v2.4.1.9
Document and Entity Information
12 Months Ended
Dec. 31, 2014
Document and Entity Information [Abstract]  
Document Type 20-F
Document Period End Date Dec. 31, 2014
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 2014
Entity Well-Known Seasoned Issuer No
Entity Current Reporting Status Yes
Entity Filer Category Non-accelerated Filer
Entity Common Stock, Shares Outstanding 13,742,585dei_EntityCommonStockSharesOutstanding
v2.4.1.9
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
CURRENT ASSETS    
Cash and cash equivalents $ 4,789us-gaap_CashAndCashEquivalentsAtCarryingValue $ 2,673us-gaap_CashAndCashEquivalentsAtCarryingValue
Restricted bank deposit 5,195us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue 85us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue
Trade accounts receivable, net of allowance for doubtful accounts of $4,390 and $2,084 as of December 31, 2014 and 2013, respectively 11,628us-gaap_AccountsReceivableNetCurrent 3,096us-gaap_AccountsReceivableNetCurrent
Deferred tax short term 3,958us-gaap_DeferredTaxAssetsLiabilitiesNetCurrent 2,183us-gaap_DeferredTaxAssetsLiabilitiesNetCurrent
Other accounts receivable and prepaid expenses (Note 3) 1,190us-gaap_PrepaidExpenseAndOtherAssetsCurrent 3,365us-gaap_PrepaidExpenseAndOtherAssetsCurrent
Inventories, net (Note 4) 1,614us-gaap_InventoryNet 707us-gaap_InventoryNet
TOTAL CURRENT ASSETS 28,374us-gaap_AssetsCurrent 12,109us-gaap_AssetsCurrent
LONG-TERM ASSETS    
Severance pay funds (Note 2.j) 325spcb_SeverancePayFund 294spcb_SeverancePayFund
Deferred tax long term 301us-gaap_DeferredTaxAssetsLiabilitiesNetNoncurrent 3,930us-gaap_DeferredTaxAssetsLiabilitiesNetNoncurrent
Customer Contracts 4,587spcb_CustomerContractsNet 5,745spcb_CustomerContractsNet [1]
Software and other IP 4,949spcb_IntellectualPropertyNet 5,303spcb_IntellectualPropertyNet [1]
Goodwill 3,722us-gaap_Goodwill 3,722us-gaap_Goodwill [1]
TOTAL LONG-TERM ASSETS OTHER THAN PROPERTY AND EQUIPMENT, NET 13,884spcb_LongTermAssetsOtherThanPropertyPlantAndEquipmentNet 18,994spcb_LongTermAssetsOtherThanPropertyPlantAndEquipmentNet
Property and equipment, net (Note 6) 616us-gaap_PropertyPlantAndEquipmentNet 176us-gaap_PropertyPlantAndEquipmentNet
TOTAL ASSETS 42,874us-gaap_Assets 31,279us-gaap_Assets
CURRENT LIABILITIES    
Short-term bank credit    1us-gaap_ShortTermBankLoansAndNotesPayable
Trade accounts payable 2,892us-gaap_AccountsPayableTradeCurrent 1,689us-gaap_AccountsPayableTradeCurrent
Employees and payroll accruals 944us-gaap_EmployeeRelatedLiabilitiesCurrent 419us-gaap_EmployeeRelatedLiabilitiesCurrent
Related parties 341us-gaap_DueToRelatedPartiesCurrent 434us-gaap_DueToRelatedPartiesCurrent
Accrued expenses and other liabilities (Note 8) 2,755spcb_AccruedExpensesAndOtherLiabilitiesCurrent 3,636spcb_AccruedExpensesAndOtherLiabilitiesCurrent
Advances from customers 2,864us-gaap_CustomerAdvancesCurrent   
Short-term liability for future earn-out 2,870spcb_BusinessCombinationContingentLiabilityCurrent 1,950spcb_BusinessCombinationContingentLiabilityCurrent [1]
TOTAL CURRENT LIABILITIES 12,666us-gaap_LiabilitiesCurrent 8,129us-gaap_LiabilitiesCurrent
LONG-TERM LIABILITIES    
Long-term liability for future earn-out 1,477spcb_BusinessCombinationContingentLiabilityNoncurrent 3,359spcb_BusinessCombinationContingentLiabilityNoncurrent [1]
Accrued severance pay 425spcb_AccruedSeverancePay 399spcb_AccruedSeverancePay
TOTAL LONG TERM LIABILITIES 1,902us-gaap_LiabilitiesNoncurrent 3,758us-gaap_LiabilitiesNoncurrent
TOTAL LIABILITIES 14,568us-gaap_Liabilities 11,887us-gaap_Liabilities
SHAREHOLDERS' EQUITY (Note 11)    
Ordinary shares, NIS 0.25 par value - authorized 40,000,000 shares, 13,742,585 shares issued and outstanding at December 31, 2014 and 13,284,144 shares issued and outstanding at December 31, 2013 937us-gaap_CommonStockValue 904us-gaap_CommonStockValue
Additional paid-in capital 58,210us-gaap_AdditionalPaidInCapitalCommonStock 55,530us-gaap_AdditionalPaidInCapitalCommonStock
Accumulated deficit (30,841)us-gaap_RetainedEarningsAccumulatedDeficit (37,042)us-gaap_RetainedEarningsAccumulatedDeficit
Total shareholders' equity 28,306us-gaap_StockholdersEquity 19,392us-gaap_StockholdersEquity
Total liabilities and shareholders' equity $ 42,874us-gaap_LiabilitiesAndStockholdersEquity $ 31,279us-gaap_LiabilitiesAndStockholdersEquity
[1] Retroactive Application
v2.4.1.9
CONSOLIDATED BALANCE SHEETS (Parenthetical)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2014
