Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 28, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CYREN Ltd. | ||
Entity Central Index Key | 0001084577 | ||
Trading Symbol | CYRN | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 73.7 | ||
Entity Common Stock, Shares Outstanding | 54,217,357 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 17,571 | $ 23,981 |
Trade receivables (net of allowances for doubtful accounts of $20 and $445 as of December 31, 2018 and 2017, respectively) | 3,658 | 2,890 |
Deferred commissions | 887 | |
Prepaid expenses and other receivables | 778 | 1,339 |
Total current assets | 22,894 | 28,210 |
LONG-TERM ASSETS: | ||
Long-term deferred commissions | 1,880 | |
Long-term lease deposits | 821 | 379 |
Severance pay fund | 503 | 714 |
Property and equipment, net | 4,608 | 2,787 |
Intangible assets, net | 8,802 | 11,018 |
Goodwill | 20,519 | 21,128 |
Total long-term assets | 37,133 | 36,026 |
Total assets | 60,027 | 64,236 |
CURRENT LIABILITIES: | ||
Trade payables | 1,668 | 1,017 |
Employees and payroll accruals | 3,959 | 3,239 |
Accrued expenses and other liabilities | 910 | 1,012 |
Earn-out consideration and related costs | 2,926 | 3,588 |
Deferred revenues | 5,773 | 5,032 |
Total current liabilities | 15,236 | 13,888 |
LONG-TERM LIABILITIES: | ||
Deferred revenues | 503 | 524 |
Convertible notes | 10,000 | |
Deferred tax liability, net | 1,130 | 1,355 |
Accrued severance pay | 598 | 930 |
Other liabilities | 700 | 438 |
Total long-term liabilities | 12,931 | 3,247 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY: | ||
Ordinary shares nominal value ILS 0.15 par value - Authorized: 75,353,340 shares as of December 31, 2018 and 2017; Issued: 54,405,881 shares as of December 31, 2018 and 2017; Outstanding: 54,057,208 and 53,375,854 shares as of December 31, 2018 and 2017, respectively | 2,097 | 2,097 |
Additional paid-in capital | 245,570 | 244,609 |
Treasury shares at cost: 348,673 and 1,030,027 Ordinary shares as of December 31, 2018 and 2017, respectively | (998) | (3,312) |
Accumulated other comprehensive loss | (1,666) | (1,195) |
Accumulated deficit | (213,143) | (195,098) |
Total shareholders' equity | 31,860 | 47,101 |
Total liabilities and shareholders' equity | $ 60,027 | $ 64,236 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2018USD ($)shares | Dec. 31, 2018₪ / shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2017₪ / shares |
Statement of Financial Position [Abstract] | ||||
Allowances for doubtful accounts | $ | $ 20 | $ 445 | ||
Ordinary shares, par value | ₪ / shares | ₪ 0.15 | ₪ 0.15 | ||
Ordinary shares, authorized | 75,353,340 | 75,353,340 | ||
Ordinary shares, issued | 54,405,881 | 54,405,881 | ||
Ordinary shares, outstanding | 54,057,208 | 53,375,854 | ||
Treasury shares | 348,673 | 1,030,027 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 35,900 | $ 30,799 |
Cost of revenues | 14,540 | 11,899 |
Gross profit | 21,360 | 18,900 |
Operating expenses: | ||
Research and development, net | 16,116 | 9,825 |
Sales and marketing | 16,202 | 15,551 |
General and administrative | 8,343 | 7,286 |
Total operating expenses | 40,661 | 32,662 |
Operating loss | (19,301) | (13,762) |
Other income (expense), net | (11) | 452 |
Financial expenses, net | (255) | (2,380) |
Loss before taxes on income | (19,567) | (15,690) |
Tax benefit | 153 | 42 |
Loss | $ (19,414) | $ (15,648) |
Basic and diluted loss per share | $ (0.36) | $ (0.38) |
Weighted average number of shares used in computing basic and diluted loss per share | 53,634,199 | 40,922,453 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Loss | $ (19,414) | $ (15,648) |
Other comprehensive loss: | ||
Foreign currency translation adjustments | (471) | 1,656 |
Comprehensive loss | $ (19,885) | $ (13,992) |
Statements of Changes in Shareh
Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Number of outstanding ordinary shares | Additional paid-in capital | Treasury shares | Accumulated other comprehensive income (loss) | [1] | Accumulated deficit |
Balance beginning at Dec. 31, 2016 | $ 31,738 | $ 1,497 | $ 216,147 | $ (3,867) | $ (2,851) | $ (179,188) | |
Balance beginning, shares at Dec. 31, 2016 | 39,174,272 | ||||||
Issuance of shares upon private offering ($1.85 per share), net of $631 issuance expenses | 18,971 | $ 452 | 18,519 | ||||
Issuance of shares upon private offering ($1.85 per share), net of $631 issuance expenses, shares | 10,595,521 | ||||||
Issuance of shares upon conversion of convertible notes and accrued interest on account of the convertible notes | 8,231 | $ 148 | 8,083 | ||||
Issuance of shares upon conversion of convertible notes and accrued interest on account of the convertible notes, shares | 3,456,407 | ||||||
Issuance of treasury shares upon exercise of options and vesting of restricted share units | 93 | (200) | 555 | (262) | |||
Issuance of treasury shares upon exercise of options and vesting of restricted share units, shares | 149,654 | ||||||
Stock-based compensation related to employees, directors and consultants | 2,060 | 2,060 | |||||
Other comprehensive income (loss) | 1,656 | 1,656 | |||||
Loss | (15,648) | (15,648) | |||||
Balance ending at Dec. 31, 2017 | 47,101 | $ 2,097 | 244,609 | (3,312) | (1,195) | (195,098) | |
Balance ending, shares at Dec. 31, 2017 | 53,375,854 | ||||||
Issuance of treasury shares upon exercise of options and vesting of restricted share units | 1,393 | (479) | 2,314 | (442) | |||
Issuance of treasury shares upon exercise of options and vesting of restricted share units, shares | 681,354 | ||||||
Stock-based compensation related to employees, directors and consultants | 1,440 | 1,440 | |||||
Other comprehensive income (loss) | (471) | (471) | |||||
Cumulative effect of adopting ASC 606 | 1,811 | 1,811 | |||||
Loss | (19,414) | (19,414) | |||||
Balance ending at Dec. 31, 2018 | $ 31,860 | $ 2,097 | $ 245,570 | $ (998) | $ (1,666) | $ (213,143) | |
Balance ending, shares at Dec. 31, 2018 | 54,057,208 | ||||||
[1] | Relates to foreign currency translation adjustments. |
Statements of Changes in Shar_2
Statements of Changes in Shareholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Issuance expenses | $ | $ 631 |
Issuance of shares upon private offering price per share | $ / shares | $ 1.85 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Loss | $ (19,414) | $ (15,648) |
Adjustments to reconcile loss to net cash used in operating activities: | ||
Loss on disposal of property and equipment | 15 | 2 |
Depreciation | 1,856 | 1,303 |
Stock-based compensation | 1,440 | 2,060 |
Amortization of intangible assets | 4,165 | 3,746 |
Amortization of deferred commissions | 1,351 | |
Interest and accretion of discount on convertible notes | 40 | 480 |
Change in fair value of embedded conversion feature on convertible notes | 1,349 | |
Other income related to investment in affiliate | (450) | |
Other expenses related to the earn-out consideration | 97 | 117 |
Deferred taxes, net | (182) | (175) |
Changes in assets and liabilities: | ||
Trade receivables, net | (596) | 77 |
Prepaid expenses and other receivables | 530 | (362) |
Deferred commissions | (2,307) | |
Change in long-term lease deposits | (105) | 28 |
Trade payables | 264 | 36 |
Employees and payroll accruals, accrued expenses and other liabilities | 516 | 780 |
Deferred revenues | 720 | (841) |
Accrued severance pay, net | (121) | 4 |
Other long-term liabilities | 274 | 302 |
Net cash used in operating activities | (11,457) | (7,192) |
Cash flows from investing activities: | ||
Capitalization of technology, net of grants received | (1,984) | (3,567) |
Proceeds from sale of investment in affiliate | 450 | |
Proceeds from sale of property and equipment | 1 | |
Purchase of property and equipment | (3,320) | (1,771) |
Net cash used in investing activities | (5,303) | (4,888) |
Cash flows from financing activities: | ||
Proceeds from private offerings, net | 18,971 | |
Proceeds from convertible notes | 10,000 | 6,300 |
Payment of earn-out consideration | (604) | |
Proceeds from options exercised | 1,393 | 93 |
Net cash provided by financing activities | 10,789 | 25,364 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (101) | 98 |
Increase (decrease) in cash, cash equivalents and restricted cash | (6,072) | 13,382 |
Cash, cash equivalents and restricted cash at the beginning of the period | 24,228 | 10,846 |
Cash, cash equivalents and restricted cash at the end of the period | 18,156 | 24,228 |
Cash paid (received) during the year for: | ||
Taxes, net | (161) | (50) |
Interest | 92 | 130 |
Non-cash transactions: | ||
Unpaid purchases of property and equipment | (383) | (217) |
Net change in accrued payroll expenses related to capitalization of technology | (110) | (255) |
Conversion of convertible notes and accrued interest on account of convertible notes into equity | $ (8,231) |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Reconciliation of Cash, Cash Equivalents and Restricted Cash) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statements of cash flow: | ||
Cash and cash equivalents | $ 17,571 | $ 23,981 |
Restricted cash included in long-term restricted lease deposits | 585 | 247 |
Total cash, cash equivalents and restricted cash | $ 18,156 | $ 24,228 |
General
General | 12 Months Ended |
Dec. 31, 2018 | |
General [Abstract] | |
GENERAL | NOTE 1: GENERAL a. Cyren Ltd. (henceforth “Cyren”) was incorporated under the laws of the State of Israel on February 10, 1991 and its legal form is a company limited by shares. Cyren listed its shares to the public on July 15, 1999 under the name Commtouch Software Ltd. and changed its legal name to Cyren Ltd. in January 2014. Cyren and its subsidiaries, unless otherwise indicated will be referred to in these consolidated financial statements as the “Company”. The Company is engaged in developing and marketing information security solutions for protecting web, email and mobile transactions. The Company sells its cloud-based solutions worldwide, in both embedded and Security-as-a-Service models, to Original Equipment Manufacturers (“OEMs”), service providers and enterprises. The Company operates in one reportable segment, which constitutes its reporting unit. b. Over the past several years, the Company has devoted substantially most of its effort to research and development, product development and increasing revenues through additional investments in sales & marketing. The Company generated a loss of 19,414 and negative cash flow of 11,457 from operating activities in the twelve month period ended December 31, 2018, and has an accumulated deficit of 213,143 as of December 31, 2018. The Company is planning to finance its operations from its existing and future working capital resources and to continue to evaluate additional sources of capital and financing. However, there is no assurance that additional capital and/or financing will be available to the Company, and even if available, whether it will be on terms acceptable to the Company or in amounts required. Accordingly, the Company's Board approved a contingency plan, to be effected if needed, in whole or in part, at its discretion, to allow the Company to continue its operations and meet its cash obligations. The contingency plan consists of cost reduction, which include mainly the following steps: reduction in consultants’ expenses, headcount, compensation paid to key management personnel and capital expenditures. The Company and the Board believe that its existing capital resources and other future measures that may be implemented, if so required, will be adequate to satisfy its expected liquidity requirements for at least twelve months from the filing date. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
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 (“U.S. GAAP”). a. Use of estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company’s management evaluates estimates, including those related to fair value and useful lives of intangible assets, fair value of earn-out liabilities, valuation allowance on deferred tax assets, income tax uncertainties, fair values of stock-based awards, other contingent liabilities and estimates used in applying the revenue recognition policy. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. b. Financial statements in U.S. dollars: Cyren’s revenues, and certain of its subsidiary’s revenues, are generated mainly in U.S. dollars. In addition, most of their costs are incurred in U.S. dollars. The Company’s management believes that the U.S. dollar is the primary currency of the economic environment in which Cyren and certain of its subsidiaries operate. Thus, the functional and reporting currency of Cyren and certain of its subsidiaries is the U.S. dollar. Cyren and certain subsidiaries’ transactions and balances denominated in U.S. dollars are presented at their original amounts. Non-dollar transactions and balances have been re-measured to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate. For those subsidiaries whose functional currency has been determined to be their local currency, assets and liabilities are translated at year-end exchange rates and statements of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. c. Principles of consolidation: The consolidated financial statements include the accounts of Cyren and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. d. Cash equivalents: Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at acquisition. e. Restricted deposits: The Company maintains certain deposits amounts restricted as to withdrawal or use. On December 31, 2018, the Company maintained a balance of $585 which is restricted and is held as collateral for a bank guarantee and a letter of credit provided to the lessors of two of the Company’s offices. The balance is presented on the balance sheets within the long-term restricted lease deposits balance. f. Investment in affiliates: The Company’s investments in affiliated companies comprises of investments in which the Company owns less than 20 % or in which the Company cannot exercise significant influence over the affiliates’ operating and financial policies. These investments are stated at cost. As of December 31, 2018 and 2017, the Company does not hold any investments in affiliates. g. