Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Ability Inc. |
Entity Central Index Key | 0001652866 |
Trading Symbol | ABIL |
Amendment Flag | true |
Amendment Description | This Amendment No. 1 to the Annual Report on Form 20-F of Ability Inc. (the “Company”) for the year ended December 31, 2018 filed with the Securities and Exchange Commission on April 24, 2019 (the “Original Filing”) is being filed to amend the Auditor Consent contained in Exhibit 15.1. This Amendment No. 1 also includes an updated signature page and the certifications of the Company’s Principal Executive Officer and Principal Financial Officer in Exhibits 12 and 13. No other changes have been made to the Original Filing. For the convenience of the reader, this Amendment No. 1 restates in its entirety the Original Filing. This Amendment No. 1 speaks as of the filing date of the Original Filing, does not reflect events that may have occurred subsequent to the filing date of the Original Filing, and does not modify or update in any way disclosures made in the Original Filing, except as noted above. |
Current Fiscal Year End Date | --12-31 |
Document Type | 20-F/A |
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 Ex Transition Period | true |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Common Stock, Shares Outstanding | 6,304,677 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 9,856 | $ 1,944 |
Restricted deposit for put option | 12,331 | |
Accounts receivable | 1,996 | 1,975 |
Inventory | 50 | |
Income tax receivable | 3 | 162 |
Other receivables | 172 | 2,351 |
Total Current Assets | 24,358 | 6,482 |
NON-CURRENT ASSETS: | ||
Restricted deposit for put option | 12,143 | |
Property and equipment, net | 1,016 | 1,388 |
Total Non-Current Assets | 1,016 | 13,531 |
Total Assets | 25,374 | 20,013 |
CURRENT LIABILITIES: | ||
Accrued payroll and other compensation related accruals | 188 | 135 |
Trade payables, accrued expenses and other accounts payable | 3,910 | 4,056 |
Put option liability | 12,331 | |
Accrued expenses and accounts payable with respect to Projects | 2,739 | 2,541 |
Progress payments in excess of accumulated costs with respect to projects | 2,490 | 306 |
Total Current Liabilities | 21,658 | 7,038 |
NON-CURRENT LIABILITIES: | ||
Put option liability | 12,143 | |
Accrued severance pay | 167 | 241 |
Total Non-Current Liabilities | 167 | 12,384 |
Total Liabilities | 21,825 | 19,422 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Ordinary shares $0.001 par value, 100,000,000 and 20,000,000 shares authorized, 6,304,677 and 2,576,415 shares issued and outstanding as of December 31, 2018 and 2017, respectively | 6 | 3 |
Preferred shares $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2018 and 2017 | ||
Additional paid-in-capital | 31,704 | 18,560 |
Accumulated deficit | (28,161) | (17,972) |
Total Shareholders' Equity | 3,549 | 591 |
Total Liabilities and Shareholders' Equity | $ 25,374 | $ 20,013 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value per share | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 100,000,000 | 20,000,000 |
Ordinary shares, shares issued | 6,304,677 | 2,576,415 |
Ordinary shares, shares outstanding | 6,304,677 | 2,576,415 |
Preferred shares, par value per share | $ 0.001 | $ 0.001 |
Preferred shares, shares authorized | 5,000,000 | 5,000,000 |
Preferred shares, shares outstanding | ||
Preferred shares, shares issued |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues | $ 539 | $ 2,972 | $ 16,508 |
Cost of revenues | 1,637 | 2,957 | 8,617 |
Gross profit (loss) | (1,098) | 15 | 7,891 |
Selling and marketing expenses | 2,569 | 3,033 | 5,323 |
General and administrative expenses | 6,503 | 6,016 | 9,662 |
Operating loss | (10,170) | (9,034) | (7,094) |
Financial expenses (income), net | 19 | 77 | (127) |
Loss before income taxes | (10,189) | (9,111) | (6,967) |
Income tax expense | 1,086 | ||
Net and comprehensive loss | $ (10,189) | $ (9,111) | $ (8,053) |
Loss per ordinary share - basic and diluted (U.S. dollars) | $ (3.45) | $ (3.71) | $ (3.27) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Preferred shares | Ordinary Shares | Additional paid-in-capital | Accumulated deficit | Total | ||
Balance at Dec. 31, 2015 | $ 3 | $ 18,560 | $ (808) | $ 17,755 | |||
Balance, shares at Dec. 31, 2015 | 2,528,415 | ||||||
Issuance of shares as part of the Reverse Merger | [1] | [1] | |||||
Issuance of shares as part of the Reverse Merger, shares | 48,000 | ||||||
Net and comprehensive loss | (8,053) | (8,053) | |||||
Balance at Dec. 31, 2016 | $ 3 | 18,560 | (8,861) | 9,702 | |||
Balance, shares at Dec. 31, 2016 | 2,576,415 | ||||||
Net and comprehensive loss | (9,111) | (9,111) | |||||
Balance at Dec. 31, 2017 | $ 3 | 18,560 | (17,972) | 591 | |||
Balance, shares at Dec. 31, 2017 | 2,576,415 | ||||||
Issuance of shares and warrants, net of issuance costs | $ 3 | 11,596 | 11,599 | ||||
Issuance of shares and warrants, net of issuance costs, shares | 3,578,262 | ||||||
Issuance of restricted shares to employees | [1] | [1] | |||||
Issuance of restricted shares to employees, shares | 150,000 | ||||||
Payment on account of shares | 1,457 | 1,457 | |||||
Stock-based compensation in connection with restricted shares and options granted to employees and service provider | 91 | 91 | |||||
Net and comprehensive loss | (10,189) | (10,189) | |||||
Balance at Dec. 31, 2018 | $ 6 | $ 31,704 | $ (28,161) | $ 3,549 | |||
Balance, shares at Dec. 31, 2018 | 6,304,677 | ||||||
[1] | Less than $0.5 thousand |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (10,189) | $ (9,111) | $ (8,053) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 129 | 168 | 149 |
Amortization | 349 | 321 | 193 |
Impairment of inventory | 201 | ||
Impairment of property and equipment | 114 | ||
Capital (gain) loss from sale of property and equipment | (7) | 30 | (10) |
Stock-based compensation in connection with restricted shares and options granted to employees and service provider | 91 | ||
Changes in operating assets and liabilities: | |||
Restricted deposits | 1,758 | (1,433) | |
Accounts receivable | (21) | 1,198 | 631 |
Inventory | (50) | (311) | |
Other receivables | 2,179 | (1,773) | 1,459 |
Interest earned on restricted deposit for put option | 128 | (128) | |
Accrued payroll and other compensation related accruals | 53 | (135) | 210 |
Trade payables, accrued expenses and other accounts payable | (146) | (896) | 3,108 |
Income tax payable | 159 | 73 | (2,674) |
Accrued expenses and accounts payable with respect to Projects | 198 | (2,193) | (2,233) |
Due to related company | (600) | ||
Progress payments in excess of accumulated costs with respect to Projects (accumulated costs with respect to Projects in excess of progress payments) | 2,184 | 457 | (1,170) |
Accrued severance pay | (74) | (4) | (25) |
Total Adjustments | 5,094 | (918) | (2,519) |
Net cash used in operating activities | (5,095) | (10,029) | (10,572) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment | (123) | (187) | (182) |
Proceeds from sale of property and equipment | 74 | 124 | 10 |
Net cash used in investing activities | (49) | (63) | (172) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of shares and warrants, net of issuances costs | 11,599 | ||
Proceeds received from a line of credit | 1,457 | ||
Repayment of a line of credit | (1,457) | ||
Payment on account of shares | 1,457 | ||
Due from the controlling shareholders, net | 196 | 378 | |
Withholding tax paid by the Company on behalf of the controlling shareholders with respect to dividend distributed | (4,393) | ||
Withholding tax paid by the controlling shareholders to the Company with respect to dividend distributed, to be paid by the Company to the Israel Tax Authority | 770 | ||
Net cash provided by (used in) financing activities | 13,056 | 196 | (3,245) |
Net change in cash and cash equivalents | 7,912 | (9,896) | (13,989) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 1,944 | 11,840 | 25,829 |
CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 9,856 | 1,944 | 11,840 |
Cash paid during the years for: | |||
Interest and banks' charges | 128 | 18 | 36 |
Income tax | $ 3 | $ 7 | $ 3,758 |
Organization and Business Opera
Organization and Business Operation | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS OPERATION | NOTE 1 - organization and business operation: a. General: Ability Inc. (the "Company" or "INC") was incorporated under the laws of the Cayman Islands on September 1, 2015, originally as Cambridge Holdco Corp., an exempted company. INC was formed as a wholly-owned subsidiary of Cambridge Capital Acquisition Corporation ("Cambridge"), a special purpose acquisition corporation, incorporated under the laws of Delaware on October 1, 2013. Cambridge closed its initial public offering and a simultaneous private placement on December 23, 2013. On December 23, 2015, upon a merger of Cambridge into INC, with INC surviving the merger and becoming the public entity, INC consummated a business combination whereby it acquired Ability Computer & Software Industries Ltd., an Israeli company ("ACSI"), by way of a share exchange (the "Reverse Merger"), following which ACSI became INC's wholly-owned subsidiary. Upon the closing of the Reverse Merger, INC's ordinary shares and warrants began trading on the Nasdaq Capital Market under the symbols "ABIL" and "ABILW", respectively. INC's warrants were delisted on April 18, 2016 and since such date have traded on OTC Pink under the symbol "ABIWF". On January 12, 2016 INC's ordinary shares were listed for trading on the Tel Aviv Stock Exchange. The Company, ACSI and Ability Security Systems Ltd. ("ASM") are jointly defined as the "Group". b. The Reverse Merger: 1) ACSI's shareholders prior to the closing of the Reverse Merger, Anatoly Hurgin and Alexander Aurovsky, (the "Controlling Shareholders") received in the Reverse Merger: 1,621,327 ordinary shares of INC (reflecting approximately 63% of INC's issued and outstanding ordinary shares immediately following the Reverse Merger); $18.1 million in cash and an additional number of ordinary shares of INC to be issued upon and subject to ACSI achieving certain net income targets following the Reverse Merger, as described below (the "Net Income Shares"), as consideration for their shares of ACSI. Furthermore, of the ordinary shares received, each of the Controlling Shareholders have the right, on one occasion during the 60-day period following the third anniversary of the closing of the Reverse Merger, to put to INC all or part of his pro rata portion of 117,327 ordinary shares that he received in the share exchange for an amount in cash equal to (1) (x) the number of shares being put multiplied by (y) $101.0 per share plus (2) his pro rata portion of interest, if any, on $11.9 million deposited into an escrow account by INC to fund the payment of the purchase price for the put option if it is exercised. The put option terms were updated subsequently, see Note 3 for additional information. 2) Migdal Underwriting and Business Initiatives Ltd. ("Migdal") received in the Reverse Merger: 48,000 ordinary shares of INC; $1.2 million in cash and up to 25,350 Net Income Shares, all in consideration for services provided by them with respect to the Reverse Merger. 3) INC acquired from the sole shareholder of ASM, Eyal Tzur, (the "ASM Former Shareholder") 16% of the shares of ASM, a variable interest entity with ACSI as its primary beneficiary, for $0.9 million in cash and a put option to sell his remaining holdings to INC in exchange for 48,000 of INC's ordinary shares and up to 25,350 Net Income Shares. The put option was exercised in January 2016. 4) ACSI's transaction costs with respect to the Reverse Merger were $6.3 million and include Migdal's service fees ($1.2 million in cash and ordinary shares valued at $4.3 million as detailed above) and other consulting expenses (the "Transaction Costs"). 5) The Controlling Shareholders, Migdal and ASM Former Shareholder are entitled to receive Net Income Shares based on ACSI's achievement of specified net income targets in the fiscal years 2015 to 2018 as set out below: Number of the Company's ordinary shares Year Ended December 31, Net Income Target Controlling Shareholders Migdal ASM Former Shareholder Total 2015 $ 27,000,000 338,400 10,800 10,800 360,000 2016 $ 40,000,000 173,900 5,550 5,550 185,000 2017 $ 60,000,000 188, 000 6,000 6,000 200,000 2018 $ 80,000,000 94,000 3,000 3,000 100,000 In the event that INC fails to satisfy the net income target for any fiscal year but net income for such fiscal year is 90% or more of the net income target for such fiscal year, then INC is required to issue to the Controlling Shareholders, Migdal and ASM Former Shareholder, the pro rata portion of Net Income Shares relating to the percentage achieved. The net income targets for the years ended December 31, 2018, 2017, 2016 and 2015 were not achieved. 6) The remaining funds in the restricted trust account of Cambridge amounted to $81.3 million of which: $21.6 million was paid to the holders of 213,676 ordinary shares of Cambridge who elected to convert their shares into cash upon consummation of the Reverse Merger; $18.1 million and $11.9 million were paid to the Controlling Shareholders and deposited in an escrow account to secure their put option, respectively; $0.9 million was paid to ASM Former Shareholder; $7.8 million was used to pay outstanding accounts payable and accrued expenses of Cambridge; $2.0 million was used to pay for the Company's Transaction Costs. The balance of $19.0 million was released to ACSI. c. Business operations: The Group provides advanced interception, geolocation, monitoring and cyber intelligence tools to serve the needs and increasing challenges of security and intelligence agencies, military forces, law enforcement and homeland security agencies worldwide. d. Regulatory matters: The Israeli Control Order Regarding the Engagement in Encryption Items, 1998 regulated under the Encryptions Export Control Department in the IMOD controls development, import, export, and sale of all encrypted items (the "Decryption Regime"). The Israeli Defense Export Control Law, 2007 (the "2007 Law") regulated under DECA (the Defense Export Control Agency in IMOD) regulates the marketing and export of defense equipment, transfer of defense know-how and the provision of defense services, taking into account national security considerations, foreign relations considerations, international obligations and other interests of the State of Israel. ACSI exports from Israel certain products and components that are not subject to Israeli export control. ASM, a wholly-owned subsidiary of the Company, is an Israeli company registered with DECA as a certified exporter for the marketing and export of "controlled" products of Israeli origin, or "controlled" products that are exported from Israel. However, for the most part, ACSI's products are manufactured outside of Israel and therefore are not subject to the general provisions of the 2007 Law. Thus, ACSI strives to ensure that components of ACSI's systems (that otherwise would be subject to DECA control) are sent to the customers directly by the foreign suppliers of such components, which are located outside of Israel, and are installed or integrated there by ACSI or others under its responsibility. The interception systems that contain decryption capabilities of ACSI and ASM may be subject to the Decryption Regime and therefore have obtained necessary licenses thereunder. On March 17, 2019, the IMOD informed the Company that it has ordered the suspension of the licenses granted to ASM under the 2007 Law. In addition, on March 20, 2019, the IMOD decided to suspend the licenses which were granted to ASM and ACSI under the Order for the Supervision of Goods and Services (Engagement in Encryption Items), 1974. On March 26, 2019, the IMOD made public the existence of an investigation regarding regulatory matters. For additional information, see note 13.d. e. ASM: ACSI and the ASM Former Shareholder were parties to a long-term agreement (the "JV Agreement") pursuant to which ACSI contributed substantial business efforts while ASM was responsible mainly for the regulatory aspects of pursuing business opportunities in the field of DECA controlled products. The JV Agreement could be terminated and/or the activities could be transferred to ACSI's full ownership at any time, subject to ACSI's exclusive discretion. ACSI and the Controlling Shareholders were significantly involved in the redesign of ASM's operations, in such manner that in essence, the operations are conducted only in favor of ACSI (ASM had no other activities other than on behalf of ACSI). Moreover, according to the JV Agreement, ASM was required to negotiate and determine any project terms and sign contracts with the clients - all with full transparency, coordination and advance consent from ACSI, as applicable. Upon the closing of the Reverse Merger, the JV Agreement was terminated while maintaining its terms for the existing projects. As mentioned above, in January 2016, the ASM Former Shareholder exercised his put option, resulting in ASM becoming a wholly-owned subsidiary of the Company. ACSI had the power to govern ASM's operations through the provision requiring its consent of any new client which ASM wishes to accept. ACSI was entitled to all but 3% commission (the return that the ASM Former Shareholder was entitled to as a service provider) of ASM's net results which are transferred to the Company, and was fully responsible for indemnifying ASM for any losses incurred as part of their joint operations (ASM Former Shareholder does not have any obligation to absorb ASM's losses) or any negative consequences with respect to the performance of a project. When the activities of ASM commenced (following conclusion of the JV Agreement) it did not have equity at risk (no equity and no subordinated loans). All the equity that ASM has achieved is based on transactions involving ACSI. There were no restrictions on ASM's assets. Any required financial guarantees were provided by ACSI. f. Material events: On July 3, 2018, the SEC issued Wells notices to the Company and Messrs. Hurgin and Aurovsky in connection with the previously disclosed SEC investigation. The Wells notice indicated that the Staff of the SEC's Division of Enforcement (the "Staff") has made a preliminary determination to recommend that the SEC authorize the institution of an enforcement action against the Company and Messrs. Hurgin and Aurovsky that would allege, among others, violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 14(a) of the Securities Exchange Act of 1934, and may seek remedies that include an injunction, cease and desist order, monetary relief of disgorgement, pre-judgment interest, and civil penalties, and in the case of Messrs. Hurgin and Aurovsky, a bar from serving as an officer or director. On August 10, 2018, the Company and Messrs. Hurgin and Aurovsky made Wells submissions in