USD ($)
Dec. 31, 2014
ILS
Dec. 31, 2013
USD ($)
Dec. 31, 2013
ILS
CONSOLIDATED BALANCE SHEETS [Abstract]        
Trade receivables, allowance for doubtful accounts $ 4,390us-gaap_AllowanceForDoubtfulAccountsReceivable   $ 2,084us-gaap_AllowanceForDoubtfulAccountsReceivable  
Ordinary shares, par value per share   0.25us-gaap_CommonStockParOrStatedValuePerShare   0.25us-gaap_CommonStockParOrStatedValuePerShare
Ordinary shares, shares authorized 40,000,000us-gaap_CommonStockSharesAuthorized 40,000,000us-gaap_CommonStockSharesAuthorized 15,000,000us-gaap_CommonStockSharesAuthorized 15,000,000us-gaap_CommonStockSharesAuthorized
Ordinary shares, shares issued 13,742,585us-gaap_CommonStockSharesIssued 13,742,585us-gaap_CommonStockSharesIssued 13,284,144us-gaap_CommonStockSharesIssued 13,284,144us-gaap_CommonStockSharesIssued
Ordinary shares, shares outstanding 13,742,585us-gaap_CommonStockSharesOutstanding 13,742,585us-gaap_CommonStockSharesOutstanding 13,284,144us-gaap_CommonStockSharesOutstanding 13,284,144us-gaap_CommonStockSharesOutstanding
v2.4.1.9
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]      
REVENUES $ 29,703us-gaap_SalesRevenueNet $ 8,822us-gaap_SalesRevenueNet $ 8,940us-gaap_SalesRevenueNet
COST OF REVENUES 7,301us-gaap_CostOfGoodsAndServicesSold 1,896us-gaap_CostOfGoodsAndServicesSold 1,619us-gaap_CostOfGoodsAndServicesSold
GROSS PROFIT 22,402us-gaap_GrossProfit 6,926us-gaap_GrossProfit 7,321us-gaap_GrossProfit
OPERATING EXPENSES:      
Research and development 3,359us-gaap_ResearchAndDevelopmentExpense 564us-gaap_ResearchAndDevelopmentExpense 313us-gaap_ResearchAndDevelopmentExpense
Sales and marketing 7,036us-gaap_SellingAndMarketingExpense 3,158us-gaap_SellingAndMarketingExpense 3,060us-gaap_SellingAndMarketingExpense
General and administrative 2,773us-gaap_GeneralAndAdministrativeExpense 1,183us-gaap_GeneralAndAdministrativeExpense 857us-gaap_GeneralAndAdministrativeExpense
Other expenses 1,225us-gaap_OtherCostAndExpenseOperating 507us-gaap_OtherCostAndExpenseOperating 1,085us-gaap_OtherCostAndExpenseOperating
Total operating expenses 14,393us-gaap_OperatingExpenses 5,412us-gaap_OperatingExpenses 5,315us-gaap_OperatingExpenses
OPERATING INCOME 8,009us-gaap_OperatingIncomeLoss 1,514us-gaap_OperatingIncomeLoss 2,006us-gaap_OperatingIncomeLoss
Financial income (expenses), net (133)us-gaap_NonoperatingIncomeExpense (156)us-gaap_NonoperatingIncomeExpense 1,805us-gaap_NonoperatingIncomeExpense
INCOME BEFORE INCOME TAXES 7,876us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest 1,358us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest 3,811us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest
Income tax benefit (expense) (1,675)us-gaap_IncomeTaxExpenseBenefit 5,108us-gaap_IncomeTaxExpenseBenefit 1,006us-gaap_IncomeTaxExpenseBenefit
NET INCOME FOR THE YEAR $ 6,201us-gaap_NetIncomeLoss $ 6,466us-gaap_NetIncomeLoss $ 4,817us-gaap_NetIncomeLoss
Net income per share:      
Basic $ 0.46us-gaap_EarningsPerShareBasic $ 0.71us-gaap_EarningsPerShareBasic $ 0.75us-gaap_EarningsPerShareBasic
Diluted $ 0.45us-gaap_EarningsPerShareDiluted $ 0.70us-gaap_EarningsPerShareDiluted $ 0.59us-gaap_EarningsPerShareDiluted
Shares used in calculation of net income per share:      
Basic (in shares) 13,560,490us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 9,107,130us-gaap_WeightedAverageNumberOfSharesOutstandingBasic 6,464,808us-gaap_WeightedAverageNumberOfSharesOutstandingBasic
Diluted (in shares) 13,662,151us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding 9,194,865us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding 8,156,339us-gaap_WeightedAverageNumberOfDilutedSharesOutstanding
v2.4.1.9
STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT (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, 2011 $ (5,601)us-gaap_StockholdersEquity $ 192us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
$ 41,713us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
$ 819us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= spcb_AmountOfLiabilityExtinguishedOnAccountOfSharesMember
$ (48,325)us-gaap_StockholdersEquity
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
Balance (in shares) at Dec. 31, 2011   2,831,827us-gaap_SharesOutstanding
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Exercise of options and warrants    5spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
(5)spcb_StockIssuedDuringPeriodValueStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
     
