v2.4.1.9
Document and Entity Information
12 Months Ended
Dec. 31, 2015
Document and Entity Information [Abstract]  
Document Type 20-F
Document Period End Date Dec. 31, 2015
Amendment Flag false
Entity Registrant Name SuperCom Ltd
Entity Central Index Key 0001291855
Trading Symbol SPCB
Current Fiscal Year End Date --12-31
Document Fiscal Period Focus FY
Document Fiscal Year Focus 2015
Entity Well-Known Seasoned Issuer No
Entity Current Reporting Status Yes
Entity Filer Category Non-accelerated Filer
Entity Common Stock, Shares Outstanding 15,493,615dei_EntityCommonStockSharesOutstanding


v2.4.1.9
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
CURRENT ASSETS    
Cash and cash equivalents $ 22,246us-gaap_CashAndCashEquivalentsAtCarryingValue $ 4,789us-gaap_CashAndCashEquivalentsAtCarryingValue
Restricted bank deposit 3,274us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue 5,195us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue
Trade accounts receivable, net of allowance for doubtful accounts of $1,576 and $4,390 as of December 31,2015 and 2014, respectively (Note 14) 15,122us-gaap_AccountsReceivableNetCurrent 11,628us-gaap_AccountsReceivableNetCurrent
Deferred tax short term 2,639us-gaap_DeferredTaxAssetsLiabilitiesNetCurrent 3,958us-gaap_DeferredTaxAssetsLiabilitiesNetCurrent
Other accounts receivable and prepaid expenses (Note 3) 1,199us-gaap_PrepaidExpenseAndOtherAssetsCurrent 1,190us-gaap_PrepaidExpenseAndOtherAssetsCurrent
Inventories, net (Note 4) 3,602us-gaap_InventoryNet 1,614us-gaap_InventoryNet
TOTAL CURRENT ASSETS 48,082us-gaap_AssetsCurrent 28,374us-gaap_AssetsCurrent
LONG-TERM ASSETS    
Severance pay funds (Note 2.j) 216spcb_SeverancePayFund 325spcb_SeverancePayFund
Deferred tax long term 1,433us-gaap_DeferredTaxAssetsLiabilitiesNetNoncurrent 301us-gaap_DeferredTaxAssetsLiabilitiesNetNoncurrent
Property and equipment, net (Note 6) 888us-gaap_PropertyPlantAndEquipmentNet 616us-gaap_PropertyPlantAndEquipmentNet
Customer Contracts 4,052spcb_CustomerContractsNet 4,587spcb_CustomerContractsNet
Software and other IP 4,595spcb_IntellectualPropertyNet 4,949spcb_IntellectualPropertyNet
Other Intangible assets (Note 7) 1,988us-gaap_OtherIntangibleAssetsNet   
Goodwill 4,688us-gaap_Goodwill 3,722us-gaap_Goodwill
TOTAL ASSETS 65,942us-gaap_Assets 42,874us-gaap_Assets
CURRENT LIABILITIES    
Trade accounts payable 3,705us-gaap_AccountsPayableTradeCurrent 2,892us-gaap_AccountsPayableTradeCurrent
Employees and payroll accruals 1,488us-gaap_EmployeeRelatedLiabilitiesCurrent 944us-gaap_EmployeeRelatedLiabilitiesCurrent
Related parties 77us-gaap_DueToRelatedPartiesCurrent 341us-gaap_DueToRelatedPartiesCurrent
Accrued expenses and other liabilities (Note 8) 2,917spcb_AccruedExpensesAndOtherLiabilitiesCurrent 2,755spcb_AccruedExpensesAndOtherLiabilitiesCurrent
Advances from customers    2,864us-gaap_CustomerAdvancesCurrent
Short-term liability for future earn-out 2,051spcb_BusinessCombinationContingentLiabilityCurrent 2,870spcb_BusinessCombinationContingentLiabilityCurrent
TOTAL CURRENT LIABILITIES 10,238us-gaap_LiabilitiesCurrent 12,666us-gaap_LiabilitiesCurrent
LONG-TERM LIABILITIES    
Long-term liability for future earn-out 931spcb_BusinessCombinationContingentLiabilityNoncurrent 1,477spcb_BusinessCombinationContingentLiabilityNoncurrent
Accrued severance pay 341spcb_AccruedSeverancePay 425spcb_AccruedSeverancePay
TOTAL LONG TERM LIABILITIES 1,272us-gaap_LiabilitiesNoncurrent 1,902us-gaap_LiabilitiesNoncurrent
TOTAL LIABILITIES 11,510us-gaap_Liabilities 14,568us-gaap_Liabilities
SHAREHOLDERS' EQUITY (Note 11)    
Ordinary shares, NIS 0.25 par value - authorized 18,000,000 shares, 15,493,615 shares issued and outstanding at December 31, 2015 and 13,742,585 shares issued and outstanding at December 31, 2014 1,053us-gaap_CommonStockValue 937us-gaap_CommonStockValue
Additional paid-in capital 83,201us-gaap_AdditionalPaidInCapitalCommonStock 58,210us-gaap_AdditionalPaidInCapitalCommonStock
Accumulated deficit (29,822)us-gaap_RetainedEarningsAccumulatedDeficit (30,841)us-gaap_RetainedEarningsAccumulatedDeficit
Total shareholders' equity 54,432us-gaap_StockholdersEquity 28,306us-gaap_StockholdersEquity
Total liabilities and shareholders' equity $ 65,942us-gaap_LiabilitiesAndStockholdersEquity $ 42,874us-gaap_LiabilitiesAndStockholdersEquity


v2.4.1.9
CONSOLIDATED BALANCE SHEETS (Parenthetical)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2015
USD ($)
Dec. 31, 2015
ILS
Dec. 31, 2014
USD ($)
Dec. 31, 2014
ILS
CONSOLIDATED BALANCE SHEETS [Abstract]        
Trade receivables, allowance for doubtful accounts $ 1,576us-gaap_AllowanceForDoubtfulAccountsReceivable   $ 4,390us-gaap_AllowanceForDoubtfulAccountsReceivable  
Ordinary shares, par value per share   0.25us-gaap_CommonStockParOrStatedValuePerShare   0.25us-gaap_CommonStockParOrStatedValuePerShare
Ordinary shares, shares authorized 18,000,000us-gaap_CommonStockSharesAuthorized 18,000,000us-gaap_CommonStockSharesAuthorized 18,000,000us-gaap_CommonStockSharesAuthorized 18,000,000us-gaap_CommonStockSharesAuthorized
Ordinary shares, shares issued 15,493,615us-gaap_CommonStockSharesIssued 15,493,615us-gaap_CommonStockSharesIssued 13,742,585us-gaap_CommonStockSharesIssued 13,742,585us-gaap_CommonStockSharesIssued
Ordinary shares, shares outstanding 15,493,615us-gaap_CommonStockSharesOutstanding 15,493,615us-gaap_CommonStockSharesOutstanding 13,742,585us-gaap_CommonStockSharesOutstanding 13,742,585us-gaap_CommonStockSharesOutstanding