response to the Wells notices. The Company and Messrs. Hurgin and Aurovsky are currently in talks with the Staff to settle the SEC enforcement action that the Staff plans to recommend to the SEC's Commissioners. Any settlement in principle between the Company, Messrs. Hurgin and Aurovsky, and the Staff would be subject to final approval by the SEC's Commissioners. The terms of any settlement will be disclosed if and when the SEC's Commissioners approve a settlement. However, there can be no assurance that a settlement will occur. If no settlement is reached, the SEC Commissioners may authorize the filing of an unsettled civil enforcement action against the Company and Messrs. Hurgin and Aurovsky. If an enforcement action is initiated (whether unsettled or settled), this could result in the Company and Messrs. Hurgin and/or Aurovsky being subject to an injunction or cease and desist order from violations of the securities laws described above, as well as monetary relief of disgorgement, pre-judgment interest, and civil penalties, and in the case of Messrs. Hurgin and Aurovsky, a bar from serving as an officer or director. If an enforcement action is initiated (whether unsettled or settled), even if ultimately resolved favorably for us, this would have a material adverse impact on our reputation, business, financial condition, results of operations or cash flows. The Company and its officers are fully cooperating with the investigation. On February 21, 2018 the Controlling Shareholders executed an irrevocable undertaking (the "Undertaking") for the benefit of the Group. According to the Undertaking, the Controlling Shareholders agreed to make available to ACSI from, March 1, 2018, a $3.0 million line of credit or loan in favor of the Group. The Undertaking provided that the term of the line of credit or loan is to be for a period of no less than six months. The Undertaking further provided that at the end of the term of the line of credit or loan, the Company' Board of Directors (the "Board") will determine whether repayment of the line of credit or the loan will compromise the ability of the Group to meet its obligations during the twelve months following repayment. The Controlling Shareholders undertook to renew the line of credit or extend the term of the loan on the same terms for an additional period of no less than six months in accordance with a resolution of the Board with respect to the necessity of the support of the Controlling Shareholders. As a result, on April 11, 2018, ACSI obtained a six-month line of credit, secured by the Controlling Shareholders, from an Israeli commercial bank in the amount of NIS 11.0 million (approximately $2.9 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), of which NIS 5.5 million (approximately $1.5 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) was drawn down (the "Outstanding Amount"). On January 10, 2019, the Group completed the conversion agreement (the "Conversion Agreement") with the Controlling Shareholders, pursuant to which Messrs. Hurgin and Aurovsky transferred to the Group an amount in cash equal to the Outstanding Amount (the "Founders' Proceeds"), and the Group used the entire Founders' Proceeds in order to repay the amount outstanding under its line of credit in full. In return for the transfer of the Founders' Proceeds to the Group, the Company issued, in a private placement, to each of the Controlling Shareholders 226,426 ordinary shares (452,852 ordinary shares in the aggregate) and five-year warrants to purchase 226,426 ordinary shares (452,852 ordinary shares in the aggregate) at an exercise price of $3.25. Simultaneously with the closing of the Conversion Agreement, the Undertaking was automatically terminated. Such conversion transaction was considered final prior to December 31, 2018 as all pending decisions and approvals were already obtained (as well as cash received) and the issuance of the ordinary shares and warrants were the only action that was completed subsequent to December 31, 2018, therefore, the Company recorded the conversion amount as 'Payment on account of shares' within the 2018 Consolidated Statement of Changes in Shareholders' Equity. On August 16, 2018, the Company sold to certain institutional investors 728,262 ordinary shares in a registered direct offering at $4.60 per share, for aggregate gross proceeds of approximately $3.35 million, or $2.8 million, net of issuance costs. In connection with the offering, the Company issued to the placement agent five-year warrants to purchase 54,620 ordinary shares at an exercise price of $5.75 per share. On November 27, 2018, the Company sold to a single institutional investor 360,000 units, each unit consisting of one ordinary share and one five-year warrant to purchase one ordinary share, at a price of $3.25 per unit, and 2,716,923 pre-funded units, with each pre-funded unit consisting of one pre-funded warrant to purchase one ordinary share and one warrant to purchase one ordinary share, at a price of $3.24 per pre-funded unit, for aggregate gross proceeds of approximately $10.0 million, or approximately $8.8 million, net of issuance costs. As of December 31, 2018, an aggregate of 2,490,000 ordinary shares have been issued upon exercise of pre-funded warrants and an aggregate of 226,923 ordinary shares were issued upon exercise of the remaining pre-funded warrants during January 2019. As part of the offering, the Company issued to the placement agent five-year warrants to purchase 153,846 ordinary shares at an exercise price of $4.06 per share. Refer to Note 13.d. for the suspension of the licenses granted to ASM and ACSI. g. going concern As of December 31, 2018, the Company had an accumulated deficit of $28,161 thousand, cash and cash equivalents of $9,856 thousand and a net loss of $10,189 thousand for the year ended December 31, 2018. Due to a significant decline in revenues and continued significant legal and professional services fees, the Company has an accumulated deficit, suffered recurring losses and has negative operating cash flow. Additionally, the Company is under an investigation of the Israeli Ministry of Defense, which ordered a suspension of certain export licenses. These matters, along with other reasons, which are described below, raise substantial doubt about the Company's ability to continue as a going concern. Management is investing significant marketing efforts in order to generate additional revenue and simultaneously is continuing to decrease its expenses, primarily its legal and professional services fees in order to regain profitability. Additionally, the Company plans to raise additional capital through the sale of equity securities or debt and settling certain of the lawsuits that are pending. There is no assurance however, that the Company will be successful in regaining profitability or obtaining the level of financing needed for its operations. If the Company is unsuccessful in generating additional revenue to support its operations or raising additional capital, it may need to further reduce activities, curtail or cease operations. On March 17, 2019, the IMOD informed the Company that it has ordered the suspension of the licenses granted to ASM under the 2007 Law. In addition, on March 20, 2019, the MOD decided to suspend the licenses which were granted to ASM and ACSI under the Order for the Supervision of Goods and Services (Engagement in Encryption Items), 1974. The Company believes based on current information that the Company's expected revenue will not be affected by the IMOD's decision. For additional information, see note 13.d. The accompanying consolidated financial statements do not include any adjustments that might result relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these risks and uncertainties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Basis of presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Group’s financial position, results of operations, changes in shareholders’ equity and cash flows for the periods presented. The Reverse Merger was accounted for as a reverse merger whereby the Company was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on ACSI comprising the ongoing operations of the combined company, ACSI’s senior management comprising the senior management of the combined company, and that the former shareholders of ACSI are the controlling shareholders of the Company after the Reverse Merger. The Reverse Merger was considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Reverse Merger was treated as the equivalent of ACSI issuing shares for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Merger are those of ACSI, and therefore the historical consolidated financial statements presented are the consolidated financial statements of ACSI and the ordinary shares and the corresponding capital amounts pre-merger have been retroactively restated as ordinary shares reflecting the exchange ratio in the Reverse Merger. b. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries, ACSI and ASM. All intercompany accounts and transactions have been eliminated in the consolidation. c. Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. d. Foreign currency: The currency of the primary economic environment in which the operations of the Group is conducted is the U.S. dollar (“dollar” or “$”); thus, the dollar is the functional currency of the Group. Therefore, the Group’s transactions and balances denominated in dollars are presented at their original amounts, while non-dollar transactions and balances have been re-measured to dollars and the relating gains and losses are reflected in the statements of comprehensive loss as financial income or expenses, as appropriate. All amounts are presented in dollars, unless otherwise indicated, and are rounded to the nearest thousand. e. Revenue recognition: Effective January 1, 2018, the Group adopted a new accounting standard related to the recognition of revenue in contracts with customers. The Group did not have any material cumulative-effect adjustment as a result of the adoption of ASC 606. In addition, the adoption of ASC 606 did not have any material impact on the Group consolidated financial statement line items in the year of adoption. The Group generates revenues from sales of products, which include hardware, software, connection to supportive infrastructure, integration services, training and warranty, as well as revenues from Software as a Service (“SaaS”). The Group sells its products (the “Products”) and provides services (the “Services”) directly to end users and resellers and also participates as a subcontractor of prime contractors in joint projects and as a prime contractor in projects with resellers (the “Projects”). The Group determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a customer. ● Identification of the performance obligations in the contract. ● Determination of the transaction price. ● Allocation of the transaction price to the performance obligations in the contract. ● Recognition of revenue when, or as, the Group satisfies a performance obligation. As a general point, the Group applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Group assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Group then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Projects: Revenues from Projects are recognized along the project period, as applicable, and on a final acceptance date, once such acceptance is deemed substantive. Under such method, costs are accumulated on the balance sheet until final acceptance is received. Similarly, amounts billed to customers are also deferred until final acceptance is received. To the extent that the amount of accumulated costs exceeds the amount of advance (or progress) payments received or billed by the Group, the excess is reflected on the balance sheet as a current asset, separated from inventory. To the extent that the amount of advance (or progress) payments received or billed by the Group exceeds the amount of accumulated costs, the excess is reflected as a liability on the balance sheet. In instances where revenues are derived from sales of third-party vendors’ products or services, revenues are recognized on a gross basis and the related costs are recognized within cost of revenues, when the Group has the following indicators for gross reporting: (i) it is the primary obligor of the sales arrangements; (ii) it is subject to inventory risks of physical loss; (iii) it has latitude in establishing prices; and (iv) it has discretion in suppliers’ selection and assumes credit risks on receivables from customers. Products and Services: Revenues from sales of Products of which the final acceptance of the product is specified by the customer, and the acceptance is deemed substantive, are recognized when the Group has delivered the Products to the customer and received final acceptance, the revenue can be reliably measured and collectability of the receivables is reasonably assured. The revenues are deferred until the acceptance criteria have been met. Revenues from sales of Services are recognized ratably in the period in which the services are rendered (connection to supportive infrastructure is generally over one year). The Group provides a one-year warranty for the majority of its Products. Based on the Group’s experience, the provision is de minims. The Group’s SaaS multiple-element arrangements are typically comprised of subscription and support fees from customers accessing the Group’s software and set-up fees. The Group does not provide the customer the contractual right to take possession of the software at any time during the hosting period under these arrangements. Typically, the support and set up fees are incidental to the full arrangement. Accordingly, the Group recognizes revenue for subscription, support services and set up fees over the arrangement period originating when the subscription service is made available to the customer and the contractual hosting period has commenced. In arrangements that comprise of usage based fees, revenues are recognized in the period in which subscribers use the related services. f. Advertising costs: Advertising costs are expensed as incurred. In the years ended December 31, 2018, 2017 and 2016, advertising expenses were $69 thousand, $53 thousand and $24 thousand, respectively. g. Related parties: Related parties include the Controlling Shareholders and entities controlled by them. h. Fair value measurements: Fair value is defined as the price that would be received by selling an asset or paid to transfer a liability (i.e. the ‘exit price’) in an arms’ length transaction between willing market participants at the measurement date. The applicable financial accounting rules establish a hierarchy for inputs used in measuring fair value. The hierarchy is divided into three levels based on the reliability of inputs: Level 1 Level 2 Level 3 The Group’s financial assets and liabilities as of December 31, 2018 and 2017 are measured based on Level 1 inputs. i. Inventory: The inventory items consist of purchased systems and are stated at the lower of cost or market. Cost is determined using the “First-In, First-Out” method of inventory accounting. The valuation of inventory items requires the Group to make estimates regarding excess or obsolete inventories. The purchased systems are utilized typically for one of the following purposes: (i) future projects; (ii) demo; and (iii) spare parts for installed systems. The first utilization suggests that the systems should be classified as inventory while the second and third suggest it should be classified as property and equipment. In order to reflect those utilizations appropriately between the inventory and property and equipment line items, the Group performed an aggregated analysis which suggested that such systems should be classified as inventory for the first year from purchase date, on such date tested for impairment and then classified to property and equipment and amortized over four years from that date, see also section j. below for the amortization period. j. Property and equipment, net: Property and equipment are stated at cost, less accumulated depreciation and amortization. Upon the retirement or disposition of property and equipment, the related costs and accumulated depreciation and amortization are removed and any related gain or loss is recorded in the statements of operations and comprehensive loss. Repairs and maintenance that do not extend the life, or improve an asset are expensed in the periods incurred. The Group evaluates its property and equipment for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. Should impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Useful life (years) Software systems (from classified date, see also section i. above) 25 4 Vehicles 15 7 Leasehold improvements 10-20 5-10 Office furniture and equipment 7-10 10-14 Computers, electronics and related 15-33 3-7 k. Income taxes: Deferred tax asset and liability accounts’ balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Group accounts for deferred tax on non-distributed income that are subject to income tax once distributed and when there is an intent to distribute them. The Group applies the two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. l. Accounting for stock-based compensation: The Group accounts for share based compensation in accordance with ASC No. 718, “Compensation - Stock Compensation” that requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company recognizes compensation expenses for the value of its awards granted based the guidance established in ASC No. 718. m. Loss per share: The Group calculates basic earnings or loss per share by dividing net income or loss by the weighted-average number of ordinary shares outstanding during the year. However, the outstanding shares subject to put options were excluded, consistent with the accounting treatment of a put option liability. Potential ordinary shares are included in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. Basic and diluted loss per ordinary share data were computed as follows: Year Ended December 31, 2018 2017 2016 Net loss (U.S. dollars in thousands) $ (10,189 ) $ (9,111 ) $ (8,053 ) Weighted-average ordinary shares outstanding - basic and diluted 2,956,908 2,459,088 2,459,088 Loss per ordinary basic and diluted (U.S. dollars) $ (3.45 ) $ (3.71 ) $ (3.27 ) n. Contingencies: The Group is involved in various commercial, government investigation and other legal proceedings that arise from time to time. The Group records accruals for these types of contingencies to the extent that the Group concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Group will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Group accrues for the minimum amount within the range. The Group records anticipated recoveries under existing insurance contracts that are virtually certain of occurring at the gross amount that is expected to be collected. Legal costs are expensed as incurred. o. Recently Issued Accounting Pronouncements: Adopted in current period: 1) In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC 605”), Revenue Recognition, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. ASU 2014-09 permits the use of either a retrospective or cumulative effect transition method. The Group adopted ASU 2014-09 along with the related additional ASUs on Topic 606 (collectively, “ASC 606”) on January 1, 2018, using the modified retrospective transition method. Contracts that are substantially completed were excluded from the transition adjustment. The Group has reviewed all of its contracts with customers and has implemented the required process, data, and system changes to comply with the requirements of ASC 606. The Group did not have any material cumulative-effect adjustment as a result of the adoption of ASC 606. In addition, the adoption of ASC 606 did not have any material impact on the Group consolidated financial statement line items in the year of adoption. Not yet adopted in current period: 2) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financial or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The new guidance is effective for all periods beginning after December 15, 2018. The Group does not expect to have any material effect as a result of the adoption of this guidance. 