Exercise of options and warrants (in shares)   80,499spcb_StockIssuedDuringPeriodSharesStockOptionsAndWarrantsExercised
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Shares, options and warrants issued in connection with extinguishments of liabilities (see Note 11e) 1,495spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued 377spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
1,810spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_AdditionalPaidInCapitalMember
(692)spcb_StockIssuedDuringPeriodValueSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= spcb_AmountOfLiabilityExtinguishedOnAccountOfSharesMember
  
Shares, options and warrants issued in connection with extinguishments of liabilities (see Note 11e) (in shares)   5,739,377spcb_StockIssuedDuringPeriodSharesSharesNewIssuesStockOptionsIssuedWarrantIssued
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_CommonStockMember
     
Shares issued under employee share-based plans               
Shares issued under employee share-based plans (in shares)           
Net income for the year 4,817us-gaap_NetIncomeLoss          4,817us-gaap_NetIncomeLoss
/ us-gaap_StatementEquityComponentsAxis
= us-gaap_RetainedEarningsMember
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, options and warrants issued in connection with extinguishments of liabilities (see Note 11e)    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, options and warrants issued in connection with extinguishments of liabilities (see Note 11e) (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 cost 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 cost 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
     
v2.4.1.9
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
CASH FLOWS - OPERATING ACTIVITIES      
Net income for the year $ 6,201us-gaap_NetIncomeLoss $ 6,466us-gaap_NetIncomeLoss $ 4,817us-gaap_NetIncomeLoss
Adjustments to reconcile net income to net cash from operations:      
Depreciation and amortization 1,615us-gaap_DepreciationDepletionAndAmortization 48us-gaap_DepreciationDepletionAndAmortization 31us-gaap_DepreciationDepletionAndAmortization
Accrued severance pay 26spcb_AccruedSeverancePayAdjustment 163spcb_AccruedSeverancePayAdjustment 9spcb_AccruedSeverancePayAdjustment
Stock-based compensation 173us-gaap_ShareBasedCompensation 32us-gaap_ShareBasedCompensation   
Deferred tax 1,854us-gaap_DeferredIncomeTaxExpenseBenefit (5,080)us-gaap_DeferredIncomeTaxExpenseBenefit (1,033)us-gaap_DeferredIncomeTaxExpenseBenefit
Capital loss on disposal of property and equipment 1us-gaap_GainLossOnSaleOfPropertyPlantEquipment      
Capital gain on extinguishments of liabilities       (2,230)spcb_GainOnExtinguishmentOfLiabilities
Increase in trade receivables, net (8,532)us-gaap_IncreaseDecreaseInAccountsReceivable (1,498)us-gaap_IncreaseDecreaseInAccountsReceivable (55)us-gaap_IncreaseDecreaseInAccountsReceivable
Decrease (increase) in other accounts receivable and prepaid expenses 2,175spcb_IncreaseDecreaseInOtherAccountsReceivableAndPrepaidExpenses (2,779)spcb_IncreaseDecreaseInOtherAccountsReceivableAndPrepaidExpenses (206)spcb_IncreaseDecreaseInOtherAccountsReceivableAndPrepaidExpenses
Increase in inventories, net (907)us-gaap_IncreaseDecreaseInInventories (84)us-gaap_IncreaseDecreaseInInventories (11)us-gaap_IncreaseDecreaseInInventories
Increase (decrease) in trade payables 1,203us-gaap_IncreaseDecreaseInAccountsPayableTrade (142)us-gaap_IncreaseDecreaseInAccountsPayableTrade (659)us-gaap_IncreaseDecreaseInAccountsPayableTrade