v2.4.1.9
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]      
REVENUES $ 28,340us-gaap_SalesRevenueNet $ 29,703us-gaap_SalesRevenueNet $ 8,822us-gaap_SalesRevenueNet
COST OF REVENUES 10,446us-gaap_CostOfGoodsAndServicesSold 7,301us-gaap_CostOfGoodsAndServicesSold 1,896us-gaap_CostOfGoodsAndServicesSold
GROSS PROFIT 17,894us-gaap_GrossProfit 22,402us-gaap_GrossProfit 6,926us-gaap_GrossProfit
OPERATING EXPENSES:      
Research and development 3,669us-gaap_ResearchAndDevelopmentExpense 3,359us-gaap_ResearchAndDevelopmentExpense 564us-gaap_ResearchAndDevelopmentExpense
Sales and marketing 6,611us-gaap_SellingAndMarketingExpense 7,036us-gaap_SellingAndMarketingExpense 3,158us-gaap_SellingAndMarketingExpense
General and administrative 3,947us-gaap_GeneralAndAdministrativeExpense 2,773us-gaap_GeneralAndAdministrativeExpense 1,183us-gaap_GeneralAndAdministrativeExpense
Other expenses 2,174us-gaap_OtherCostAndExpenseOperating 1,225us-gaap_OtherCostAndExpenseOperating 507us-gaap_OtherCostAndExpenseOperating
Total operating expenses 16,401us-gaap_OperatingExpenses 14,393us-gaap_OperatingExpenses 5,412us-gaap_OperatingExpenses
OPERATING INCOME 1,493us-gaap_OperatingIncomeLoss 8,009us-gaap_OperatingIncomeLoss 1,514us-gaap_OperatingIncomeLoss
Financial expenses, net (277)us-gaap_NonoperatingIncomeExpense (133)us-gaap_NonoperatingIncomeExpense (156)us-gaap_NonoperatingIncomeExpense
INCOME BEFORE INCOME TAXES 1,216us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest 7,876us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest 1,358us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
Income tax benefit (expense) (197)us-gaap_IncomeTaxExpenseBenefit (1,675)us-gaap_IncomeTaxExpenseBenefit 5,108us-gaap_IncomeTaxExpenseBenefit
NET INCOME FOR THE YEAR $ 1,019us-gaap_NetIncomeLoss $ 6,201us-gaap_NetIncomeLoss $ 6,466us-gaap_NetIncomeLoss
Net income per share:      
Basic $ 0.07us-gaap_EarningsPerShareBasic $ 0.46us-gaap_EarningsPerShareBasic $ 0.71us-gaap_EarningsPerShareBasic
Diluted $ 0.07us-gaap_EarningsPerShareDiluted $ 0.45us-gaap_EarningsPerShareDiluted $ 0.70us-gaap_EarningsPerShareDiluted
Shares used in calculation of net income per share:      
Basic (in shares) 15,047,496us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 13,560,490us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 9,107,130us-gaap_WeightedAverageNumberOfSharesOutstandingBasic
Diluted (in shares) 15,202,303us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding 13,662,151us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding 9,194,865us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding


v2.4.1.9
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Share data
Total
Ordinary Shares [Member]
Additional Paid-in Capital [Member]
Amount of liability extinguished on account of shares [Member]
Accumulated deficit [Member]
Balance at Dec. 31, 2012 $ 711us-gaap_StockholdersEquity $ 574us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
$ 43,518us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
$ 127us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= spcb_AmountOfLiabilityExtinguishedOnAccountOfSharesMember
$ (43,508)us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance (in shares) at Dec. 31, 2012   8,651,703us-gaap_SharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Exercise of options and warrants 140spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised 11spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
129spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Exercise of options and warrants (in shares)   155,141spcb_StockIssuedDuringPeriodSharesStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Shares, warrants issued in connection with extinguishments of liabilities (see Note 11d)    72spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
55spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
(127)spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= spcb_AmountOfLiabilityExtinguishedOnAccountOfSharesMember
  
Shares, warrants issued in connection with extinguishments of liabilities (see Note 11d) (in shares)   1,027,300spcb_StockIssuedDuringPeriodSharesSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Issuance of share capital, net of issuance costs 12,043us-gaap_StockIssuedDuringPeriodValueNewIssues 247us-gaap_StockIssuedDuringPeriodValueNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
11,796us-gaap_StockIssuedDuringPeriodValueNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Issuance of share capital, net of issuance costs (in shares) 3,450,000us-gaap_StockIssuedDuringPeriodSharesNewIssues 3,450,000us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Stock based compensation 32us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue    32us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Net income for the year 6,466us-gaap_NetIncomeLoss          6,466us-gaap_NetIncomeLoss
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance at Dec. 31, 2013 19,392us-gaap_StockholdersEquity 904us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
55,530us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
   (37,042)us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance (in shares) at Dec. 31, 2013   13,284,144us-gaap_SharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Exercise of options and warrants 82spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised 7spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
75spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Exercise of options and warrants (in shares)   100,441spcb_StockIssuedDuringPeriodSharesStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Issuance of share capital, net of issuance costs 2,458us-gaap_StockIssuedDuringPeriodValueNewIssues 26us-gaap_StockIssuedDuringPeriodValueNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
2,432us-gaap_StockIssuedDuringPeriodValueNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Issuance of share capital, net of issuance costs (in shares) 358,000us-gaap_StockIssuedDuringPeriodSharesNewIssues 358,000us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Stock based compensation 173us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue    173us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Net income for the year 6,201us-gaap_NetIncomeLoss          6,201us-gaap_NetIncomeLoss
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance at Dec. 31, 2014 28,306us-gaap_StockholdersEquity 937us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
58,210us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
   (30,841)us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance (in shares) at Dec. 31, 2014   13,742,585us-gaap_SharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Exercise of options and warrants 193spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised 7spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
186spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Exercise of options and warrants (in shares)   110,966spcb_StockIssuedDuringPeriodSharesStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Issuance of share capital, net of issuance costs 27,126us-gaap_StockIssuedDuringPeriodValueNewIssues 159us-gaap_StockIssuedDuringPeriodValueNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
26,967us-gaap_StockIssuedDuringPeriodValueNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Issuance of share capital, net of issuance costs (in shares)   2,415,000us-gaap_StockIssuedDuringPeriodSharesNewIssues
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Treasury shares acquired (3,741)us-gaap_StockRepurchasedDuringPeriodValue (50)us-gaap_StockRepurchasedDuringPeriodValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
(3,691)us-gaap_StockRepurchasedDuringPeriodValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Treasury shares acquired (in shares)   (774,936)us-gaap_StockRepurchasedDuringPeriodShares
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Issuance of warrants 503us-gaap_AdjustmentsToAdditionalPaidInCapitalWarrantIssued    503us-gaap_AdjustmentsToAdditionalPaidInCapitalWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Stock based compensation 1,026us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue    1,026us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Net income for the year 1,019us-gaap_NetIncomeLoss          1,019us-gaap_NetIncomeLoss
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance at Dec. 31, 2015 $ 54,432us-gaap_StockholdersEquity $ 1,053us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
$ 83,201us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
   $ (29,822)us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance (in shares) at Dec. 31, 2015   15,493,615us-gaap_SharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     


