periods within that year. Adoption of this standard did not have a material impact on our consolidated financial statements. F - 24 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted the new standard effective January 1, 2018 using the retrospectively method. The adoption of this new guidance had an immaterial impact on the Company’s consolidated financial statements. Restricted cash is invested in short-term bank deposits (for three months), which are mainly used as security for the Company’s guarantees to customers and lines of credits with banks. The following table provides a reconciliation of cash and cash equivalents and restricted deposits reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: December 31, 2020 2019 2018 Cash and cash equivalents $ 36,289 $ 13,754 $ 20,814 Restricted cash 567 380 422 Cash and cash equivalents and restricted cash $ 36,856 $ 14,134 $ 21,236 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
LEASES | NOTE 3: LEASES The Company adopted ASC 842, as of January 1, 2019, using the modified retrospective approach. Consequently, prior period balances and disclosures have not been restated. The Company has elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard which does not require it to reassess the prior conclusions about lease identification, lease classification and initial direct costs. The Company elected the practical expedient to not separate lease and non-lease components for all its leases. This results in the initial and subsequent measurement of the balances of the right-of-use asset and lease liability being greater than if the policy election was not applied. The Company also elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. Some leases include one or more options to renew. The exercise of lease renewal options is typically at the Company's sole discretion; therefore, the majority of renewals to extend the lease terms are not included in our right of use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in remeasurement of the right of use asset and lease liability, which are not accounted as separate lease contract. The right-of-use asset and lease liability are initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate based on the information available at the date of adoption in determining the present value of the lease payments. The Company's incremental borrowing rate is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located. Some of the real estate leases contain variable lease payments, including payments based on an index or rate (CPI). Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease adoption. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. F - 26 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 3: LEASES (Cont.) The Company has various operating leases for office space and vehicles that expire through 2021 and 2031. Its lease agreements do not contain any material residual value guarantees or material restrictive covenants. Below is a summary of the Company's operating right-of-use assets and operating lease liabilities as of December 31, 2020: December 31, 2020 December 31, 2019 Operating right-of-use assets 10,581 $ 7,654 Operating lease liabilities, current 1,885 1,240 Operating lease liabilities long-term 8,732 6,499 Total operating lease liabilities 10,617 $ 7,739 Weighted average remaining lease term (years) 8 9 Weighted average discount rate 3.27 % 3.56 % Cash paid for lease expenses during the twelve months ended December 31, 2020 and 2019 were $1,508 and $1,302, respectively. Non-cash transactions recognize in operating assets and liabilities for new leases were $3,044 and $8,205, as of December 31, 2020 and 2019, respectively. Minimum lease payments for the Company's right of use assets over the remaining lease periods as of December 31, 2020, are as follows: 2021 $ 1,806 2022 1,671 2023 1,460 2024 1,303 2025 1,318 Thereafter 3,431 Total undiscounted lease payments 10,989 Less: Interest (372 ) Present value of lease liabilities $ 10,617 Total lease expenses for the twelve months ended December 31, 2020, 2019 and 2018 were $1,862, $1,138 and $958 respectively. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 4:- REVENUES In accordance with the new standard, costs and estimated earnings in excess of billings on uncompleted contracts were reclassified as contract assets and contract liabilities from December 31, 2018. Contract liabilities include advances from customers, which were presented separately in the Company's consolidated balance sheets as of December 31, 2020 and 2019. The following table presents the significant changes in the advances from customers balance during the twelve months ended December 31, 2020: Year ended December 31, 2020 2019 Balance, beginning of the period $ 1,563 $ 727 New performance obligations 1,677 893 Reclassification to revenue as a result of satisfying performance obligation (917 ) (57 ) Balance, end of the period $ 2,323 $ 1,563 The following table summarizes our contract assets and liabilities balances: 2020 2019 Contract assets at January 1, $ 1,269 $ 899 Contract assets at December 31, $ 756 $ 1,269 Change in contract assets – increase (decrease) $ (513 ) $ 370 Contract liabilities at January 1, $ 196 $ 366 Contract liabilities at December 31, $ 232 $ 196 Change in contract liabilities – increase (decrease) $ 36 $ (170 ) Net change $ (477 ) $ 200 For the twelve months ended December 31, 2020, 100% of the amount that was previously included in the beginning balance of contract liabilities was recognized. The Company’s unsatisfied performance obligations as of December 31, 2020 and the estimated revenue expected to be recognized in the future related to long-term fixed price contracts amounts to $366. The Company expects to recognize approximately 92% of this amount as revenues during the next 12 months. For information regarding disaggregated revenues, please refer to Note 14. |
OTHER ACCOUNTS RECEIVABLE AND P
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES | NOTE 5:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES December 31, 2020 2019 Prepaid expenses $ 953 $ 781 Government authorities 216 78 Advance payments to vendors 302 9 Deposits 7 40 Fair value of the outstanding forward contracts 159 35 Other accounts receivable related to Discontinued operations (see also note 1b.) - 730 $ 1,637 $ 1,673 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6:- INVENTORIES December 31, 2020 2019 Raw materials $ 23,744 $ 11,990 *) Work in progress, net 3,997 3,884 Finished goods 1,042 1,322 *) $ 28,783 $ 17,196 *) Reclassified Write-offs of inventories for the years ended December 31, 2020, 2019 and 2018 amounted to $132, $230 and $39, respectively. The write-offs were due to slow-moving items and excess inventories and were recorded in cost of revenues. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 7:- PROPERTY, PLANT AND EQUIPMENT, NET December 31, 2020 2019 Cost: Factory building $ 1,722 $ 2,081 Machinery and equipment *) **) 16,603 14,641 Office furniture and equipment 1,098 1,089 Leasehold improvements 2,959 2,004 22,382 19,815 Accumulated depreciation: Factory building 1,812 2,058 Machinery and equipment **) 6,170 8,043 Office furniture and equipment 236 389 Leasehold improvements 196 198 8,414 10,688 Depreciated cost $ 13,968 $ 9,127 *) As of December 31, 2020 and 2019, $ **) Capital loss from sale of fixed asset amounted to $ Depreciation expense amounted to $2,289, $1,223 and $799 (offset by depreciation write-offs of $4,519, $0 and $1,030 mainly due to assets disposals) for the years ended December 31, 2020, 2019 and 2018, respectively. |
OTHER ACCOUNTS PAYABLE AND ACCR