Increase (decrease) in employees and payroll accruals 525us-gaap_IncreaseDecreaseInEmployeeRelatedLiabilities 257us-gaap_IncreaseDecreaseInEmployeeRelatedLiabilities (1)us-gaap_IncreaseDecreaseInEmployeeRelatedLiabilities
Increase in advances from customer 2,864us-gaap_IncreaseDecreaseInCustomerAdvances      
Increase (decrease ) in accrued expenses and other liabilities, related parties and liability for earn-out (927)us-gaap_IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities 2,050us-gaap_IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities (638)us-gaap_IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities
Net cash used in operating activities 6,271us-gaap_NetCashProvidedByUsedInOperatingActivities (567)us-gaap_NetCashProvidedByUsedInOperatingActivities 24us-gaap_NetCashProvidedByUsedInOperatingActivities
CASH FLOWS - INVESTING ACTIVITIES      
Purchase of property and equipment (544)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment (103)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment (28)us-gaap_PaymentsToAcquirePropertyPlantAndEquipment
Proceeds from sale of property and equipment        
Acquisition of a business entity    (8,788)us-gaap_PaymentsToAcquireBusinessesNetOfCashAcquired   
Decrease (Increase) in severance pay fund (31)spcb_IncreaseDecreaseInAccruedSeverancePay (91)spcb_IncreaseDecreaseInAccruedSeverancePay 25spcb_IncreaseDecreaseInAccruedSeverancePay
Payment of liability for future earn-out in business combination (1,009)spcb_PaymentsForBusinessCombinationContingentLiability      
Restricted bank deposits, net (5,110)us-gaap_IncreaseDecreaseInRestrictedCash (85)us-gaap_IncreaseDecreaseInRestrictedCash   
Net cash provided by (used in) investing activities (6,694)us-gaap_NetCashProvidedByUsedInInvestingActivities (9,067)us-gaap_NetCashProvidedByUsedInInvestingActivities (3)us-gaap_NetCashProvidedByUsedInInvestingActivities
CASH FLOWS - FINANCING ACTIVITIES      
Short-term bank credit, net (1)us-gaap_ProceedsFromRepaymentsOfLinesOfCredit (101)us-gaap_ProceedsFromRepaymentsOfLinesOfCredit (11)us-gaap_ProceedsFromRepaymentsOfLinesOfCredit
Proceeds from issuance of share capital, net of issuance costs 2,458us-gaap_ProceedsFromIssuanceOrSaleOfEquity 12,043us-gaap_ProceedsFromIssuanceOrSaleOfEquity   
Proceeds from exercise of options and warrants, net 82spcb_ProceedsFromOptionAndWarrantExercises 140spcb_ProceedsFromOptionAndWarrantExercises    [1]
Net cash used in (provided by) financing activities 2,539us-gaap_NetCashProvidedByUsedInFinancingActivities 12,082us-gaap_NetCashProvidedByUsedInFinancingActivities (11)us-gaap_NetCashProvidedByUsedInFinancingActivities
Increase in cash and cash equivalents 2,116us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease 2,448us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease 10us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease
Cash and cash equivalents - beginning of year 2,673us-gaap_CashAndCashEquivalentsAtCarryingValue 225us-gaap_CashAndCashEquivalentsAtCarryingValue 215us-gaap_CashAndCashEquivalentsAtCarryingValue
Cash and cash equivalents - end of year $ 4,789us-gaap_CashAndCashEquivalentsAtCarryingValue $ 2,673us-gaap_CashAndCashEquivalentsAtCarryingValue $ 225us-gaap_CashAndCashEquivalentsAtCarryingValue
[1] Less than $1.
v2.4.1.9
GENERAL
12 Months Ended
Dec. 31, 2014
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.