3) In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13. This update replaces the incurred loss impairment methodology in current U.S. GAAP for recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the guidance requires to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The Group is currently evaluating the effects of this guidance will have on its consolidated financial statements. 4) In June 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-07. This ASU supersedes ASC 505-50, Equity - Equity-Based Payments to Non-Employees, and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in Topic 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. Entities should apply the amendments on a modified retrospective basis, through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the ASU is adopted, for all: 1. Liability-classified nonemployee awards that have not been settled as of the adoption date and 2. Equity-classified nonemployee awards for which a measurement date has not been established. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for periods in which financial statements have not yet been issued. The Group is currently evaluating the effects of this guidance will have on its consolidated financial statements. 5) In December 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-20. This ASU permits lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will exclude from the consideration in the contract and from variable payments not included in the consideration in the contracts all collections from lessees of taxes within the scope of this election. Additionally, the guidance updates revenue recognition related to variable payments by (1) requiring lessors to exclude from variable payments lessor costs paid directly to third parties by the lessee; and (2) requiring lessors to allocate certain variable payments to lease and non-lease components when there are changes in facts and circumstances on which the variable payment is based. When an allocation of variable payments between lease and non-lease components is made, the variable payment allocated to the lease component will be recognized as revenue in accordance with Topic 842, whereas the variable payment allocated to the non-lease component will be recognized in accordance with other applicable topics, such as Topic 606, Revenue from Contracts with Customers. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. The Group is currently evaluating the effects of this guidance will have on its consolidated financial statements. |
Restricted Deposit for Put Opti
Restricted Deposit for Put Option | 12 Months Ended |
Dec. 31, 2018 | |
Restricted Deposits [Abstract] | |
RESTRICTED DEPOSIT FOR PUT OPTION | NOTE 3 - Restricted DEPOSIT for put option: Regarding the restricted deposit in connection with the put option provided to the Controlling Shareholders, on November 13, 2017, the Company, the Controlling Shareholders and the Bank Leumi Le-Israel Trust Company Ltd., as escrow agent entered into an amendment (the “Amendment”) to the escrow agreement among such parties dated December 23, 2015, the terms of such escrow agreement are presented in Note 1.b.1. Pursuant to the Amendment, the Put Option Period commenced on January 1, 2019 and ends on March 1, 2021. On October 31, 2018 and February 19, 2019, the Controlling Shareholders undertook not to exercise their put options in whole or in part during the period from January 1, 2019 and May 1, 2019. Subsequently, on March 31, 2019, the Controlling Shareholders undertook not to exercise their put options in whole or in part during the period from May 2, 2019 and October 31, 2019. Such change resulted in a classification of the restricted deposit and the put option liability from non-current assets and non-current liabilities, respectively as of December 31, 2017 to current assets and current liabilities, respectively as of December 31, 2018. The increase relates to accrued interest recognized during 2018. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 4 - Property and Equipment, Net: Composition: December 31, 2018 2017 (U.S. dollars in thousands) Cost: Software Systems $ 1,411 $ 1,361 Vehicles 538 554 Leasehold improvements 347 347 Office furniture and equipment 122 121 Computers, electronics and related 13 13 $ 2,431 $ 2,396 Less: accumulated depreciation and amortization 1,415 1,008 Property and equipment, net $ 1,016 $ 1,388 The depreciation and amortization recorded by the Group amounted to $478 thousand, $489 thousand and $342 thousand in the years ended December 31, 2018, 2017 and 2016, respectively. |
Progress Payments in Excess of
Progress Payments in Excess of Accumulated Costs With Respect to Projects | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | |
PROGRESS PAYMENTS IN EXCESS OF ACCUMULATED COSTS WITH RESPECT TO PROJECTS | NOTE 5 - Progress payments in excess of accumulated costs with respect to Projects: a. Composition: December 31, 2018 2017 (U.S. dollars in thousands) Advanced payments from customers $ 4,488 $ 853 Accumulated costs (1,998 ) (547 ) Progress payments in excess of accumulated costs with respect to projects $ 2,490 $ 306 b. Contract assets and liabilities table: The following table presents changes in the Group's contract assets and liabilities during the years ended December 31, 2018 and 2017: Balance at beginning of year Additions Deductions Balance at end of year (U.S. Dollar in thousands) Year ended December 31, 2017: Advanced payments from customers $ 397 $ 2,546 $ (2,090 ) $ 853 Accumulated costs (548 ) (990 ) 991 (547 ) Progress payments in excess of accumulated costs with respect to projects / (Accumulated costs with respect to Projects in excess of progress payments) $ (151 ) $ 1,556 $ (1,099 ) $ 306 Year ended December 31, 2018: Advanced payments from customers $ 853 $ 3,997 $ (362 ) $ 4,488 Accumulated costs (547 ) (1,718 ) 267 (1,998 ) Progress payments in excess of accumulated costs with respect to projects $ 306 $ 2,279 $ (95 ) $ 2,490 c. Revenues as a result of changes in the contract asset and the contract liability balances: During the years ended December 31, 2018, 2017 and 2016, the Group recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods: Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Revenue recognized in the year from amounts included in the contract liability at the beginning of the year $ 253 $ 397 $ 3,649 During the year ended December 31, 2018, the Group completed three significant purchase orders for Ultimate Interception ("ULIN"). However, due to technical implementation issues and regulatory difficulties, the Group has not recognized any revenue from such sales to date. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 6 - Related Parties: a. Related parties’ employment agreements and compensation: 1. The Group entered into new employment agreements with each of its two Controlling Shareholders. One of the Controlling Shareholders is the Chairman of the Board and the Chief Executive Officer and the other is a member of the Board and the Chief Technology Officer. Each of the employment agreements will remain in effect unless terminated as described below. Pursuant to each employment agreement, the executive’s gross monthly salary is NIS 120 thousand (approximately $32 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) commencing on January 1, 2016; however, each of the executives agreed to a temporary 50% reduction in their salaries, effective from May 2017 through December 2018. Each executive is also entitled to receive social benefits. Each employment agreement provides that the executive is entitled to receive an annual performance bonus of up to NIS 360 thousand (approximately $96 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) based on annual performance goals agreed upon by the Group and the executive. These performance goals were not met for the years ended December 31, 2018, 2017 and 2016, and therefore no performance bonus was recorded or paid. Each employment agreement may be terminated by the Group or the executive upon 120 days’ prior written notice, in which case, the executive is entitled to receive salary and benefits during such 120 days and for a period of eight months thereafter. The executive will be entitled to accept new employment after the expiration of such eight-month period. In addition, the Group, by resolution of the Company’s Board, may terminate the employment agreements at any time by a written notice with cause (as defined in the employment agreements). The Controlling Shareholders’ compensation related expenses in the years ended December 31, 2018, 2017 and 2016 amounted to NIS 1,767 thousand (approximately $471 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), NIS 2,391 thousand (approximately $690 thousand based on the exchange rate of $1.00 / NIS 3.467 in effect as of December 31, 2017) and NIS 3,562 thousand (approximately $926 thousand based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016), respectively. Commencing January 1, 2019, each of Mr. Hurgin and Mr. Aurovsky will be entitled to a bonus, subject to the approval of the Company’s Board, in an amount equal to the higher of: (i) 2% of the Company’s consolidated gross profit, or (ii) 4% of the Company’s consolidated EBITDA, in each case, based on the Company’s annual audited consolidated financial statement. In the event the Company recognizes a loss and a negative EBITDA in a specific year, then, to the extent an executive is entitled to a bonus in an amount equal to 2% of the gross profit, such bonus (if applicable) will be paid through the issuance of ordinary shares. 2. Refer to Note 1.f. for the Undertaking provided by the Controlling Shareholders which was subsequently converted into the Company’s shares and warrants. 3. The Group entered into a new employment agreement with a Controlling Shareholder’s son commencing March 22, 2016 and was employed by the Group until June 20, 2016. Based on the agreement he was entitled to a monthly gross salary of NIS 10,000 (approximately $2,600 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016) and other related social benefits. |
Ordinary Shares, Preferred Shar
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
ORDINARY SHARES, PREFERRED SHARES, WARRANTS, RESTRICTED SHARES AND OPTIONS | NOTE 7 - ordinary shares, PREFERRED shares, warrants, restricted shares and options: a. Ordinary shares: The share capital as of December 31, 2018 and 2017 is composed of ordinary shares of $0.001 par value and preferred shares of $0.0001 par value, as follows: Number of shares Number of shares Authorized Issued and outstanding Authorized Issued and outstanding December 31, 2018 December 31, 2017 Ordinary shares 100,000,000 6,304,677 20,000,000 2,576,415 Preferred shares 5,000,000 - 5,000,000 - On December 27, 2017, the Company implemented a 1-for-10 consolidation of its ordinary shares with a market effective date of March 23, 2018. The effect of such consolidation was applied retrospectively for all the amount of shares, warrants, related par value and others presented in this note and elsewhere in the consolidated financial statements. The increase in the issued and outstanding ordinary shares was due to the ordinary shares issued as part of the August 16, 2018 and November 27, 2018 financing rounds (see Note 1.f. for additional information) and due to the restricted ordinary shares issued to certain employees of the Group (see section c. below for additional information). On December 24, 2018, as part of the annual general meeting resolutions, the authorized ordinary shares were increased by an additional 80,000,000 ordinary shares of $0.001 par value. b. Warrants: Since its inception, Cambridge issued 855,744 warrants which were assumed by the Company in the merger (see Note 1). Each warrant entitles its holder to purchase one ordinary share at a price of $115.0 and expires on December 17, 2018. The Company may redeem the warrants in the event that the traded ordinary share price is at least $175.00 per share (for any 20 trading days within a 30-day trading period) on a "cashless basis". On March 21, 2016, the Company received a letter from Nasdaq informing that its warrants did not meet the minimum 400 Round Lot Holder requirement for initial listing on the Nasdaq and that the Staff had determined to initiate procedures to delist the Company's warrants from Nasdaq. As the Company did not appeal this determination, the Company's warrants were delisted from Nasdaq on April 18, 2016 and since such date have traded on the "OTC Pink" market under the symbol "ABIWF". The warrant holders did not exercise their warrants and therefore those warrants expired on December 17, 2018. On August 16, 2018, the Company issued warrants to purchase 54,620 ordinary shares in connection with a financing round; such warrants were classified within the Company's equity due to the nature of their rights. See Note 1.f. for additional information. On November 17, 2018, the Company issued warrants to purchase an aggregate of 3,230,769 ordinary shares in connection with a financing round; such warrants were classified within the Company's equity due to the nature of their rights. See Note 1.f. for additional information. On January 10, 2019, the Company issued warrants to purchase an aggregate of 452,852 ordinary shares in connection with the Conversion Agreement. See Note 1.f. for additional information. On January 15, 2019, the Company issued warrants to purchase 300,000 ordinary shares in connection with the purchase of Telcostar Pte. Ltd ("Telcostar). See Note 8.c. for additional information. c. Restricted ordinary shares: On December 24, 2018, the Company issued 150,000 restricted ordinary shares to certain employees of the Group (on the date of issuance, the closing price of the ordinary shares of the Company was $1.59). The restricted ordinary shares vest in three equal installments on each of January 17, 2019, January 17, 2020 and January 17, 2021, subject to the executive's continued service with the Group through the applicable vesting date. On a "change of control" (as defined in the 2015 Long-Term Equity Incentive Plan), the restricted ordinary shares will vest immediately prior to such change of control, subject to the executive's continued service to the Group through the date of the change of control. On April 17, 2019, the Company granted each of Mr. Hurgin and Mr. Aurovsky an award of 350,000 restricted ordinary shares (700,000 restricted ordinary shares for both) under the Company's 2015 Long-Term Equity Incentive Plan and in accordance with Section 3(i) of the Israeli Income Tax Ordinance (New Version) 1961. The restricted ordinary shares vest in three equal installments on each of January 13, 2022, January 13, 2023 and January 13, 2024, subject to the Controlling Shareholders' continued service with the Group through the applicable vesting date. On a "change of control" (as defined in the 2015 Long-Term Equity Incentive Plan) the restricted ordinary shares will vest immediately prior to such change of control, subject to the executive's continued service to the Group through the date of the change of control. d. Options: On December 24, 2018, the Company granted 25,000 options to purchase 25,000 ordinary shares with an exercise price of $0.001 to one of the Group service providers. The options vest in three equal installments on each of January 17, 2019, January 17, 2020 and January 17, 2021, subject to the service provider continued providing service to the Group through the applicable vesting date. On a "change of control" (as defined in the 2015 Long-Term Equity Incentive Plan) the options will vest as of immediately prior to such change of control, subject to the executive's continued service to the Company through the date of the change of control. A summary of the Company's stock option activities and related information for the year ended December 31, 2018, is as follows: Number of Weighted Weighted Aggregate Outstanding as of December 31, 2017 - $ - - $ - Granted during the year 25,000 $ 0.001 Outstanding as of December 31, 2018 25,000 $ 0.001 9.05 $ 39,725 Exercisable as of December 31, 2018 - $ - - $ - On February 17, 2019, the Company's Board resolved to increase the number of shares authorized for issuance under the 2015 Long-Term Equity Incentive Plan ("Plan") by an additional 1,668,887 shares. e. Stock based compensation: The Stock based compensation in connection with restricted shares and options granted to the Group employees and service provider amounted to $91 thousand, $0 and $0 in the years ended December 31, 2018, 2017 and 2016, respectively, and were recorded as follows: Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Selling and marketing expenses $ 52 $ - $ - General and administrative expenses 39 - - $ 91 $ - $ - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - commitments and contingencies: a. Legal proceedings: 1) SEC Investigation As the Company disclosed in its Report on Form 6-K furnished with the Securities and Exchange Commission ("SEC") on February 16, 2017, the Company received a subpoena from the SEC. In furtherance of the investigation, the SEC issued subpoenas to Anatoly Hurgin and Alexander Aurovsky, the Company's controlling shareholders who are also officers and directors, and the SEC obtained testimony from Company officers among others. As a result of the investigation, the Company has incurred, and may continue to incur, significant legal and accounting expenses. On July 3 2018, the SEC issued a wells notice to the Company and the Controlling Shareholders. For additional information, see Note 1f. 