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 7–20 Leasehold improvements Over the shorter of the term of the lease or the life of the assets h. Intangible assets: Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives, which range from 1 to 15 years. Acquired customer contracts and relationships are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such customer contracts and relationships arrangements as compared to the straight-line method. Technology, Intellectual Property and Trademark are amortized over their estimated useful lives on a straight-line basis. i. Impairment of long-lived assets: The Company’s long-lived assets and identifiable intangibles are reviewed for impairment in accordance with ASC 360 “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset group to the future undiscounted cash flows the asset group is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. For each of the two years in the period ended December 31, 2018, no impairment losses have been identified. j. Goodwill: Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an impairment test. The Company performs an annual impairment test at December 31, of each fiscal year, or more frequently if impairment indicators are present. The Company operates in one operating segment, and this segment comprises its only reporting unit. ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value determined using market capitalization. In such case, the second phase is then performed, and the Company measures impairment by comparing the carrying amount of the reporting unit’s goodwill to the implied fair value of that goodwill. An impairment loss is recognized in an amount equal to the excess. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. Accordingly, the Company elected to proceed directly to the first step of the quantitative goodwill impairment test and compares the fair value of the reporting unit with its carrying value. For each of the two years in the period ended December 31, 2018, no impairment losses have been identified. k. Fair value measurements: The carrying amounts of cash and cash equivalents, trade receivables, prepaid expenses, other receivables and trade payables, approximate their fair values due to the short-term maturities of such financial instruments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tiered fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the instruments are categorized as Level 3. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. l. Derivative financial instruments: The Company accounts for derivatives based on ASC 815 (“Derivatives and Hedging”). ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. Under these standards, the Company separately accounts for the liability and derivative component as an implicit or explicit term that affects some or all of the cash flows or the value of other exchanges required by a contract in a manner similar to a derivative instrument. The derivative component at issuance is recognized at fair value, based on the fair value of a similar instrument that does not have a conversion feature. The liability component is presented at its discounted value based on the excess of the principal amount of the debentures over the fair value of the derivative component, after adjusting for an allocation of debt issuance costs. The effective portion of the gain or loss on the derivative instrument is reported in the consolidated statements of operations under financial expenses, net. See Note 2(x), “recently issued and adopted pronouncments”, for further details. m. Revenue recognition: Effective January 1, 2018, the Company adopted the requirements of ASC 606 under the modified retrospective method of transition which was applied to all customer contracts that were not completed on the effective date of ASC 606. The Company implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 as detailed below. Revenue recognition Policy The Company derives its revenues from the sale of real-time cloud-based services for each of Cyren’s email security, web security, antimalware and advanced threat protection offerings. The Company sells all of its solutions as subscription services, either through OEMs, which are considered end-users, or as complete security services directly to enterprises. The Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an amount reflecting the consideration the Company expects to receive in revenue. In order to achieve that core principle, the Company applies the following five-step approach: 1) Identification of the contract, or contracts, with the customer 2) Identification of the performance obligation in the contract 3) Determination of the transaction price Variable Consideration - 4) Allocation of the transaction price to the performance obligations in the contract - 5) Recognition of revenue when, or as, the Company satisfies a performance obligation Subscription Service Revenue Deferred Revenue - Deferred commissions The Company capitalizes sales commissions paid to internal sales personnel that are generally incremental to the acquisition of customer contracts. These costs are recorded as deferred commissions on the consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have occurred absent the customer contract. Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rate between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit while commissions paid related to renewal contracts are amortized over a contractual renewal period. Amortization is recognized based on the expected future revenue streams under the customer contracts. Amortization of deferred sales commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. The Company determines the period of benefit for commissions paid for the acquisition of the initial subscription contract by taking into consideration factors such as peer estimates of technology lives and customer lives as well as the Company’s own historical data. The Company classifies deferred commissions as current or long-term based on the timing of when the Company expects to recognize the expense. The Company periodically reviews these deferred commission costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented. Impact of Adoption of ASC 606 The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of ASC 606 were as follows: Balance as of December 31, 2017 Impact of Adoption Balance as of January 1, 2018 Current deferred commissions $ - $ 682 $ 682 Long-term deferred commissions $ - $ 1,129 $ 1,129 Accumulated deficit $ (195,098 ) $ 1,811 $ (193,287 ) In accordance with the requirements of ASC 606, the disclosure for the quantitative effect and the significant changes between the reported results under ASC 606 and those that would have been reported under ASC 605 on our consolidated statements of operations and balance sheets was as follows: As of December 31, 2018 As Reported ASC 606 Impact of Adoption Amounts under Consolidated Balance Sheet Current deferred commissions $ 887 $ 887 $ - Long-term deferred commissions $ 1,880 $ 1,880 $ - Accumulated deficit $ (213,143 ) $ 2,767 $ (210,376 ) Year ended December 31, 2018 As Reported ASC 606 Impact of Adoption Amounts under Consolidated Statements of Operations Sales and Marketing $ 16,202 $ (956 ) $ 17,158 n. Research and development costs, net: Research and development costs are charged to statements of operations as incurred, except for capitalized technology. o. Capitalized technology: The Company capitalizes development costs incurred during the application development stage which are related to internal-use technology that supports its security services. Costs related to preliminary project activities and post implementation activities are expensed as incurred as research and development costs on the statements of operations. Capitalized internal-use technology is included in intangible assets on the balance sheet and is amortized on a straight-line basis over its estimated useful life, which is generally one to three years. Amortization expenses are recognized under cost of goods sold. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. p. Government grants: The Company received Israeli government grants for funding certain approved research and development projects. These grants are recognized at the time the Company is entitled to such grants, on the basis of the related costs incurred and recorded as a deduction of research and development costs. The deduction in research and development costs due to government grants amounted to $69 and $778 in 2018 and 2017, respectively. q. Concentrations of credit risk: The Company has no significant off-balance-sheet concentration of credit risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. The majority of the Company’s cash and cash equivalents are invested in dollars and are deposited in major banks in the United States, Germany, Iceland, UK and Israel. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The trade receivables of the Company are derived from transactions with companies located primarily in North America, Europe, Israel and Asia. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. The provision for doubtful accounts amounted $20 and $445 at December 31, 2018 and 2017, respectively. Bad debt benefit for each of the years ended December 31, 2018 and 2017 was $52 and $65, respectively. r. Accounting for stock-based compensation: ASC 718 - “Compensation-stock Compensation”- (“ASC 718”) requires companies to estimate the fair value of equity-based payment awards on the date of grant 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 statements of operations. The Company recognizes compensation expense for the value of its awards on a straight-line basis over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on actual historical pre-vesting forfeitures (pursuant to the adoption of ASU 2016-09, the Company made a policy election to estimate the number of awards that are expected to vest). The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements over the most recent periods ending on the grant date, equal to the expected term of the options. The expected term of options granted represents the period of time that options granted are expected to be outstanding, based upon historical experience. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. The Company applies ASC 718, and ASC 505-50, “Equity Based Payments to Non-Employees” (“ASC 505-50”), with respect to options issued to non-employees. The fair value for options granted in 2018 and 2017 is estimated at the date of grant using a Black-Scholes options pricing model with the following assumptions: Year ended Stock options 2018 2017 Volatility 49%-51% 44%-51% Risk-free interest rate 2.3%-3.1% 1.2%-2.1% Dividend yield 0% 0% Expected term (years) 3.6-5.0 3.5-5.1 s. Basic and diluted loss per share: Basic loss per share has been computed using the weighted-average number of ordinary shares outstanding during the year. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during each year, plus the weighted average number of dilutive potential ordinary shares considered outstanding during the year. In 2018 and 2017 there is no difference between the denominator of basic and diluted loss per share. t. Severance pay: The Company’s liability for severance pay in Israel is calculated pursuant to Israel’s Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date. Employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company’s obligation for all of its Israeli employees is fully provided by monthly deposits with severance pay funds and insurance policies, and by an accrual. The value of those funds and policies is recorded as an asset in the Company’s balance sheet. The deposited funds include profits and losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel’s Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies. Effective October, 2014, the Company’s agreements with new employees in Israel, are under Section 14 of the Severance Pay Law, 1963. The Company’s contributions for severance pay have replaced its severance obligation. Upon contribution of the full amount of the employee’s monthly salary for each year of service, no additional calculations is conducted between the parties regarding the matter of severance pay and no additional payment is made by the Company to the employee. Further, the related obligation and amounts deposited on behalf of the employee for such obligation are not stated on the balance sheet, as the Company is legally released from the obligation to employees once the deposit amounts have been paid. Severance benefit for the years ended December 31, 2018 and 2017 was $108 and $20, respectively. u. Treasury shares: The Company repurchases its ordinary shares from time to time on the open market and holds such shares as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction in shareholders’ equity. The Company reissues treasury shares under the stock purchase plan, upon exercise of option and upon issuance of shares upon acquisitions. Reissuance of treasury shares is accounted for in accordance with ASC 505-30 whereby gains are credited to additional paid-in capital and losses are charged to additional paid-in capital to the extent that previous net gains are included therein; otherwise to accumulated deficit. v. Income taxes: The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between 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 provides a valuation allowance to reduce deferred tax assets to amounts more likely than not to be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. w. Comprehensive loss: The Company accounts for comprehensive loss in accordance with ASC No. 220, “Comprehensive Income”. Comprehensive loss generally represents all changes in shareholders’ equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to gains and losses from functional currency translation adjustments on behalf of subsidiaries whose functional currency has been determined to be their local currency. x. Recently issued and adopted pronouncements: In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance with the intent of reducing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted ASU 2016-15 during 2018. The adoption of this new guidance had no impact on the Company’s consolidated balance sheets, statements of income and cash flows In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 during the first quarter of 2018. The adoption of this new guidance had no material impact on the Company’s consolidated balance sheets, statements of operations and cash flows. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Topic 606. The standard replaced the revenue recognition guidance in U.S. GAAP under Topic 605, and was required to be applied retrospectively to each prior period presented, or applied using a modified retrospective method with the cumulative effect recognized in the beginning retained earnings during the period of initial application. Subsequently, the FASB issued several additional ASUs related to ASU No. 2014-09, collectively they are referred to as the “new revenue standards”, which became effective for the Company beginning January 1, 2018. The Company adopted the standard using the modified retrospective method applied to those contracts which were not substantially completed as of the adoption date. See “m. Revenue recognition” above for further details. In July 2017, the FASB issued Accounting Standards Update No. 2017-11, Derivatives and Hedging (Topic 815); Accounting for Certain Financial Instruments with Down Round Features which allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be classified as liabilities. The Company adopted ASU 2017-11 effective January 1, 2018. The company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For convertible instruments with embedded conversion features containing down round provisions, the Company will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. If applicable, for equity-classified freestanding financial instruments, such as warrants, the Company will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. y. New accounting pronouncements not yet adopted: In February 2016, the FASB issued ASU 2016-02, “Leases”, on the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, “Leases” and requires lessees, to classify leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a manner similar to the accounting under existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases.. In July 2018, the FASB also issued ASU 2018-11, Targeted Improvements to Topic 842, which provides an alternative transition method at the transition date, allowing entities to recognize a cumulative effect adjustment to the opening balance of retained earnings upon adoption. The guidance is effective for the interim and annual periods beginning on or after December 15, 2018, and early adoption is permitted. The Company will adopt the new standard as of January 1, 2019. The Company will elect the optional transition approach to not apply ASU 2016-02 in the comparative periods presented and the package of practical expedients. The Company will also elect the practical expedient to not account for lease and non-lease components separately for office space, datacenter and equipment operating leases, as applicable. The Company expects the adoption of ASU 2016-02 will result in the recognition of approximately $10,200 lease liabilities and right-of use assets, with the approximate entire portion being attributed to the Company’s office space. The Company does not expect the adoption of ASU 2016-02 to have a material impact on the consolidated statements of operations or to have any impact on its consolidated cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements and footnote disclosures. In July 2018, the FASB issued ASU 2018-07, “Compensation - Stock Compensation (Topic 718) - Improvements to Non-employee Share-based Payment Accounting.” ASU 2018-07 was issued to simplify several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements and footnote disclosures. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or ob |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 3: PROPERTY AND EQUIPMENT, NET December 31 2018 2017 Cost: Computers and peripheral equipment $ 10,801 $ 11,782 Office furniture and equipment 978 1,293 Leasehold improvements 825 1,896 12,604 14,971 Less accumulated depreciation (7,996 ) (12,184 ) Property and equipment, net $ 4,608 $ 2,787 Depreciation expense amounted to $1,856 and $1,303 in 2018 and 2017, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net/Goodwill [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 4: INTANGIBLE ASSETS, NET a. Definite-lived intangible assets: December 31, 2018 2017 Original amounts: Customer contracts and relationships $ 5,200 $ 5,326 Technology (*)18,768 (*)16,896 Trademarks 1,586 1,614 Total original amounts 25,554 23,836 Accumulated amortization: Customer contracts and relationships (4,107 ) (3,744 ) Technology (11,661 ) (8,235 ) Trademarks (984 ) (839 ) Accumulated amortization (16,752 ) (12,818 ) Intangible assets, net $ 8,802 $ 11,018 (*) Includes $10,971 and $8,877 capitalized technology as of December 31, 2018 and 2017, respectively. Capitalized technology includes $1,423 and $4,081 for which amortization has not yet begun as of December 31, 2018 and 2017, respectively. b. The intangible assets that are subject to amortization are amortized over their estimated useful lives using the straight-line method, except for customer relations which are amortized on an accelerated basis. The following table sets forth the weighted average annual rates of amortization for the major classes of intangible assets: Weighted average % Customer contracts and relationships 7 Technology 34 Trademarks 10 Total intangible assets 26 c. Amortization expense amounted to $4,165 and $3,746 for 2018 and 2017, respectively. d. The estimated aggregate amortization expenses for the succeeding fiscal years are as follows: 2019 $ 3,563 2020 2,957 2021 833 2022 731 2023 151 Thereafter 567 Total $ 8,802 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net/Goodwill [Abstract] | |
GOODWILL | NOTE 5: GOODWILL The changes in the carrying amount of goodwill for the year ended December 31, 2018 and 2017 are as follows: Year ended 2018 2017 Balance at the beginning of the year $ 21,128 $ 19,441 Foreign currency translation adjustments (609 ) 1,687 Balance at the year end $ 20,519 $ 21,128 |
Earn-out Consideration
Earn-out Consideration | 12 Months Ended |
Dec. 31, 2018 | |
Earn-out Consideration [Abstract] | |
EARN-OUT CONSIDERATION | NOTE 6: EARN-OUT CONSIDERATION In conjunction with the 2012 acquisition of eleven, the Company entered into an earn-out agreement with the former shareholders that would pay additional consideration based on the revenue performance for the years ending 2012-2015. Subsequently in 2014 the Company had a legal dispute regarding the amount and timing of the earn-out payments and had entered into arbitral proceedings with the former shareholders of eleven. On March 9, 2017, the Company received the arbitral judgement. Pursuant to the judgement, the earn-out consideration balance was increased to reflect additional legal expenses and interest expenses covering the period up to December 31, 2016. During 2017 and 2018, the Company continued to accrue interest on the unpaid earn-out consideration balance. Such interest is reflected in the consolidated statements of operations under financial expenses, net. For the years ended December 31, 2018 and 2017, the interest accrued amounted to $97 and $117, respectively. In May 2018, the Company made a partial payment of the earn-out consideration to five of the six former shareholders, in an amount of $604. The earn-out consideration balance presented on the Company’s balance sheet as of December 31, 2018 reflects the complete remaining liability relating to the earn-out, including accrued interest. For additional information, please refer to Note 7c(i). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7: COMMITMENTS AND CONTINGENCIES a. Cyren Ltd., which was incorporated in Israel, partially financed its research and development expenditures under programs sponsored by the Israel Innovation Authority (“IIA”) for the support of certain research and development activities conducted in Israel. In connection with specific research and development, the Company received $3,699 of participation payments from the IIA through December 31, 2018. During 2018 and 2017, the Company received $228 and $718 grants from the IIA, respectively. In return for the IIA’s participation in this program, the Company is committed to pay royalties at a rate of 3% - 3.5% of the program’s developed product sales, up to 100% of the amount of grants received plus interest at annual LIBOR rate. The Company’s total commitment for royalties payable with respect to future sales, based on IIA participations received, net of royalties paid or accrued, totaled $2,921 and $2,734 as of December 31, 2018 and 2017, respectively. For the years ended December 31, 2018 and 2017, $156 and $144, respectively, were recorded as cost of revenues with respect to royalties due to the IIA. b. Operating leases: Certain facilities of the Company are rented under non-cancellable operating lease agreements, which expire on various dates, the latest of which is in 2026. Facilities rent expenses for 2018 and 2017 were $1,749 and $2,004, respectively. Annual minimum future lease payments due under the above agreements (and motor vehicle leases, which expire in 2021), at the exchange rate in effect on December 31, 2018, are as follows: 2019 $ 2,224 2020 2,375 2021 2,263 2022 1,777 2023 903 2024 and thereafter 1,164 $ 10,706 c. Litigations: i. Between 2014 and 2015 the Company entered into arbitral proceedings with the former shareholders of eleven regarding an escrow account and the earn-out consideration related to the purchase agreement of former eleven. With respect to these claims, on March 9, 2017, the arbitrational panel provided their ruling in which it accepted the claims submitted by the former eleven shareholders with respect to the escrow amount and the 2013 earn-out liability. The arbitrational panel also ruled that Cyren pay legal expenses and interest on the claimed amounts, which were reflected in the year ending December 31, 2016 on the Company’s balance sheet and in the consolidated statements of operations under adjustment to earn-out consideration. The escrow account has been released to the former shareholders. The arbitrational award related to the 2013 earn-out consideration was declared enforceable by the applicable courts in Germany. Accordingly, on May 30, 2018, the Company paid the portion of the earn-out consideration in the amount of $604 that was declared enforceable by the German district court. The Company did not pay the remainder of the earn-out consideration, including accrued legal and interest, which appear on the Company’s consolidated balance sheets as of December 31, 2018, and has filed an appeal to the German Federal Supreme Court challenging the enforceability of the remaining amounts. In February 2019, the parties have signed a settlement agreement to resolve all pending claims, and on February 28, 2019 the Company paid $2,683 to settle the earn-out consideration in full. ii. On June 28, 2017 a vendor filed a Statement of Claim in the Tel Aviv District Court (the “SOC”). According to the vendor’s SOC, the Company entered into an agreement with the vendor for receipt of services, based on a database developed by the vendor. In September 2015, the Company terminated the agreement with the vendor, effective as of December 31, 2015. The vendor claims that the Company continues to make use of the vendor’s database post termination thus breaching the agreement, infringing on the vendor’s rights and commercial secrets, and being unjustly enriched. The vendor is claiming license fees of approximately $3,150 and an injunction relief ordering the Company and/or its customers to delete any remaining data and to cease from utilizing such data. The Company denies all claims and has filed a Statement of Defense on November 15, 2017. Pretrial was scheduled for May 15, 2018. In accordance with the court’s recommendation from November 28, 2017, the parties agreed to examine a non-binding mediation process and have appointed a mediator. The parties agreed to conduct a third party audit of the Company’s databases in the scope of the mediation and the audit is currently being conducted. At this early stage, the Company is unable to make any estimations as to the outcome of this litigation. In September 2018 and January 2019, the same vendor filed a lawsuit against two of the Company’s customers in the United States. The vendor alleges that the clients misappropriated the vendor’s trade secrets and is seeking injunctive relief and monetary damages in an amount to be determined. Both customers have contended that the allegations relate to the services they receive from the Company, and the Company has agreed to indemnify both clients against these claims. As such, the Company has taken over the representation in these lawsuits. At this early stage, the Company is unable to make any estimations as to the outcome of these litigations. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 8: SHAREHOLDERS’ EQUITY a. General: Ordinary shares confer upon their holders the right to receive notice to participate and vote in general shareholder meetings of the Company and to receive dividends, if declared. b. Public and Private Offerings: On November 6, 2017, the Company completed a private offering to Warburg Pincus, a global private equity firm (“WP”), of 10,595,521 ordinary shares, nominal value ILS 0.15 per share at an offering price of $1.85 per share. The Company received total proceeds of $18,971, which is net of $631 issuance expenses. Subsequent to private offering, WP executed a share tender offer to the Company’s shareholders which was finalized on December 24, 2017, after which WP held approximately 52% of the Company’s shares. c. Conversion of convertible notes issued in 2017: On March 27, 2017 the Company issued $6,300 aggregate principal amount of convertible notes in a private offering. The notes were unsecured, unsubordinated obligations of Cyren and carried a 5.0% interest rate, payable semi-annually in (i) 50% cash and (ii) 50% cash or ordinary shares at Cyren’s election. The notes had a 2.5-year term and were expected to mature in September 2019, unless converted in accordance with their terms prior to maturity. The notes had a conversion price of $2.50 per share. The conversion price was subject to adjustment should future equity issuances be priced at less than $2.10 per share. In addition, the notes would be subject to immediate conversion upon any change in control in the Company. On September 27, 2017, the Company issued 11,594 shares on account of accrued interest based on a conversion price of $2.50 per share. On November 6, 2017, the Company completed a private offering to WP at a price per share of $1.85 as described in note 8b. above. According to the terms of the convertible notes, the conversion price was adjusted to $1.85. On November 30, 2017, $925 of the convertible notes balance was converted into 500,000 shares at a price per share of $1.85. On December 24, 2017, WP completed a share tender offer after which WP held approximately 52% of the Company’s shares. In accordance with the terms of the convertible notes, this constituted a change of control event, and the convertible notes including all accrued interest as of December 24, 2017 were converted into 2,944,813 shares at a price per share of $1.85. d. Issuance of new convertible notes: On December 5, 2018 the Company issued $10,000 aggregate principal amount of convertible notes in a private offering. The notes are unsecured, unsubordinated obligations of Cyren and carry a 5.75% interest rate, payable semi-annually in (i) 50% cash and (ii) 50% cash or ordinary shares at Cyren’s election. The notes have a 3-year term and are expected to mature in December 