 

As of December 31, 2014, the Company's principal activities were conducted mainly through SuperCom Ltd. and Supercom Inc. and through SuperCom Tanzania and SuperCom Panama, that were acquired in December 2013 as part of the acquisition of the SmartID division. The subsidiaries in Tanzania and Panama provide support and maintenance services to the Company's customers in these countries.

 

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

 

In year 2014, the Company derived most of its revenues from four major customers. Throughout the 2012 and 2013 periods 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, 2014
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.
v2.4.1.9
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
12 Months Ended
Dec. 31, 2014
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES [Abstract]  
OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
NOTE 3: OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

 

             December 31,             
2014     2013
      $       $
               
Prepaid expenses     55       1,433
Government institutions     945       1,887
Others     190       45  
               
      1,190       3,365
v2.4.1.9
INVENTORIES, NET
12 Months Ended
Dec. 31, 2014
INVENTORIES, NET [Abstract]  
INVENTORIES, NET
NOTE 4:INVENTORIES, NET

 

December 31,  
2014     2013  
    $     $  
             
Raw materials, parts and supplies     759       687  
Finished products     855       20  
                 
      1,614       707  

 

As of December 31, 2014 and 2013, inventory is presented net of write offs for slow inventory in the amount of approximately $121 and $57, respectively.

v2.4.1.9
ACQUISITION
12 Months Ended
Dec. 31, 2014
ACQUISITION [Abstract]  
ACQUISITION
NOTE 5: ACQUISITION

 

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 2014, the Company paid an amount of $1 million 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.

 

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 acquired assets and assumed liabilities as of the acquisition date:

 

Assets acquired   $  
Inventories     343  
Other current assets     276  
Customer contracts     5,745  
Software and other IP     5,303  
Goodwill     3,722  
Property and equipment, net     28  
Total assets acquired     15,417  
Liabilities assumed        
Other current liabilities     1,320  
Total liabilities assumed     1,320  
Net assets acquired     14,097  

 

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.

 

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

 

    $  
2014     1,511  
2015     1,271  
2016     1,101  
2017     966  
2018     855  
2019     764  
2020     690  
2021     629  
2022-2028     3261  
v2.4.1.9
PROPERTY AND EQUIPMENT, NET
12 Months Ended
Dec. 31, 2014
PROPERTY AND EQUIPMENT, NET [Abstract]  
PROPERTY AND EQUIPMENT, NET
NOTE 6:PROPERTY AND EQUIPMENT, NET

 

December 31,  
2014     2013  
      $       $  
Cost:            
                 
Computers and peripheral equipment     726       375  
Office furniture and equipment     230       214  
Leasehold improvements     192       43  
      1,148       632  
Accumulated depreciation:                
Computers and peripheral equipment     360       279  
Office furniture and equipment     160       148  
Leasehold improvements     12       29  
      532       456  
Depreciated cost     616       176  

 

Depreciation expenses for the years ended December 31, 2014, 2013 and 2012, were $103, $48 and $32, respectively.

v2.4.1.9
BANK CREDIT
12 Months Ended
Dec. 31, 2014
BANK CREDIT [Abstract]  
BANK CREDIT
NOTE 7:BANK CREDIT

 

  a. On February 10, 2011 the Company received a $100 credit line from an Israeli bank. As of December 31, 2013, the entire amount was utilized. During December, 2014 the Company closed the credit line.