2) Re. Ability, Inc. Securities Litigation On May 25, 2016, a purported class action lawsuit, captioned In re Ability Inc. Securities Litigation, Master File No. 16-cv-03893-VM (S.D.N.Y) was filed against the Company, Anatoly Hurgin and Avi Levin in the Southern District of New York in the United States. The complaint asserts claims pursuant to Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder on behalf of a putative class of all purchasers of the Company's ordinary shares between September 8, 2015 and April 29, 2016. The complaint broadly alleges that certain of the Company's public statements were false, and that the Company materially overstated its income and failed to disclose that it had material weaknesses in its internal controls. The complaint does not specify the amount of damages sought. On July 25, 2016, a second purported class action lawsuit was filed against the Company, Anatoly Hurgin and Avi Levin in the Southern District of New York in the United States. The complaint asserts claims pursuant to Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder on behalf of a putative class of all purchasers of the Company's ordinary shares between September 8, 2015 and April 29, 2016. The complaint broadly alleges that the Company's financial statements were false and misleading and were not prepared in conformity with GAAP, nor was the financial information a fair presentation of the Company's operations. The complaint does not specify the amount of damages sought. These two putative class actions have been consolidated into one action and co-lead plaintiffs have been appointed. In accordance with a schedule adopted by the court, co-lead plaintiffs filed an amended complaint on April 28, 2017. In the amended complaint, co-lead plaintiffs have added the Company's former director, Benjamin Gordon and the Company's auditor, BDO Ziv Haft as defendants. The amended complaint asserts claims pursuant to Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder against all defendants, a claim pursuant to Section 20(a) of the Exchange Act against Messrs. Hurgin, Levin and Benjamin Gordon, a claim pursuant to Section 11 of the Securities Act against the Company, BDO Ziv Haft and Messrs. Hurgin and Benjamin Gordon, and a claim pursuant to Section 15 of the Securities Act against Messrs. Hurgin, Levin and Benjamin Gordon on behalf of a putative class of all purchasers of the Company's ordinary shares between September 8, 2015 and April 29, 2016. The amended complaint does not specify the amount of damages sought. The complaint broadly alleges that certain of the Company's public statements were false, that it had material weaknesses in its internal controls, that its financial statements were false and misleading and were not prepared in conformity with GAAP, nor was the financial information a fair presentation of the Company's operations, and that its registration statement contained material misstatements and omissions. On August 17, 2017, the court ordered a stipulated schedule recognizing that all parties had agreed to a mediation on October 17, 2017 and all deadlines were reset until after that mediation took place. On December 21, 2017, the Company entered into a Memorandum of Understanding (the "MOU"), to memorialize an agreement in principle to settle all claims of participating class members in the class actions consolidated in the lawsuit captioned In re Ability Inc. Securities Litigation, No. 16-cv-03893 (VM), pending in the Southern District of New York (the "New York Class Action Litigation"). The MOU provides for an aggregate settlement payment of $3.0 million, which includes all plaintiffs' attorneys' fees and expenses, as well as any other class notice and administrative fees related to the resolution of the New York Class Action Litigation. On May 18, 2018, the court granted preliminary approval of the settlement and on September 14, 2018, the court granted final approval to the settlement, overruling the one objection that was filed. The settlement includes the dismissal of all claims against the Company and the named individuals in the New York Class Action Litigation. On September 17, 2018, the objector whose objection was overruled, Brian Levy, filed a notice of appeal to the United States Court of Appeals for the Second Circuit. On or about March 15, 2019, a stipulation for dismissal of the appeal was filed, and the Court entered the order dismissing the appeal. Of the $3.0 million settlement, an amount of $250,000 was funded by the Company and the remaining $2.75 million was funded by the Company's insurance proceeds and contributed by other defendants. The ultimate impact of this class action settlement on the Levy Litigation (Case No. 2015-CA-003339), Pottash Litigation (Case No. 502016CA013823), Hammel Litigation (Case No. 50-2018-CA-000762-MB-AG) and the Ladragor Litigation (C.A. 8482-05-16), each as further described herein, has yet to be determined, however, some or all of the claims raised in such other actions may be deemed to be resolved, settled and disposed of as part of such class action settlement. The Company intends to continue to attempt to settle and resolve the litigation. There is no assurance that the court will finally approve the settlement. In connection with the entry into of the MOU, the Company entered into an agreement with its insurer (the "Discharge Agreement"), pursuant to which the Company agreed to discharge the insurer from liability with respect to any U.S. claims (excluding the Ladragor Litigation in Israel) in consideration for an aggregate settlement amount of $5.0 million, of which $2.5 million is to be used for settlement of the New York Class Action Litigation and the remaining amount is to be used to cover various defense and legal costs. Accordingly, no insurance proceeds will be available for any U.S. claims other than with respect to the settlement of the New York Class Action Litigation. The Company did not record any provision with respect to this litigation. 3) Pottash Litigation On December 13, 2016, a complaint, captioned Pottash v. Benjamin Gordon et. al., Case No. 50-2016-CA-013823, was filed in the 15th Circuit, Palm Beach County, Florida in the United States, against the Company, its former director, Benjamin Gordon, BG Strategic Advisors, LLC, Cambridge Capital, LLC and Jonathan Morris, in his capacity as trustee of the Gordon Family 2007 Trust. On January 23, 2017, the plaintiff filed an amended complaint. On March 2, 2017, the Company filed a motion to dismiss all of the claims asserted against it in the amended complaint. On the same day, Benjamin Gordon and BG Strategic Advisors also filed motions seeking the dismissal of the amended complaint in its entirety. On November 27, 2017, the plaintiff filed a second amended complaint against the Company, Benjamin Gordon and Jonathan Morris. The complaint alleges violations of Florida State securities laws, common law fraud, negligent misrepresentation and conspiracy. On January 17, 2018, the Company filed a motion to dismiss seeking the dismissal of all claims asserted against it on various legal grounds. The co-defendants also filed motions seeking dismissal of the second amended complaint. Based on the arguments for dismissal, the plaintiff elected to amend the allegations and the plaintiff filed his third amended complaint on August 17, 2018. The Company then filed its motion to dismiss directed at the third amended complaint on October 1, 2018. The Court held a hearing on the Company's motion to dismiss, granted the Company's motion to dismiss without prejudice, and provided the plaintiff with the opportunity to file a further amended complaint. Thereafter, the plaintiff filed his fourth amended complaint on March 14, 2019, and the Company is in the process of preparing its responsive filing in connection with the fourth amended complaint, and the Company intends to continue vigorously defend against this action. It is impossible to predict the probable outcome of these legal proceedings at this time in light of the relatively early stage of the proceedings. The Company did not record any provision with respect to this litigation. 4) Hammel Litigation On January 19, 2018, a complaint, captioned Hammel v. Benjamin Gordon et. al (Case No. 50-2018-CA-000762-MB-AG), was filed in the 15th Circuit, Palm Beach County, Florida in the United States, against the Company, Benjamin Gordon and Jonathan Morris. The complaint alleges that the defendants, through a series of misrepresentations and omissions, induced the plaintiff, Robert Hammel, to invest in the stock of Cambridge. Plaintiff alleges to have lost more than $1.6 million due to the defendants' conduct. In a summons issued in February 26, 2018, the Company was also named as one of the defendants. The Company filed a motion to dismiss the complaint. Based on the arguments for dismissal, the plaintiff elected to amend the allegations and the plaintiff filed his third amended complaint on August 17, 2018. The Company filed its motion to dismiss directed at the third amended complaint on October 1, 2018, and the Company intends to vigorously defend against this action. Given that these proceedings are in the preliminary stage, the timing or outcome of this matter cannot be predicted at this time. The Company did not record any provision with respect to this litigation. 5) Patent Infringement Litigation On October 27, 2015, ACSI received a notice alleging that its GSM interception and decryption systems allegedly fall within the claims of an Israeli patent owned by the claimant. The notice demands an accounting of all such products manufactured, exported, sold or otherwise commercialized by ACSI and/or any entity on its behalf. On November 12, 2015, a lawsuit, captioned Dr. Elad Barkan et al. v. ACSI et al. C.C. 29551-11-15, alleging patent infringement, violation of a non-disclosure agreement, trade secret misappropriation and unjust enrichment, was filed with the Central District Court in Israel by a company and an individual originally against ACSI and its controlling shareholders at that time. The amount sought in the lawsuit for registration fee purposes is NIS 5.0 million (approximately $1.3 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), however the plaintiffs have not yet quantified the amount of the compensation demanded. Furthermore, the plaintiffs demanded to immediately cease any infringement of the patent as well as any further use of the claimed technology, including the further manufacture, export, sale or marketing of the alleged infringing products. On April 5, 2016, ACSI and its Controlling Shareholders filed a statement of defense, and on April 13, 2016 a pre-trial hearing was held. On May 23, 2016, the plaintiffs filed a petition to add the Company, Ability Limited, a company wholly-owned by Anatoly Hurgin, and ASM as defendants and to amend the statement of claim. The parties then agreed to appoint a mediator in an attempt to settle the dispute out of court, and agreed, with the approval of the court, on a stay of proceedings until September 2016. However, the parties did not reach an agreement by that time. On October 9, 2016, upon the application of the original defendants and with the plaintiffs' consent, the court decided to stay the proceedings until a decision is handed down on a related pending application to the Israeli Patent Registrar to revoke the patent in dispute. On August 23, 2017, the Deputy Patent Registrar decided to reject the revocation application, and on August 28, 2017 the plaintiffs informed the court of the deputy registrar's decision, and requested to resume the proceedings and instruct the original defendants (the Company and its former controlling shareholders) to file their response to the petition to join the Company, Ability Limited and ASM as defendants (a response was filed on September 25, 2017, and a rejoinder was filed by the plaintiffs on October 22, 2017). On December 25, 2017, the original defendants filed a petition to order the plaintiffs to deposit a guarantee as security for costs of the trial (a response was filed on January 14, 2018, and a rejoinder was filed on January 17, 2018). A second pre-trial hearing was held on January 17, 2018, in which the court decided that the plaintiffs were allowed to amend the statement of claim without having the consent either of the original defendants or of the Company, Ability Limited and ASM to the content of the amended statement of claim, and without waiving the right to request dismissal of the amended suit (partially or completely). The court also decided that the petition to order the plaintiffs to deposit a guarantee as security for costs will be adjudicated after the statement of case is amended. On March 15, 2018 the plaintiffs filed an amended statement of claims against the original defendants, as well as against the Company, Ability Limited and ASM. On May 30, 2018 the defendants filed an amended statement of defense along with two petitions: (1) a petition for issuing a decision on the petition to order the plaintiffs to deposit a guarantee as security for costs: and (2) a petition for dismissing the case in limine. The plaintiffs filed their responses to the two petitions on June 26, 2018 and the defendants filed rejoinders on July 8, 2018. On July 11, 2018 and July 18, 2018 two pre-trial hearings were held, and the court decided to order the plaintiffs to deposit a guarantee of NIS 100,000 (approximately $26,700 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) as a security for costs. In addition, the defendants were asked by the court to reconsider their position regarding the petition for dismissing the case in limine. On July 24, 2018 the parties jointly informed the court that: (1) without waiving any contentions or rights, the defendants would not insist on the petition for dismissing the case in limine, and the contentions raised in the petition for dismissing the case in limine would be decided in the final judgement or in any interim decision; (2) they agree to appoint again a mediator (Adv. Reuven Behar) in an attempt to settle the dispute out of court via mediation limited in time duration, not longer than six months; and (3) to set dates for pre-trial procedures (discovery and interrogatories), for a pre-trial hearing and for filing evidence. Accordingly, on July 24, 2018 the court decided to dismiss the petition for dismissing the case in limine without mutually waving any contentions or rights and set dates for discovery and for exchanging of and replying to interrogatories (originally the entire procedure should have been completed by the end of October 2018, and later it was extended to December 2018). On August 6, 2018 the parties jointly applied to the mediator, Adv. Behar, and a preliminary meeting with the mediator took place on September 2, 2018 and the mediation process is ongoing. On December 17, 2018, the parties exchanged discovery affidavits and interrogatories. On February 20, 2019, a pre-trial hearing was held. The court decided, in accordance with the consent of the parties, to extend the timetable for the pre-trial procedures: (1) completion of discovery and replying to interrogatories by March 31, 2019; (2) filing petitions concerning the pre-trial procedures by May 2, 2019; and (3) filing responses to the petitions by May 23, 2019. A pre-trial hearing was set for June 24, 2019. The defendants filed an amended statement of claims on February 27, 2019. On April 4, 2019, after a short extension was agreed on and was approved by the court, the parties exchanged replies to interrogatories and complementary discovery affidavits. The Company intends to continue vigorously defend against this action. The Company believes that the suit's probability of success, as filed, is less than even, and the Company intends to vigorously defend against it. In addition, after the Deputy Patent Registrar decided to reject the revocation application on August 23, 2017, the patentee, Dr. Barkan, filed an amended version of certain claims on September 28, 2017. The amendment was subject to opposition by third parties until December 28, 2017. On December 27, 2017, the Company filed with the Patent Registrar an opposition to the request to have the specification of the patent amended. On March 15, 2018, the Company filed its statement of claims, arguing that the request should be dismissed for various reasons. Dr. Barkan filed his statement of claims on June 14, 2018. On November 28, 2018, ACSI filed its evidence (an expert opinion). On December 5, 2018, Dr. Barkan informed that he waived his right to file evidence, and later informed that he did not intend to cross-examine the expert on behalf of ACSI, but on February 11, 2019, the deputy registrar decided to summon the expert on behalf of ACSI to testify. On February 14, 2019, a hearing took place. On February 20, 2019, the deputy registrar decided to dismiss ACSI's opposition and decided that ACSI will bear costs in a total sum of NIS 33,000 (approximately $8,800 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). On March 19, 2019, ACSI filed an appeal on the deputy patent registrar's decision to the District Court of Tel Aviv (C.A. 45733-03-19). The Company did not record any provision with respect to this litigation. 