2021, unless converted in accordance with their terms prior to maturity. The notes have a conversion price of $3.90 per share. The conversion price may be subject to adjustment using a weighted average ratchet mechanism based on the size and price of future equity offerings and the total shares outstanding. In addition, the notes would be subject to immediate conversion upon any change in control in the Company. e. Equity Incentive Plan: In 1996, the Company adopted the 1996 CSI Stock Option Plan for granting options to its U.S. employees and consultants to purchase ordinary shares of the Company, which was replaced in 2006 by the 2006 U.S. Stock Option Plan. Until 1999, the Company issued options to purchase ordinary shares to its Israeli employees pursuant to individual agreements. In 1999, the Company approved the 1999 Section 3(i) share option plan for its Israeli employees and consultants, (which was amended in 2003 and renamed the “Amended and Restated Israeli Share Option Plan”). On December 22, 2016, the Company’s shareholders approved a new stock option plan - the 2016 Equity Incentive Plan (the “Equity Incentive Plan”). This plan, along with its respective Israeli appendix, has replaced all existing employee and consultants stock option plans which have terminated. The Equity Incentive Plan allows for the issuance of Restricted Stock Units (“RSUs”), as well as options. The options and RSUs generally vest over a period of four years. Options granted under the Equity Incentive Plan generally expire after six years from the date of grant. Options and RSUs cease vesting upon termination of the optionee’s employment or other relationship with the Company. The per share exercise price for options shall be no less than 100% of the fair market value per ordinary share on the date of grant. Any options and RSUs that are canceled or not exercised within the option term become available for future grant. As of December 31, 2018, an aggregate of 1,755,919 ordinary shares of the Company are still available for future grant under the Equity Incentive Plan. f. Non-Employee Directors stock option plan: In 1999, the Company adopted the 1999 Directors Stock Option Plan, and in 2008 shareholders approved an extension of the term of this plan through July 13, 2019. On December 15, 2006, the plan was extended through 2016. On December 22, 2016, the Company’s shareholders approved a new stock option plan - the 2016 Non-Employee Director Equity Incentive Plan (the “Non-Employee Director Plan”). This plan, along with its respective Israeli appendix, has replaced all existing Directors stock option plans which have terminated. The Non-Employee Director Plan allows for the issuance of Restricted Stock Units (“RSUs”), as well as options. Each option and RSU granted under the Non-Employee Plan generally vests over a period of four years. Each option has an exercise price equal to the fair market value of the ordinary shares on the grant date of such option. Options granted under the Non-Employee Director Plan generally expire after six years from the date of grant. Options and RSUs cease vesting upon termination of the relationship with the Company. As of December 31, 2018, an aggregate of 270,214 ordinary shares of the Company are still available for future grant to non-employee directors. g. The finalization of the tender offer executed by WP, as described in note 8b., resulted in a Change of Control event (“COC”) in accordance with the Company’s equity incentive plans. As a result, as of December 24, 2017, fifty percent of all outstanding options became fully vested, and the remainder vested over a period of one year, or upon termination of the relationship with the optionee. In addition, as of December 24, 2017, all outstanding RSUs became fully vested in accordance with the Non-Employee Director Plan. h. A summary of the Company’s employees and directors’ stock option activity under the plans is as follows: Number of options Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value Outstanding at January 1, 2018 6,050,820 $ 2.27 3.56 $ 2,498 Granted 1,642,000 2.34 Exercised (671,354 ) 2.04 Expired and forfeited (546,484 ) 2.63 Outstanding at December 31, 2018 6,474,982 $ 2.28 3.39 $ 4,475 Options vested and expected to vest at December 31, 2018 6,320,402 $ 2.33 3.44 $ 4,401 Exercisable options at December 31, 2018 4,944,982 $ 2.26 2.80 $ 3,775 Weighted average fair value of options granted during the year $ 0.83 As of December 31, 2018, the Company had $1,757 of unrecognized compensation expense related to non-vested stock options, expected to be recognized over a remaining weighted average period of 3.27 years. i. The employee and directors options outstanding as of December 31, 2018, have been separated into ranges of exercise prices, as follows: Outstanding Exercisable Exercise Weighted average remaining Weighted average exercise Weighted average exercise price per Options contractual price per Options price per share outstanding life in years share exercisable share $1.44 - $1.93 1,464,937 3.32 $ 1.56 1,464,937 $ 1.56 $2.00 - $2.13 1,554,377 4.01 $ 2.03 1,554,377 $ 2.03 $2.29 - $2.79 1,530,668 3.74 $ 2.46 523,918 $ 2.70 $2.90 - $3.14 1,599,000 2.87 $ 3.00 1,090,750 $ 3.03 $3.20 - $3.32 326,000 1.58 $ 3.31 311,000 $ 3.32 6,474,982 3.39 $ 2.33 4,944,982 $ 2.26 j. Options to non-employees and non-directors: Issuance date Options outstanding Exercise price per share Options exercisable Exercisable through February 13, 2013 5,000 $ 3.14 5,000 Feb-19 August 1, 2013 150,000 $ 3.08 150,000 Aug-19 May 14, 2014 3,000 $ 3.32 3,000 May-20 February 18, 2015 3,000 $ 3.00 3,000 Feb-21 February 10, 2016 40,000 $ 1.44 40,000 Feb-22 January 24, 2017 25,000 $ 2.00 25,000 Jan-23 226,000 226,000 The options vest and become exercisable at a rate of 1/16 of the options every three months. As of December 31, 2018, the Company did not have any unrecognized compensation expense related to non-employee non-vested stock options. k. A summary of the Company’s RSUs activity for employees, directors and non-employees under the plans is as follows: Number of RSUs Outstanding at January 1, 2018 - Granted 499,000 Vested (10,000 ) Forfeited (10,000 ) Outstanding at December 31, 2018 479,000 As of December 31, 2018, the Company had approximately $2,024 of unrecognized compensation expense related to RSUs, expected to be recognized over a weighted average period of 3.15 years. l. The total stock-based compensation expense related to all of the Company’s equity-based awards, recognized for the years ended December 31, 2018 and 2017, was as follows: Year ended 2018 2017 Cost of revenues $ 174 $ 207 Research and development 407 505 Sales and marketing 387 553 General and administrative 472 795 $ 1,440 $ 2,060 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 9: INCOME TAXES a. Corporate tax structure: i. Corporate tax rates and real capital gains tax in Israel were 23% in 2018 and 24% in 2017. ii. The Company’s German subsidiary is subject to German tax at a consolidated rate of approximately 30%. iii. Other Non-Israeli subsidiaries are taxed according to the tax laws in their respective countries of residence. The Company does not provide deferred tax liabilities when it intends to reinvest earnings of foreign subsidiaries indefinitely. As of December 31, 2018 there are no undistributed earnings of foreign subsidiaries. b. Tax benefits under Israel’s Law for the Encouragement of Industry (Taxation), 1969: The Company may currently qualify as an “industrial company” within the definition of the Law for the Encouragement of Industry (Taxation), as such, it may be eligible for certain tax benefits, including, inter alia, special depreciation rates for machinery, equipment and buildings, amortization of patents, certain other intangible property rights and deduction of share issuance expenses. c. U.S. Tax Reform: On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “U.S. Tax Reform”); a comprehensive tax legislation that includes significant changes to the taxation of business entities. These changes include several key tax provisions that might impact the Company, among others: (i) a permanent reduction to the statutory federal corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017; (ii) a partial limitation on the tax deductibility of business interest expense; (iii) a shift of the U.S. taxation of multinational corporations from a tax on worldwide income to a territorial system (along with certain rules designed to prevent erosion of the U.S. income tax base) and (iv) a one-time deemed repatriation tax on accumulated offshore earnings held in cash and illiquid assets, with the latter taxed at a lower rate. d. Net operating loss carry-forwards: As of December 31, 2018, Cyren’s net operating loss carryforwards for tax purposes amounted to $80,126 and capital loss carryforwards of $17,824 which may be carried forward and offset against taxable income in the future, for an indefinite period. As of December 31, 2018 the U.S. subsidiary had net operating loss carryforwards of $40,348 for federal tax purposes and $8,785 for state tax purposes. These losses may offset any future U.S. taxable income of the U.S. subsidiary and will expire in the years 2019 through 2038. On December 24, 2017, a “change in the respective ownership” event occurred upon the completion of the WP tender offer as described in note 8b, and in accordance with the relevant provisions of the Internal Revenue Code 382 of 1986 and similar state provisions. Therefore, utilization of U.S. net operating losses are subject to substantial annual limitation. Management believes that the annual limitations will result in the partial expiration of net operating losses before utilization. Management currently believes that based upon its estimations for future taxable income, it is more likely than not that the deferred tax assets regarding the loss carryforwards will not be utilized in the foreseeable future. Thus, a valuation allowance was provided to reduce deferred tax assets to their realizable value. e. 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. As of December 31, 2018 and 2017, the Company’s deferred taxes were in respect of the following: December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 27,325 $ 25,645 Capital loss carryforwards 4,099 3,500 Other 3,290 2,295 Deferred tax assets before valuation allowance 34,714 31,440 Valuation allowance (33,634 ) (30,177 ) Deferred tax asset, net of valuation allowance 1,080 1,263 Deferred tax liabilities: Intangibles (1,973 ) (2,432 ) Deferred revenue (237 ) (186 ) Deferred tax liability (2,210 ) (2,618 ) Deferred tax liability, net (*) $ (1,130 ) $ (1,355 ) (*) The entire amount is due to foreign deferred taxes f. Reconciliation of the theoretical tax benefit (expense): For the year ended December 31, 2018, the main reconciling item between the Company’s statutory tax rate and the effective tax rate relates to the increase in the valuation allowance in the amount of $3,457 due to the increase in carryforward losses. For the year ended December 31, 2017, the main reconciling item between the Company’s statutory tax rate and the effective tax rate relates to the increase in the valuation allowance in the amount of $3,494 due to the increase in carryforward losses (prior to the effect of the “change in the respective ownership” which resulted in a parallel decrease in the deferred tax asset and the valuation allowance). The statutory tax rate used in the reconciliation is the Israeli corporate tax rate. g. Loss before tax benefit (expense) consists of the following: Year ended 2018 2017 Domestic $ (13,570 ) $ (10,452 ) Foreign (5,997 ) (5,238 ) Loss before tax benefit (expense) $ (19,567 ) $ (15,690 ) h. Tax benefit (expense) is comprised of the following: Year ended 2018 2017 Current taxes: Foreign $ (28 ) $ (133 ) Domestic - - $ (28 ) $ (133 ) Deferred taxes: Foreign $ 181 $ 175 Domestic - - $ 181 $ 175 Tax benefit (expense), net $ 153 $ 42 i. A reconciliation of the beginning and ending amount of unrecognized tax benefits related to u n December 31, 2018 2017 Beginning balance $ 272 $ 119 Increases (decrease) related to tax positions taken during prior years 94 137 Effect of exchange rate (12 ) 16 Ending balance $ 354 $ 272 The entire amount of unrecognized tax benefits, if recognized, would reduce the Company’s annual effective tax rate. Unrecognized tax benefits are presented on the consolidated balance sheets under other long term liabilities. j. Tax assessments: As of December 31, 2018, the Company and certain of its subsidiaries filed Israeli and foreign income tax returns. The statute of limitations relating to the consolidated Israeli income tax return is closed for all tax years up to and including 2014. The statute of limitations related to tax returns of the Company’s U.S subsidiary is closed for all tax years up to and including 2014. The statute of limitations related to tax returns of the Company’s German subsidiary is closed for all tax years up to and including 2013. The Company believes that it has adequately provided for reasonably foreseeable outcomes related to tax audits and settlements. The final tax outcome of any Company tax audits could be different from that which is reflected in the Company’s income tax provisions and accruals. Such differences could have a material effect on the Company’s income tax provision and net income (loss) in the period in which such determination is made. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment and Geographic Information [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 10: SEGMENT AND GEOGRAPHIC INFORMATION Operating segments are reported in a manner consistent with the internal reporting supported and defined by the components of an enterprise about which separate financial information is available, provided and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis. The company has one business activity, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Accordingly, the Company determined that it has one operating and reportable segment. The following sets forth total revenue by solutions offered by geographic area based on billing address of the customer: a. The following sets forth total revenue by solutions offered by geographic area based on billing address of the customer: Year ended 2018 2017 United States $ 16,391 $ 12,407 Europe 14,318 12,992 Asia Pacific 2,625 2,724 Israel 2,261 2,397 Other 305 279 $ 35,900 $ 30,799 b. Major customers: During the year ended December 31, 2018, 17% of the Company’s revenues were derived from customer A. During the year ended December 31, 2017, no customer accounted for more than 10% of total revenue . c . The following sets forth the Company’s property and equipment by geographic area: December 31 2018 2017 Israel $ 1,217 $ 685 United States 1,623 1,490 Germany 1,453 287 Other 315 325 $ 4,608 $ 2,787 |