v2.4.1.9
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
CASH FLOWS - OPERATING ACTIVITIES      
Net income for the year $ 1,019us-gaap_NetIncomeLoss $ 6,201us-gaap_NetIncomeLoss $ 6,466us-gaap_NetIncomeLoss
Adjustments to reconcile net income to net cash from operations:      
Depreciation and amortization 1,673us-gaap_DepreciationDepletionAndAmortization 1,615us-gaap_DepreciationDepletionAndAmortization 48us-gaap_DepreciationDepletionAndAmortization
Stock-based compensation 1,529us-gaap_ShareBasedCompensation 173us-gaap_ShareBasedCompensation 32us-gaap_ShareBasedCompensation
Deferred tax 187us-gaap_DeferredIncomeTaxExpenseBenefit 1,854us-gaap_DeferredIncomeTaxExpenseBenefit (5,080)us-gaap_DeferredIncomeTaxExpenseBenefit
Capital loss on disposal of property and equipment    1us-gaap_GainLossOnSaleOfPropertyPlantEquipment   
Increase in trade receivables, net (3,666)us-gaap_IncreaseDecreaseInAccountsReceivable (8,532)us-gaap_IncreaseDecreaseInAccountsReceivable (1,498)us-gaap_IncreaseDecreaseInAccountsReceivable
Decrease (increase) in other accounts receivable and prepaid expenses 39spcb_IncreaseDecreaseInOtherAccountsReceivableAndPrepaidExpenses 2,175spcb_IncreaseDecreaseInOtherAccountsReceivableAndPrepaidExpenses (2,779)spcb_IncreaseDecreaseInOtherAccountsReceivableAndPrepaidExpenses
Increase in inventories, net (1,988)us-gaap_IncreaseDecreaseInInventories (907)us-gaap_IncreaseDecreaseInInventories (84)us-gaap_IncreaseDecreaseInInventories
Increase (decrease) in trade payables 721us-gaap_IncreaseDecreaseInAccountsPayableTrade 1,203us-gaap_IncreaseDecreaseInAccountsPayableTrade (142)us-gaap_IncreaseDecreaseInAccountsPayableTrade
Increase in employees and payroll accruals 404us-gaap_IncreaseDecreaseInEmployeeRelatedLiabilities 525us-gaap_IncreaseDecreaseInEmployeeRelatedLiabilities 257us-gaap_IncreaseDecreaseInEmployeeRelatedLiabilities
Increase (decrease) in accrued severance pay (110)us-gaap_IncreaseDecreaseInAccruedSalaries 26us-gaap_IncreaseDecreaseInAccruedSalaries 163us-gaap_IncreaseDecreaseInAccruedSalaries
Increase (decrease) in advances from customer (2,864)us-gaap_IncreaseDecreaseInCustomerAdvances 2,864us-gaap_IncreaseDecreaseInCustomerAdvances   
Increase (decrease ) in accrued expenses and other liabilities, related parties and liability for earn-out (618)us-gaap_IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities (927)us-gaap_IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities 2,050us-gaap_IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities
Net cash provided by (used in) operating activities (3,674)us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations 6,271us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations (567)us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations
CASH FLOWS - INVESTING ACTIVITIES      
Purchase of property and equipment (541)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment (544)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment (103)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment
Capitalization of software development costs (2,099)us-gaap_PaymentsToAcquireIntangibleAssets      
Acquisition of a business entity (988)us-gaap_PaymentsToAcquireBusinessesNetOfCashAcquired    (8,788)us-gaap_PaymentsToAcquireBusinessesNetOfCashAcquired
Decrease (Increase) in severance pay fund 109spcb_IncreaseDecreaseInAccruedSeverancePay (31)spcb_IncreaseDecreaseInAccruedSeverancePay (91)spcb_IncreaseDecreaseInAccruedSeverancePay
Restricted bank deposits, net 1,921us-gaap_IncreaseDecreaseInRestrictedCash (5,110)us-gaap_IncreaseDecreaseInRestrictedCash (85)us-gaap_IncreaseDecreaseInRestrictedCash
Net cash used in investing activities (1,598)us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations (5,685)us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations (9,067)us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations
CASH FLOWS - FINANCING ACTIVITIES      
Short-term bank credit, net    (1)us-gaap_ProceedsFromRepaymentsOfLinesOfCredit (101)us-gaap_ProceedsFromRepaymentsOfLinesOfCredit
Treasury shares acquired (3,741)us-gaap_PaymentsForRepurchaseOfCommonStock      
Proceeds from issuance of share capital, net of issuance costs 27,126us-gaap_ProceedsFromIssuanceOrSaleOfEquity 2,458us-gaap_ProceedsFromIssuanceOrSaleOfEquity 12,043us-gaap_ProceedsFromIssuanceOrSaleOfEquity
Payment of liability for future earn-out in business combination (849)spcb_PaymentsForBusinessCombinationContingentLiability (1,009)spcb_PaymentsForBusinessCombinationContingentLiability [1]   
Proceeds from exercise of options and warrants, net 193spcb_ProceedsFromOptionAndWarrantExercises 82spcb_ProceedsFromOptionAndWarrantExercises 140spcb_ProceedsFromOptionAndWarrantExercises
Net cash provided by financing activities 22,729us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations 1,530us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations 12,082us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations
Increase in cash and cash equivalents 17,457us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease 2,116us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease 2,448us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease
Cash and cash equivalents - beginning of year 4,789us-gaap_CashAndCashEquivalentsAtCarryingValue 2,673us-gaap_CashAndCashEquivalentsAtCarryingValue 225us-gaap_CashAndCashEquivalentsAtCarryingValue
Cash and cash equivalents - end of year $ 22,246us-gaap_CashAndCashEquivalentsAtCarryingValue $ 4,789us-gaap_CashAndCashEquivalentsAtCarryingValue $ 2,673us-gaap_CashAndCashEquivalentsAtCarryingValue
[1] Reclassified from investing activities


v2.4.1.9
GENERAL
12 Months Ended
Dec. 31, 2015
GENERAL [Abstract]  
GENERAL
NOTE 1: GENERAL