6) Ladragor Litigation On May 3, 2016, the Company was served with a lawsuit and a motion for the certification of the lawsuit as class action, captioned Ladragror v. Ability Inc. et al. C.A. 8482-05-16, in the Tel Aviv District Court in Israel, filed, against the Company, Anatoly Hurgin, Alexander Aurovsky, and Benjamin Gordon and Mitchell Gordon. The claim alleges, among other things, that the Company misled the public in the Company's public filings with regard to its financial condition and included misleading information (or omitted to include relevant information) in its financial statements published in connection with the January 12, 2016 listing of shares for trading on the Tel Aviv Stock Exchange. In addition, the claim alleges that the defendant directors breached their fiduciary duty under Israeli law towards the Company and its public shareholders. The claim alleges that the plaintiff suffered personal damages of NIS 137.7 (approximately $36.7 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), and estimates that its shareholders suffered damages of approximately NIS 23.3 million (approximately $6.2 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). On September 15, 2016, the Company filed a motion for a stay of proceedings, due to other pending class action lawsuits in the United States that also relate (among other things) to the stated causes of action and based on similar claims. The Court required the parties to update the Court on the status of the United States class actions by March 15, 2017. On March 15, 2017, the plaintiff filed an update and requested that proceedings be stayed until the completion of the internal investigation of the audit committee. On the same day, the Company filed a separate update with respect to the United States class actions, together with a motion for a stay of proceedings pending resolution of the consolidated United States class actions. On March 16, 2017, the Court held that the plaintiff must respond to the motion to stay proceedings pending resolution of the consolidated United States class actions. On March 26, 2017, the plaintiff filed a partial response, requesting an extension until May 15, 2017 to file a full response, alleging that the publication of the Company's annual financial statements, together with the findings of the internal investigation, would affect its position on its motion to stay proceedings. On May 23, 2017, the Court granted the plaintiff the requested extension. On May 15, 2017, the plaintiff filed a motion asking for an additional three-month extension to file a full response, among other things, as the Company had not filed its annual financial statements or published the findings of the internal investigation. On August 14, 2017, the Company and Messrs. Hurgin and Aurovsky filed a notice regarding their counsel substitution. In light of this, the judge decided on August 27, 2017 to recuse herself from the case. On August 21, 2017, the plaintiff filed a motion and an updated notice in which he claimed that the Company had not yet published the report of the internal investigation, and hence the reasons for granting him a continuance to file his response to the motion to stay of proceedings are still relevant. The plaintiff also informed the Court that in the U.S. proceedings, the parties agreed to mediation, and the mediation meeting was scheduled in October 2017. The plaintiff asked the Court to file an update notice in 90 days. On August 28, 2017, the Court ordered the parties to file an update notice on September 28, 2017. On September 28, 2017 and November 7, 2017, the plaintiff, the Company, and Messrs. Hurgin and Aurovsky updated the Court that the mediation process in the U.S. was still pending. On November 8, 2017, the Court ordered the parties to file an update notice in 90 days. On February 7, March 7, April 12, May 8, June 12, July 10, August 9, October 10, October 31, November 14, November 28, December 12, December 31, 2018 and on January 14, January 28, February 11, February 25, March 11 and March 25, 2019, the parties updated the Court that they are holding negotiations in order to settle the case, and requested extensions of time for filing the updated notice. The parties are required to file the settlement agreement, if signed, and a motion to approve the settlement, on April 8, 2019. The Company intends to attempt to settle and resolve the litigation. If the case does not settle, the Company intends to continue vigorously defend against this action. Given that the proceeding is currently suspended, the timing or outcome of this matter cannot be predicted at this time. As referenced above in Re. Ability Inc. Securities Litigation, the Ladragor Litigation is not subject to the Discharge Agreement. The Company did not record any provision with respect to this litigation. 7) Mitchell Gordon v. Ability Inc. On June 22, 2018, Mitchell Gordon, the former Chief Financial Officer of Cambridge, filed a Summons with Notice (the "Notice"), against the Company in the Supreme Court of the State of New York, New York County (Index No. 653124/2018). In the Notice, Mitchell Gordon describes the nature of his claims as ones for breach of contract and unjust enrichment against the Company based on the Company's alleged failure to indemnify him under the terms of the Amended and Restated Memorandum and Articles of Association of Ability Inc., adopted by special resolution and passed with effect on December 23, 2015. Mitchell Gordon purports to seek compensatory damages in the amount of at least $325,000. On January 8, 2019, the Court entered an Order extending Mitchell Gordon's time to serve the Summons with Notice upon us until May 8, 2019. ACSI recorded a provision of $325,000 as of December 31, 2018, even though, intends to vigorously defend against this action. 8) Beazley Insurance Company Inc. v. Benjamin Gordon v. XL Insurance Company SE (XL Catlin), and Ability Inc. On or about July 31, 2018, Benjamin Gordon filed a third-party complaint asserting a breach of contract action against XL Insurance Company SE, and the Company for alleged failure to defend and indemnify Benjamin Gordon with respect to underlying actions against Gordon arising out of Cambridge's merger with ACSI. In the third-party complaint, Benjamin Gordon is alleging that we breached the parties' Merger Agreement by failing to advance fees and failing to indemnify him for defense fees and costs. Gordon is seeking recovery of monetary damages, attorneys' fees and costs. On September 17, 2018, the Company filed a Motion to Dismiss, seeking the dismissal of all claims asserted against us on various legal grounds. On October 19, 2018, Gordon filed a Response to the Motion to Dismiss and on October 30, 2018, the Company filed a Reply. Based on its Reply, and without waiting for a ruling from the Court, on November 30, 2018, Gordon filed a Notice of Voluntary Dismissal. On December 4, 2018, the Court terminated the Company further involvement in this complaint. 9) Levy Litigation On October 15, 2015, plaintiff Brian Levy, purportedly on behalf of himself and all others similarly situated, filed a first amended class action and derivative complaint against Cambridge Holdco Corp., ACSI, the individual members of the board of directors of Cambridge Capital Acquisition Corp. ("Cambridge"), and Cambridge, and the Company as nominal defendants in case number 2015CA003339 in the Circuit Court of the 15th Judicial Circuit in Palm Beach County, Florida. The complaint generally alleged, among other things, that the members of the Cambridge board of directors breached their fiduciary duties to Cambridge stockholders by approving the contemplated merger with ACSI, and that ACSI was aiding and abetting the Cambridge board of directors in the alleged breach of their fiduciary duties. The action sought injunctive relief, damages and reimbursement of fees and costs, among other remedies. On February 17, 2016, ACSI filed a motion and supporting memorandum of law to dismiss the plaintiff's amended complaint on the grounds that the Court lacked personal jurisdiction over ACSI; the derivative aiding and abetting claim was extinguished by the closing of the Business Combination and the claims against ACSI are insufficiently pleaded. On September 15, 2016, the Court granted the defendants' motion to dismiss in its entirety without prejudice, and the Judge dismissed the amended complaint. However, the court provided the plaintiff with 45 days within which to file a further amended complaint. On October 22, 2016, a second amended complaint was filed by the plaintiff. On January 17, 2017, the defendants filed a motion to dismiss the second amended complaint on multiple grounds, including various pleading deficiencies that the plaintiff has failed to adequately correct. On March 9, 2017, the plaintiff filed a response to the motion to dismiss. On June 21, 2017, the Judge entered an order (the "June 21 Order") granting a partial motion to dismiss as to the counts against ACSI due to lack of personal jurisdiction over ACSI. ACSI was therefore dismissed from the case without prejudice, and it is unclear at this stage whether the plaintiff will attempt to bring ACSI directly back into the action in the future. On the other hand, pursuant to the Judge's ruling, the Company still remains as a necessary party and named defendant in the case. In the June 21 Order, the Judge also partially denied the motion to dismiss the second amended complaint, and the purported class action and derivative claims against the individual defendants for alleged breach of fiduciary duties, failure to disclose and ultra vires acts still remained pending. On July 21, 2017, the Company and each of the individual defendants filed their answer and affirmative defenses raising numerous substantive and legal defenses to the alleged claims set forth in the second amended complaint. On August 7, 2017, plaintiff's counsel filed a motion for class certification and incorporated memorandum of law. The Company and defendants filed papers in opposition to such motion, and on March 13, 2018, the Court entered an order denying Plaintiff filed his Verified Third Amended Class Action and Derivative Complaint on April 12, 2018, asserting the same claims set forth in the Second Amended Complaint, and revising the proposed class definition. On May 2, 2018, plaintiff filed his Renewed Motion for Class Certification and Incorporated Memorandum of Law. On June 27, 2018, the defendants filed a Motion to Dismiss the Third Amended Complaint seeking dismissal of the claims asserted on multiple grounds. On September 11, 2018, defendants filed their formal memorandum in opposition to plaintiff's renewed motion for class certification. The Court held an evidentiary hearing on the Renewed Motion for Class Certification on September 18, 2018 After the evidentiary hearing and oral argument, on October 16, 2018, the Judge entered the formal Order Denying plaintiff's Renewed Motion for Class Certification for multiple reasons, including the failure of plaintiff to satisfy the various requirements necessary for class certification and the failure of plaintiff to establish that he has any valid individual direct claim in light of the final class action settlement in New York and in light of plaintiff's decision to opt-into the New York class action. In the October 16, 2018 order, the Judge further ruled that the court will proceed to dismiss Counts I, II, III and VI of the Third Amended Complaint with prejudice, subject only to the resolution of any appeal filed by plaintiff challenging the final judgement in the New York federal court. This case has now been formally resolved, and pursuant to the Joint Motion for Entry of Stipulated Order of Dismissal filed by counsel for the parties, the Court entered the Stipulated Order of Dismissal on March 6, 2019, wherein the Court dismissed all counts of the Third Amended Complaint with prejudice as to the plaintiff Brian Levy. ACSI recorded a recorded $200,000 provision as of December 31, 2018 with respect to this litigation and paid such amount on March 5, 2019. 10) Israeli Arbitration In January 2015, ACSI, Messrs. Anatoly Hurgin and Alexander Aurovsky, and a third-party plaintiff entered into an arbitration process, following a claim filed with the Tel Aviv Magistrates Court in October 2014 by the plaintiff against ACSI and its former shareholders, claiming a right to review ACSI's accounts and reserving the right to file a monetary claim. On September 14, 2016, the plaintiff presented the defendants with a settlement proposal for the resolution of all claims against the defendants and any entity affiliated with them in exchange of the full and final payment of an amount of NIS 8,450,000 (approximately $2,200,000 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016), which was subsequently approved by the board of directors of the Company. On or about the time of the board meeting at which (among things) the settlement proposal was approved, the plaintiff made claims that the proposal did not include VAT and that a settlement agreement has not been entered into between the parties. This dispute was referred to a new arbitration process and on February 16, 2017 a settlement was reached, according to which the parties agreed that the plaintiff would receive a total of NIS 9,527,000 (approximately $2,480,000 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016), including VAT (which is equal to NIS 8,142,735 plus VAT). Thereafter, on February 20, 2017, such settlement was approved by the arbitrator and was made an arbitral award. Following the arbitral award and according to the determination of the Company board of directors, the Company and Messrs. Hurgin and Aurovsky appointed an independent legal expert acting as an arbitrator to make a final determination as to the allocation of the settlement amount between the Company and Messrs. Hurgin and Aurovsky. On March 30, 2017, and as clarified on April 13, 2017, the legal expert determined that Messrs. Hurgin and Aurovsky shall pay 30% of the settlement amount excluding VAT, and the Company shall be required to pay 70% of the settlement amount, and the entire |
Revenue Classified by Geographi
Revenue Classified by Geographical Area | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Classified by Geographical Area [Abstract] | |
REVENUE CLASSIFIED BY GEOGRAPHICAL AREA | NOTE 9 - rEVENUE CLASSIFIED BY GEOGRAPHICAL AREA: Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Asia $ 495 $ 555 $ 9,230 Latin America - 754 5,320 Europe 11 210 1,750 Israel* 33 1,325 - Other - 128 208 $ 539 $ 2,972 $ 16,508 * Sales in Israel during the years ended December 31, 2018, 2017 and 2016 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 6%, 45% and 0% of revenues during such periods, respectively. The majority of the Company’s revenues are project based. Refer to Note 12 for revenues from the major customers during the years ended December 31, 2018, 2017 and 2016. |
General and Administrative Expe
General and Administrative Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
GENERAL AND ADMINISTRATIVE EXPENSES | NOTE 10 – GENERAL and administrative expenses: Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Legal fees* $ 3,756 $ 2,741 $ 3,849 Professional services fees 1,532 2,126 2,821 Settlement in connection in one of the legal proceedings (see Note 8.a.10.) - - 1,664 Salaries and related expenses 518 620 681 Impairment of fixed assets - - 114 Stock-based compensation 39 - - Others 658 529 533 $ 6,503 $ 6,016 $ 9,662 * The 2017 legal fees include a deduction of $2 million legal fees refund in connection with the 2016 directors and officers insurance policy based on a settlement agreement. Such amount was received on February 23, 2018 and presented within other receivables as of December 31, 2017. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 - income taxes: a. Tax rates The Israeli corporate tax rates applicable to ACSI and ASM: 2016 – 25% 2017 – 24% 2018 and thereafter – 23% b. “Approved Enterprise” status ACSI was granted an ‘approved enterprise’ status for the 10 years ended December 31, 2014, under the Israeli Law for the Encouragement of Capital Investments, 1959 (the “Encouragement Law”). The tax benefit is a reduced corporate income tax rate on non-distributed income generated in approved areas (“Approved Income”). Distributed Approved Income is subject to 25% corporate income tax at the company level and 15% withholding income tax at the shareholder level. As of December 31, 2011, upon a tax assessment by the Israel Tax Authority, all of the accumulated Approved Income was distributed as dividends to the Controlling Shareholders and the applicable income tax was applied. As ACSI distributes its Approved Income to its Controlling Shareholders, a deferred tax liability was recorded on the non-distributed Approved Income as generated, on the difference of the reduced corporate income tax rate applied and the regular corporate tax rates, as well as related deferred income tax expenses. On May 30, 2016, ACSI and the Israel Tax Authority signed a tax assessment agreement for the three years ended December 31, 2014 according to which all of the accumulated Approved Income was distributed as dividends to the Controlling Shareholders and the applicable income tax were applied. As part of that tax assessment ACSI was also required to pay $1.1 million in excess accrued tax provision for that period; such additional tax was recorded as part of the 2016 income tax. ACSI has final tax assessments for the years up to 2015 inclusive. c. “Preferred Enterprise” status: Commencing January 1, 2015, ACSI has elected the “Preferred Enterprise” program under the amendment of the Encouragement Law, whereby ACSI is subject to corporate income tax rate on non-Preferred Income and 16% reduced income tax rate on its Preferred Income generated in all areas other than Development Area A. As part of the tax assessment for the three years ended December 31, 2014 as mentioned above, it was agreed that ACSI will be subject to a 14.6% (based on blended tax rates) for the tax years 2015 and 2016 and a reduced tax rate, not yet determined (but up to 16%) in the tax year 2017 and thereafter. d. Net operating losses carryforwards: As of December 31, 2018, ASCI has incurred operating and capital accumulated losses for tax purposes in the amount of NIS 114.4 million (approximately $30.5 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) and NIS 349 thousand (approximately $93 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), respectively and ASM has incurred operating accumulated losses for tax purposes in the amount NIS 329 thousand (approximately $88 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). Those losses may be carried forward and offset against taxable income for an indefinite period. e. Income tax expense: Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Current $ - $ - $ 32 Previous year - - 1,054 Income tax expense $ - $ - $ 1,086 f. Deferred income taxes: In assessing the realization of deferred tax assets, the Group considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. As described in Note 1.f. regarding the substantial doubt about the Group’s ability to continue as a going concern, the Group applied a full valuation allowance for its deferred tax assets. Composition: December 31, 2018 2017 (U.S. dollars in thousands) Net and comprehensive loss $ 4,927 $ 3,271 Temporary differences of expense in connection with employee benefits 34 41 Deferred tax assets before valuation allowance 4,961 3,312 Valuation allowance (4,961 ) (3,312 ) $ - $ - g. Reconciliation of income tax expenses: As the Company and ASM stand-alone net results during the years ended December 31, 2018, 2017 and 2016 are relatively immaterial, the Group’s overall effective tax rate is attributable to Israeli income tax and therefore a reconciliation between the theoretical income tax, assuming corporate tax rates and the actual income tax expenses as reported in the consolidated statements of comprehensive loss is calculated based on the Israeli corporate tax rates and is as follows: Year ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Income (loss) before income tax $ (10,189 ) $ (9,111 ) $ (6,967 ) Israeli corporate income tax rate 23 % 24 % 25 % Theoretical income tax benefit (2,343 ) (2,187 ) (1,742 ) Valuation allowance for deferred tax 2,343 2,187 1,109 Tax rates differences - - 725 Taxes in respect of previous year - - 1,054 Other, net - - (60 ) Income tax expense $ - $ - $ 1,086 h. Uncertain tax positions: The following is a roll-forward of the total amounts of the Group’s unrecognized tax benefits at the beginning and at the end of the years ended December 31, 2018, 2017 and 2016: Year ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Balance at beginning of year $ - $ - $ - Increase as a result of tax position taken in prior period - - 1054 Decrease due to settlement with the Israeli tax authorities - - (1054 ) Balance at end of year $ - $ - $ - |