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 8:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES December 31, 2020 2019 Payroll and related accruals $ 6,579 $ 4,327 Accrued expenses - agents’ commissions 1,094 518 Accrued expenses 1,954 727 Royalties to IIA 228 - $ 9,855 $ 5,572 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 9:- COMMITMENTS AND CONTINGENT LIABILITIES a. The Company’s research and development efforts have been partially financed through royalty-bearing programs The total amount of royalties charged to operations for the years ended December 31, 2020, 2019 and 2018, were approximately $228, $41 and $458, respectively. As of December 31, 2020, the Company’s contingent liability for royalties, net of royalties paid or accrued is zero. b. The Company provides bank guarantees to some of its customers and others, in the ordinary course of business. The |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 10:- SHAREHOLDERS’ EQUITY a. Share capital: Ordinary Shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company. In June 2018, the Company's shareholders approved an increase of the Company's authorized share capital by NIS 1,875,000 and as a result the authorized share capital is equal to NIS 3,000,000 divided into 100,000,000 Ordinary Shares, par value NIS 0.03 each. In November 2018, the Company entered into agreements with several Israeli institutional investors to sell 4,545,454 Ordinary shares at price per share of $2.75, for a total consideration of $12,500. Offering costs amounted to $248. In January 2019, the Company’s shareholders approved the sale of 545,454 Ordinary shares to the controlling shareholder at a price per share of $2.75, approximately $1,500 in the aggregate. In January 2020, the Company completed an underwritten public offering of 4,819,052 Ordinary shares at a price of $5.25 per share, for a total consideration of $25,300. Offering costs amounted to approximately $1,800. b. Stock option plans: In April 2015, the Company's Board of Directors adopted the "2015 Share Option Plan" (the "Plan"), which authorized the grant of options to purchase up to an aggregate of 1,500,000 Ordinary shares to officers, directors, consultants and key employees of the Company and its subsidiaries. Options granted under the Plan expire within a maximum of ten years from adoption of the plan in 2018, the Company's Board of Directors had extended the plan to 10 additional years. Generally, under the terms of the Plan, unless determined otherwise by the administrator of the Plans, 25% of the option granted becomes exercisable on the first anniversary of the date of grant and 6.25% becomes exercisable once every quarter during the subsequent three years. In addition, options granted under the plan are granted at the average closing price of our Shares as quoted on NASDAQ during the 30 business days prior to the date the Option is granted. For our US employees, the exercise price is Higher of (a) the average closing price of our Shares as quoted on NASDAQ during the 30 business days prior to the date the Option is granted, and (b) the closing price as quoted on NASDAQ on the last trading day preceding the date the Option is granted.) These options will be exercisable for 48 months following the date of vesting. As of December 31, 2020, options to purchase 164,592 Ordinary shares are available for future grant under the Plan. F - 32 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 10:- SHAREHOLDERS’ EQUITY (Cont.) A summary of the Company’s activity for options granted to employees and directors under the Plan is as follows: Twelve months ended December 31, 2020 Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate Intrinsic Value Price Outstanding at the beginning of the period 3,110,938 $ 2.76 8.23 $ 7,579 Granted 952,500 5.18 - - Exercised (626,871 ) 2.01 - - Forfeited (146,405 ) 3.57 - - Outstanding at the end of the period 3,290,162 3.57 7.91 8,768 Exercisable 1,302,349 $ 2.79 7.05 $ 19,726 Aggregate intrinsic value of exercisable options (the difference between the closing share price of the Company’s Ordinary Shares on the last trading day in the period and the exercise price, multiplied by the number of in-the-money options) represents the amount that would have been received by the employees and directors option holders had all option holders exercised their options on December 31, 2020. This amount changes based on the fair market value of the Company’s Ordinary shares. The total intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018 was $4,596, $1,192, and $173, respectively. The weighted average grant date fair value of options granted to employees and directors during the years ended December 31, 2020, 2019, and 2018, was $2,340 $1,060 and $2,179, respectively. As of December 31, 2020, unrecognized compensation expenses related to employees and directors stock options to be recognized over an average time of approximately 4 years is approximately $3,629. During the twelve months period ended December 31, 2020, the Company recognized compensation expenses related to employees and service providers stock option in the amount of $1,436, as follows: Year ended December 31, 2020 2019 Cost of revenues $ 256 $ 134 Research and development $ 393 $ 243 Marketing and selling $ 22 $ 57 General and administrative $ 765 $ 714 $ 1,436 $ 1,148 |
TAXES ON INCOME
TAXES ON INCOME | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | NOTE 11:- TAXES ON INCOME a. The Israeli corporate tax rate and real capital gains tax was The Company’s subsidiaries which were incorporated in the U.S. were subject to federal tax rate of 21% in 2020, 2019 and 2018. b. In accordance with the Israeli tax laws, tax returns of the Company submitted up to and including the 2015 tax year The Company’s subsidiaries did not receive final tax assessments since their incorporation. c. Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: The Company qualifies as an “Industrial Company” under the Law for the Encouragement of Industry (Taxes), 1969 (the “Industrial Encouragement Law”). The Industrial Encouragement Law defines an “Industrial Company” as a company that is resident in Israel and that derives at least 90% of its income in any tax year, other than income from defense loans, capital gains, interest and dividends, from an enterprise whose major activity in a given tax year is industrial production. The principal benefit from the above law is the deduction of expenses in connection with a public offering. Also, under the industrial Encouragement Law an “Industrial Company” is entitled to special rates of depreciation for industrial equipment and in addition to amortization of the cost of purchased know-how and patents over an eight-year period for tax purposes and an accelerated depreciation rate on equipment. Eligibility for the benefits under the Industry Encouragement Law is not subject to receipt of prior approval from any governmental authority. d. As of December 31, 2020, the net operating tax loss carry-forward relating to the Company in Israel amounted to F - 34 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 11:- TAXES ON INCOME (Cont.) As of December 31, 2020, the U.S. subsidiaries have U.S. federal carry-forward tax losses of approximately $3,750. As the Company believes that it is more likely than not that the deferred tax assets in respect of these carry-forward losses will not be utilized, the Company recorded a full valuation allowance for the entire balance of the deferred tax asset relating to the carry-forward losses. e. The main reconciling items between the statutory tax rate of the Company and the effective tax rate is the valuation Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: December 31, 2020 2019 Net operating loss carry-forward $ 14,745 $ 15,373 Capital loss carry-forward 941 883 Allowances and reserve 455 401 Total deferred tax assets before valuation allowance 16,141 16,657 Valuation allowance (16,141 ) (16,657 ) Net deferred tax assets $ - $ - As of December 31, 2020 and 2019, the Company has provided valuation allowances in respect of deferred tax assets resulting from the tax loss carry-forward and other temporary differences, since it has a history of operating losses and the current uncertainty concerning its ability to realize these deferred tax assets in the future. The Company accounts for its income tax uncertainties in accordance with ASC 740, which clarifies the accounting for uncertainties in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2020 and 2019, there were no unrecognized tax benefits that if recognized would affect the annual effective tax rate. |
FINANCIAL EXPENSES, NET
FINANCIAL EXPENSES, NET | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