Financial Expense, Net
Financial Expense, Net | 12 Months Ended |
Dec. 31, 2018 | |
Financial Expense, Net [Abstract] | |
FINANCIAL EXPENSE, NET | NOTE 11: FINANCIAL EXPENSE, NET Year ended December 31, 2018 2017 Income: Interest on cash and cash equivalents $ 58 $ 2 Foreign currency exchange differences, net - - 58 2 Expenses: Change in fair value of embedded conversion feature on convertible notes - (1,349 ) Interest and accretion of discount (135 ) (735 ) Foreign currency exchange differences, net (131 ) (248 ) Other (47 ) (50 ) (313 ) (2,382 ) $ (255 ) $ (2,380 ) |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Parties [Abstract] | |
RELATED PARTIES | NOTE 12: RELATED PARTIES a. Balances with related parties: December 31 2018 2017 Prepaid expenses (*) $ 6 $ 31 (*) Related to a software license agreement with a related party. See note 12b. for further details. b. Transactions with related parties: Year ended December 31, 2018 2017 Bad debt collected (*) $ - $ 226 Gain from sale of investment in affiliate (*) $ - $ 450 Software licensing expenses (**) $ 25 $ 21 (*) Transactions with imatrix. The effects arising from imatrix’s bad debt were recorded under general and administrative expenses on the consolidated statements of operations. The gain from the sale of the investment in imatrix was recorded as other income on the consolidated statements of operations. (**) Expenses arising from a software licensing agreement which was executed in March 2017. At the time of execution, the vendor was not a related party. On December 24, 2017, upon completion of the tender offer by WP, the vendor became a related party. The expenses were recorded under research and development expenses net, on the consolidated statements of operations. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Use of estimates: | a. Use of estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company’s management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company’s management evaluates estimates, including those related to fair value and useful lives of intangible assets, fair value of earn-out liabilities, valuation allowance on deferred tax assets, income tax uncertainties, fair values of stock-based awards, other contingent liabilities and estimates used in applying the revenue recognition policy. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Financial statements in U.S. dollars: | b. Financial statements in U.S. dollars: Cyren’s revenues, and certain of its subsidiary’s revenues, are generated mainly in U.S. dollars. In addition, most of their costs are incurred in U.S. dollars. The Company’s management believes that the U.S. dollar is the primary currency of the economic environment in which Cyren and certain of its subsidiaries operate. Thus, the functional and reporting currency of Cyren and certain of its subsidiaries is the U.S. dollar. Cyren and certain subsidiaries’ transactions and balances denominated in U.S. dollars are presented at their original amounts. Non-dollar transactions and balances have been re-measured to U.S. dollars in accordance with ASC 830, “Foreign Currency Matters”. All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate. For those subsidiaries whose functional currency has been determined to be their local currency, assets and liabilities are translated at year-end exchange rates and statements of operations items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity. |
Principles of consolidation: | c. Principles of consolidation: The consolidated financial statements include the accounts of Cyren and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. |
Cash equivalents: | d. Cash equivalents: Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at acquisition. |
Restricted deposits: | e. Restricted deposits: The Company maintains certain deposits amounts restricted as to withdrawal or use. On December 31, 2018, the Company maintained a balance of $585 which is restricted and is held as collateral for a bank guarantee and a letter of credit provided to the lessors of two of the Company’s offices. The balance is presented on the balance sheets within the long-term restricted lease deposits balance. |
Investment in affiliates: | f. Investment in affiliates: The Company’s investments in affiliated companies comprises of investments in which the Company owns less than 20 % or in which the Company cannot exercise significant influence over the affiliates’ operating and financial policies. These investments are stated at cost. As of December 31, 2018 and 2017, the Company does not hold any investments in affiliates. |
Property and equipment: | g. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates: % Computers and peripheral equipment 33 Office furniture and equipment 7–20 Leasehold improvements Over the shorter of the term of the lease or the life of the assets |
Intangible assets: | h. Intangible assets: Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives, which range from 1 to 15 years. Acquired customer contracts and relationships are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such customer contracts and relationships arrangements as compared to the straight-line method. Technology, Intellectual Property and Trademark are amortized over their estimated useful lives on a straight-line basis. |
Impairment of long-lived assets: | i. Impairment of long-lived assets: The Company’s long-lived assets and identifiable intangibles are reviewed for impairment in accordance with ASC 360 “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset group to the future undiscounted cash flows the asset group is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. For each of the two years in the period ended December 31, 2018, no impairment losses have been identified. |
Goodwill | j. Goodwill: Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an impairment test. The Company performs an annual impairment test at December 31, of each fiscal year, or more frequently if impairment indicators are present. The Company operates in one operating segment, and this segment comprises its only reporting unit. ASC 350 prescribes a two-phase process for impairment testing of goodwill. The first phase screens for impairment, while the second phase (if necessary) measures impairment. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value determined using market capitalization. In such case, the second phase is then performed, and the Company measures impairment by comparing the carrying amount of the reporting unit’s goodwill to the implied fair value of that goodwill. An impairment loss is recognized in an amount equal to the excess. ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Alternatively, ASC 350 permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the goodwill impairment test. Accordingly, the Company elected to proceed directly to the first step of the quantitative goodwill impairment test and compares the fair value of the reporting unit with its carrying value. For each of the two years in the period ended December 31, 2018, no impairment losses have been identified. |
Fair value measurements: | k. Fair value measurements: The carrying amounts of cash and cash equivalents, trade receivables, prepaid expenses, other receivables and trade payables, approximate their fair values due to the short-term maturities of such financial instruments. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tiered fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the instruments are categorized as Level 3. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Derivative financial instruments: | l. Derivative financial instruments: The Company accounts for derivatives based on ASC 815 (“Derivatives and Hedging”). ASC 815 requires the Company to recognize all derivatives on the balance sheet at fair value. Under these standards, the Company separately accounts for the liability and derivative component as an implicit or explicit term that affects some or all of the cash flows or the value of other exchanges required by a contract in a manner similar to a derivative instrument. The derivative component at issuance is recognized at fair value, based on the fair value of a similar instrument that does not have a conversion feature. The liability component is presented at its discounted value based on the excess of the principal amount of the debentures over the fair value of the derivative component, after adjusting for an allocation of debt issuance costs. The effective portion of the gain or loss on the derivative instrument is reported in the consolidated statements of operations under financial expenses, net. See Note 2(x), “recently issued and adopted pronouncments”, for further details. |
Revenue recognition: | m. Revenue recognition: Effective January 1, 2018, the Company adopted the requirements of ASC 606 under the modified retrospective method of transition which was applied to all customer contracts that were not completed on the effective date of ASC 606. The Company implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The adoption of ASC 606 resulted in changes to the Company’s accounting policies for revenue recognition previously recognized under ASC 605 as detailed below. Revenue recognition Policy The Company derives its revenues from the sale of real-time cloud-based services for each of Cyren’s email security, web security, antimalware and advanced threat protection offerings. The Company sells all of its solutions as subscription services, either through OEMs, which are considered end-users, or as complete security services directly to enterprises. The Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an amount reflecting the consideration the Company expects to receive in revenue. In order to achieve that core principle, the Company applies the following five-step approach: 1) Identification of the contract, or contracts, with the customer 2) Identification of the performance obligation in the contract 3) Determination of the transaction price Variable Consideration - 4) Allocation of the transaction price to the performance obligations in the contract - 5) Recognition of revenue when, or as, the Company satisfies a performance obligation Subscription Service Revenue Deferred Revenue - Deferred commissions The Company capitalizes sales commissions paid to internal sales personnel that are generally incremental to the acquisition of customer contracts. These costs are recorded as deferred commissions on the consolidated balance sheets. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have occurred absent the customer contract. Sales commissions for renewal of a subscription contract are not considered commensurate with the commissions paid for the acquisition of the initial subscription contract given the substantive difference in commission rate between new and renewal contracts. Commissions paid upon the initial acquisition of a contract are amortized over an estimated period of benefit while commissions paid related to renewal contracts are amortized over a contractual renewal period. Amortization is recognized based on the expected future revenue streams under the customer contracts. Amortization of deferred sales commissions is included in sales and marketing expense in the accompanying consolidated statements of operations. The Company determines the period of benefit for commissions paid for the acquisition of the initial subscription contract by taking into consideration factors such as peer estimates of technology lives and customer lives as well as the Company’s own historical data. The Company classifies deferred commissions as current or long-term based on the timing of when the Company expects to recognize the expense. The Company periodically reviews these deferred commission costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred contract acquisition costs. There were no material impairment losses recorded during the periods presented. Impact of Adoption of ASC 606 The cumulative effect of the changes made to our January 1, 2018 balance sheet for the adoption of ASC 606 were as follows: Balance as of December 31, 2017 Impact of Adoption Balance as of January 1, 2018 Current deferred commissions $ - $ 682 $ 682 Long-term deferred commissions $ - $ 1,129 $ 1,129 Accumulated deficit $ (195,098 ) $ 1,811 $ (193,287 ) In accordance with the requirements of ASC 606, the disclosure for the quantitative effect and the significant changes between the reported results under ASC 606 and those that would have been reported under ASC 605 on our consolidated statements of operations and balance sheets was as follows: As of December 31, 2018 As Reported ASC 606 Impact of Adoption Amounts under Consolidated Balance Sheet Current deferred commissions $ 887 $ 887 $ - Long-term deferred commissions $ 1,880 $ 1,880 $ - Accumulated deficit $ (213,143 ) $ 2,767 $ (210,376 ) Year ended December 31, 2018 As Reported ASC 606 Impact of Adoption Amounts under Consolidated Statements of Operations Sales and Marketing $ 16,202 $ (956 ) $ 17,158 |
Research and development costs, net: | n. Research and development costs, net: Research and development costs are charged to statements of operations as incurred, except for capitalized technology. |
Capitalized technology: | o. Capitalized technology: The Company capitalizes development costs incurred during the application development stage which are related to internal-use technology that supports its security services. Costs related to preliminary project activities and post implementation activities are expensed as incurred as research and development costs on the statements of operations. Capitalized internal-use technology is included in intangible assets on the balance sheet and is amortized on a straight-line basis over its estimated useful life, which is generally one to three years. Amortization expenses are recognized under cost of goods sold. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Government grants: | p. Government grants: The Company received Israeli government grants for funding certain approved research and development projects. These grants are recognized at the time the Company is entitled to such grants, on the basis of the related costs incurred and recorded as a deduction of research and development costs. The deduction in research and development costs due to government grants amounted to $69 and $778 in 2018 and 2017, respectively. |
