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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Radcom Ltd | NASDAQ:RDCM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 9.59 | 9.63 | 9.75 | 0 | 01:00:00 |
RADCOM LTD.
|
|||
Date: September 9, 2015
|
By:
|
/s/ Uri Birenberg
|
|
Name:
|
Uri Birenberg
|
||
Title:
|
CFO
|
||
Exhibit
Number
|
Description of Exhibit
|
|
99.1
99.2
|
Management’s Discussion and Analysis of financial Condition and Result of Operations
Interim Consolidated Financial Statements as of June 30, 2015
|
·
|
"we", "us", "our", "Radcom", or the "Company" are to Radcom Ltd. and its subsidiaries;
|
·
|
"dollars" or "$" are to United States dollars; and
|
·
|
"NIS" or "shekel" are to New Israeli Shekels.
|
Six month periods ended June 30,
(U.S. dollars in thousands)
UNAUDITED
|
% Change
2015 vs. 2014
|
|||||||||||
2015
|
2014
|
|||||||||||
Revenues:
|
||||||||||||
Products
|
$ | 9,891 | $ | 9,002 | 9.8 | % | ||||||
Services
|
1,300 | 1,439 | (9.6 | )% | ||||||||
11,191 | 10,441 | 7.2 | % | |||||||||
Cost of Revenues-Products
|
2,213 | 2,844 | (22.2 | )% | ||||||||
Cost of Revenues-Services
|
141 | 181 | (22.1 | )% | ||||||||
2,354 | 3,025 | (22.2 | )% | |||||||||
Gross Profit
|
8,837 | 7,416 | 19.2 | % | ||||||||
Research and Development
|
3,071 | 3,086 | (0.48 | )% | ||||||||
Less royalty-bearing participation
|
148 | 587 | (74.78 | )% | ||||||||
Research and Development, net
|
2,923 | 2,499 | 17.0 | % | ||||||||
Selling and Marketing, net
|
3,587 | 3,721 | (3.6 | )% | ||||||||
General and Administrative
|
1,206 | 1,136 | 6.2 | % | ||||||||
Total Operating Expenses
|
7,716 | 7,356 | 4.9 | % | ||||||||
Operating Income
|
1,121 | 60 | 1,768.3 | % | ||||||||
Financial Income (Expenses), net
|
(374 | ) | 257 | (245.5 | )% | |||||||
Income before taxes on income
|
747 | 317 | 135.6 | % | ||||||||
Taxes on income
|
(107 | ) | - | |||||||||
Net Income
|
$ | 640 | $ | 317 | 101.9 | % |
Page
|
|
F - 2 - F - 3
|
|
F - 4
|
|
F - 5
|
|
F - 6
|
|
F - 7 - F - 15
|
June 30,
|
December 31,
|
|||||||
2015
|
2014
|
|||||||
ASSETS
|
Unaudited
|
|||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 9,883 | $ | 6,848 | ||||
Restricted bank deposits
|
33 | 32 | ||||||
Trade receivables
|
3,434 | 5,477 | ||||||
Inventories
|
1,482 | 2,699 | ||||||
Other account receivables and prepaid expenses
|
1,569 | 1,411 | ||||||
Total current assets
|
16,401 | 16,467 | ||||||
SEVERENCE PAY FUND
|
3,163 | 3,051 | ||||||
OTHER LONG -TERM RECEIVABLES
|
622 | 600 | ||||||
PROPERTY AND EQUIPMENT, NET
|
210 | 200 | ||||||
Total assets
|
$ | 20,396 | $ | 20,318 |
June 30,
|
December 31
|
|||||||
2015
|
2014
|
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
Unaudited
|
|||||||
CURRENT LIABILITIES:
|
||||||||
Trade payables
|
$ | 424 | $ | 1,524 | ||||
Employees and payroll accruals
|
2,120 | 2,377 | ||||||
Deferred revenues and advances from customers
|
842 | 765 | ||||||
Other account payables and accrued expenses
|
1,518 | 1,739 | ||||||
Total current liabilities
|
4,904 | 6,405 | ||||||
NON- CURRENT LIABILITIES:
|
||||||||
Deferred revenues
|
384 | 198 | ||||||
Accrued severance pay
|
3,636 | 3,453 | ||||||
Total long-term liabilities
|
4,020 | 3,651 | ||||||
Total liabilities
|
8,924 | 10,056 | ||||||
COMMITMENTS AND CONTINGENCIES
|
||||||||
SHAREHOLDERS' EQUITY
|
||||||||
Share capital:
Ordinary shares of NIS 0.20 par value: Authorized: 9,997,670 shares at June 30, 2015 and December 31, 2014;
Issued and outstanding: 8,588,093 and 8,447,307 shares at June 30, 2015 and December 31, 2014, respectively;
|
368 | 361 | ||||||