FINANCIAL EXPENSES, NET | NOTE 12:- FINANCIAL EXPENSES, NET Year ended December 31, 2020 2019 2018 Income: Foreign currency exchange differences $ - $ - $ 47 Interest on cash equivalents and restricted deposits 278 359 184 Operating lease income 195 - - Other 131 96 - 604 455 231 Expenses: Bank commissions and others 51 38 19 Operating lease expenses - 85 - Foreign currency exchange differences 386 453 93 437 576 112 Total financial (expenses) Income, net $ 167 $ (121 ) $ 119 |
RELATED PARTY BALANCE AND TRANS
RELATED PARTY BALANCE AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCE AND TRANSACTIONS | NOTE 13:- RELATED PARTY BALANCE AND TRANSACTIONS In January 2017, the Company’s shareholders approved that in addition to the directors’ fees to be paid to all of the Company’s directors, commencing as of January 1, 2017, the Company will pay to its Executive Chairman of the Board of Directors additional monthly payment of approximately $4.6 (NIS 17,500) for time devoted to the Company. Such payment is subject to increase in the event the Company achieved profitable operations. In 2017, the Company’s consolidated audited financial statements reflected net income (before taxes), so such additional payment increased to approximately $9 (NIS 35,000). In 2020 and 2019, the total payments to the Executive Chairman of the Board of Directors were $123 and $119, respectively. F - 36 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 13:- RELATED PARTY BALANCE AND TRANSACTIONS (Cont.) See also Note 10 for transactions with the Company’s shareholders. Balances with related parties: December 31, 2020 2019 Accrued expenses $ 52 $ 50 Related parties’ expenses: Year ended December 31, 2020 2019 2018 Directors and management fees $ 167 $ 169 $ 156 |
MAJOR CUSTOMERS AND GEOGRAPHIC
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | NOTE 14:- MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION a. Operating segments are defined as components of an enterprise about which separate financial information is b. Revenues by geographic areas: Revenues are attributed to geographic area based on the location of the end customers as follows: Year ended December 31, 2020 2019 2018 North America $ 45,080 $ 21,995 $ 11,686 Israel 15,485 12,737 10,446 Europe 12,038 6,073 1,601 Asia 1,740 2,499 3,093 South America 1,089 1,027 1,206 Australia 785 - - Total $ 76,217 $ 44,331 $ 28,032 F - 37 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 14:- MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Cont.) c. Major customers: Revenues from single customers that exceed 10% of the total revenues in the reported years as a percentage of total revenues are as follows: Year ended December 31, 2020 2019 2018 % Customer A 21 - - Customer B 14 7 - Customer C 10 - - Customer D 6 8 11 Customer E 5 4 12 Customer F 4 12 7 Customer G 1 3 11 Customer H - 4 12 d. Long-lived assets (property, plant and equipment) by geographic areas: December 31, 2020 2019 Israel $ 10,108 $ 6,062 USA 3,860 3,065 $ 13,968 $ 9,127 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15:- SUBSEQUENT EVENTS In February 2021, the Company’s shares began trading also on the Tel Aviv Stock Exchange. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | a. Use of estimates: The preparation of financial statements in conformity with (“US GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. F - 13 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they were made. |
Financial Statements in U.S. Dollars | b. Financial statements in U.S. dollars: The majority of the revenues of the Company are generated in U.S. dollars. In addition, financing activities are made in U.S. dollars. The Company’s management believes that the dollar is the currency of the primary economic environment in which the Company operates. Thus, its functional and reporting currency is the dollar. Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the statement of operations as financial income or expenses, as appropriate, in the period in which the currency exchange rate changes. The financial statements of the Company’s former foreign subsidiary (CACS), whose functional currency is not the U.S. dollar, have been translated into dollars. All balance sheet amounts have been translated using the exchange rates in effect at balance sheet date. Statement of operation amounts have been translated using the average exchange rate prevailing during the year. Such translation adjustments are reported as a separate component of accumulated other comprehensive income (loss) in equity (see also note 1b). |
Basis of Consolidation | c. Basis of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Inter-company transactions and balances have been eliminated upon consolidation. |
Cash Equivalents | d. Cash equivalents: All highly liquid investments that are readily convertible to cash and are not restricted as to withdrawal or use and the period to maturity of which did not exceed three months at time of deposit, are considered cash equivalents. |
Restricted Deposit | e. Restricted deposit: Restricted cash is invested in short-term bank deposits (less than twelve months), which are mainly used as security for the Company’s guarantees to customers and lines of credits with banks. The deposits are in U.S. dollars and bear a variable annual interest of up to 0.43%. |
Inventories | f. Inventories: Inventories are stated at the lower of cost or market value. Inventory write-offs are provided to cover risks arising from slow-moving items, excess inventories and for market prices lower than cost (see also Note 6). Cost is determined as follows: Raw materials and components - using the FIFO cost method. Work in progress and finished goods - represents the cost of manufacturing with the addition of allocable indirect manufacturing costs. Costs incurred on long-term contracts in progress include direct labor, material, subcontractors, other direct costs and an allocation of overhead, which represent recoverable costs incurred for production. |
Property, Plant and Equipment | g. Property, plant and equipment: Property plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows: % Factory and other buildings 4 Machinery and equipment 7 - 33 Office furniture and equipment 6 - 33 Leasehold improvements are depreciated over the shorter of the estimated useful life or the lease period. Assets, in respect of which investment grants have been received, are presented at cost less the related grant amount. Depreciation is based on net cost. |
Impairment of Long-Lived Assets | h. Impairment of long-lived assets: The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, plant and equipment”, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2020, 2019 and 2018, no impairment losses have been identified. F - 15 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) As required by ASC 820, “Fair Value Measurement”, the Company applies assumptions that market-place participations would consider in determines the fair value of long-lived assets (or asset group). |
Research and Development Costs | i. Research and development costs: Research and development costs, net of participation grants, include costs incurred for research and development, are charged to the statement of operations as incurred. The Company received royalty-bearing grants from the Israeli Innovation Authority (“IIA”) for the purpose of partially funding research and development projects. The grants are recognized as a deduction from research and development costs incurred (see also Note 9a). |
Income Taxes | j. Income taxes: The Company accounts for income taxes in accordance with ASC 740, “Income taxes”. This statement prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax based assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The Company implements a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740. 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. The adoption of ASC 740-10 did not result in a change in the Company’s accumulated deficit. The Company did not record any provision in connection with ASC 740-10 as of December 31, 2020 and 2019. |