 

  b. Regarding guarantees and liens - see Note 9b.
v2.4.1.9
ACCRUED EXPENSES AND OTHER LIABILITIES
12 Months Ended
Dec. 31, 2014
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract]  
ACCRUED EXPENSES AND OTHER LIABILITIES

NOTE 8:      ACCRUED EXPENSES AND OTHER LIABILITIES

 

December 31  
2014     2013  
      $       $  
                 
Liabilities related with the Smart ID acquisition     813       2,833  
Accrued marketing expenses     437       284  
Employees Benefits     417       -  
Authorities     277       -  
Overheads     255       -  
Legal service providers     93       201  
Other accrued expenses     463       318  
                 
      2,755       3,636  
v2.4.1.9
COMMITMENTS AND CONTINGENT LIABILITIES
12 Months Ended
Dec. 31, 2014
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 2015 to 2019. The monthly lease amount, including management fees of the leased property, is approximately $70.

 

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

 

2015     749  
2016     604  
2017     604  
2018     604  
2019     201  
      2,762  

 

  b. Guarantees, indemnity and liens:

 

  1.

The Company issued bank guaranties in the total amount of $5.1 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, 2014) 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 (see Note 7a) and in order to secure short-term loans that are given by them from time to time to the Company.

 

  c. Litigation:

 

  1. According to a success based consulting agreement from November 29, 2009, Periscope Finance Ltd. (“Periscope”), committed to assist the Company in finding an investor, With the following payments terms: (i) for any investment of up to $2 million, an amount equal to 6% of the investment amount and (ii) options for 3% of the Company's share capital. (iii) for any amount over $2 million, an additional $25,000 for any $1 million and an additional options for 1% of the Company's share capital. Periscope claims that they are responsible for an investment by Sigma Wave, the Company's current controlling shareholder. This dispute was in a process of mediation from 2013 until September 2014. The company and Periscope had come to an agreement with no additional liability to the company.

  

  2. 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.
v2.4.1.9
INCOME TAX
12 Months Ended
Dec. 31, 2014
INCOME TAX [Abstract]  
INCOME TAX
NOTE 10:INCOME TAX

 

  a. Changes in Israeli corporate tax rates:

 

On December 6, 2011, the Law for the Change in the Tax Burden (Legislative Amendments) – 2011 was publicized.  As part of the law, among other things, the Economic Efficiency Law (Legislative Amendments for the Implementation of the Economic Plan for 2009 and 2010) – 2009 and the Income Tax Ordinance (New Version) – 1961 were amended whereby, commencing in 2012, the blueprint for the reduction in the corporate tax rates will be cancelled and the corporate tax rate will be 25%. On July 30, 2013, the Israeli Parliament (the Knesset) passed a law which was designated to increase the tax levy in the years 2013 and 2014. Among other things, the law increases the Israeli corporate tax rate from 25% to 26.5% for the year 2014.

 

  b. Non-Israeli subsidiaries:

 

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,  
  2014     2013  
  $   $
   
Operating loss carry forwards   8,703   12,041
Reserves and allowances   1,525   691
   
Net deferred tax assets before valuation allowance   10,228   12,732
Valuation allowance   (5,969 )   (6,619 )
   
Net deferred tax assets   4,259   6,113
   
Deferred income taxes consist of the following:    
Domestic   2,750   6,272
Valuation allowance   1,509   (159 )
Net deferred tax assets   4,259   6,113
   
Foreign   5,953   5,769
Valuation allowance   5,953   (5,769 )
   
  -   -

 

As of December 31, 2014, the Company and its subsidiaries have provided a valuation allowance of $5,969 in respect of deferred tax assets resulting from tax loss carryforwards and other temporary differences. Management currently believes that since the Company and its subsidiaries had net profits in 2013 and 2014, the deferred tax assets are likely to be realized in the next year.

 

  d. Carryforward tax losses:

 

SuperCom Ltd. has accumulated losses for tax purposes as of December 31, 2014 of approximately $10,377, 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 $13,663, 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, 2014, SuperCom's subsidiaries in the United States have estimated total available carryforward tax losses of approximately $13,176. 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 of 1986 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, 2009.