 

  a. SuperCom Ltd. (the “Company") is an Israeli resident company organized in 1988 in Israel. On January 24, 2013 the Company changed its name back to SuperCom Ltd, its original name, from Vuance Ltd. On September 12, 2013, the Company's ordinary shares were approved for listing on the NASDAQ Capital Market and began trading under the ticker symbol “SPCB” on September 17, 2013. Previously, the Company's ordinary shares traded on the OTCQB® electronic quotation service.

 

The Company is a global provider of traditional and digital identity solutions, providing advanced safety, identification, tracking and security products to governments and organizations,both private and public, throughout the world The Company provides cutting edge real-time positioning, tracking, monitoring and verification solutions enabled by its RFID &Mobile pure security advanced solutions suite of products and technologies, all connected to a web-based, secure, proprietary, interactive and user-friendly interface.    The Company offers a wide range of solutions including, national ID registries, e-passports, biometric visas, automated fingerprint identification systems, digitized driver's licenses, and electronic voter registration and election management using the common platform ("MAGNA"). The Company sells its products through marketing offices in the U.S, Tanzania, Panama, Ecuador and Israel.  

 

  b.

On December 26, 2013 the Company acquired the SmartID Division of On Track Innovations Ltd. (NASDAQ: OTIV) (“OTI”), consisting of customer contracts, software, other related technologies and IP assets. The Company paid OTI $8.8 million ($10 million less certain price adjustments) at the closing and agreed to make contingent payments of up to $12.5 million pursuant to an earn-out mechanism based on certain performance and other milestones. The SmartID Division has a strong international presence, with a broad range of competitive and well-known e-ID solutions and technology. The acquisition significantly expanded the breadth of the Company's e-ID capabilities globally, while providing it with market and technological experts, together with its ID software platforms and technologies.


In June 2015 the Company has completed an offering which included an issuance of 2,415,000 shares with total net proceeds of $27,126 thousands.

 

As of December 31, 2015, the Company's principal activities were conducted mainly through SuperCom Ltd. and Supercom Inc. and through SuperCom Tanzania and SuperCom Ecuador that were acquired in December 2013 as part of the acquisition of the SmartID division.

 

  c. Concentration of risk that may have a significant impact on the Company:

 

In year 2015, the Company derived most of its revenues from five major customers (2014 four major customers). Throughout the 2013 period the Company derived most of its revenues from one major customer. See also Note 13c.

 

The Company purchases certain services and products used by it to generate revenues in its projects and sales from several sole suppliers. Although there are only a limited number of manufacturers of those particular services and products, management believe that other suppliers could provide similar services and products on comparable terms without affecting operating results.

 



v2.4.1.9
SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2015
SIGNIFICANT 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").

 

  a. Use of estimates:

 

The preparation of financial statements in conformity with generally accepted accounting principles 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. As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to allowance for doubtful accounts and contingencies.

 

  b. Financial statements in U.S. dollars:

 

Most of the revenues of the Company and its subsidiaries are received in U.S. dollars. In addition, a substantial portion of the costs of the Company and its subsidiaries are incurred in U.S. dollars. Therefore, management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate. Thus, the functional and reporting currency of the Company and its subsidiaries is the U.S. dollar.

 

Monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars at the exchange rate prevailing at the end of the reporting period in accordance with provisions of ASC 835-10. All transaction gains and losses from the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or financial expenses as appropriate.

 

  c. Principles of consolidation:

 

The consolidated financial statements include the accounts of the Company and its subsidiaries. Material intercompany transactions and balances were eliminated upon consolidation. Material profits from intercompany sales, not yet realized outside the group, were also eliminated.

 

  d. Cash and cash equivalents:

 

The Company considers unrestricted short-term highly liquid investments originally purchased with maturities of three months or less to be cash equivalents.

 

  e. Allowance for doubtful accounts:

  

The allowance for doubtful accounts is determined with respect to specific amounts the Company has determined to be doubtful of collection. In determining the allowance for doubtful accounts, the Company considers, among other things, its past experience with such customers and the information available regarding such customers.

 

  f. Inventories:

 

Inventories are stated at the lower of cost or market value. Inventory write-offs are mainly provided to cover risks arising from slow-moving items or technological obsolescence. Cost is determined for all types of inventory using the moving average cost method.

  

  g. Property and equipment:

 

Property and equipment are stated at cost, net of accumulated depreciation.

 

Depreciation is computed using the straight-line method, over the estimated useful lives, at the following annual rates:

 

    %
     
Computers and peripheral equipment   33
Office furniture and equipment   6 - 20
Leasehold improvements  
Over the shorter of the term of the lease or the life of the asset

 

  h. Impairment of long-lived assets and intangible assets:

 

    The Company's long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.

  i. Goodwill:

 

The Company's goodwill reflects the excess of the consideration paid or transferred including the fair value of contingent consideration over the fair values of the identifiable net assets acquired. The goodwill impairment test is performed as follows: An initial qualitative assessment of the likelihood of impairment may be performed. If this step indicates that the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the impairment test is performed.

 

In step one of the impairment test, the Company compares the fair value of the reporting unit to the carrying value of the reporting unit. If the fair value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further testing is required. If the fair value is less than the carrying value of the reporting unit, then the second step of the impairment test is performed to measure the amount of the impairment.