Severance Pay | k. Severance pay: The Company’s agreements with most of its Israeli employees are in accordance with section 14 of the Severance Pay Law - 1963, under which the Company’s contributions for severance pay shall be instead of severance compensation. Upon release of the policy to the employee, no additional liability exists between the parties regarding the matter of severance pay and no additional payments will be made by the Company to the employee. F - 16 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company’s liability for severance pay for its Israeli employees that are not covered in section 14 is calculated pursuant to Israel’s Severance Pay Law - 1963, based on the most recent salary of the employees as of the balance sheet date less monthly deposits for insurance policies and/or pension funds. Employees are entitled to one month’s salary for each year of employment or a portion thereof. The carrying value of deposited funds includes profits (losses) accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfilment of the obligations pursuant to Israeli severance pay law or labor agreements. Severance expense recorded in the statement of operations is net of interest and other income accumulated in the deposits. Severance expense for the years ended December 31, 2020, 2019 and 2018 amounted to $1,218, $951 and $33, respectively |
Accounting for Share-Based Compensation | l. Accounting for share-based compensation: The Company accounts for share-based payment in accordance with ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees on the date of grant using an option-pricing model. The value of the portion of the award is recognized as an expense over the requisite service periods in the Company’s statement of operations. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The fair value for the Company’s stock options granted to employees and directors was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions: December 31, 2020 2019 Dividend yield 0 % 0 % Risk-free interest rate 0.52 % 1.81 % Expected term (in years) 4.22 4.22 Volatility 55 % 63 % The dividend yield assumption is based on the Company’s historical experience and expectation of future dividend payouts and may be subject to changes in the future. The computation of expected volatility is based on realized historical share price volatility of the Company’s Ordinary shares. F - 17 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The risk-free interest rate assumption is the implied yield currently available on the U.S treasury yield zero-coupon issues with a remaining term equal to the expected life term of the Company’s options. The expected term of the options represents the period of time that the options are expected to be outstanding and is based on the simplified method, as allowed under Staff Accounting Bulletin No. 110, which is the mid-point between the vesting date and the end of the contractual of the option. |
Fair Value of Financial Instruments | m. Fair value of financial instruments: The Company measures its financial instruments at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3. The carrying amount of cash and cash equivalents, restricted deposits, trade receivables, other accounts receivable, bank credit, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments. F - 18 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. As of December 31, 2020, and 2019 the fair value of foreign currencies derivatives assets were 159 and 35, respectively. |
Concentrations of Credit Risk | n. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and long-term receivables. The Company’s cash and cash equivalents and restricted deposits are mainly held in U.S. dollars with major banks in Israel. Management believes that the financial institutions that hold the Company’s investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The Company’s trade receivables are derived from sales to large and solid organizations located mainly in the United States, Asia, Latin America and Israel. The Company performs ongoing credit evaluations of its customers and to date has not experienced any material losses. The Company is exposed to credit losses primarily through sales to customers. The Company’s expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. |
Comprehensive Income (Loss) | o. Comprehensive income (loss): The Company accounts for comprehensive income in accordance with ASC 220, “Comprehensive Income”. This statement establishes standards for the reporting and display of comprehensive income and its components. Comprehensive income generally represents all changes in shareholders’ equity during the period except those resulting from investments by, or distributions to, shareholders. Accordingly, the Company presents a separate consolidated statement of comprehensive income (loss). The following table summarizes the changes in accumulated balances of other comprehensive income, net of taxes for the years ended December 31, 2018 (no other comprehensive income was recorded in 2019 and 2020): Accumulated foreign currency translation differences Balance as of December 31, 2017 $ 392 Net current period other comprehensive loss (172 ) Balance as of December 31, 2018 $ 220 |
Warranty | p. Warranty: In connection with the sale of its products, the Company provides product warranties for periods between one to two years. Based on past experience and engineering estimates, the estimated liability from these warranties are $212 and $35 as of December 31, 2020 and 2019, respectively. |
Revenue Recognition | q. Revenue recognition: The Company generates revenues mainly from the sale of products and from long-term fixed price contracts of defense electronics as follows: data recording and management systems, inertial navigation systems for air and land applications, avionics solutions, and avionics for UAVs, and land radar for critical infrastructure protection, border surveillance, active military protection and counter-drone applications. In addition, the Company provides manufacturing, development and product support services. The Company recognizes revenue when (or as) it satisfies performance obligations by transferring promised goods or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five-step approach: a) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into a written agreement with a customer that defines each party’s rights regarding the products or services to be transferred and identifies the payment terms related to these products or services, (ii) both parties to the contract are committed to perform their respective obligations, (iii) the contract has commercial substance, and (iv) the Company determines that collection of substantially all consideration for products or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s payment history or, in the case of a new customer, published credit and financial information pertaining to the customer. b) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the products or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract. F - 20 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company’s contracts contain a single performance obligation which includes the sale of product or development and manufacturing services and the sale of products that are not separately identifiable and, therefore, not distinct. In situations where the Company’s contract includes distinct goods or services that are substantially the same and have the same pattern of transfer to the customer over time, they are recognized as a series of distinct goods or services. When contracts are modified to account for changes in contract specifications and requirements, the Company consider whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and the Company’s measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at a relative stand-alone selling price, they are accounted for as a new contract and performance obligation, which are recognized prospectively. c) Determine the transaction price The transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. The Company doesn’t usually grant its customers with a right to return the products sold. However, in some cases, the arrangements may include penalties if the Company fails to deliver future goods on time. The above is accounted for as variable considerations, which may be considered as adjustments to the transaction price. As the Company’s standard payment terms are less than one year, the Company elected the practical expedient and the contracts have no significant financing component. d) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Stand-alone selling price is the price at which the Company would sell a promised good or service separately to a customer. Stand-alone selling prices are established at contract inception and subsequent changes in transaction price are allocated on the same basis as at contract inception. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative stand-alone selling price basis unless a portion of the variable consideration related to the contract is allocated entirely to a performance obligation. F - 21 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) e) Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. The Company generally satisfies performance obligations once the customer has obtained the legal title to the items purchased or service provided. Revenues from long-term and short-term fixed price contracts are usually recognized over time based on the cost-to-cost input method that best depicts the transfer of control over the performance obligation to the customer. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. For contracts with an estimated amortization period of less than one year, the Company elected the practical expedient and expenses incremental costs immediately. The cost estimation process is based upon the professional knowledge and experience of the Company’s engineers, program managers, and financial professionals. Factors considered in estimating the work to be completed and ultimate contract recovery include the availability, productivity, and cost of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any performance delays, the availability and timing of funding from the customer, and the recoverability of any claims included in the estimates to complete. Changes in estimates of sales, costs, and profits on a performance obligation are recognized using the cumulative catch-up method of accounting, which recognizes in the current period the cumulative effect of the changes in current and prior periods. When estimates of total costs to be incurred exceed estimates of total revenue to be earned on a performance obligation related to a complex, construction-type contract, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. F - 22 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) Contract Assets Contract Liabilities |
Basic and Diluted Net Income (Loss) Per Share | r. Basic and diluted net income (loss) per share: Basic net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary shares outstanding during each year, plus dilutive potential Ordinary shares considered outstanding during the year in accordance with ASC 260, “Earnings per share”. |
Derivatives and Hedging | s. Derivatives and hedging: The Company accounts for derivatives and hedging based on ASC 815, “Derivatives and hedging”, as amended and related Interpretations. ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. If a derivative meets the definition of a hedge and is so designated, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings (for fair value hedge transactions) or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings (for cash flow hedge transactions). If a derivative does not meet the definition of a hedge, the changes in the fair value are included in earnings. Cash flows related to such hedges are classified as operating activities. F - 23 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) The Company enters into forward exchange contracts and option contracts in order to limit the exposure to exchange rate fluctuation associated with payroll expenses mainly incurred in NIS. Since the derivative instruments that the Company holds do not meet the definition of hedging instruments under ASC 815, any gain or loss derived from such instruments is recognized immediately as financial expenses, net. As of December 31, 2020 and 2019, the fair value of the outstanding forward contracts was $159 and $35, which were recorded in other receivables against financial income, respectively. |
Reclassifications | t. Reclassifications: Certain financial statement data for prior years has been reclassified to conform to current year financial statement presentation. |
New accounting pronouncements not yet effective | u. New accounting pronouncements not yet effective: In January 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. This guidance will be effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company do not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |
Recently Adopted Accounting Pronouncements | v. Recently Adopted Accounting Pronouncements: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The new accounting standard was effective for the fiscal year beginning on January 1, 2020, including interim periods within that year. Adoption of this standard did not have a material impact on our consolidated financial statements. F - 24 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.) In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted the new standard effective January 1, 2018 using the retrospectively method. The adoption of this new guidance had an immaterial impact on the Company’s consolidated financial statements. Restricted cash is invested in short-term bank deposits (for three months), which are mainly used as security for the Company’s guarantees to customers and lines of credits with banks. The following table provides a reconciliation of cash and cash equivalents and restricted deposits reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: December 31, 2020 2019 2018 Cash and cash equivalents $ 36,289 $ 13,754 $ 20,814 Restricted cash 567 380 422 Cash and cash equivalents and restricted cash $ 36,856 $ 14,134 $ 21,236 |
GENERAL (Tables)
GENERAL (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Results of Discontinued Operations | The results of the discontinued operations in prior periods’ comparable results, assets and liabilities have been retroactively included in discontinued operations as separate line items in the statements of operations and balance sheets, are presented below: F - 12 RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands, except share and per share data NOTE 1:- GENERAL (Cont.) Year ended December 31, 2020 2019 2018 Revenues $ - $ - $ 750 Cost of sales - - (787 ) Operating expenses - - (208 ) Operating loss - - (245 ) Net loss - - (245 ) Loss from sale of subsidiary - (115 ) (159 ) Net loss from discontinued operations $ - $ (115 ) $ (404 ) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Annual Rate of Depreciation | Property plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets. Annual rates of depreciation are as follows: % Factory and other buildings 4 Machinery and equipment 7 - 33 Office furniture and equipment 6 - 33 |
Schedule of Fair Value of Stock Options Valuation Assumptions | The fair value for the Company’s stock options granted to employees and directors was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions: December 31, 2020 2019 Dividend yield 0 % 0 % Risk-free interest rate 0.52 % 1.81 % Expected term (in years) 4.22 4.22 Volatility 55 % 63 % |
Summary of Changes in Accumulated Other Comprehensive Income | The following table summarizes the changes in accumulated balances of other comprehensive income, net of taxes for the years ended December 31, 2018 (no other comprehensive income was recorded in 2019 and 2020): Accumulated foreign currency translation differences Balance as of December 31, 2017 $ 392 Net current period other comprehensive loss (172 ) Balance as of December 31, 2018 $ 220 |
Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Deposits | The following table provides a reconciliation of cash and cash equivalents and restricted deposits reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: December 31, 2020 2019 2018 Cash and cash equivalents $ 36,289 $ 13,754 $ 20,814 Restricted cash 567 380 422 Cash and cash equivalents and restricted cash $ 36,856 $ 14,134 $ 21,236 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lessee Disclosure [Abstract] | |