Concentrations of credit risk: | q. Concentrations of credit risk: The Company has no significant off-balance-sheet concentration of credit risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. The majority of the Company’s cash and cash equivalents are invested in dollars and are deposited in major banks in the United States, Germany, Iceland, UK and Israel. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company’s investments are institutions with high credit standing, and accordingly, minimal credit risk exists with respect to these investments. The trade receivables of the Company are derived from transactions with companies located primarily in North America, Europe, Israel and Asia. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. The provision for doubtful accounts amounted $20 and $445 at December 31, 2018 and 2017, respectively. Bad debt benefit for each of the years ended December 31, 2018 and 2017 was $52 and $65, respectively. |
Accounting for stock-based compensation: | r. Accounting for stock-based compensation: ASC 718 - “Compensation-stock Compensation”- (“ASC 718”) requires companies to estimate the fair value of equity-based payment awards on the date of grant 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 statements of operations. The Company recognizes compensation expense for the value of its awards on a straight-line basis over the requisite service period of each of the awards, net of estimated forfeitures. Estimated forfeitures are based on actual historical pre-vesting forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on actual historical pre-vesting forfeitures (pursuant to the adoption of ASU 2016-09, the Company made a policy election to estimate the number of awards that are expected to vest). The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon actual historical stock price movements over the most recent periods ending on the grant date, equal to the expected term of the options. The expected term of options granted represents the period of time that options granted are expected to be outstanding, based upon historical experience. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends. The Company applies ASC 718, and ASC 505-50, “Equity Based Payments to Non-Employees” (“ASC 505-50”), with respect to options issued to non-employees. The fair value for options granted in 2018 and 2017 is estimated at the date of grant using a Black-Scholes options pricing model with the following assumptions: Year ended Stock options 2018 2017 Volatility 49%-51% 44%-51% Risk-free interest rate 2.3%-3.1% 1.2%-2.1% Dividend yield 0% 0% Expected term (years) 3.6-5.0 3.5-5.1 |
Basic and diluted loss per share: | s. Basic and diluted loss per share: Basic loss per share has been computed using the weighted-average number of ordinary shares outstanding during the year. Diluted loss per share is computed based on the weighted average number of ordinary shares outstanding during each year, plus the weighted average number of dilutive potential ordinary shares considered outstanding during the year. In 2018 and 2017 there is no difference between the denominator of basic and diluted loss per share. |
Severance pay: | t. Severance pay: The Company’s liability for severance pay in Israel is calculated pursuant to Israel’s Severance Pay Law based on the most recent salary of the employees multiplied by the number of years of employment as of the balance sheet date. Employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company’s obligation for all of its Israeli employees is fully provided by monthly deposits with severance pay funds and insurance policies, and by an accrual. The value of those funds and policies is recorded as an asset in the Company’s balance sheet. The deposited funds include profits and losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to Israel’s Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash surrendered value of these policies. Effective October, 2014, the Company’s agreements with new employees in Israel, are under Section 14 of the Severance Pay Law, 1963. The Company’s contributions for severance pay have replaced its severance obligation. Upon contribution of the full amount of the employee’s monthly salary for each year of service, no additional calculations is conducted between the parties regarding the matter of severance pay and no additional payment is made by the Company to the employee. Further, the related obligation and amounts deposited on behalf of the employee for such obligation are not stated on the balance sheet, as the Company is legally released from the obligation to employees once the deposit amounts have been paid. Severance benefit for the years ended December 31, 2018 and 2017 was $108 and $20, respectively. |
Treasury shares: | u. Treasury shares: The Company repurchases its ordinary shares from time to time on the open market and holds such shares as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction in shareholders’ equity. The Company reissues treasury shares under the stock purchase plan, upon exercise of option and upon issuance of shares upon acquisitions. Reissuance of treasury shares is accounted for in accordance with ASC 505-30 whereby gains are credited to additional paid-in capital and losses are charged to additional paid-in capital to the extent that previous net gains are included therein; otherwise to accumulated deficit. |
Income taxes: | v. Income taxes: The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). ASC 740 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between 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 provides a valuation allowance to reduce deferred tax assets to amounts more likely than not to be realized. ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. |
Comprehensive loss: | w. Comprehensive loss: The Company accounts for comprehensive loss in accordance with ASC No. 220, “Comprehensive Income”. Comprehensive loss generally represents all changes in shareholders’ equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income (loss) relate to gains and losses from functional currency translation adjustments on behalf of subsidiaries whose functional currency has been determined to be their local currency. |
Recently issued and adopted pronouncements: | x. Recently issued and adopted pronouncements: In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides guidance with the intent of reducing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company adopted ASU 2016-15 during 2018. The adoption of this new guidance had no impact on the Company’s consolidated balance sheets, statements of income and cash flows In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company adopted ASU 2016-18 during the first quarter of 2018. The adoption of this new guidance had no material impact on the Company’s consolidated balance sheets, statements of operations and cash flows. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Topic 606. The standard replaced the revenue recognition guidance in U.S. GAAP under Topic 605, and was required to be applied retrospectively to each prior period presented, or applied using a modified retrospective method with the cumulative effect recognized in the beginning retained earnings during the period of initial application. Subsequently, the FASB issued several additional ASUs related to ASU No. 2014-09, collectively they are referred to as the “new revenue standards”, which became effective for the Company beginning January 1, 2018. The Company adopted the standard using the modified retrospective method applied to those contracts which were not substantially completed as of the adoption date. See “m. Revenue recognition” above for further details. In July 2017, the FASB issued Accounting Standards Update No. 2017-11, Derivatives and Hedging (Topic 815); Accounting for Certain Financial Instruments with Down Round Features which allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be classified as liabilities. The Company adopted ASU 2017-11 effective January 1, 2018. The company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For convertible instruments with embedded conversion features containing down round provisions, the Company will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. If applicable, for equity-classified freestanding financial instruments, such as warrants, the Company will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. |
New accounting pronouncements not yet adopted: | y. New accounting pronouncements not yet adopted: In February 2016, the FASB issued ASU 2016-02, “Leases”, on the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard supersedes the lease requirements in Accounting Standards Codification (ASC) Topic 840, “Leases” and requires lessees, to classify leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a manner similar to the accounting under existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases.. In July 2018, the FASB also issued ASU 2018-11, Targeted Improvements to Topic 842, which provides an alternative transition method at the transition date, allowing entities to recognize a cumulative effect adjustment to the opening balance of retained earnings upon adoption. The guidance is effective for the interim and annual periods beginning on or after December 15, 2018, and early adoption is permitted. The Company will adopt the new standard as of January 1, 2019. The Company will elect the optional transition approach to not apply ASU 2016-02 in the comparative periods presented and the package of practical expedients. The Company will also elect the practical expedient to not account for lease and non-lease components separately for office space, datacenter and equipment operating leases, as applicable. The Company expects the adoption of ASU 2016-02 will result in the recognition of approximately $10,200 lease liabilities and right-of use assets, with the approximate entire portion being attributed to the Company’s office space. The Company does not expect the adoption of ASU 2016-02 to have a material impact on the consolidated statements of operations or to have any impact on its consolidated cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements and footnote disclosures. In July 2018, the FASB issued ASU 2018-07, “Compensation - Stock Compensation (Topic 718) - Improvements to Non-employee Share-based Payment Accounting.” ASU 2018-07 was issued to simplify several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The ASU is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements and footnote disclosures. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update to the standard is effective for interim an annual periods beginning after December 15, 2019, with early adoption permitted. Entities can choose to adopt the ASU 2018-15 prospectively or retrospectively. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements and footnote disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Schedule of depreciation is calculated using the straight-line method over estimated useful lives of assets | % Computers and peripheral equipment 33 Office furniture and equipment 7–20 Leasehold improvements Over the shorter of the term of the lease or the life of the assets |
Schedule of cumulative effect | Balance as of December 31, 2017 Impact of Adoption Balance as of January 1, 2018 Current deferred commissions $ - $ 682 $ 682 Long-term deferred commissions $ - $ 1,129 $ 1,129 Accumulated deficit $ (195,098 ) $ 1,811 $ (193,287 ) As of December 31, 2018 As Reported ASC 606 Impact of Adoption Amounts under Consolidated Balance Sheet Current deferred commissions $ 887 $ 887 $ - Long-term deferred commissions $ 1,880 $ 1,880 $ - Accumulated deficit $ (213,143 ) $ 2,767 $ (210,376 ) Year ended December 31, 2018 As Reported ASC 606 Impact of Adoption Amounts under Consolidated Statements of Operations Sales and Marketing $ 16,202 $ (956 ) $ 17,158 |
Schedule of condensed financial statements | Year ended Stock options 2018 2017 Volatility 49%-51% 44%-51% Risk-free interest rate 2.3%-3.1% 1.2%-2.1% Dividend yield 0% 0% Expected term (years) 3.6-5.0 3.5-5.1 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment, net | December 31 2018 2017 Cost: Computers and peripheral equipment $ 10,801 $ 11,782 Office furniture and equipment 978 1,293 Leasehold improvements 825 1,896 12,604 14,971 Less accumulated depreciation (7,996 ) (12,184 ) Property and equipment, net $ 4,608 $ 2,787 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net/Goodwill [Abstract] | |
Schedule of definite-lived intangible assets | December 31, 2018 2017 Original amounts: Customer contracts and relationships $ 5,200 $ 5,326 Technology (*)18,768 (*)16,896 Trademarks 1,586 1,614 Total original amounts 25,554 23,836 Accumulated amortization: Customer contracts and relationships (4,107 ) (3,744 ) Technology (11,661 ) (8,235 ) Trademarks (984 ) (839 ) Accumulated amortization (16,752 ) (12,818 ) Intangible assets, net $ 8,802 $ 11,018 (*) Includes $10,971 and $8,877 capitalized technology as of December 31, 2018 and 2017, respectively. Capitalized technology includes $1,423 and $4,081 for which amortization has not yet begun as of December 31, 2018 and 2017, respectively. |
Schedule of weighted average annual rates of amortization for intangible assets | Weighted average % Customer contracts and relationships 7 Technology 34 Trademarks 10 Total intangible assets 26 |
Schedule of estimated aggregate amortization expenses for five succeeding fiscal years | 2019 $ 3,563 2020 2,957 2021 833 2022 731 2023 151 Thereafter 567 Total $ 8,802 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets, Net/Goodwill [Abstract] | |
Schedule of changes in carrying amount of goodwill | Year ended 2018 2017 Balance at the beginning of the year $ 21,128 $ 19,441 Foreign currency translation adjustments (609 ) 1,687 Balance at the year end $ 20,519 $ 21,128 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of annual minimum future lease payments | 2019 $ 2,224 2020 2,375 2021 2,263 2022 1,777 2023 903 2024 and thereafter 1,164 $ 10,706 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders' Equity [Abstract] | |
Schedule of employees and directors stock option activity | Number of options Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value Outstanding at January 1, 2018 6,050,820 $ 2.27 3.56 $ 2,498 Granted 1,642,000 2.34 Exercised (671,354 ) 2.04 Expired and forfeited (546,484 ) 2.63 Outstanding at December 31, 2018 6,474,982 $ 2.28 3.39 $ 4,475 Options vested and expected to vest at December 31, 2018 6,320,402 $ 2.33 3.44 $ 4,401 Exercisable options at December 31, 2018 4,944,982 $ 2.26 2.80 $ 3,775 Weighted average fair value of options granted during the year $ 0.83 |