 

In the second step, the reporting unit's fair value is allocated to all the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that simulates the business combination principles to derive an implied goodwill value. If the implied fair value of the reporting unit's goodwill is less than its carrying value, the difference is recorded as impairment.


  j. Accrued severance pay and severance pay fund:

 

The liabilities of the Company for severance pay of its Israeli employees are calculated pursuant to Israel's Severance Pay Law. Employees are entitled to one month's salary for each year of employment, or portion thereof. The Company's liability for all its employees is presented under "accrued severance pay". The Company deposits on a monthly basis to severance pay funds and insurance policies. The value of these policies is presented as an asset on the Company's balance sheet.

 

The deposited funds include accrued income up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the Company's obligation pursuant to Israel's Severance Pay Law or labor agreements.

 

Severance expenses for the years ended December 31, 2015, 2014 and 2013 amounted to $607, $308 and $128, respectively.


  k. Revenue recognition:

 

The Company and its subsidiaries generate their revenues from the sale of products, maintenance, royalties and long term contracts (including training and installation).

 

Product sales are recognized in accordance with ASC 605-10, when persuasive evidence of an agreement exists, delivery of the product has occurred or services have been rendered, the fee is fixed or determinable, collectability is reasonably assured, and inconsequential or perfunctory performance obligations remain. If the product requires specific customer acceptance, revenue is deferred until customer acceptance occurs or the acceptance provision lapses.

 

The Company recognized certain long-term contract revenues in accordance with ASC Topic 605-35, "Construction-Type and Production-Type Contracts". Pursuant to ASC Topic 605-35, revenues from these contracts are recognized under the percentage of completion method. The Company measures the percentage of completion based on output or input criteria, such as contract milestones, percentage of engineering completion or number of units shipped, as applicable to each contract. Provisions for estimated losses on uncompleted contracts are made during the period in which such losses are first identified, in the amount of the estimated loss on the entire contract. As of December 31, 2015, no such estimated losses were identified.

 

The Company's management believes that the use of the percentage of completion method is appropriate in these cases since most of our contracts specify milestones achievements in details, as to allow determination of progress made towards completion. In addition, our contracts include provisions that clearly specify the enforceable rights of the parties to the contract, the consideration to be exchanged and the manner and terms of settlement.


In all cases, the Company expects to perform its contractual obligations and the parties are expected to satisfy their obligations under the contract.


Revenues from maintenance services are recognized over the term of the contracts. 

 

The Company is not obligated to accept returned products or issue credit for returned products, unless a product return has been approved by the Company in advance and according to specific terms and conditions. As of December 31, 2015, the Company had no allowance for customer returns at an insignificant amount.

  

Warranty period is usually 12 months. Based primarily on historical experience, the Company does not provide for warranty costs when revenue is recognized, since such costs are not material.


  l. Research and development costs and software development costs:

 

Research and development costs are expensed as incurred. Software development costs eligible for capitalization are accounted for in accordance with 985-20 Software — Costs of Software to be Sold, Leased or Marketed. Capitalization of software development costs for products to be sold to third parties begins upon the establishment of technological feasibility and ceases when the product is available for general release. Amortization is calculated and provided over the estimated economic life of the software, using the straight-line method. Amortization commences when developed software is available for general release to clients.


The estimated useful life of capitalized software development costs is between 3 to 5 years.


  m. Income taxes:

 

The Company and its subsidiaries account for income taxes in accordance with ASC Topic 740, "Income Taxes". This Statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws, that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.

 

The Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise's financial statements. According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition and measurement threshold. The Company's accounting policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Company did not recognize such items in its fiscal 2015, 2014 or 2013 financial statements.


  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 deposits and trade receivables. The Company's trade receivables are derived from sales to limited number of customers located primarily in Eastern Europe, Africa, the United States and Ecuador. The Company performs ongoing credit evaluations of its customers' financial condition. The allowance for doubtful accounts is determined with respect to specific debts that the Company has determined to be doubtful of collection.

 

Cash and cash equivalents and restricted cash deposits are deposited with major banks in Israel and the United States. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to these financial instruments. The Company has no significant off-balance-sheet concentration of credit risk.

 

  o. Basic and diluted earnings per share:

 

Basic earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year, plus the dilutive potential of stock options and warrants outstanding during the year using the treasury stock method and the dilutive potential, if any, of convertible bonds using the “if-converted method”.

 

The numbers of potential shares from the conversion of options and warrants that have been excluded from the calculation were 392,124, 35,193 and 121,196 for the years ended December 31, 2015, 2014 and 2013, respectively.


  p. Fair value of financial instruments:

 

At December 31, 2015 and 2014, the carrying amounts of cash and cash equivalents, restricted cash deposits, current trade receivables, other accounts receivable, trade payables and other accounts payable approximate their fair value due to the short-term maturity of such financial instruments.


  q. Accounting for stock-based compensation:

 

Stock-based compensation, including grants of stock options, is recognized in the consolidated statement of operations as an operating expense, based on the fair value of the award on the date of grant. The fair value of stock-based compensation is estimated using an option-pricing model.

 

The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of operations.

 

The Company estimates the fair value of employee stock options using a Black-Scholes valuation model. The Company amortizes compensation costs using the graded vesting attribution method over the vesting period, net of estimated forfeitures.

 

  r. Acquisition-related intangible assets

 

The Company accounts for its business combinations in accordance with ASC 805 “Business Combinations” and with ASC 350-20 “Goodwill and Other Intangible Assets” (“ASC 350-20”). ASC 805-10 specifies the accounting for business combinations and the criteria for recognizing and reporting intangible assets apart from goodwill.

 

Acquisition-related intangible assets result from the Company's acquisitions of businesses accounted for under the purchase method and consist of the value of identifiable intangible assets including developed software products and trade names, as well as goodwill. Goodwill is the amount by which the acquisition cost exceeds the fair values of identifiable acquired net assets on the date of purchase. Acquisition-related intangible assets are reported at cost, net of accumulated amortization.



v2.4.1.9
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
12 Months Ended
Dec. 31, 2015
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract]  
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
NOTE 3: OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

 

             December 31,             
2015     2014
      $       $
               
Prepaid expenses     176       55
Government institutions     780       945
Others     243       190  
               
      1,199       1,190


v2.4.1.9
INVENTORIES, NET
12 Months Ended
Dec. 31, 2015
INVENTORIES, NET [Abstract]  
INVENTORIES, NET
NOTE 4: INVENTORIES, NET

 

December 31,  
2015     2014  
    $     $  
             
Raw materials, parts and supplies     928       759  
Finished products     2,674       855  
                 
      3,602       1,614  

 

As of December 31, 2015 and 2014, inventory is presented net of write offs for slow inventory in the amount of approximately $151 and $121, respectively.



v2.4.1.9
ACQUISITION
12 Months Ended
Dec. 31, 2015
ACQUISITION [Abstract]  
ACQUISITION
NOTE 5: ACQUISITION

 

Purchase agreement with OTI

On August 13, 2013, the Company entered into an asset purchase agreement with OTI, to acquire OTI's SmartID Division, including all contracts, software, other related technologies and IP assets. The acquisition closed on December 26, 2013.