Schedule of Operating Right-of-use Assets and Operating Lease Liabilities | The Company has various operating leases for office space and vehicles that expire through 2021 and 2031. Its lease agreements do not contain any material residual value guarantees or material restrictive covenants. Below is a summary of the Company's operating right-of-use assets and operating lease liabilities as of December 31, 2020: December 31, 2020 December 31, 2019 Operating right-of-use assets 10,581 $ 7,654 Operating lease liabilities, current 1,885 1,240 Operating lease liabilities long-term 8,732 6,499 Total operating lease liabilities 10,617 $ 7,739 Weighted average remaining lease term (years) 8 9 Weighted average discount rate 3.27 % 3.56 % |
Schedule of Minimum lease Payments | Minimum lease payments for the Company's right of use assets over the remaining lease periods as of December 31, 2020, are as follows: 2021 $ 1,806 2022 1,671 2023 1,460 2024 1,303 2025 1,318 Thereafter 3,431 Total undiscounted lease payments 10,989 Less: Interest (372 ) Present value of lease liabilities $ 10,617 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Changes in Advances from Customers | The following table presents the significant changes in the advances from customers balance during the twelve months ended December 31, 2020: Year ended December 31, 2020 2019 Balance, beginning of the period $ 1,563 $ 727 New performance obligations 1,677 893 Reclassification to revenue as a result of satisfying performance obligation (917 ) (57 ) Balance, end of the period $ 2,323 $ 1,563 |
Schedule of Contract Assets and Liabilities | The following table summarizes our contract assets and liabilities balances: 2020 2019 Contract assets at January 1, $ 1,269 $ 899 Contract assets at December 31, $ 756 $ 1,269 Change in contract assets – increase (decrease) $ (513 ) $ 370 Contract liabilities at January 1, $ 196 $ 366 Contract liabilities at December 31, $ 232 $ 196 Change in contract liabilities – increase (decrease) $ 36 $ (170 ) Net change $ (477 ) $ 200 |
OTHER ACCOUNTS RECEIVABLE AND_2
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Accounts Receivable and Prepaid Expenses | December 31, 2020 2019 Prepaid expenses $ 953 $ 781 Government authorities 216 78 Advance payments to vendors 302 9 Deposits 7 40 Fair value of the outstanding forward contracts 159 35 Other accounts receivable related to Discontinued operations (see also note 1b.) - 730 $ 1,637 $ 1,673 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | December 31, 2020 2019 Raw materials $ 23,744 $ 11,990 *) Work in progress, net 3,997 3,884 Finished goods 1,042 1,322 *) $ 28,783 $ 17,196 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property Plant and Equipment | December 31, 2020 2019 Cost: Factory building $ 1,722 $ 2,081 Machinery and equipment *) **) 16,603 14,641 Office furniture and equipment 1,098 1,089 Leasehold improvements 2,959 2,004 22,382 19,815 Accumulated depreciation: Factory building 1,812 2,058 Machinery and equipment **) 6,170 8,043 Office furniture and equipment 236 389 Leasehold improvements 196 198 8,414 10,688 Depreciated cost $ 13,968 $ 9,127 *) As of December 31, 2020 and 2019, $ **) Capital loss from sale of fixed asset amounted to $ |
OTHER ACCOUNTS PAYABLE AND AC_2
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accounts Payable and Accrued Expenses | December 31, 2020 2019 Payroll and related accruals $ 6,579 $ 4,327 Accrued expenses - agents’ commissions 1,094 518 Accrued expenses 1,954 727 Royalties to IIA 228 - $ 9,855 $ 5,572 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock Options Activity | Twelve months ended December 31, 2020 Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate Intrinsic Value Price Outstanding at the beginning of the period 3,110,938 $ 2.76 8.23 $ 7,579 Granted 952,500 5.18 - - Exercised (626,871 ) 2.01 - - Forfeited (146,405 ) 3.57 - - Outstanding at the end of the period 3,290,162 3.57 7.91 8,768 Exercisable 1,302,349 $ 2.79 7.05 $ 19,726 |
Schedule of Recognized Stock-based Compensation | During the twelve months period ended December 31, 2020, the Company recognized compensation expenses related to employees and service providers stock option in the amount of $1,436, as follows: Year ended December 31, 2020 2019 Cost of revenues $ 256 $ 134 Research and development $ 393 $ 243 Marketing and selling $ 22 $ 57 General and administrative $ 765 $ 714 $ 1,436 $ 1,148 |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Income Tax | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: December 31, 2020 2019 Net operating loss carry-forward $ 14,745 $ 15,373 Capital loss carry-forward 941 883 Allowances and reserve 455 401 Total deferred tax assets before valuation allowance 16,141 16,657 Valuation allowance (16,141 ) (16,657 ) Net deferred tax assets $ - $ - |
FINANCIAL EXPENSES, NET (Tables
FINANCIAL EXPENSES, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Financial Expenses, Net | Year ended December 31, 2020 2019 2018 Income: Foreign currency exchange differences $ - $ - $ 47 Interest on cash equivalents and restricted deposits 278 359 184 Operating lease income 195 - - Other 131 96 - 604 455 231 Expenses: Bank commissions and others 51 38 19 Operating lease expenses - 85 - Foreign currency exchange differences 386 453 93 437 576 112 Total financial (expenses) Income, net $ 167 $ (121 ) $ 119 |
RELATED PARTY BALANCE AND TRA_2
RELATED PARTY BALANCE AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Balance with Related Parties | Balances with related parties: December 31, 2020 2019 Accrued expenses $ 52 $ 50 |
Schedule of Related Party Expenses | Related parties’ expenses: Year ended December 31, 2020 2019 2018 Directors and management fees $ 167 $ 169 $ 156 |
MAJOR CUSTOMERS AND GEOGRAPHI_2
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Areas | Revenues are attributed to geographic area based on the location of the end customers as follows: Year ended December 31, 2020 2019 2018 North America $ 45,080 $ 21,995 $ 11,686 Israel 15,485 12,737 10,446 Europe 12,038 6,073 1,601 Asia 1,740 2,499 3,093 South America 1,089 1,027 1,206 Australia 785 - - Total $ 76,217 $ 44,331 $ 28,032 |
Schedule of Revenue from Major Customers | Revenues from single customers that exceed 10% of the total revenues in the reported years as a percentage of total revenues are as follows: Year ended December 31, 2020 2019 2018 % Customer A 21 - - Customer B 14 7 - Customer C 10 - - Customer D 6 8 11 Customer E 5 4 12 Customer F 4 12 7 Customer G 1 3 11 Customer H - 4 12 |
Schedule of Long-Lived Assets by Geographic Area | d. Long-lived assets (property, plant and equipment) by geographic areas: December 31, 2020 2019 Israel $ 10,108 $ 6,062 USA 3,860 3,065 $ 13,968 $ 9,127 |
GENERAL (Details Narrative)
GENERAL (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2019 | Jan. 31, 2018 | Dec. 31, 2016 | |
Loss from sale of subsidiary | $ (115) | $ (159) | ||||
Percentage of consideration received from transaction | 100.00% | |||||
Proceeds from sale of discontinued operations, net | 730 | |||||
Accumulated deficit | 73,351 | $ 78,991 | ||||
Cash and cash equivalents | $ 36,289 | $ 13,754 | $ 20,814 | |||
CACS [Member] | ||||||
Ownership percentage | 80.00% | |||||
Percentage on ownership acquired | 100.00% | |||||
Decrease of additional paid in capital | $ 254 | |||||
Proceeds from noncontrolling interests | 1,500 | |||||
Loss from sale of subsidiary | $ 159 | |||||
RADA Sensors Inc [Member] | ||||||
Ownership percentage | 100.00% | 75.00% | ||||
RADA Technologies LLC [Member] | ||||||
Ownership percentage | 25.00% | |||||
RADA Innovations LLC [Member] | ||||||
Ownership percentage | 100.00% |
GENERAL - Schedule of Results o
GENERAL - Schedule of Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Revenues | $ 750 | ||
Cost of sales | (787) | ||
Operating expenses | (208) | ||
Operating loss | (245) | ||
Net loss | (245) | ||
Loss from sale of subsidiary | (115) | (159) | |
Net loss from discontinued operations | $ (115) | $ (404) |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Interest rate on investments held as restricted deposits | 0.43% | ||
Impairment of long-lived assets | |||