Schedule of employee and directors options outstanding | Outstanding Exercisable Exercise Weighted average remaining Weighted average exercise Weighted average exercise price per Options contractual price per Options price per share outstanding life in years share exercisable share $1.44 - $1.93 1,464,937 3.32 $ 1.56 1,464,937 $ 1.56 $2.00 - $2.13 1,554,377 4.01 $ 2.03 1,554,377 $ 2.03 $2.29 - $2.79 1,530,668 3.74 $ 2.46 523,918 $ 2.70 $2.90 - $3.14 1,599,000 2.87 $ 3.00 1,090,750 $ 3.03 $3.20 - $3.32 326,000 1.58 $ 3.31 311,000 $ 3.32 6,474,982 3.39 $ 2.33 4,944,982 $ 2.26 |
Schedule of options to non-employees | Issuance date Options outstanding Exercise price per share Options exercisable Exercisable through February 13, 2013 5,000 $ 3.14 5,000 Feb-19 August 1, 2013 150,000 $ 3.08 150,000 Aug-19 May 14, 2014 3,000 $ 3.32 3,000 May-20 February 18, 2015 3,000 $ 3.00 3,000 Feb-21 February 10, 2016 40,000 $ 1.44 40,000 Feb-22 January 24, 2017 25,000 $ 2.00 25,000 Jan-23 226,000 226,000 |
Schedule of RSUs activity | Number of RSUs Outstanding at January 1, 2018 - Granted 499,000 Vested (10,000 ) Forfeited (10,000 ) Outstanding at December 31, 2018 479,000 |
Schedule of stock-based compensation expense | Year ended 2018 2017 Cost of revenues $ 174 $ 207 Research and development 407 505 Sales and marketing 387 553 General and administrative 472 795 $ 1,440 $ 2,060 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of deferred taxes | December 31, 2018 2017 Deferred tax assets: Net operating loss carryforwards $ 27,325 $ 25,645 Capital loss carryforwards 4,099 3,500 Other 3,290 2,295 Deferred tax assets before valuation allowance 34,714 31,440 Valuation allowance (33,634 ) (30,177 ) Deferred tax asset, net of valuation allowance 1,080 1,263 Deferred tax liabilities: Intangibles (1,973 ) (2,432 ) Deferred revenue (237 ) (186 ) Deferred tax liability (2,210 ) (2,618 ) Deferred tax liability, net (*) $ (1,130 ) $ (1,355 ) (*) The entire amount is due to foreign deferred taxes |
Schedule of loss before tax benefit (expense) | Year ended 2018 2017 Domestic $ (13,570 ) $ (10,452 ) Foreign (5,997 ) (5,238 ) Loss before tax benefit (expense) $ (19,567 ) $ (15,690 ) |
Schedule of tax benefit (expense) | Year ended 2018 2017 Current taxes: Foreign $ (28 ) $ (133 ) Domestic - - $ (28 ) $ (133 ) Deferred taxes: Foreign $ 181 $ 175 Domestic - - $ 181 $ 175 Tax benefit (expense), net $ 153 $ 42 |
Scheldule of unrecognized tax benefits related to uncertain tax positions | December 31, 2018 2017 Beginning balance $ 272 $ 119 Increases (decrease) related to tax positions taken during prior years 94 137 Effect of exchange rate (12 ) 16 Ending balance $ 354 $ 272 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment and Geographic Information [Abstract] | |
Schedule of total revenue by solutions offered by geographic area | Year ended 2018 2017 United States $ 16,391 $ 12,407 Europe 14,318 12,992 Asia Pacific 2,625 2,724 Israel 2,261 2,397 Other 305 279 $ 35,900 $ 30,799 |
Schedule of net amount of property and equipment | December 31 2018 2017 Israel $ 1,217 $ 685 United States 1,623 1,490 Germany 1,453 287 Other 315 325 $ 4,608 $ 2,787 |
Financial Expense, Net (Tables)
Financial Expense, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Expense, Net [Abstract] | |
Schedule of financial expense, net | Year ended December 31, 2018 2017 Income: Interest on cash and cash equivalents $ 58 $ 2 Foreign currency exchange differences, net - - 58 2 Expenses: Change in fair value of embedded conversion feature on convertible notes - (1,349 ) Interest and accretion of discount (135 ) (735 ) Foreign currency exchange differences, net (131 ) (248 ) Other (47 ) (50 ) (313 ) (2,382 ) $ (255 ) $ (2,380 ) |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Parties [Abstract] | |
Schedule of related party balances | December 31 2018 2017 Prepaid expenses (*) $ 6 $ 31 (*) Related to a software license agreement with a related party. See note 12b. for further details. |
Schedule of related party transactions | Year ended December 31, 2018 2017 Bad debt collected (*) $ - $ 226 Gain from sale of investment in affiliate (*) $ - $ 450 Software licensing expenses (**) $ 25 $ 21 (*) Transactions with imatrix. The effects arising from imatrix’s bad debt were recorded under general and administrative expenses on the consolidated statements of operations. The gain from the sale of the investment in imatrix was recorded as other income on the consolidated statements of operations. (**) Expenses arising from a software licensing agreement which was executed in March 2017. At the time of execution, the vendor was not a related party. On December 24, 2017, upon completion of the tender offer by WP, the vendor became a related party. The expenses were recorded under research and development expenses net, on the consolidated statements of operations. |
General (Details)
General (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
General (Textual) | ||
Loss | $ (19,414) | $ (15,648) |
Negative cash flow of from operating activities | (11,457) | (7,192) |
Accumulated deficit | $ (213,143) | $ (195,098) |
Significant Accounting Polici_4
Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Computers and peripheral equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rate | 33.00% |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rate | 7.00% |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation rate | 20.00% |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Over the shorter of the term of the lease or the life of the assets |
Significant Accounting Polici_5
Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheet | ||
Current deferred commissions | $ 887 | |
Long-term deferred commissions | 1,880 | |
Accumulated deficit | (213,143) | (195,098) |
Impact of Adoption [Member] | ||
Consolidated Balance Sheet | ||
Current deferred commissions | 887 | 682 |
Long-term deferred commissions | 1,880 | 1,129 |
Accumulated deficit | 2,767 | 1,811 |
Amounts under ASC 605 [Member] | ||
Consolidated Balance Sheet | ||
Current deferred commissions | ||
Long-term deferred commissions | ||
Accumulated deficit | $ (210,376) | |
Balance as of January 1, 2018 [Member] | ||
Consolidated Balance Sheet | ||
Current deferred commissions | 682 | |
Long-term deferred commissions | 1,129 | |
Accumulated deficit | $ (193,287) |
Significant Accounting Polici_6
Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Operations | ||
Sales and Marketing | $ 16,202 | $ 15,551 |
Impact of Adoption [Member] | ||
Consolidated Statements of Operations | ||
Sales and Marketing | (956) | |
Amounts under ASC 605 [Member] | ||
Consolidated Statements of Operations | ||
Sales and Marketing | $ 17,158 |
Significant Accounting Polici_7
Significant Accounting Policies (Details 3) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility, minimum | 49.00% | 44.00% |
Volatility, maximum | 51.00% | 51.00% |
Risk-free interest rate, minimum | 2.30% | 1.20% |
Risk-free interest rate, maximum | 3.10% | 2.10% |
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 3 years 7 months 6 days | 3 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 5 years | 5 years 1 month 6 days |
Significant Accounting Polici_8
Significant Accounting Policies (Details Textual) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Significant Accounting Policies (Textual) | ||
Restricted deposits | $ 585 | |
Investment in affiliate's description | The Company's investments in affiliated companies comprises of investments in which the Company owns less than 20 % or in which the Company cannot exercise significant influence over the affiliates' operating and financial policies. | |
Number of operating segments | Segment | 1 | |
Research and development costs due to government grants | $ 69 | $ 778 |
Provision for doubtful accounts | 20 | 445 |
Bad debt benefit | 52 | 65 |
Severance benefit (expense) | 108 | $ 20 |
Lease liabilities and right-of use assets | $ 10,200 | |
Minimum [Member] | ||
Significant Accounting Policies (Textual) | ||
Intangible assets, useful life | 1 year | |
Minimum [Member] | Capitalized Technology [Member] | ||
Significant Accounting Policies (Textual) | ||
Intangible assets, useful life | 1 year | |
Maximum [Member] | ||
Significant Accounting Policies (Textual) | ||
Intangible assets, useful life | 15 years | |
Maximum [Member] | Capitalized Technology [Member] | ||
Significant Accounting Policies (Textual) | ||
Intangible assets, useful life | 3 years |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,604 | $ 14,971 |
Less accumulated depreciation | (7,996) | (12,184) |
Property and equipment, net | 4,608 | 2,787 |
Computers and peripheral equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,801 | 11,782 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 978 | 1,293 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 825 | $ 1,896 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property and Equipment, Net (Textual) | ||
Depreciation expense | $ 1,856 | $ 1,303 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | $ 25,554 | $ 23,836 | |
Accumulated amortization | (16,752) | (12,818) | |
Intangible assets, net | 8,802 | 11,018 | |
Customer contracts and relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 5,200 | 5,326 | |
Accumulated amortization | (4,107) | (3,744) | |
Technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | [1] | 18,768 | 16,896 |
Accumulated amortization | (11,661) | (8,235) | |
Trademarks [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Original amounts | 1,586 | 1,614 | |
Accumulated amortization | $ (984) | $ (839) | |
[1] | Includes $10,971 and $8,877 capitalized technology as of December 31, 2018 and 2017, respectively. Capitalized technology includes $1,423 and $4,081 for which amortization has not yet begun as of December 31, 2018 and 2017, respectively. |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details 1) | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 26.00% |
Customer contracts and relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 7.00% |
Technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 34.00% |
Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Total intangible assets | 10.00% |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details 2) $ in Thousands | Dec. 31, 2018USD ($) |
Intangible Assets, Net/Goodwill [Abstract] | |
2019 | $ 3,563 |
2020 | 2,957 |
2021 | 833 |
2022 | 731 |
2023 | 151 |
Thereafter | 567 |
Total | $ 8,802 |
Intangible Assets, Net (Detai_4
Intangible Assets, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets, Net (Textual) | ||
Amortization expense | $ 4,165 | $ 3,746 |
Capitalized technology [Member] | ||
Intangible Assets, Net (Textual) | ||
Includes capitalized technology in the amount of | 10,971 | 8,877 |
Capitalized technology | $ 1,423 | $ 4,081 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intangible Assets, Net/Goodwill [Abstract] | ||
Balance at the beginning of the year | $ 21,128 | $ 19,441 |
Foreign currency translation adjustments | (609) | 1,687 |
Balance at the year end | $ 20,519 | $ 21,128 |
Earn-out Consideration (Details
Earn-out Consideration (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
May 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earn-out Consideration (Textual) | |||
Payment of earn-out consideration | $ (604) | ||
Interest accrued | $ 97 | $ 117 | |
Former shareholders [Member] | |||
Earn-out Consideration (Textual) | |||
Payment of earn-out consideration | $ (604) |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
2019 | $ 2,224 |
2020 | 2,375 |
2021 | 2,263 |
2022 | 1,777 |
2023 | 903 |
2024 and thereafter | 1,164 |
Total future lease payments | $ 10,706 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2019 | May 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies (Textual) | ||||
Research and development | $ 3,699 | |||
Payment of earn-out consideration | $ 604 | |||
Royalty rate | Royalties at a rate of 3% - 3.5 | |||
Net of royalties paid or accrued | $ 2,921 | 2,734 | ||
Cost of revenues with respect to royalties | 156 | 144 | ||
Facilities rent expenses | 1,749 | 2,004 | ||
License fees | 3,150 | |||
Company received grants from the IIA | $ 228 | $ 718 | ||
Subsequent Event [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Legal claim settlements amount | $ 2,683 | |||
Former shareholders [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Payment of earn-out consideration | $ 604 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Employee Stock Option [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Summary of employees and directors share option activity | |
Number of RSUs, Outstanding, Beginning balance | shares | 6,050,820 |
Number of options, Granted | shares | 1,642,000 |
Number of options, Exercised | shares | (671,354) |
Number of options, Expired and forfeited | shares | (546,484) |
Number of RSUs, Outstanding, Ending balance | shares | 6,474,982 |
Number of options, Options vested and expected to vest | shares | 6,320,402 |
Number of options, Exercisable | shares | 4,944,982 |
Weighted average exercise price, Beginning balance | $ 2.27 |
Weighted average exercise price, Granted | 2.34 |
Weighted average exercise price, Exercised | 2.04 |
Weighted average exercise price, Expired and forfeited | 2.63 |
Weighted average exercise price, Ending balance | 2.28 |
Weighted average exercise price, Options vested and expected to vest | 2.33 |
Weighted average exercise price, Exercisable options | 2.26 |
Weighted average fair value of options, Granted | $ 0.83 |
Weighted average remaining contractual term (years), Outstanding, Beginning balance | 3 years 6 months 21 days |
Weighted average remaining contractual term (years), Outstanding, Ending balance | 3 years 4 months 20 days |
Weighted average remaining contractual term (years), Options vested and expected to vest | 3 years 5 months 9 days |
Weighted average remaining contractual term (years), Exercisable options | 2 years 9 months 18 days |
Aggregate intrinsic value, Outstanding , Beginning balance | $ | $ 2,498 |
Aggregate intrinsic value, Outstanding, Ending balance | $ | 4,475 |
Aggregate intrinsic value, Options vested and expected to vest | $ | 4,401 |
Aggregate intrinsic value, Exercisable options | $ | $ 3,775 |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Schedule of employee and director options outstanding separated into ranges of exercise prices | |
Options outstanding | shares | 6,474,982 |
Weighted average remaining contractual life in years | 3 years 4 months 20 days |
Outstanding weighted average exercise price per share | $ 2.33 |
Options exercisable | shares | 4,944,982 |
Exercisable weighted average exercise price per share | $ 2.26 |
$1.44 - $1.93 [Member] | |
Schedule of employee and director options outstanding separated into ranges of exercise prices | |
Exercise price per share, lower limit | 1.44 |
Exercise price per share, upper limit | $ 1.93 |
Options outstanding | shares | 1,464,937 |
Weighted average remaining contractual life in years | 3 years 3 months 26 days |