Concentration Risk
Concentration Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION RISK | NOTE 12 - CONCENTRATION Risk: Major customers and vendors are defined as those from whom the Group derives at least 10% of its revenues and cost of revenues, respectively. During the years ended December 31, 2018, 2017 and 2016, revenues from the major customers reflected 86% (two customers), 89% (three customers) and 79% (two customers) of the total consolidated revenues, respectively. During the years ended December 31, 2018, 2017 and 2016, the cost of revenues from major vendors reflected 0% (none vendors), 17% (one vendor) and 72% (three vendors) of the total consolidated cost of revenues, respectively. As of December 31, 2018 and 2017, accounts receivables from one of the Group’s customers represented 98% and 99% of the total accounts receivables, respectively. Both amounts represent one project that was substantially completed on 2015. The Company periodically evaluates its account receivables for impairment, and reserves accordingly. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 - Subsequent events: a. On January 10, 2019, the Group completed the Conversion Agreement with the Controlling Shareholders. See Note 1.f. for additional information. b. On January 15, 2019, the Company purchased the outstanding shares of Telcostar. See Note 8.c. for additional information. c. On February 17, 2019, the Company's number of shares authorized for issuance under the Plan was increased. See Note 7.d. for additional information. d. On March 17, 2019, the Company disclosed in a Report on Form 6-K furnished with the SEC on March 27, 2019, that on March 17, 2019, the IMOD informed the Company that it has ordered the suspension of the licenses granted to ASM under the 2007 Law. In addition, on March 20, 2019, the IMOD decided to suspend the licenses which were granted to ASM and ACSI under the Order for the Supervision of Goods and Services (Engagement in Encryption Items), 1974. The abovementioned decisions arose in the course of an investigation which is ongoing, the details of which are subject to a gag order. On March 26, 2019, the IMOD made public the existence of the investigation and the suspensions. The Company is reviewing the decisions of the IMOD and has limited information about the reasons for the IMOD decisions and the investigation. Based upon the limited information available to the Company at present, the Company believes that the decisions of the IMOD will have a limited impact on future orders. As of the date of this financial statements, the Company is not aware of any financial implication that may result in recording a provision in its books associated with the investigation mentioned above. e. On April 17, 2019, the Company issued each of its Controlling Shareholders an award of 350,000 restricted ordinary shares (700,000 restricted ordinary shares for both) under the Company's 2015 Long-Term Equity Incentive Plan and in accordance with Section 3(i) of the Israeli Income Tax Ordinance (New Version) 1961. See Note 7.c. for additional information. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation | a. Basis of presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Group’s financial position, results of operations, changes in shareholders’ equity and cash flows for the periods presented. The Reverse Merger was accounted for as a reverse merger whereby the Company was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on ACSI comprising the ongoing operations of the combined company, ACSI’s senior management comprising the senior management of the combined company, and that the former shareholders of ACSI are the controlling shareholders of the Company after the Reverse Merger. The Reverse Merger was considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Reverse Merger was treated as the equivalent of ACSI issuing shares for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Merger are those of ACSI, and therefore the historical consolidated financial statements presented are the consolidated financial statements of ACSI and the ordinary shares and the corresponding capital amounts pre-merger have been retroactively restated as ordinary shares reflecting the exchange ratio in the Reverse Merger. |
Principles of consolidation | b. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries, ACSI and ASM. All intercompany accounts and transactions have been eliminated in the consolidation. |
Use of estimates | c. Use of estimates: The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Foreign currency | d. Foreign currency: The currency of the primary economic environment in which the operations of the Group is conducted is the U.S. dollar (“dollar” or “$”); thus, the dollar is the functional currency of the Group. Therefore, the Group’s transactions and balances denominated in dollars are presented at their original amounts, while non-dollar transactions and balances have been re-measured to dollars and the relating gains and losses are reflected in the statements of comprehensive loss as financial income or expenses, as appropriate. All amounts are presented in dollars, unless otherwise indicated, and are rounded to the nearest thousand. |
Revenue recognition | e. Revenue recognition: Effective January 1, 2018, the Group adopted a new accounting standard related to the recognition of revenue in contracts with customers. The Group did not have any material cumulative-effect adjustment as a result of the adoption of ASC 606. In addition, the adoption of ASC 606 did not have any material impact on the Group consolidated financial statement line items in the year of adoption. The Group generates revenues from sales of products, which include hardware, software, connection to supportive infrastructure, integration services, training and warranty, as well as revenues from Software as a Service (“SaaS”). The Group sells its products (the “Products”) and provides services (the “Services”) directly to end users and resellers and also participates as a subcontractor of prime contractors in joint projects and as a prime contractor in projects with resellers (the “Projects”). The Group determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a customer. ● Identification of the performance obligations in the contract. ● Determination of the transaction price. ● Allocation of the transaction price to the performance obligations in the contract. ● Recognition of revenue when, or as, the Group satisfies a performance obligation. As a general point, the Group applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Group assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Group then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Projects: Revenues from Projects are recognized along the project period, as applicable, and on a final acceptance date, once such acceptance is deemed substantive. Under such method, costs are accumulated on the balance sheet until final acceptance is received. Similarly, amounts billed to customers are also deferred until final acceptance is received. To the extent that the amount of accumulated costs exceeds the amount of advance (or progress) payments received or billed by the Group, the excess is reflected on the balance sheet as a current asset, separated from inventory. To the extent that the amount of advance (or progress) payments received or billed by the Group exceeds the amount of accumulated costs, the excess is reflected as a liability on the balance sheet. In instances where revenues are derived from sales of third-party vendors’ products or services, revenues are recognized on a gross basis and the related costs are recognized within cost of revenues, when the Group has the following indicators for gross reporting: (i) it is the primary obligor of the sales arrangements; (ii) it is subject to inventory risks of physical loss; (iii) it has latitude in establishing prices; and (iv) it has discretion in suppliers’ selection and assumes credit risks on receivables from customers. Products and Services: Revenues from sales of Products of which the final acceptance of the product is specified by the customer, and the acceptance is deemed substantive, are recognized when the Group has delivered the Products to the customer and received final acceptance, the revenue can be reliably measured and collectability of the receivables is reasonably assured. The revenues are deferred until the acceptance criteria have been met. Revenues from sales of Services are recognized ratably in the period in which the services are rendered (connection to supportive infrastructure is generally over one year). The Group provides a one-year warranty for the majority of its Products. Based on the Group’s experience, the provision is de minims. SaaS Revenues: The Group’s SaaS multiple-element arrangements are typically comprised of subscription and support fees from customers accessing the Group’s software and set-up fees. The Group does not provide the customer the contractual right to take possession of the software at any time during the hosting period under these arrangements. Typically, the support and set up fees are incidental to the full arrangement. Accordingly, the Group recognizes revenue for subscription, support services and set up fees over the arrangement period originating when the subscription service is made available to the customer and the contractual hosting period has commenced. In arrangements that comprise of usage based fees, revenues are recognized in the period in which subscribers use the related services. |
Advertising costs | f. Advertising costs: Advertising costs are expensed as incurred. In the years ended December 31, 2018, 2017 and 2016, advertising expenses were $69 thousand, $53 thousand and $24 thousand, respectively. |
Related parties | g. Related parties: Related parties include the Controlling Shareholders and entities controlled by them. |
Fair value measurements | h. Fair value measurements: Fair value is defined as the price that would be received by selling an asset or paid to transfer a liability (i.e. the ‘exit price’) in an arms’ length transaction between willing market participants at the measurement date. The applicable financial accounting rules establish a hierarchy for inputs used in measuring fair value. The hierarchy is divided into three levels based on the reliability of inputs: Level 1 Level 2 Level 3 The Group’s financial assets and liabilities as of December 31, 2018 and 2017 are measured based on Level 1 inputs. |
Inventory | i. Inventory: The inventory items consist of purchased systems and are stated at the lower of cost or market. Cost is determined using the “First-In, First-Out” method of inventory accounting. The valuation of inventory items requires the Group to make estimates regarding excess or obsolete inventories. The purchased systems are utilized typically for one of the following purposes: (i) future projects; (ii) demo; and (iii) spare parts for installed systems. The first utilization suggests that the systems should be classified as inventory while the second and third suggest it should be classified as property and equipment. In order to reflect those utilizations appropriately between the inventory and property and equipment line items, the Group performed an aggregated analysis which suggested that such systems should be classified as inventory for the first year from purchase date, on such date tested for impairment and then classified to property and equipment and amortized over four years from that date, see also section j. below for the amortization period. |
Property and equipment, net | j. Property and equipment, net: Property and equipment are stated at cost, less accumulated depreciation and amortization. Upon the retirement or disposition of property and equipment, the related costs and accumulated depreciation and amortization are removed and any related gain or loss is recorded in the statements of operations and comprehensive loss. Repairs and maintenance that do not extend the life, or improve an asset are expensed in the periods incurred. The Group evaluates its property and equipment for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment exists if the carrying amounts of such assets exceed the estimates of future net undiscounted cash flows expected to be generated by such assets. Should impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s estimated fair value. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: % Useful life (years) Software systems (from classified date, see also section i. above) 25 4 Vehicles 15 7 Leasehold improvements 10-20 5-10 Office furniture and equipment 7-10 10-14 Computers, electronics and related 15-33 3-7 |
Income taxes | k. Income taxes: Deferred tax asset and liability accounts’ balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Group accounts for deferred tax on non-distributed income that are subject to income tax once distributed and when there is an intent to distribute them. The Group applies the two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. |
Accounting for stock-based compensation | l. Accounting for stock-based compensation: The Group accounts for share based compensation in accordance with ASC No. 718, “Compensation - Stock Compensation” that requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The Company recognizes compensation expenses for the value of its awards granted based the guidance established in ASC No. 718. |
Loss per share | m. Loss per share: The Group calculates basic earnings or loss per share by dividing net income or loss by the weighted-average number of ordinary shares outstanding during the year. However, the outstanding shares subject to put options were excluded, consistent with the accounting treatment of a put option liability. Potential ordinary shares are included in the computation of diluted earnings per share when their conversion decreases earnings per share from continuing operations. Basic and diluted loss per ordinary share data were computed as follows: Year Ended December 31, 2018 2017 2016 Net loss (U.S. dollars in thousands) $ (10,189 ) $ (9,111 ) $ (8,053 ) Weighted-average ordinary shares outstanding - basic and diluted 2,956,908 2,459,088 2,459,088 Loss per ordinary basic and diluted (U.S. dollars) $ (3.45 ) $ (3.71 ) $ (3.27 ) |
Contingencies | n. Contingencies: The Group is involved in various commercial, government investigation and other legal proceedings that arise from time to time. The Group records accruals for these types of contingencies to the extent that the Group concludes their occurrence is probable and that the related liabilities are estimable. When accruing these costs, the Group will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, the Group accrues for the minimum amount within the range. The Group records anticipated recoveries under existing insurance contracts that are virtually certain of occurring at the gross amount that is expected to be collected. Legal costs are expensed as incurred. |
Recently Issued Accounting Pronouncements | o. Recently Issued Accounting Pronouncements: Adopted in current period: 1) In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC 605”), Revenue Recognition, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. As currently issued and amended, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. ASU 2014-09 permits the use of either a retrospective or cumulative effect transition method. The Group adopted ASU 2014-09 along with the related additional ASUs on Topic 606 (collectively, “ASC 606”) on January 1, 2018, using the modified retrospective transition method. Contracts that are substantially completed were excluded from the transition adjustment. The Group has reviewed all of its contracts with customers and has implemented the required process, data, and system changes to comply with the requirements of ASC 606. The Group did not have any material cumulative-effect adjustment as a result of the adoption of ASC 606. In addition, the adoption of ASC 606 did not have any material impact on the Group consolidated financial statement line items in the year of adoption. Not yet adopted in current period: 2) In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will require lessees to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a financial or operating lease. However, unlike current GAAP, which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The new guidance is effective for all periods beginning after December 15, 2018. The Group does not expect to have any material effect as a result of the adoption of this guidance. 3) In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13. This update replaces the incurred loss impairment methodology in current U.S. GAAP for recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the guidance requires to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The Group is currently evaluating the effects of this guidance will have on its consolidated financial statements. 4) In June 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-07. This ASU supersedes ASC 505-50, Equity - Equity-Based Payments to Non-Employees, and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in Topic 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. Entities should apply the amendments on a modified retrospective basis, through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year in which the ASU is adopted, for all: 1. Liability-classified nonemployee awards that have not been settled as of the adoption date and 2. Equity-classified nonemployee awards for which a measurement date has not been established. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for periods in which financial statements have not yet been issued. The Group is currently evaluating the effects of this guidance will have on its consolidated financial statements. 5) In December 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-20. This ASU permits lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, those lessors will exclude from the consideration in the contract and from variable payments not included in the consideration in the contracts all collections from lessees of taxes within the scope of this election. Additionally, the guidance updates revenue recognition related to variable payments by (1) requiring lessors to exclude from variable payments lessor costs paid directly to third parties by the lessee; and (2) requiring lessors to allocate certain variable payments to lease and non-lease components when there are changes in facts and circumstances on which the variable payment is based. When an allocation of variable payments between lease and non-lease components is made, the variable payment allocated to the lease component will be recognized as revenue in accordance with Topic 842, whereas the variable payment allocated to the non-lease component will be recognized in accordance with other applicable topics, such as Topic 606, Revenue from Contracts with Customers. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in ASU 2016-02. The Group is currently evaluating the effects of this guidance will have on its consolidated financial statements. |