Servenance expense | 1,218 | 951 | $ 33 |
Fair value of derivative asset | 159 | 35 | |
Warranties | 212 | 35 | |
Other receivables | $ 159 | $ 35 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Annual Rate of Depreciation (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Factory and Other Building [Member] | |
Annual rate of depreciation | 4.00% |
Machinery and Equipment [Member] | Minimum [Member] | |
Annual rate of depreciation | 7.00% |
Machinery and Equipment [Member] | Maximum [Member] | |
Annual rate of depreciation | 33.00% |
Office Furniture and Equipment [Member] | Minimum [Member] | |
Annual rate of depreciation | 6.00% |
Office Furniture and Equipment [Member] | Maximum [Member] | |
Annual rate of depreciation | 33.00% |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value of Stock Options Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 0.52% | 1.81% |
Expected term (in years) | 4 years 2 months 19 days | 4 years 2 months 19 days |
Volatility | 55.00% | 63.00% |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Summary of Changes in Accumulated Other Comprehensive Income (Details) - Accumulated Foreign Currency Adjustment Attributable to Parent [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Balance as of beginning of the period | $ 392 |
Net current period other comprehensive loss | (172) |
Balance as of end of the period | $ 220 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 36,289 | $ 13,754 | $ 20,814 |
Restricted cash | 567 | 380 | 422 |
Cash and cash equivalents and restricted cash | $ 36,856 | $ 14,134 | $ 21,236 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee Disclosure [Abstract] | |||
Lease expenses | $ 1,862 | $ 1,138 | $ 958 |
Cash paid for lease | $ 1,508 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Assets and lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee Disclosure [Abstract] | ||
Operating right-of-use assets | $ 10,581 | $ 7,654 |
Operating lease liabilities, current | 1,885 | 1,240 |
Operating lease liabilities long-term | 8,732 | 6,499 |
Total operating lease liabilities | $ 10,617 | $ 7,739 |
Weighted average remaining lease term (years) | 8 years | 9 years |
Weighted average discount rate | 3.27% | 3.56% |
LEASES - Schedule of Minimum Le
LEASES - Schedule of Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating leases | ||
2021 | $ 1,806 | |
2022 | 1,671 | |
2023 | 1,460 | |
2024 | 1,303 | |
2025 | 1,318 | |
Thereafter | 3,431 | |
Total undiscounted lease payments | 10,989 | |
Less: Interest | (372) | |
Total operating lease liabilities | $ 10,617 | $ 7,739 |
REVENUES (Details Narrative)
REVENUES (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Percentage of amount recognized from contract liabilities | 100.00% |
Revenue performance obligations | $ 366 |
Revenue, performance obligation, percentage | 92.00% |
REVENUES - Schedule of Changes
REVENUES - Schedule of Changes in Advances from Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Balance, beginning of the period | $ 1,563 | $ 727 |
New performance obligations | 1,677 | 893 |
Reclassification to revenue as a result of satisfying performance obligation | (917) | (57) |
Balance, end of the period | $ 2,323 | $ 1,563 |
REVENUES - Schedule of Contract
REVENUES - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contract assets at January 1 | $ 1,269 | |
Contract assets at December 31 | 756 | $ 1,269 |
Contract liabilities at January 1 | 196 | |
Contract liabilities at December 31 | 232 | 196 |
Contract Assets and Liabilities [Member] | ||
Contract assets at January 1 | 1,269 | 899 |
Contract assets at December 31 | 756 | 1,269 |
Change in contract assets - increase (decrease) | (513) | 370 |
Contract liabilities at January 1 | 196 | 366 |
Contract liabilities at December 31 | 232 | 196 |
Change in contract liabilities - increase (decrease) | 36 | (170) |
Net change | $ (477) | $ 200 |
OTHER ACCOUNTS RECEIVABLE AND_3
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES - Schedule of Other Accounts Receivable and Prepaid Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 953 | $ 781 |
Government authorities | 216 | 78 |
Advance payments to vendors | 302 | 9 |
Deposits | 7 | 40 |
Fair value of the outstanding forward contracts | 159 | 35 |
Other accounts receivable related to Discontinued operations (see also note 1b.) | 730 | |
Other accounts receivable and prepaid expenses | $ 1,637 | $ 1,673 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |||
Write-offs of inventories | $ 132 | $ 230 | $ 39 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |||
Raw materials | [1] | $ 23,744 | $ 11,990 |
Work in progress, net | 3,997 | 3,884 | |
Finished goods | [1] | 1,042 | 1,322 |
Inventory net | $ 28,783 | $ 17,196 | |
[1] | Reclassified |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |||
Depreciation expense | $ 2,289 | $ 1,223 | $ 799 |
Write-offs of machinery and equipment | $ 4,519 | $ 0 | $ 1,030 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Total cost | $ 22,382 | $ 19,815 | |
Total accumulated depriciation | 8,414 | 10,688 | |
Depreciated cost | 13,968 | 9,127 | |
Factory Building [Member] | |||
Total cost | 1,722 | 2,081 | |
Total accumulated depriciation | 1,812 | 2,058 | |
Machinery and Equipment [Member] | |||
Total cost | [1],[2] | 16,603 | 14,641 |
Total accumulated depriciation | [2] | 6,170 | 8,043 |
Office Furniture and Equipment [Member] | |||
Total cost | 1,098 | 1,089 | |
Total accumulated depriciation | 236 | 389 | |
Leasehold Improvements [Member] | |||
Total cost | 2,959 | 2,004 | |
Total accumulated depriciation | $ 196 | $ 198 | |
[1] | As of December 31, 2020 and 2019, $ | ||
[2] | Capital loss from sale of fixed asset amounted to $ |
PROPERTY, PLANT AND EQUIPMENT_5
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property Plant and Equipment (Details) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |||
Construction-in-process of production infrastructure | $ 94 | $ 459 | |
Net Loss from sale of fixed asset | $ 27 | $ 103 |
OTHER ACCOUNTS PAYABLE AND AC_3
OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Schedule of Other Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Payroll and related accruals | $ 6,579 | $ 4,327 |
Accrued expenses - agents' commissions | 1,094 | 518 |
Accrued expenses | 1,954 | 727 |
Royalties to IIA | 228 | |
Other accounts payable and accrued expenses | $ 9,855 | $ 5,572 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Royalties | $ 228 | $ 41 | $ 458 |
Contingent liability for royalties | 0 | ||
Total bank guarantees provided to customers and others | $ 457 | ||
Israel Innovation Authority [Member] | |||
Grants received percentage | 100.00% | ||
Grants received | $ 5,543 | ||
Israel Innovation Authority [Member] | Minimum [Member] | |||
Royalties payable, percent of sales | 3.00% | ||
Israel Innovation Authority [Member] | Maximum [Member] | |||
Royalties payable, percent of sales | 5.00% |
SHAREHOLDERS' EQUITY (Details N
SHAREHOLDERS' EQUITY (Details Narrative) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2020USD ($)$ / sharesshares | Jan. 31, 2019$ / sharesshares | Nov. 30, 2018USD ($)$ / sharesshares | Apr. 30, 2015shares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020₪ / shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019₪ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | |
Ordinary shares, shares authorized | shares | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||
Ordinary shares, par value | (per share) | ₪ 0.03 | ₪ 0.03 | $ 0.03 | ||||||||
Number of shares sold, value | $ 23,537 | $ 1,500 | $ 12,252 | ||||||||
Stock-based compensation expense | 1,436 | 1,148 | 898 | ||||||||
Intrinsic value of options exercised | $ 4,596 | 1,192 | $ 173 | ||||||||
2015 Share Option Plan [Member] | |||||||||||
Number of stock options shares grant to purchase | shares | 1,500,000 | ||||||||||
Option expire term | 10 years | ||||||||||
Additional option expiry term | 10 years | ||||||||||
Stock option exercisable description | 25% of the option granted becomes exercisable on the first anniversary of the date of grant and 6.25% becomes exercisable once every quarter during the subsequent three years. | ||||||||||
Number of shares available for grant | shares | 164,592 | ||||||||||