 

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,           
  2014   2013     2012
  $   $   $
     
Domestic   6,281   1,495   3,917
Foreign   1,595   (137 )   (106 )
  7,876   1,358   3,811

 

  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,      
  2014 2013     2012
  $   $   $
Income before income tax, as reported in the consolidated statements of operations   7,876   1,358   3,811
Statutory tax rate in Israel   26.5 %   25 %   25 %
     
Theoretical tax expense   2,087   340   953
Carryforward losses for which a full valuation allowance was recorded  and other differences for which deferred taxes were not created   67
  (908 )   (463 )
Changes in valuation allowance   (1,332 )   (3,668 )   (1,442 )
Changes in foreign currency exchange rate   674   (425 )   -
Changes in tax rate   -   (334 )   -
Others   179   (113 )   (54 )
     
Actual income tax expense (benefit)   1,675   (5,108 )   (1,006 )
v2.4.1.9
SHARE CAPITAL
12 Months Ended
Dec. 31, 2014
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.

 

During 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 an aggregate gross proceeds of $2,458.

 

  c. 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.

  

  d. 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.

 

On August 9, 2011, the Company issued options to purchase up to 35,294 shares to a former officer of the Company as part of his employment agreement. The options (the fair value of which was estimated at $6) which have an exercise price of $0.47, vested immediately. The options were not exercised within the allowed time frame following the termination of services provided by the optionee, hence were expired.

 

On August 24, 2011, the Company issued options to purchase up to 90,588 shares to several employees of the Company. The options (the fair value of which was estimated at $18) have an exercise price of $0.85. Of such options, 36,471 options vested on January 1, 2012, and the remaining 54,118 vested on January 1, 2013. The options will expire after ten years.

 

During 2012 no options were granted.

 

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.

 

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

 

Year ended December 31
2014   2013     2012  
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     204,931       2.06       128,952       4.12       509,143       3.36  
Granted     36,765       1.86       152,949       0.72       -       -  
Exercised     (100,441 )     0.82       (6,000 )     0.85       (80,499 )     0.00  
Canceled and forfeited     (3,400 )     13.00       (70,970 )     5.74       (299,692 )     6.84  
Outstanding at end of year     137,855       2.64       204,931       2.06       128,952       4.12  
Exercisable at end of year     44,618       5.90       78,457       4.25       92,482       5.40  

 

The weighted average fair value of options granted during the reported periods was $5.15 per option for the year ended December 31, 2014, and $1.09 per option for the year ended December 31, 2013. In 2012 no options were granted.

 

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 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 following weighted average assumptions were used for the 2013 grants: risk-free rate of 1.2% dividend yield of 0%, expected volatility factor of 344.19% and expected term of 6.11 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 share-based employee compensation awards were $173, $32, and $7 for the years ended December 31, 2014, 2013 and 2012, respectively.

  

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

 

Year ended December 31,  
2014     2013     2012  
    $     $     $  
                   
Cost of revenues     -       -       1.5  
Research and development expenses     35       20       4  
Selling and marketing expenses     -       -       -  
General and administrative expenses     138       12       1.5  
                         
      173       32       7  

 

v2.4.1.9
RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2014
RELATED PARTY TRANSACTIONS [Abstract]  
RELATED PARTY TRANSACTIONS
NOTE 12:RELATED PARTY TRANSACTIONS

 

  a. On July 25, 2010, the board of directors of the Company elected Mrs. Tsviya Trabelsi to serve as Chairman. Mrs. Trabelsi is an officer at Sigma Wave Ltd., which is the controlling shareholder of the Company and is also the wife of the Company's chief executive officer. On May 12, 2011, the special general meeting approved a service agreement with Mrs. Trabelsi whereby she will receive a monthly fee equal to 60% of the Company's chief executive officer's monthly cost. In addition to the above consideration, the Company will bear all reasonable costs and expenses incurred by the Chairman in connection with her services and provide her with an automobile. On December 12, 2011, Mrs. Tsviya Trabelsi resigned effective immediately and the board of directors of the Company approved the appointment of Mr. Arie Trabelsi as its new Chairman, effective December 12, 2011. On December 27, 2012, the company's shareholders at a general meeting of shareholders approved the reappointment of Mrs. Trabelsi as Chairman. On May 9, 2013, the general meeting of shareholders of the Company approved the same management services compensation for Mrs. Trabelsi as those approved in May 2011.