 

The Company agreed to pay OTI $10 million and contingent consideration of up to $12.5 million pursuant to an earn-out mechanism based on certain performance and other milestones. Such contingent payments include the net amounts raised by us in future public offerings (if any) as well as the revenues generated from new e-ID projects that will be received either through the assignment of contracts by OTI pursuant to the asset purchase agreement or otherwise following August 13, 2013. Earn-out payments are capped at $7.5 million, and are due and payable annually, for a period of seven (7) years from the date of the agreement. However, the payments of the amounts due and payable pursuant to the earn-out mechanism may be accelerated if the Company receive certain new projects or in the event that the Company sell all or substantially all of the assets or contractual rights of the e-ID activities to a third party. In 2015 and in 2014, the Company paid an amount of $0.8 million and $1 million respectively, based on the earn-out mechanism agreed.

  

Furthermore, if the Company or any of its affiliates are awarded or otherwise receive orders under certain potential projects that were disclosed to the Company as part of the acquisition, then the gross amount of all potential revenues under all such orders or awards during each of the three 12-month periods following the closing date, will be divided into units of $20 million each, or an award unit, and with respect to each full award unit in each year, the Company agreed to pay OTI $1,667 as additional consideration for the acquisition, payable in accordance with the earn-out mechanism, provided that the aggregate amount of all such additional consideration will not exceed $5 million. In addition, for each award unit received, the period of OTI's earn-out eligibility will be extended by an additional 12 month period.

 

In April, 2016 the Company has concluded further negotiations with OTI with respect to the earn-out liability following by which an agreement with OTI was signed. Under this agreement the remaining earn-out amount was set to a maximum $3,550, out of which an amount of $2,050 was paid at the beginning of May, 2016 and the remaining amount of $1,500 will be subject to the original earn out mechanism.

 

The application of purchase accounting under ASC 805 Business Combinations requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed at the acquisition date, with amounts exceeding the fair values being recorded as goodwill.

 

In the allocation process, the valuation of the fair value of acquired assets and assumed liabilities were based on, but not limited to: future expected discounted cash flows for customer contracts and liability for future earn-out, current replacement cost for software and other IP and certain property and equipment, and expected settlement amounts for contingencies.

 

The purchase price allocation for the SmartID division acquisition was finalized during 2014. The change in the fair value of the net assets of the acquired division was retrospectively applied with changes allocated to goodwill.

 

The following table summarizes the calculation of the acquisition price, including the estimated fair value of the liability for future earn-out as of the acquisition date:

 

Cash paid to OTI upon Closing   $ 8,788  
Contingent consideration:        
Short-term     1,950  
Long-term     3,359  
         
Total fair value of consideration paid   $ 14,097  

 

 The following table summarizes the estimated fair values of the intangible assets acquired from OTI:

 

Customer contracts   $ 5,745  
Software and other IP     5,303  
Goodwill     3,722  
Total intangible assets acquired     14,770  

 

The customer contracts will be amortized over 13 years according to the economic benefit expected from those customers each period, and the software and other IP will be amortized by the straight-line method over 15 years.

 
Depreciated cost amounts to $11,988 as at December 31, 2015. Depreciation cost amounted to $1,271 and $1,511 in 2015.

The expected intangible assets amortization expenses for the customer contracts and for software and other IP, are as follows:

 

    $  
2016     1,101  
2017     966  
2018     855  
2019     764  
2020     690  
2021     629  
2022-2028     3,261  


Purchase of Prevision Ltd.

In November, 2015 the Company acquired 100% of the shares of Prevision Ltd. (“Prevision”), a cyber security company domiciled in Israel. The acquisition was accounted for as a business combination. The total consideration of $1.1 million assumed liabilities, net, of $0.3 million and $1.4 million recognized as customer relations and goodwill. The purchase agreement includes contingent consideration of annual payments of approximately $250,000 for the next four years. The contingent consideration is subject to service provided by the seller to the company during the earn-out period and therefore is not part of the business combination and accounted as compensation expenses as incurred.


Acquisitions completed subsequent to December 31, 2015

Refer to note 16, Subsequent events.




v2.4.1.9
PROPERTY AND EQUIPMENT, NET
12 Months Ended
Dec. 31, 2015
PROPERTY AND EQUIPMENT, NET [Abstract]  
PROPERTY AND EQUIPMENT, NET
NOTE 6: PROPERTY AND EQUIPMENT, NET

 

December 31,  
2015     2014  
      $       $  
Cost:            
                 
Computers and peripheral equipment     1,131       726  
Office furniture and equipment     351       230  
Leasehold improvements     295       192  
Vehicle     29       -  
      1,806       1,148  
Accumulated depreciation:                
Computers and peripheral equipment     648       360  
Office furniture and equipment     202       160  
Leasehold improvements     39       12  
Vehicle     29       -  
      918       532  
Depreciated cost     888       616  

 

(1) Depreciation expenses for the years ended December 31, 2015, 2014 and 2013, were $291, $103 and $48, respectively.

(2) Property plant and equipment in connection with business combination includes cost of $117 and depreciated cost of $95.



v2.4.1.9
OTHER INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2015
OTHER INTANGIBLE ASSETS [Abstract]  
OTHER INTANGIBLE ASSETS
NOTE 7: OTHER INTANGIBLE ASSETS

 

Other Intangible assets include development costs of software to be sold, eased or marketed. Development costs capitalized in during the year ended December 31, 2015 amounted to $2,099. Amortization expenses for the years ended December 31, 2015 amounted to $111.



v2.4.1.9
ACCRUED EXPENSES AND OTHER LIABILITIES
12 Months Ended
Dec. 31, 2015
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]  
ACCRUED EXPENSES AND OTHER LIABILITIES

NOTE 8:      ACCRUED EXPENSES AND OTHER LIABILITIES

 

December 31  
2015     2014  
      $       $  
                 
Liabilities related with the Smart ID acquisition     813       813  
Accrued marketing expenses     838       437  
Employees Benefits     495       417  
Authorities     113       277  
Overheads     129       255  
Legal service providers     298       93  
Other accrued expenses     231       463  
      2,917       2,755  


v2.4.1.9
COMMITMENTS AND CONTINGENT LIABILITIES
12 Months Ended
Dec. 31, 2015
COMMITMENTS AND CONTINGENT LIABILITIES [Abstract]  
COMMITMENTS AND CONTINGENT LIABILITIES
NOTE 9: COMMITMENTS AND CONTINGENT LIABILITIES

 

  a. Lease commitments:

 

The Company's facilities and those of certain subsidiaries are rented under several operating lease agreements for periods ending 2016 to 2019. The monthly lease amount, including management fees of the leased property, is approximately $76.