Organization and Business Ope_2
Organization and Business Operation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of net income shares based on achievement of specified net income targets | Number of the Company’s ordinary shares Year Ended December 31, Net Income Target Controlling Shareholders Migdal ASM Former Shareholder Total 2015 $ 27,000,000 338,400 10,800 10,800 360,000 2016 $ 40,000,000 173,900 5,550 5,550 185,000 2017 $ 60,000,000 188, 000 6,000 6,000 200,000 2018 $ 80,000,000 94,000 3,000 3,000 100,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment depreciation rates and estimated useful lives | % Useful life (years) Software systems (from classified date, see also section i. above) 25 4 Vehicles 15 7 Leasehold improvements 10-20 5-10 Office furniture and equipment 7-10 10-14 Computers, electronics and related 15-33 3-7 |
Schedule of basic and diluted loss per ordinary share | Year Ended December 31, 2018 2017 2016 Net loss (U.S. dollars in thousands) $ (10,189 ) $ (9,111 ) $ (8,053 ) Weighted-average ordinary shares outstanding - basic and diluted 2,956,908 2,459,088 2,459,088 Loss per ordinary basic and diluted (U.S. dollars) $ (3.45 ) $ (3.71 ) $ (3.27 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31, 2018 2017 (U.S. dollars in thousands) Cost: Software Systems $ 1,411 $ 1,361 Vehicles 538 554 Leasehold improvements 347 347 Office furniture and equipment 122 121 Computers, electronics and related 13 13 $ 2,431 $ 2,396 Less: accumulated depreciation and amortization 1,415 1,008 Property and equipment, net $ 1,016 $ 1,388 |
Progress Payments in Excess o_2
Progress Payments in Excess of Accumulated Costs With Respect to Projects (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | |
Schedule of progress payments in excess of accumulated costs with respect to projects | December 31, 2018 2017 (U.S. dollars in thousands) Advanced payments from customers $ 4,488 $ 853 Accumulated costs (1,998 ) (547 ) Progress payments in excess of accumulated costs with respect to projects $ 2,490 $ 306 |
Schedule of contract assets and liabilities | Balance at beginning of year Additions Deductions Balance at end of year (U.S. Dollar in thousands) Year ended December 31, 2017: Advanced payments from customers $ 397 $ 2,546 $ (2,090 ) $ 853 Accumulated costs (548 ) (990 ) 991 (547 ) Progress payments in excess of accumulated costs with respect to projects / (Accumulated costs with respect to Projects in excess of progress payments) $ (151 ) $ 1,556 $ (1,099 ) $ 306 Year ended December 31, 2018: Advanced payments from customers $ 853 $ 3,997 $ (362 ) $ 4,488 Accumulated costs (547 ) (1,718 ) 267 (1,998 ) Progress payments in excess of accumulated costs with respect to projects $ 306 $ 2,279 $ (95 ) $ 2,490 |
Schedule of group recognized result of changes in contract asset and the contract liability balances | Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Revenue recognized in the year from amounts included in the contract liability at the beginning of the year $ 253 $ 397 $ 3,649 |
Ordinary Shares, Preferred Sh_2
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of ordinary shares | Number of shares Number of shares Authorized Issued and outstanding Authorized Issued and outstanding December 31, 2018 December 31, 2017 Ordinary shares 100,000,000 6,304,677 20,000,000 2,576,415 Preferred shares 5,000,000 - 5,000,000 - |
Schedule of stock option activities and related information | Number of Weighted Weighted Aggregate Outstanding as of December 31, 2017 - $ - Granted during the year 25,000 $ 0.001 Outstanding as of December 31, 2018 25,000 $ 0.001 9.05 $ 39,725 Exercisable as of December 31, 2018 - $ - - $ - |
Schedule of stock based compensation | Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Selling and marketing expenses $ 52 $ - $ - General and administrative expenses 39 - - $ 91 $ - $ - |
Revenue Classified by Geograp_2
Revenue Classified by Geographical Area (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Classified by Geographical Area [Abstract] | |
Schedule of revenue composition | Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Asia $ 495 $ 555 $ 9,230 Latin America - 754 5,320 Europe 11 210 1,750 Israel* 33 1,325 - Other - 128 208 $ 539 $ 2,972 $ 16,508 * Sales in Israel during the years ended December 31, 2018, 2017 and 2016 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 6%, 45% and 0% of revenues during such periods, respectively. |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of general and administrative expenses | Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Legal fees* $ 3,756 $ 2,741 $ 3,849 Professional services fees 1,532 2,126 2,821 Settlement in connection in one of the legal proceedings (see Note 8.a.10.) - - 1,664 Salaries and related expenses 518 620 681 Impairment of fixed assets - - 114 Stock-based compensation 39 - - Others 658 529 533 $ 6,503 $ 6,016 $ 9,662 * The 2017 legal fees include a deduction of $2 million legal fees refund in connection with the 2016 directors and officers insurance policy based on a settlement agreement. Such amount was received on February 23, 2018 and presented within other receivables as of December 31, 2017. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expenses (benefit) | Year Ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Current $ - $ - $ 32 Previous year - - 1,054 Income tax expense $ - $ - $ 1,086 |
Schedule of deferred income tax | December 31, 2018 2017 (U.S. dollars in thousands) Net and comprehensive loss $ 4,927 $ 3,271 Temporary differences of expense in connection with employee benefits 34 41 Deferred tax assets before valuation allowance 4,961 3,312 Valuation allowance (4,961 ) (3,312 ) $ - $ - |
Schedule of reconciliation of income tax expenses | Year ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Income (loss) before income tax $ (10,189 ) $ (9,111 ) $ (6,967 ) Israeli corporate income tax rate 23 % 24 % 25 % Theoretical income tax benefit (2,343 ) (2,187 ) (1,742 ) Valuation allowance for deferred tax 2,343 2,187 1,109 Tax rates differences - - 725 Taxes in respect of previous year - - 1,054 Other, net - - (60 ) Income tax expense $ - $ - $ 1,086 |
Schedule of unrecognized tax benefits | Year ended December 31, 2018 2017 2016 (U.S. dollars in thousands) Balance at beginning of year $ - $ - $ - Increase as a result of tax position taken in prior period - - 1054 Decrease due to settlement with the Israeli tax authorities - - (1054 ) Balance at end of year $ - $ - $ - |
Organization and Business Ope_3
Organization and Business Operation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
2015 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 27,000 |
Number of the Company's ordinary shares | 360,000 |
2015 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 338,400 |
2015 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 10,800 |
2015 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 10,800 |
2016 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 40,000 |
Number of the Company's ordinary shares | 185,000 |
2016 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 173,900 |
2016 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 5,550 |
2016 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 5,550 |
2017 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 60,000 |
Number of the Company's ordinary shares | 200,000 |
2017 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 188,000 |
2017 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 6,000 |
2017 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 6,000 |
2018 [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Net Income Target | $ | $ 80,000 |
Number of the Company's ordinary shares | 100,000 |
2018 [Member] | Controlling Shareholders [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 94,000 |
2018 [Member] | Migdal [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 3,000 |
2018 [Member] | ASM Former Shareholder [Member] | |
Schedule of net income shares based on achievement of specified net income targets | |
Number of the Company's ordinary shares | 3,000 |
Organization and Business Ope_4
Organization and Business Operation (Details Textual) - USD ($) $ in Thousands | Jan. 10, 2019 | Aug. 16, 2018 | Apr. 11, 2018 | Nov. 27, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Organization and Business Operation (Textual) | ||||||||
Escrow deposit | $ 11,900 | |||||||
Reverse merger transaction cost | 6,300 | |||||||
Restricted trust amount | 81,300 | |||||||
Conversion of stock, amount | $ 21,600 | |||||||
Conversion of stock, shares | 213,676 | |||||||
Transaction cost | $ 2,000 | |||||||
Working capital | 19,000 | |||||||
Accumulated deficit | (28,161) | $ (17,972) | ||||||
Cash and cash equivalents | 9,856 | 1,944 | $ 11,840 | $ 25,829 | ||||
Net loss | $ (10,189) | $ (9,111) | $ (8,053) | |||||
Description of line of credit or loan | ACSI obtained a six-month line of credit, secured by the Controlling Shareholders, from an Israeli commercial bank in the amount of NIS 11.0 million (approximately $2.9 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), of which NIS 5.5 million (approximately $1.5 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) was drawn down (the "Outstanding Amount"). | On February 21, 2018 the Controlling Shareholders executed an irrevocable undertaking (the "Undertaking") for the benefit of the Group. According to the Undertaking, the Controlling Shareholders agreed to make available to ACSI from, March 1, 2018, a $3.0 million line of credit or loan in favor of the Group. | ||||||
Accounts payable and accrued expenses | $ 7,800 | |||||||
Ordinary shares, description | The Company sold to certain institutional investors 728,262 ordinary shares in a registered direct offering at $4.60 per share, for aggregate gross proceeds of approximately $3.35 million, or $2.8 million, net of issuance costs. In connection with the offering, the Company issued to the placement agent five-year warrants to purchase 54,620 ordinary shares at an exercise price of $5.75 per share. | The Company sold to a single institutional investor 360,000 units, each unit consisting of one ordinary share and one five-year warrant to purchase one ordinary share, at a price of $3.25 per unit, and 2,716,923 pre-funded units, with each pre-funded unit consisting of one pre-funded warrant to purchase one ordinary share and one warrant to purchase one ordinary share, at a price of $3.24 per pre-funded unit, for aggregate gross proceeds of approximately $10.0 million, or approximately $8.8 million, net of issuance costs. As of December 31, 2018, an aggregate of 2,490,000 ordinary shares have been issued upon exercise of pre-funded warrants and an aggregate of 226,923 ordinary shares were issued upon exercise of the remaining pre-funded warrants during January 2019. As part of the offering, the Company issued to the placement agent five-year warrants to purchase 153,846 ordinary shares at an exercise price of $4.06 per share. | ||||||
Subsequent Event [Member] | ||||||||
Organization and Business Operation (Textual) | ||||||||
Description of line of credit or loan | The Company issued, in a private placement, to each of the Controlling Shareholders 226,426 ordinary shares (452,852 ordinary shares in the aggregate) and five-year warrants to purchase 226,426 ordinary shares (452,852 ordinary shares in the aggregate) at an exercise price of $3.25. | |||||||
Migdal Underwriting and Business Initiatives Ltd [Member] | ||||||||
Organization and Business Operation (Textual) | ||||||||
Stock issued in reverse merger | 48,000 | |||||||
Service fees | $ 1,200 | |||||||
Net income shares | 25,350 | |||||||
Reverse merger transaction cost | $ 4,300 | |||||||
Controlling Shareholders [Member] | ||||||||
Organization and Business Operation (Textual) | ||||||||
Stock issued in reverse merger | 1,621,327 | |||||||
Equity interest in acquired | 63.00% | |||||||
Reverse merger, description | One occasion during the 60-day period following the third anniversary of the closing of the Reverse Merger, to put to INC all or part of his pro rata portion of 117,327 ordinary shares that he received in the share exchange for an amount in cash equal to (1) (x) the number of shares being put multiplied by (y) $101.0 per share plus (2) his pro rata portion of interest, if any, on $11.9 million deposited into an escrow account by INC to fund the payment of the purchase price for the put option if it is exercised. | |||||||
Escrow deposit | $ 18,100 | |||||||
Service fees | $ 18,100 | |||||||
ASM, Eyal Tzur [Member] | ||||||||
Organization and Business Operation (Textual) | ||||||||
Stock issued in reverse merger | 48,000 | |||||||
Equity interest in acquired | 16.00% | |||||||
Escrow deposit | $ 900 | |||||||
Service fees | $ 900 | |||||||
Net income shares | 25,350 | |||||||
Commission percentage | 3.00% | |||||||
Ability Computer & Software Industries Ltd. [Member] | ||||||||
Organization and Business Operation (Textual) | ||||||||
Restricted trust amount | $ 19,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Software systems [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 25.00% |
Property and Equipment, Useful life (years) | 4 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 15.00% |
Property and Equipment, Useful life (years) | 7 years |
Leasehold improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 10.00% |
Property and Equipment, Useful life (years) | 5 years |
Leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 20.00% |
Property and Equipment, Useful life (years) | 10 years |
Office furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 7.00% |
Property and Equipment, Useful life (years) | 10 years |
Office furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 10.00% |
Property and Equipment, Useful life (years) | 14 years |
Computers, electronics and related [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 15.00% |
Property and Equipment, Useful life (years) | 3 years |
Computers, electronics and related [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Depreciation Rate (%) | 33.00% |
Property and Equipment, Useful life (years) | 7 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||||
Net loss (U.S. dollars in thousands) | $ (10,189) | $ (9,111) | $ (8,053) | |
Weighted-average ordinary shares outstanding - basic and diluted | 2,956,908 | 2,459,088 | 2,459,088 | |
Loss per ordinary basic and diluted (U.S. dollars) | $ (3.45) | $ (3.71) | $ (3.27) | |
Accumulated deficit | $ (28,161) | $ (17,972) | ||
Cash and cash equivalents | 9,856 | 1,944 | $ 11,840 | $ 25,829 |
Net loss | $ (10,189) | $ (9,111) | $ (8,053) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies (Textual) | |||
Advertising expenses | $ 69 | $ 53 | $ 24 |
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 | $ 2,431 | $ 2,396 |
Less: accumulated depreciation and amortization | 1,415 | 1,008 |
Property and equipment, net | 1,016 | 1,388 |
Software Systems [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,411 | 1,361 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 538 | 554 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 347 | 347 |
Office furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 122 | 121 |
Computers, electronics and related [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 13 | $ 13 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property and Equipment, Net (Textual) | |||
Depreciation and amortization | $ 478 | $ 489 | $ 342 |
Progress Payments in Excess o_3
Progress Payments in Excess of Accumulated Costs With Respect to Projects (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | ||
Advanced payments from customers | $ 4,488 | $ 853 |
Accumulated costs | (1,998) | (547) |
Progress payments in excess of accumulated costs with respect to projects | $ 2,490 | $ 306 |
Progress Payments in Excess o_4
Progress Payments in Excess of Accumulated Costs With Respect to Projects (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Balance at beginning of year,Advanced payments from customers | $ 853 | |
Balance at end of year, Advanced payments from customers | 4,488 | $ 853 |
Balance at beginning of year, Accumulated costs | (547) | |
Balance at end of year, Accumulated costs | (1,998) | (547) |
Balance at beginning of year, Progress payments in excess of accumulated costs with respect to projects | 306 | |
Balance at end of year, Progress payments in excess of accumulated costs with respect to projects | 2,490 | 306 |
Group’s contract [Member] | ||
Balance at beginning of year,Advanced payments from customers | 853 | 397 |
Additions, Advanced payments from customers | 3,997 | 2,546 |
Deductions, Advanced payments from customers | (362) | (2,090) |
Balance at end of year, Advanced payments from customers | 4,488 | 853 |
Balance at beginning of year, Accumulated costs | (547) | (548) |
Additions, Accumulated costs | (1,718) | (990) |
Deductions, Accumulated costs | 267 | 991 |
Balance at end of year, Accumulated costs | (1,998) | (547) |
Balance at beginning of year, Progress payments in excess of accumulated costs with respect to projects | 306 | (151) |
Additions, Progress payments in excess of accumulated costs with respect to projects | 2,279 | 1,556 |
Deductions, Progress payments in excess of accumulated costs with respect to projects | (95) | (1,099) |
Balance at end of year, Progress payments in excess of accumulated costs with respect to projects | $ 2,490 | $ 306 |
Progress Payments in Excess o_5
Progress Payments in Excess of Accumulated Costs With Respect to Projects (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Costs with Respect to Projects in Excess of Progress Payments [Abstract] | |||
Revenue recognized in the year from amounts included in the contract liability at the beginning of the year | $ 253 | $ 397 | $ 3,649 |
Related Parties (Details)
Related Parties (Details) ₪ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018ILS (₪) | Dec. 31, 2017USD ($) | Dec. 31, 2017ILS (₪) | Dec. 31, 2016USD ($) | Dec. 31, 2016ILS (₪) | |
Related Parties (Textual) | ||||||
Compensation related expenses | $ 518 | $ 620 | $ 681 | |||