 

  b. Mr. Trabelsi has served as the chief executive officer of the Company since June 1, 2012. Mr. Trabelsi is the sole director of Sigma Wave, which is the controlling shareholder of the Company. On May 9, 2013, the general meeting of shareholders of the Company approved the payment of management fees to Mr. Trabelsi of $10.6 per month plus social benefits and an annual bonus of the greater of 2% of the Company's annual net profit or 0.5% of annual revenues, but in no event greater than Mr. Trabelsi's annual salary.

 

  c. As of December 31, 2014, the Company accrued $128 as expenses arising from related party management services.

 

  d. On April 29, 2012, the board of directors approved the recording of a floating charge on all of the Company's assets in favor of Mrs. and Mr. Trabelsi, unlimited in amount, in order to secure personal guarantees granted by them in favor of the Company to a bank and in order to secure short-term loans that are given by them from time to time to the Company. The short terms loans provided by Mrs. and Mr. Trabelsi during the years 2010 until 2013 ranged from NIS 10,000 up to NIS 1,965,000. Currently, there are no outstanding loans from Mrs. and Mr. Trabelsi. (Mr. and Mrs. Trabelsi provided a guaranty to the bank in the amount of NIS 1 million ($257 as of December 31, 2014)).
v2.4.1.9
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION
12 Months Ended
Dec. 31, 2014
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION [Abstract]  
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION
NOTE 13:SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION

 

  a. Summary information about geographic areas:

 

The Company manages its business on the basis of one reportable segment (see Note 1 for a brief description of the Company's business) and follows the requirements of ASC Topic 280, "Segment Reporting".

 

The following is a summary of revenues from external customers of the continued operations within geographic areas and data regarding property and equipment, net:

 

  Year ended December 31,  
  2014     2013     2012  
  Total    Property and     Total     Property and     Total      Property and  
  Revenues   Equipment, net     revenues     Equipment, net     revenues      Equipment, net  
  $   $   $   $   $   $
East European country (*)   3,901     7,455   -   8,637   -
United States   126   16   199   17   217   17
Israel   50   600   232   159   86   76
Africa   24,083   -   903   -   -   -
South America   1,479   -   33   -   -   -
Other   64   -   -   -   -   -
           
  29,703   616   8,822   176   8,940   93

 

  - Revenues were attributed to countries based on the customer's location.

 

  - Property and equipment were classified based on geographic areas in which such property and equipment items are held.
(*)
Due to the demand of the customer, the name of the specific country cannot be disclosed.

 

  b. Summary of revenues from external customers based on products and services:

 

Year ended December 31,  
2014     2013     2012  
    $     $     $  
                   
Raw materials and equipment     4,982       5,392       3,856  
Maintenance, royalties and project management     24,721       3,430       5,084  
                         
      29,703       8,822       8,940  

 

  c. Major customer data as a percentage of total sales:

 

Year ended December 31,
2014   2013     2012  
           
Customer A 42 %     -       -  
Customer B     19 %     -       -  
Customer C     18 %     -       -  
Customer D     13 %     73 %     64 %

 

v2.4.1.9
OTHER (INCOME) EXPENSES
12 Months Ended
Dec. 31, 2014
OTHER (INCOME) EXPENSES [Abstract]  
OTHER (INCOME) EXPENSES
NOTE 14: OTHER (INCOME) EXPENSES

 

    Year ended December 31,  
    2014     2013     2012  
    $     $     $  
         
Gain on prior years subcontract provision   -     -     (323 )
Capital loss on disposal of property and equipment   -     -     -
Doubtful debt provision   1,225     358     1,595
Gain on extinguishment of debts (*)   -     -     (187 )
Expenses related with SmartID acquisition   -     149     -
Total   1,225     507     1,085

 

  (*)
Comprised of the capital gain on extinguishment of working capital related liabilities (employees, service providers etc.).

 

Bad debt

 

The following is a summary of the allowance for doubtful accounts related to accounts receivable for the years ended December 31:

 

    Balance at
beginning
of period
    provision
during
period
    Balance at end
of period
 
    $     $     $  
     
2012   134   1,592   1,726
2013   1,726   358   2,084
2014   2,084   2,306   4,390

 

v2.4.1.9
FINANCIAL (EXPENSES) INCOME, NET
12 Months Ended
Dec. 31, 2014
FINANCIAL (EXPENSES) INCOME, NET [Abstract]  
FINANCIAL (EXPENSES) INCOME, NET

NOTE 15:   FINANCIAL (EXPENSES) INCOME, NET

 

  2014     2013     2012