 

Future minimum lease commitments under non-cancelable operating leases for the years ended December 31, are as follows:

 

2016     908  
2017     735  
2018     735  
2019     245  
      2,623  

 

  b. Guarantees, indemnity and liens:

 

  1.

The Company issued bank guaranties in the total amount of $2.9 million as a part of the ongoing terms of the contracts with existing customers and for tenders.


  2.

The Company issued a bank guarantee of up to NIS 510 ($131 as of December 31, 2015) to the owners of its new offices in Herzliya on February 5, 2014.

 

  3. On April 29, 2012, the Company's board of directors approved the recording of a floating charge on all of the Company's assets in favor of the Company's current and former chairmen of the board of directors, unlimited in amount, in order to secure personal guarantees granted by them in favor of the Company, such as to a bank in order to secure short-term loans that are given by them from time to time to the Company.

 

  c. Litigation:

  

  As part of the acquisition of the SmartID division of OTI, the Company assumed a dispute with Merwell Inc. (“Merwell”). Merwell has alleged that it has not received the full payment it is entitled to for its services in respect of a drivers' license project. OTI alleged that Merwell breached its commitments under the service agreement and also acted in concert with third parties to damage OTI's business activities. This matter is now subject to an arbitration proceeding. An appropriate provision is included in the financial statements.


v2.4.1.9
INCOME TAX
12 Months Ended
Dec. 31, 2015
INCOME TAX [Abstract]  
INCOME TAX
NOTE 10: INCOME TAX

 

  a. Changes in Israeli corporate tax rates:

 .

The regular corporate tax rate in Israel in 2015 is 26.5% (2014: 26.5%; 2013: 25%).

 

On August 5, 2013 the Israeli parliament (the Knesset) passed the Law for Changes in National Priorities (Legislative Amendments for Achieving Budget Objectives in the Years 2013 and 2014) - 2013, by which, inter alia, the corporate tax rate would be raised by 1.5% to a rate of 26.5% as from 2014. On January 4, 2016, the Knesset plenum approved a bill to amend the Income Tax Ordinance, including a reduction in corporate tax by 1.5% from 26.5% to 25%, as from January 1, 2016.

 

  b. Non-Israeli subsidiaries are taxed according to the tax laws of the countries in which they are located.

  

  c. 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 deferred tax assets of the Company and its subsidiaries are as follows:

 

  December 31,  
  2015     2014  
  $   $
   
Operating loss carry forwards   7,656   8,081
Reserves and allowances   1,629   1,525
   
Net deferred tax assets before valuation allowance   9,285   9,606
Valuation allowance   (5,213 )   (5,347 )
   
Net deferred tax assets   4,072   4,259
   
Deferred income taxes consist of the following:    
Domestic   4,027   4,259
Valuation allowance   -   -
Net deferred tax assets   4,027   4,259
   
Foreign   5,258
 

5,347

Valuation allowance   (5,213 )   (5,347 )
  45   -

 

As of December 31, 2015, the Company has provided a valuation allowance of $5,213 in respect of deferred tax assets resulting from tax loss carryforwards and other temporary differences in its subsidiaries. Other tax loss carryforwards and temporary differences in the amount of $4,072 were not provided with valuation allowance as the Company's management currently believes that these tax assets are more likely than not to be recovered.

 

  d. Carryforward tax losses:

 

SuperCom Ltd. has accumulated losses for tax purposes as of December 31, 2015 of approximately $9,116, which may be carried forward and offset against taxable income in the future for an indefinite period. SuperCom Ltd. also has a capital loss of approximately $13,617, which may be carried forward and offset against capital gains for an indefinite period. Loss carryforwards in Israel are measured in NIS.

 

As of December 31, 2015, SuperCom's subsidiaries in the United States have estimated total available carryforward tax losses of approximately $13,100. In the U.S., tax losses can be carried forward for 20 years. However, utilization of U.S. net operating losses may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code and similar state provisions. These annual limitations may result in the expiration of net operating losses before utilization. Approximately $3,413 of the carryforward tax losses of the Company's subsidiary in the U.S, is subject to such limitation.

  

  e. SuperCom Ltd has assessments which are considered as final until the tax year ended December 31, 2010.

 

SuperCom's subsidiaries in the United States and Israel have not received final assessments since their incorporation.

 

  f. Income (loss) before income tax consists of the following:

 

  Year ended December 31,           
  2015   2014     2013
  $   $   $
     
Domestic   915   6,281   1,495
Foreign   301   1,595
  (137 )
  1,216   7,876   1,358

 

  g. Reconciliation of the theoretical tax benefit to the actual tax benefit:

 

A reconciliation of theoretical tax expense, assuming all income is taxed at the statutory rate applicable to the income of companies in Israel, and the actual tax expense (benefit), is as follows:

 

  Year ended December 31,      
  2015 2014     2013
  $   $   $
Income before income tax, as reported in the consolidated statements of operations   1,216   7,876   1,358
Statutory tax rate in Israel   26.5 %   26.5 %   25 %
     
Theoretical tax expense   322   2,087   340
Current year carryforward losses and other differences for which a valuation allowance was recorded
  2
  67
  (908 )
Changes in valuation allowance   (211 )   (1,332 )   (3,668 )
Changes in foreign currency exchange rate   44
  674
  (425 )
Changes in tax rate   -
  -
  (334 )
Non-deductible expenses and other differences
  40   179
  (113 )
     
Actual income tax expense (benefit)   197   1,675
  (5,108 )


v2.4.1.9
SHARE CAPITAL
12 Months Ended
Dec. 31, 2015
SHARE CAPITAL [Abstract]  
SHARE CAPITAL
NOTE 11: SHARE CAPITAL

 

  a. The Company's ordinary shares are quoted under the symbol “SPCB” on the NASDAQ Capital Market in the United States.

 

On August 22, 2013, a 1 for 4.250002 reverse split of the Company's ordinary shares became effective. Pursuant to this reverse share split, each 4.250002 ordinary shares of NIS 0.0588235 par value became 1 ordinary share of NIS 0.25 par value and increased its share capital to 15 million ordinary shares.