Ordinary Shares Underwritten Public Offering [Member] | |||||||||||
Number of shares sold, shares | shares | 4,819,052 | ||||||||||
Proceeds from issue of underwritten public offering | $ 25,300 | ||||||||||
Shares sale price per share | $ / shares | $ 5.25 | ||||||||||
Offering cost | $ 1,800 | ||||||||||
DBSI [Member] | |||||||||||
Number of shares sold, shares | shares | 545,454 | ||||||||||
Shares sale price per share | $ / shares | $ 2.75 | ||||||||||
Israeli Institutional Investors [Member] | |||||||||||
Number of shares sold, shares | shares | 4,545,454 | ||||||||||
Shares sale price per share | $ / shares | $ 2.75 | ||||||||||
Number of shares sold, value | $ 12,500 | ||||||||||
Offering cost | $ 248 | ||||||||||
Employees and Directors [Member] | |||||||||||
Unamortized compensation expenses period | 4 years | ||||||||||
Unamortized compensation expenses | $ 3,629 | ||||||||||
Weighted average grant date fair value of options granted | $ 2,340 | $ 1,060 | $ 2,179 | ||||||||
NIS [Member] | |||||||||||
Value of shares authorized | $ 1,875 | ||||||||||
NIS [Member] | Maximum [Member] | |||||||||||
Value of shares authorized | $ 3,000 |
SHAREHOLDERS' EQUITY - Schedule
SHAREHOLDERS' EQUITY - Schedule of Stock Options Activity (Details) - Stock Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of options, outstanding at the beginning of the period | shares | 3,110,938 |
Number of options, granted | shares | 952,500 |
Number of options, exercised | shares | (626,871) |
Number of options, forfeited | shares | (146,405) |
Number of options, outstanding at the end of the period | shares | 3,290,162 |
Number of options, exercisable | shares | 1,302,349 |
Weighted average exercise price, outstanding at the beginning of the period | $ / shares | $ 2.76 |
Weighted average exercise price, granted | $ / shares | 5.18 |
Weighted average exercise price, exercised | $ / shares | 2.01 |
Weighted average exercise price, forfeited | $ / shares | 3.57 |
Weighted average exercise price, outstanding at the end of the period | $ / shares | 3.57 |
Weighted average exercise price, exercisable | $ / shares | $ 2.79 |
Weighted average remaining contractual term, outstanding at the beginning of the period | 8 years 2 months 23 days |
Weighted average remaining contractual term, outstanding at the end of the period | 7 years 10 months 28 days |
Weighted average remaining contractual term, exercisable | 7 years 18 days |
Aggregate intrinsic value price, outstanding at the beginning of the period | $ | $ 7,579 |
Aggregate intrinsic value price, outstanding at the end of the period | $ | 8,768 |
Aggregate intrinsic value price, exercisable | $ | $ 19,726 |
SHAREHOLDERS' EQUITY - Schedu_2
SHAREHOLDERS' EQUITY - Schedule of Recognized Stock-based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock-based compensation expense | $ 1,436 | $ 1,148 | $ 898 |
Cost of revenues | |||
Stock-based compensation expense | 256 | 134 | |
Research and development [Member] | |||
Stock-based compensation expense | 393 | 243 | |
Marketing and selling [Member] | |||
Stock-based compensation expense | 22 | 57 | |
General and administrative [Member] | |||
Stock-based compensation expense | $ 765 | $ 714 |
TAXES ON INCOME (Details Narrat
TAXES ON INCOME (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective tax rate | 23.00% | 23.00% | 23.00% |
Effective income tax rate reconciliation, at federal statutory income tax rate | 21.00% | 21.00% | 21.00% |
Unrecognized tax benefits | |||
Israel [Member] | |||
Net operating loss carry forward | 64,109 | ||
Capital loss carryforwards | 4,090 | ||
USA [Member] | |||
Net operating loss carry forward | $ 3,750 |
TAXES ON INCOME - Schedule of D
TAXES ON INCOME - Schedule of Deferred Income Tax (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forward | $ 14,745 | $ 15,373 |
Capital loss carry-forward | 941 | 883 |
Allowances and reserve | 455 | 401 |
Total deferred tax assets before valuation allowance | 16,141 | 16,657 |
Valuation allowance | (16,141) | (16,657) |
Net deferred tax assets |
FINANCIAL EXPENSES, NET - Sched
FINANCIAL EXPENSES, NET - Schedule of Financial Expenses, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |||
Foreign currency exchange differences | $ 47 | ||
Interest on cash equivalents and restricted deposits | 278 | 359 | 184 |
Operating lease income | 195 | ||
Other | 131 | 96 | |
Total income | 604 | 455 | 231 |
Bank commissions and others | 51 | 38 | 19 |
Operating lease expenses | 85 | ||
Foreign currency exchange differences | 386 | 453 | 93 |
Total expenses | 437 | 576 | 112 |
Total financial (expenses) Income, net | $ 167 | $ (121) | $ 119 |
RELATED PARTY BALANCE AND TRA_3
RELATED PARTY BALANCE AND TRANSACTIONS (Details Narrative) ₪ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Jan. 31, 2017USD ($) | Jan. 31, 2017ILS (₪) | |
Board of Directors Chairman [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Additional monthly payment to be paid to related party for devoted time | $ 4,600 | |||||
Increased additional monthly payment to be paid to related party for devoted time, as a result of acheiving net income before taxes in the Company's first calendar year audited financial statements | $ 9,000 | |||||
Board of Directors Chairman [Member] | NIS [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Additional monthly payment to be paid to related party for devoted time | ₪ | ₪ 17,500 | |||||
Increased additional monthly payment to be paid to related party for devoted time, as a result of acheiving net income before taxes in the Company's first calendar year audited financial statements | ₪ | ₪ 35,000 | |||||
Executive Chairman [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Repayment to related party | $ 123,000 | $ 119,000 |
RELATED PARTY BALANCE AND TRA_4
RELATED PARTY BALANCE AND TRANSACTIONS - Schedule of Balance with Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Accrued expenses | $ 52 | $ 50 |
RELATED PARTY BALANCE AND TRA_5
RELATED PARTY BALANCE AND TRANSACTIONS - Schedule of Related Party Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Directors and management fees | $ 167 | $ 169 | $ 156 |
MAJOR CUSTOMERS AND GEOGRAPHI_3
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Details Narrative) | 12 Months Ended |
Dec. 31, 2020Segments | |
Segment Reporting [Abstract] | |
Business reporting segment | 1 |
Revenue percentage | 10.00% |
MAJOR CUSTOMERS AND GEOGRAPHI_4
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Schedule of Revenues by Geographic Areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total | $ 76,217 | $ 44,331 | $ 28,032 |
Operating Segments [Member] | North America [Member] | |||
Total | 45,080 | 21,995 | 11,686 |
Operating Segments [Member] | Israel [Member] | |||
Total | 15,485 | 12,737 | 10,446 |
Operating Segments [Member] | Europe [Member] | |||
Total | 12,038 | 6,073 | 1,601 |
Operating Segments [Member] | Asia [Member] | |||
Total | 1,740 | 2,499 | 3,093 |
Operating Segments [Member] | South America [Member] | |||
Total | 1,089 | 1,027 | 1,206 |
Operating Segments [Member] | Australia [Member] | |||
Total | $ 785 |
MAJOR CUSTOMERS AND GEOGRAPHI_5
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Schedule of Revenue from Major Customers (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenue percentage | 10.00% | ||
Customer A [Member] | |||
Total revenue percentage | 21.00% | ||
Customer B [Member] | |||
Total revenue percentage | 14.00% | 7.00% | |
Customer C [Member] | |||
Total revenue percentage | 10.00% | ||
Customer D [Member] | |||
Total revenue percentage | 6.00% | 8.00% | 11.00% |
Customer E [Member] | |||
Total revenue percentage | 5.00% | 4.00% | 12.00% |
Customer F [Member] | |||
Total revenue percentage | 4.00% | 12.00% | 7.00% |
Customer G [Member] | |||
Total revenue percentage | 1.00% | 3.00% | 11.00% |
Customer H [Member] | |||
Total revenue percentage | 4.00% | 12.00% |
MAJOR CUSTOMERS AND GEOGRAPHI_6
MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Schedule of Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Long-Lived Assets | $ 13,968 | $ 9,127 |
Israel [Member] | ||
Long-Lived Assets | 10,108 | 6,062 |
USA [Member] | ||
Long-Lived Assets | $ 3,860 | $ 3,065 |