Bonus, description | (i) 2% of the Company's consolidated gross profit, or (ii) 4% of the Company's consolidated EBITDA, in each case, based on the Company's annual audited consolidated financial statement. In the event the Company recognizes a loss in a specific year, then, to the extent an executive is entitled to a bonus in an amount equal to 2% of the gross profit, such bonus (if applicable) will be paid through the issuance of ordinary shares. | (i) 2% of the Company's consolidated gross profit, or (ii) 4% of the Company's consolidated EBITDA, in each case, based on the Company's annual audited consolidated financial statement. In the event the Company recognizes a loss in a specific year, then, to the extent an executive is entitled to a bonus in an amount equal to 2% of the gross profit, such bonus (if applicable) will be paid through the issuance of ordinary shares. | ||||
Controlling Shareholders [Member] | ||||||
Related Parties (Textual) | ||||||
Gross monthly salary | $ 32 | 2,600 | ||||
Compensation related expenses | 471 | $ 690 | $ 926 | |||
Annual performance bonus | $ 96 | |||||
Temporary reduction salaries percentage | 50.00% | 50.00% | ||||
Controlling Shareholders [Member] | NIS [Member] | ||||||
Related Parties (Textual) | ||||||
Gross monthly salary | ₪ | ₪ 120 | ₪ 10 | ||||
Compensation related expenses | ₪ | 1,767 | ₪ 2,391 | ₪ 3,562 | |||
Annual performance bonus | ₪ | ₪ 360 |
Ordinary Shares, Preferred Sh_3
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Details) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Equity [Abstract] | ||
Number of Ordinary shares, Authorized | 100,000,000 | 20,000,000 |
Number of Ordinary shares, Issued | 6,304,677 | 2,576,415 |
Number of Ordinary shares, outstanding | 6,304,677 | 2,576,415 |
Number of Preferred shares, Authorized | 5,000,000 | 5,000,000 |
Number of Preferred shares, Issued | ||
Number of Preferred shares, outstanding |
Ordinary Shares, Preferred Sh_4
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Details 1) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Equity [Abstract] | |
Number of options, Outstanding, beginning | shares | |
Number of options, Granted during the year | shares | 25,000 |
Number of options, Outstanding, ending | shares | 25,000 |
Number of options Exercisable | shares | |
Weighted average exercise price, Outstanding, beginning | $ / shares | |
Weighted average exercise price, Granted during the year | $ / shares | 0.001 |
Weighted average exercise price, Outstanding, ending | $ / shares | 0.001 |
Weighted average exercise price, Exercisable | $ / shares | |
Weighted average remaining contractual term (in years), Outstanding, ending | 9 years 18 days |
Weighted average remaining contractual term (in years), Exercisable | 0 years |
Aggregate intrinsic-value, Outstanding, ending | $ | $ 39,725 |
Aggregate intrinsic-value, Exercisable | $ |
Ordinary Shares, Preferred Sh_5
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock based compensation | $ 91 | ||
Selling and marketing expenses [Member] | |||
Stock based compensation | 52 | ||
General and administrative expenses [Member] | |||
Stock based compensation | $ 39 |
Ordinary Shares, Preferred Sh_6
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Apr. 17, 2019 | Feb. 17, 2019 | Dec. 24, 2018 | Dec. 27, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 15, 2019 | Jan. 10, 2019 | Nov. 17, 2018 | Aug. 16, 2018 | |
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Ordinary shares, par value | $ 0.001 | $ 0.001 | |||||||||
Preferred shares, par value per share | $ 0.001 | $ 0.001 | |||||||||
Stock option granted | 25,000 | ||||||||||
Stock based compensation | $ 91 | ||||||||||
Ordinary shares, stock split | 1-for-10 | ||||||||||
Common Stock [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Ordinary shares, par value | $ 0.001 | ||||||||||
Common stock, shares additional authorized | 80,000,000 | ||||||||||
Share issued | 3,578,262 | ||||||||||
Warrant [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Warrant issued | 855,744 | 3,230,769 | 54,620 | ||||||||
Share price | $ 115 | ||||||||||
Warrants, expiration date | Dec. 17, 2018 | ||||||||||
Warrant, description | The Company may redeem the warrants in the event that the traded ordinary share price is at least $175.00 per share (for any 20 trading days within a 30-day trading period) on a "cashless basis". | ||||||||||
Restricted ordinary shares [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Share issued | 150,000 | ||||||||||
Restricted ordinary shares [Member] | Vesting Three [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 17, 2021 | ||||||||||
Restricted ordinary shares [Member] | Vesting One [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 17, 2019 | ||||||||||
Restricted ordinary shares [Member] | Vesting Two [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 17, 2020 | ||||||||||
Subsequent Event [Member] | Warrant [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Warrant issued | 300,000 | 452,852 | |||||||||
Share issued | 700,000 | ||||||||||
Subsequent Event [Member] | Restricted ordinary shares [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Share issued | 350,000 | ||||||||||
Subsequent Event [Member] | Restricted ordinary shares [Member] | Vesting Three [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 13, 2024 | ||||||||||
Subsequent Event [Member] | Restricted ordinary shares [Member] | Vesting One [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 13, 2022 | ||||||||||
Subsequent Event [Member] | Restricted ordinary shares [Member] | Vesting Two [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 13, 2023 | ||||||||||
2015 Long-Term Equity Incentive Plan [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Stock option granted | 25,000 | ||||||||||
Options exercise price | $ 0.001 | ||||||||||
Purchase of ordinary shares | 25,000 | ||||||||||
2015 Long-Term Equity Incentive Plan [Member] | Vesting Three [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 17, 2021 | ||||||||||
2015 Long-Term Equity Incentive Plan [Member] | Vesting One [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 17, 2019 | ||||||||||
2015 Long-Term Equity Incentive Plan [Member] | Vesting Two [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Restricted ordinary shares vest period | Jan. 17, 2020 | ||||||||||
2015 Long-Term Equity Incentive Plan [Member] | Subsequent Event [Member] | |||||||||||
Ordinary Shares, Preferred Shares, Warrants, Restricted Shares and Options (Textual) | |||||||||||
Options shares additional authorized | 1,668,887 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, € in Thousands, ₪ in Thousands, $ in Thousands | Jan. 15, 2019$ / sharesshares | Aug. 07, 2018USD ($) | Aug. 07, 2018EUR (€) | Sep. 14, 2016USD ($) | Sep. 14, 2016ILS (₪) | Nov. 12, 2015USD ($) | Nov. 12, 2015ILS (₪) | Oct. 20, 2015USD ($) | Jun. 22, 2018USD ($) | Jan. 19, 2018USD ($) | Dec. 21, 2017USD ($) | Apr. 19, 2017USD ($) | Apr. 19, 2017ILS (₪) | Mar. 30, 2017 | Dec. 31, 2018USD ($) | Dec. 31, 2018ILS (₪) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Settlement amount | $ 2,200 | $ 196,000 | ||||||||||||||||
Aggregate settlement payment | $ 5,000 | |||||||||||||||||
Remaining proceeds or contributed by other defendants | 2,500 | |||||||||||||||||
Received an excess amount | $ 1,664 | |||||||||||||||||
Lawsuit amount for registration fee | $ 1,300 | |||||||||||||||||
Monthly rent | $ 12 | |||||||||||||||||
Exchange rate | 1 | 1 | 1 | |||||||||||||||
Lease renewed date | Nov. 30, 2022 | Nov. 30, 2022 | ||||||||||||||||
Rent expenses | $ 160 | 130 | 152 | |||||||||||||||
Right and license term | 3 years | |||||||||||||||||
Percentage of net income | 50.00% | |||||||||||||||||
Minimum annual sales | $ 10,000 | |||||||||||||||||
Percentage of penalty | 15.00% | |||||||||||||||||
Shortfall amount | $ 1,500 | |||||||||||||||||
Secure minimum sales and penalty | $ 125 | |||||||||||||||||
Legal payments | $ 325 | $ 98,000 | ||||||||||||||||
Legal settlement, percentage | 70.00% | |||||||||||||||||
Plaintiff Received | $ 2,480 | |||||||||||||||||
Plaintiff fees | $ 1,532 | $ 2,126 | $ 2,821 | |||||||||||||||
Patent infringement litigation, description | On July 11, 2018 and July 18, 2018 two pre-trial hearings were held, and the court decided to order the plaintiffs to deposit a guarantee of NIS 100,000 (approximately $26,700 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) as a security for costs. In addition, the defendants were asked by the court to reconsider their position regarding the petition for dismissing the case in limine. | On July 11, 2018 and July 18, 2018 two pre-trial hearings were held, and the court decided to order the plaintiffs to deposit a guarantee of NIS 100,000 (approximately $26,700 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) as a security for costs. In addition, the defendants were asked by the court to reconsider their position regarding the petition for dismissing the case in limine. | ||||||||||||||||
Litigation fee description | On February 20, 2019, the deputy registrar decided to dismiss ACSI's opposition and decided that ACSI will bear costs in a total sum of NIS 33,000 (approximately $8,800 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). | On February 20, 2019, the deputy registrar decided to dismiss ACSI's opposition and decided that ACSI will bear costs in a total sum of NIS 33,000 (approximately $8,800 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). | ||||||||||||||||
Provision for legal proceedings | $ 325 | |||||||||||||||||
Minimum [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Minimum monthly commitment | $ 125 | |||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Minimum monthly commitment | € | € 30 | |||||||||||||||||
5-year lease agreement [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Office space, expiring date | Nov. 30, 2017 | |||||||||||||||||
2.5-year lease agreement [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Office space, expiring date | Nov. 30, 2017 | |||||||||||||||||
1 Year Lease Agreement [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Monthly rent | $ 1 | |||||||||||||||||
Exchange rate | 1 | 1 | ||||||||||||||||
Lease renewed date | Aug. 15, 2019 | Aug. 15, 2019 | ||||||||||||||||
Memorandum of Understanding [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Aggregate settlement payment | $ 3,000 | |||||||||||||||||
Expected litigation settlement | 250 | |||||||||||||||||
Remaining proceeds or contributed by other defendants | $ 2,750 | |||||||||||||||||
Ability Computer & Software Industries Ltd. [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Provision for legal proceedings | $ 200 | |||||||||||||||||
Hurgin and Aurovsky [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Description of exchange rate | The Company NIS 376,410 (approximately $98,000 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016), or a total of NIS 752,820 (approximately $196,000 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016) constituting their portion of the settlement amount. | The Company NIS 376,410 (approximately $98,000 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016), or a total of NIS 752,820 (approximately $196,000 based on the exchange rate of $1.00 / NIS 3.845 in effect as of December 31, 2016) constituting their portion of the settlement amount. | ||||||||||||||||
NIS [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Settlement amount | ₪ | ₪ 8,450 | ₪ 752,820 | ||||||||||||||||
Lawsuit amount for registration fee | ₪ | ₪ 5,000 | |||||||||||||||||
Monthly rent | ₪ | ₪ 44 | |||||||||||||||||
Exchange rate | 3.845 | 3.748 | 3.748 | |||||||||||||||
Legal payments | ₪ | ₪ 376,410 | |||||||||||||||||
Plaintiff Received | ₪ | ₪ 9,527 | |||||||||||||||||
VAT receivable | $ 8,142,735 | |||||||||||||||||
NIS [Member] | 1 Year Lease Agreement [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Monthly rent | ₪ | ₪ 5 | |||||||||||||||||
Exchange rate | 3.748 | 3.748 | ||||||||||||||||
Hammel Litigation [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Plaintiff fees | $ 1,600 | |||||||||||||||||
Ladragor Litigation [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Patent infringement litigation, description | The claim alleges that the plaintiff suffered personal damages of NIS 137.7 (approximately $36.7 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), and estimates that its shareholders suffered damages of approximately NIS 23.3 million (approximately $6.2 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). | The claim alleges that the plaintiff suffered personal damages of NIS 137.7 (approximately $36.7 based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), and estimates that its shareholders suffered damages of approximately NIS 23.3 million (approximately $6.2 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). | ||||||||||||||||
Subsequent Event [Member] | Amended and Restated Stock Purchase Agreement [Member] | ||||||||||||||||||
Commitment and Contigencies [Line Items] | ||||||||||||||||||
Issued an aggregate of ordinary shares | shares | 354,609 | |||||||||||||||||
Warrant exercisable | shares | 100,000 | |||||||||||||||||
Exercise price | $ / shares | $ 3.807 |
Revenue Classified by Geograp_3
Revenue Classified by Geographical Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | $ 539 | $ 2,972 | $ 16,508 | |
Asia [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | 495 | 555 | 9,230 | |
Latin America [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | 754 | 5,320 | ||
Europe [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | 11 | 210 | 1,750 | |
Israel [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | [1] | 33 | 1,325 | |
Other [Member] | ||||
Revenue Recognition, Milestone Method [Line Items] | ||||
Revenue | $ 128 | $ 208 | ||
[1] | Sales in Israel during the years ended December 31, 2018, 2017 and 2016 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 6%, 45% and 0% of revenues during such periods, respectively. |
Revenue Classified by Geograp_4
Revenue Classified by Geographical Area (Details Textual) | 12 Months Ended |
Dec. 31, 2018 | |
Israeli integrators [Member] | |
Revenue Classified by Geographical Area (Textual) | |
Revenue percentage, description | Sales in Israel during the years ended December 31, 2018, 2017 and 2016 include sales to Israeli integrators that have been sold to end users in Asia and Africa, which represented 6%, 45% and 0% of revenues during such periods, respectively. |
General and Administrative Ex_3
General and Administrative Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Other Income and Expenses [Abstract] | ||||
Legal fees | [1] | $ 3,756 | $ 2,741 | $ 3,849 |
Professional services fees | 1,532 | 2,126 | 2,821 | |
Settlement in connection in one of the legal proceedings (see Note 8.a.10.) | 1,664 | |||
Salaries and related expenses | 518 | 620 | 681 | |
Impairment of fixed assets | 114 | |||
Stock based compensation | 39 | |||
Others | 658 | 529 | 533 | |
Total general and administrative expenses | $ 6,503 | $ 6,016 | $ 9,662 | |
[1] | The 2017 legal fees include a deduction of $2 million legal fees refund in connection with the 2016 directors and officers insurance policy based on a settlement agreement. Such amount was received on February 23, 2018 and presented within other receivables as of December 31, 2017. |
General and Administrative Ex_4
General and Administrative Expenses (Details Textual) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
General and Administrative Expenses (Textual) | |
Deduction of legal fees | $ 2,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 32 | ||
Previous year | 1,054 | ||
Income tax expense | $ 1,086 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net and comprehensive loss | $ 4,927 | $ 3,271 |
Temporary differences of expense in connection with employee benefits | 34 | 41 |
Deferred tax assets before valuation allowance | 4,961 | 3,312 |
Valuation allowance | (4,961) | (3,312) |
Deferred tax assets |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income (loss) before income tax | $ (10,189) | $ (9,111) | $ (6,967) |
Israeli corporate income tax rate | 23.00% | 24.00% | 25.00% |
Theoretical income tax benefit | $ (2,343) | $ (2,187) | $ (1,742) |
Valuation allowance for deferred tax | 2,343 | 2,187 | 1,109 |
Tax rates differences | 725 | ||
Taxes in respect of previous year | 1,054 | ||
Other, net | (60) | ||
Income tax expense | $ 1,086 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Unrecognized tax benefits | |||
Balance at beginning of year | |||
Increase as a result of tax position taken in prior period | 1,054 | ||
Decrease due to settlement with the Israeli tax authorities | (1,054) | ||
Balance at end of year |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | Jan. 03, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes (Textual) | ||||
Israeli corporate income tax rate | 23.00% | 24.00% | 25.00% | |
Corporate income tax percentage | 25.00% | |||
Withholding income tax percentage | 15.00% | |||
Payments of accrued tax provision | $ 1,100 | |||
Description of income taxes | As part of the tax assessment for the three years ended December 31, 2014 as mentioned above, it was agreed that ACSI will be subject to a 14.6% (based on blended tax rates) for the tax years 2015 and 2016 and a reduced tax rate, not yet determined (but up to 16%) in the tax year 2017 and thereafter. | |||
Net operating losses carryforwards, description | ASCI has incurred operating and capital accumulated losses for tax purposes in the amount of NIS 114.4 million (approximately $30.5 million based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018) and NIS 349 thousand (approximately $93 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018), respectively and ASM has incurred operating accumulated losses for tax purposes in the amount NIS 329 thousand (approximately $88 thousand based on the exchange rate of $1.00 / NIS 3.748 in effect as of December 31, 2018). | |||
Reduced income tax percentage | 16.00% |
Concentration Risk (Details)
Concentration Risk (Details) | 12 Months Ended | ||
Dec. 31, 2018CustomersVendors | Dec. 31, 2017CustomersVendors | Dec. 31, 2016CustomersVendors | |
Revenues [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, percentage | 10.00% | ||
Revenues [Member] | Major customers [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, percentage | 86.00% | 89.00% | 79.00% |
Number of customers | 2 | 3 | 2 |
Cost of revenues [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, percentage | 10.00% | ||
Cost of revenues [Member] | Major vendors [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, percentage | 0.00% | 17.00% | 72.00% |
Number of vendors | Vendors | 0 | 1 | 3 |
Accounts receivables [Member] | |||
Concentration Risk (Textual) | |||
Concentration risk, percentage | 98.00% | 99.00% | |
Number of customers | 1 | 1 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | 1 Months Ended |
Apr. 17, 2019shares | |
Subsequent Events (Textual) | |
Issued restricted ordinary shares | 350,000 |
2015 Long-Term Equity Incentive Plan [Member] | |
Subsequent Events (Textual) | |
Issued restricted ordinary shares | 700,000 |