 

All amounts of shares and per shares have been retroactively amended to give effect to the reverse stock splits.

 

In December 2013, 3,450,000 ordinary shares (including the full exercise of an over-allotment option) were issued in an underwritten public offering, for aggregate gross proceeds of $13,800.

 

During 2014, 358,000 ordinary shares were issued under a security purchase agreement for aggregate gross proceeds of $2,458.


In June 2015, 2,415,000 ordinary shares (including the full exercise of an over-allotment option) were issued in an underwritten public offering, for aggregate gross proceeds of $28,980 (net proceeds of $27,126).


In December 2015, as part of the Company's stock repurchase plan, the Company repurchased 774,936 shares, at an average cost of $4.80 per share. The repurchased shares were retired in March 2016.

 

  b. Shareholders' rights:

 

The ordinary shares confer upon the holders the right to receive notice to participate and vote in the general meetings of the Company, and the right to receive dividends, if declared.

  

  c. Stock options:

 

  1. In 2003, the Company adopted a stock option plan under which the Company issues stock options (the “Option Plan”). The Option Plan is intended to provide incentives to the Company's employees, officers, directors and/or consultants by providing them with the opportunity to purchase ordinary shares of the Company. Subject to the provisions of the Israeli Companies Law, the Option Plan is administered by the Compensation Committee, and is designed: (i) to comply with Section 102 of the Israeli Tax Ordinance or any provision which may amend or replace it and the rules promulgated thereunder and to enable the Company and grantees thereunder to benefit from Section 102 of the Israeli Tax Ordinance and the Commissioner's Rules; and (ii) to enable the Company to grant options and issue shares outside the context of Section 102 of the Israeli Tax Ordinance. Options granted under the Option Plan will become exercisable ratably over a period of three to five years or immediately in certain circumstances, commencing with the date of grant. The options generally expire no later than 10 years from the date of grant. Any options which are forfeited or canceled before expiration become available for future grants.

 

As a result of an amendment to Section 102 of the Israeli Tax Ordinance as part of the 2003 Israeli tax reform, and pursuant to an election made by the Company thereunder, capital gains derived by optionees arising from the sale of shares issued pursuant to the exercise of options granted to them under Section 102 after January 1, 2003, will generally be subject to a flat capital gains tax rate of 25%. However, as a result of this election, the Company will no longer be allowed to claim as an expense for tax purposes the amounts credited to such employees as a benefit when the related capital gains tax is payable by them, as the Company had previously been entitled to do under Section 102.

 

On June 27, 2007, the Compensation Committee and board of directors of the Company approved a new option plan under which the Company may grant stock options to the U.S. employees of the Company and its subsidiaries. Under this new option plan, the Company may grant both qualified (for preferential tax treatment) and non-qualified stock options. On August 15, 2007, the new option plan was approved by the shareholders of the Company at the general shareholders meeting.

  

During 2013, the Company issued options to purchase up to 152,949 shares to several employees of the Company. The options (the fair value of which was estimated at $137) have a weighted average exercise price of $0.72. These options will vest over a 4 year period, and will expire after ten years.

 

In June 2013, the Option plan was extended for another period of 10 years, until December, 31, 2023.

 

During the year 2014, the Company issued option to purchase up to 36,765 shares to several employees and to a service provider of the Company. The options (fair value of which was estimated at $189) have a weighted average exercise price of $1.86 , and of such options, 31,765 were exercised by the end of 2014.


During the year 2015, the Company issued option to purchase up to 500,530 shares to several employees of the Company. The options (fair value of which was estimated at $3,974) have a weighted average exercise price of $5.80, and of such options, 41,882 were exercised and 81,000 were cancelled by the end of 2015.

 

  2. A summary of the Company's stock option activity and related information is as follows:

 

Year ended December 31
2015   2014     2013  
Number of
options
  Weighted
average
exercise
price
    Number of
options
    Weighted
average
exercise
price
    Number of
options
    Weighted
average
exercise
price
 
          $             $           $  
Outstanding at Beginning of year     137,855       2.64       204,931       2.06       128,952       4.12  
Granted     500,530       5.80       36,765       1.86       152,949       0.72  
Exercised     (65,411 )     3.10       (100,441 )     0.82       (6,000 )     0.85  
Canceled and forfeited     (85,542 )     6.64       (3,400 )     13.00       (70,970 )     5.74  
Outstanding at end of year     487,432       5.12       137,855       2.64       204,931       2.06  
Exercisable at end of year     95,709       4.81       44,618       5.90       78,457       4.25  

 

The weighted average fair value of options granted during the reported periods was $7.94 per option for the year ended December 31, 2015, $5.15 per option for the year ended December 31, 2014 and $1.09 per option for the year ended December 31, 2013.

 

The fair value of these options was estimated on the date of grant using the Black & Scholes option pricing model. The following weighted average assumptions were used for the 2015 grants: risk-free rate of 1.28%, dividend yield of 0%, expected volatility factor of 362.86% and expected term of 3.11 years. The following weighted average assumptions were used for the 2014 grants: risk-free rate of 0.34% dividend yield of 0%, expected volatility factor of 314.47% and expected term of 1.9 years.

 

The expected volatility was based on the historical volatility of the Company's stock. The expected term was based on the historical experience and based on Management estimate.

 

Compensation expenses recognized by the Company related to its stock-based employee compensation awards and warrants were $1,529, $173, and $32 for the years ended December 31, 2015, 2014 and 2013, respectively.

  

The following table summarizes the allocation of the stock-based compensation and warrants charge

 

Year ended December 31,  
2015     2014     2013  
    $     $     $  
                   
Cost of revenues     264       -       -  
Research and development expenses     311       35       20  
Selling and marketing expenses     249       -       -  
General and administrative expenses     705       138       12  
                         
      1,529       173       32  

 

The options outstanding and exercisable as of December 31, 2015, have been separated into ranges of exercise prices as follows:

 

Range of
exercise price
  Options
outstanding 
as of
December 31,
2015
  Weighted
average
remaining
contractual life
(years)
  Weighted
average
exercise price 
  Aggregate
intrinsic
value
  Options
exercisable 
as of
December
31, 2015
  Weighted
average
exercise
price
  Aggregate
intrinsic
value 
$     $ $   $   $
0.00-0.85   97,512 6.61   0.68 442,471
38,687 0.67   175,906
3.00-5.00   237,648 3.04   4.40 195,626   28,000 4.31   25,395
7.00-10.00