Outstanding weighted average exercise price per share | $ 1.56 |
Options exercisable | shares | 1,464,937 |
Exercisable weighted average exercise price per share | $ 1.56 |
$2.00 - $2.13 [Member] | |
Schedule of employee and director options outstanding separated into ranges of exercise prices | |
Exercise price per share, lower limit | 2 |
Exercise price per share, upper limit | $ 2.13 |
Options outstanding | shares | 1,554,377 |
Weighted average remaining contractual life in years | 4 years 4 days |
Outstanding weighted average exercise price per share | $ 2.03 |
Options exercisable | shares | 1,554,377 |
Exercisable weighted average exercise price per share | $ 2.03 |
$2.29 - $2.79 [Member] | |
Schedule of employee and director options outstanding separated into ranges of exercise prices | |
Exercise price per share, lower limit | 2.29 |
Exercise price per share, upper limit | $ 2.79 |
Options outstanding | shares | 1,530,668 |
Weighted average remaining contractual life in years | 3 years 8 months 26 days |
Outstanding weighted average exercise price per share | $ 2.46 |
Options exercisable | shares | 523,918 |
Exercisable weighted average exercise price per share | $ 2.70 |
$2.90 - $3.14 [Member] | |
Schedule of employee and director options outstanding separated into ranges of exercise prices | |
Exercise price per share, lower limit | 2.90 |
Exercise price per share, upper limit | $ 3.14 |
Options outstanding | shares | 1,599,000 |
Weighted average remaining contractual life in years | 2 years 10 months 14 days |
Outstanding weighted average exercise price per share | $ 3 |
Options exercisable | shares | 1,090,750 |
Exercisable weighted average exercise price per share | $ 3.03 |
$3.20 - $3.32 [Member] | |
Schedule of employee and director options outstanding separated into ranges of exercise prices | |
Exercise price per share, lower limit | 3.20 |
Exercise price per share, upper limit | $ 3.32 |
Options outstanding | shares | 326,000 |
Weighted average remaining contractual life in years | 1 year 6 months 29 days |
Outstanding weighted average exercise price per share | $ 3.31 |
Options exercisable | shares | 311,000 |
Exercisable weighted average exercise price per share | $ 3.32 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Non-Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options outstanding | 226,000 |
Options exercisable | 226,000 |
February 13, 2013 [Member] | Non-Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance date | Feb. 13, 2013 |
Options outstanding | 5,000 |
Exercise price per share | $ / shares | $ 3.14 |
Options exercisable | 5,000 |
Exercisable through | Feb-19 |
August 1, 2013 [Member] | Non-Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance date | Aug. 1, 2013 |
Options outstanding | 150,000 |
Exercise price per share | $ / shares | $ 3.08 |
Options exercisable | 150,000 |
Exercisable through | Aug-19 |
May 14, 2014 [Member] | Non-Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance date | May 14, 2014 |
Options outstanding | 3,000 |
Exercise price per share | $ / shares | $ 3.32 |
Options exercisable | 3,000 |
Exercisable through | May-20 |
February 18, 2015 [Member] | Non-Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance date | Feb. 18, 2015 |
Options outstanding | 3,000 |
Exercise price per share | $ / shares | $ 3 |
Options exercisable | 3,000 |
Exercisable through | Feb - 21 |
February 10, 2016 [Member] | Non-Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance date | Feb. 10, 2016 |
Options outstanding | 40,000 |
Exercise price per share | $ / shares | $ 1.44 |
Options exercisable | 40,000 |
Exercisable through | Feb-22 |
January 24, 2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Issuance date | Jan. 24, 2017 |
Options outstanding | 25,000 |
Exercise price per share | $ / shares | $ 2 |
Options exercisable | 25,000 |
Exercisable through | Jan-23 |
Shareholders' Equity (Details 3
Shareholders' Equity (Details 3) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of RSUs, Outstanding, Beginning balance | |
Number of RSUs, Granted | 499,000 |
Number of RSUs, Vested | (10,000) |
Number of RSUs, Forfeited | (10,000) |
Number of RSUs, Outstanding, Ending balance | 479,000 |
Shareholders' Equity (Details 4
Shareholders' Equity (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | $ 1,440 | $ 2,060 |
Cost of revenues [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 174 | 207 |
Research and development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 407 | 505 |
Sales and marketing [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | 387 | 553 |
General and administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Compensation expense | $ 472 | $ 795 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) $ / shares in Units, $ in Thousands | Dec. 05, 2018USD ($)$ / shares | Dec. 24, 2017$ / sharesshares | Nov. 30, 2017USD ($)$ / sharesshares | Nov. 06, 2017USD ($)shares | Sep. 27, 2017$ / sharesshares | Mar. 27, 2017USD ($)$ / shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Nov. 06, 2017₪ / shares | Nov. 06, 2017$ / shares |
Shareholders' Equity (Textual) | ||||||||||
Proceeds received from issuance of ordinary shares | $ 18,971 | |||||||||
Issuance expenses on ordinary shares | $ 631 | |||||||||
Options grant/vest, description | The options vest and become exercisable at a rate of 1/16 of the options every three months. | |||||||||
Maturity date | Sep. 30, 2019 | |||||||||
Non-Employee Plan [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Options vesting period | 4 years | |||||||||
Options expiration, term | Options granted under the Non-Employee Director Plan generally expire after six years from the date of grant. | |||||||||
Convertible Notes [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Issuance of ordinary shares | shares | 11,594 | |||||||||
Aggregate principal amount | $ 10,000 | |||||||||
Interest rate | 5.75% | |||||||||
Debt instrument, description | (i) 50% cash and (ii) 50% cash or ordinary shares at Cyren's election. | |||||||||
Notes, term | 3 years | |||||||||
Conversion price, per share | $ / shares | $ 3.90 | $ 1.85 | $ 2.50 | |||||||
Conversion of amount | $ 925 | |||||||||
Conversion of shares | shares | 500,000 | |||||||||
Maturity date | Dec. 31, 2021 | |||||||||
Warburg Pincus [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Ownership, percentage | 52.00% | |||||||||
Warburg Pincus [Member] | Convertible Notes [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Offering price per share | $ / shares | $ 1.85 | |||||||||
Ownership, percentage | 52.00% | |||||||||
Conversion price, per share | $ / shares | $ 1.85 | 1.85 | ||||||||
Conversion of shares | shares | 2,944,813 | |||||||||
Equity Incentive Plan [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Options grant/vest, description | The per share exercise price for options shall be no less than 100% of the fair market value per ordinary share on the date of grant. | |||||||||
Ordinary shares available for future grant | shares | 1,755,919 | |||||||||
Options vesting period | 4 years | |||||||||
Options expiration, term | Options granted under the Equity Incentive Plan generally expire after six years from the date of grant. | |||||||||
Equity Incentive Plan [Member] | Warburg Pincus [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Options grant/vest, description | Fifty percent of all outstanding options became fully vested. | |||||||||
Options vesting period | 1 year | |||||||||
Non-vested stock options [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Unrecognized compensation expense | $ 1,757 | |||||||||
Recognized over remaining weighted average period | 3 years 3 months 8 days | |||||||||
Non-vested stock options [Member] | Non-Employee Plan [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Ordinary shares available for future grant | shares | 270,214 | |||||||||
Unrecognized compensation expense | $ 2,024 | |||||||||
Recognized over remaining weighted average period | 3 years 1 month 24 days | |||||||||
Private Offering [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Issuance of ordinary shares | shares | 10,595,521 | |||||||||
Offering price per share | (per share) | ₪ 0.15 | $ 1.85 | ||||||||
Proceeds received from issuance of ordinary shares | $ 18,971 | |||||||||
Issuance expenses on ordinary shares | $ 631 | |||||||||
Private Offering [Member] | Convertible Notes [Member] | ||||||||||
Shareholders' Equity (Textual) | ||||||||||
Aggregate principal amount | $ 6,300 | |||||||||
Interest rate | 5.00% | |||||||||
Debt instrument, description | (i) 50% cash and (ii) 50% cash or ordinary shares at Cyren's election. | |||||||||
Notes, term | 2 years 6 months | |||||||||
Conversion price, per share | $ / shares | $ 2.50 | |||||||||
Conversion price, description | The conversion price was subject to adjustment should future equity issuances be priced at less than $2.10 per share. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 27,325 | $ 25,645 | |
Capital loss carryforwards | 4,099 | 3,500 | |
Other | 3,290 | 2,295 | |
Deferred tax assets before valuation allowance | 34,714 | 31,440 | |
Valuation allowance | (33,634) | (30,177) | |
Deferred tax asset, net of valuation allowance | 1,080 | 1,263 | |
Deferred tax liabilities: | |||
Intangibles | (1,973) | (2,432) | |
Deferred revenue | (237) | (186) | |
Deferred tax liability | (2,210) | (2,618) | |
Deferred tax liability, net | [1] | $ (1,130) | $ (1,355) |
[1] | The entire amount is due to foreign deferred taxes |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||
Domestic | $ (13,570) | $ (10,452) |
Foreign | (5,997) | (5,238) |
Loss before tax benefit (expense) | $ (19,567) | $ (15,690) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current taxes: | ||
Foreign | $ (28) | $ (133) |
Domestic | ||
Total Current taxes | (28) | (133) |
Deferred taxes: | ||
Foreign | 181 | 175 |
Domestic | ||
Total Deferred taxes | 181 | 175 |
Tax benefit (expense), net | $ (153) | $ (42) |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||
Beginning balance | $ 272 | $ 119 |
Increases (decrease) related to tax positions taken during prior years | 94 | 137 |
Effect of exchange rate | (12) | 16 |
Ending balance | $ 354 | $ 272 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes (Textual) | ||
Cyren Ltd. Corporate tax rate | 23.00% | 24.00% |
Cyren Ltd. Net operating loss carrforwards | $ 80,126 | |
Cyren Ltd. Capital loss carryforwards | $ 17,824 | |
Israeli Corporate income tax rate description | In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which reduces the corporate income tax rate to 24% effective from January 1, 2017 and to 23% effective from January 1, 2018. | |
U.S. subsidiary [Member] | ||
Income Taxes (Textual) | ||
Cyren Inc. Federal tax purposes | $ 40,348 | |
Cyren Inc. State tax purposes | $ 8,785 | |
Cyren Inc. carryforward losses description | Expire in the years 2019 through 2038. | |
German tax [Member] | ||
Income Taxes (Textual) | ||
Cyren GmbH Corporate tax rate | 30.00% | |
Minimum [Member] | ||
Income Taxes (Textual) | ||
United States Corporate tax rate | 21.00% | |
Maximum [Member] | ||
Income Taxes (Textual) | ||
United States Corporate tax rate | 35.00% | |
Increases valuation allowance [Member] | ||
Income Taxes (Textual) | ||
Increase in valuation allowance amount | $ 3,457 | $ 3,494 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues from external customers | $ 35,900 | $ 30,799 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues from external customers | 16,391 | 12,407 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues from external customers | 14,318 | 12,992 |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues from external customers | 2,625 | 2,724 |
Israel [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues from external customers | 2,261 | 2,397 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues from external customers | $ 305 | $ 279 |
Segment and Geographic Inform_4
Segment and Geographic Information (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net amount of property and equipment | $ 4,608 | $ 2,787 |
Israel [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net amount of property and equipment | 1,217 | 685 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net amount of property and equipment | 1,623 | 1,490 |
Germany [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net amount of property and equipment | 1,453 | 287 |
Other [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net amount of property and equipment | $ 315 | $ 325 |
Segment and Geographic Inform_5
Segment and Geographic Information (Details Textual) - Segment | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment and Geographic Information (Textual) | ||
Number of reportable segments | 1 | |
Segment reporting, major customer's description | During the year ended December 31, 2018, 17% of the Company's revenues were derived from customer A. | During the year ended December 31, 2017, no customer accounted for more than 10% of total revenue. |
Financial Expense, Net (Details
Financial Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income: | ||
Interest on cash and cash equivalents | $ 58 | $ 2 |
Foreign currency exchange differences, net | ||
Total financial income | 58 | 2 |
Expenses: | ||
Change in fair value of embedded conversion feature on convertible notes | (1,349) | |
Interest and accretion of discount | (135) | (735) |
Foreign currency exchange differences, net | (131) | (248) |
Other | (47) | (50) |
Total financial expenses | (313) | (2,382) |
Financial income (expenses), net | $ (255) | $ (2,380) |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Parties [Abstract] | |||
Prepaid expenses | [1] | $ 6 | $ 31 |
[1] | Related to a software license agreement with a related party. See note 12b. for further details. |
Related Parties (Details 1)
Related Parties (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Related Parties [Abstract] | |||
Bad debt collected | [1] | $ 226 | |
Gain from sale of investment in affiliate | [1] | 450 | |
Software licensing expenses | [2] | $ 25 | $ 21 |
[1] | Transactions with imatrix. The effects arising from imatrix's bad debt were recorded under general and administrative expenses on the consolidated statements of operations. The gain from the sale of the investment in imatrix was recorded as other income on the consolidated statements of operations. | ||
[2] | Expenses arising from a software licensing agreement which was executed in March 2017. At the time of execution, the vendor was not a related party. On December 24, 2017, upon completion of the tender offer by WP, the vendor became a related party. The expenses were recorded under research and development expenses net, on the consolidated statements of operations. |