Additional paid-in capital
|
69,318 | 68,059 | ||||||
Accumulated other comprehensive loss
|
(1,758 | ) | (1,062 | ) | ||||
Accumulated deficit
|
(56,456 | ) | (57,096 | ) | ||||
Total shareholders' equity
|
11,472 | 10,262 | ||||||
Total liabilities and shareholders' equity
|
$ | 20,396 | $ | 20,318 |
Six months ended
June 30,
|
||||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Revenues:
|
||||||||
Products
|
$ | 9,891 | $ | 9,002 | ||||
Services
|
1,300 | 1,439 | ||||||
11,191 | 10,441 | |||||||
Cost of revenues:
|
||||||||
Products
|
2,213 | 2,844 | ||||||
Services
|
141 | 181 | ||||||
2,354 | 3,025 | |||||||
Gross profit
|
8,837 | 7,416 | ||||||
Operating expenses:
|
||||||||
Research and development
|
3,071 | 3,086 | ||||||
Less - royalty-bearing participation
|
148 | 587 | ||||||
Research and development, net
|
2,923 | 2,499 | ||||||
Selling and marketing, net
|
3,587 | 3,721 | ||||||
General and administrative
|
1,206 | 1,136 | ||||||
Total operating expenses
|
7,716 | 7,356 | ||||||
Operating income
|
1,121 | 60 | ||||||
Financial income (expenses), net
|
(374 | ) | 257 | |||||
Income before taxes on income
|
747 | 317 | ||||||
Taxes on income
|
(107 | ) | - | |||||
Net income
|
$ | 640 | $ | 317 | ||||
Basic net income per Ordinary Share
|
$ | 0.08 | $ | 0.04 | ||||
Diluted net income per Ordinary Share
|
$ | 0.07 | $ | 0.04 | ||||
Weighted average number of Ordinary Shares used in computing basic net income per Ordinary Share
|
8,501,254 | 7,995,073 | ||||||
Weighted average number of Ordinary Shares used in computing diluted net income per Ordinary Share
|
9,066,624 | 8,482,199 |
Six months ended
June 30,
|
||||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Net income
|
$ | 640 | $ | 317 | ||||
Other comprehensive loss:
|
||||||||
Foreign currency translation adjustment
|
(696 | ) | (247 | ) | ||||
Other comprehensive loss
|
(696 | ) | (247 | ) | ||||
Comprehensive income (loss)
|
$ | (56 | ) | $ | 70 |
Six months ended
June 30,
|
||||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 640 | $ | 317 | ||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation
|
44 | 46 | ||||||
Share-based compensation and restricted share units
|
786 | 291 | ||||||
Increase in severance pay, net
|
71 | 47 | ||||||
Decrease in trade receivables
|
1,798 | 1,451 | ||||||
Increase in other account receivables, prepaid expenses
|
(448 | ) | (19 | ) | ||||
Decreases in inventories
|
980 | 311 | ||||||
Decrease in trade payables
|
(1,101 | ) | (1,068 | ) | ||||
Decrease in employees and payroll accrual
|
(248 | ) | (2 | ) | ||||
Decrease (increase) in other account payables and accrued expenses
|
107 | (321 | ) | |||||
Increase in deferred revenue and advances from customers
|
335 | 480 | ||||||
Net cash provided by operating activities
|
2,964 | 1,533 | ||||||
Cash flows used in investing activities:
|
||||||||
Maturity of restricted bank deposits
|
- | 1,477 | ||||||
Purchase of property and equipment
|
(56 | ) | (52 | ) | ||||
Net cash provided by (used in) investing activities
|
(56 | ) | 1,425 | |||||
Cash flows from financing activities:
|
||||||||
Repayment of short-term bank credit
|
- | (629 | ) | |||||
Proceeds from exercise of warrants into Ordinary Shares
|
80 | 20 | ||||||
Proceeds from exercise of options into Ordinary Shares
|
400 | 201 | ||||||
Net cash provided by (used in) financing activities
|
480 | (408 | ) | |||||
Foreign currency translation adjustments on cash and cash equivalents
|
(353 | ) | 118 | |||||
Increase in cash and cash equivalents
|
3,035 | 2,668 | ||||||
Cash and cash equivalents at beginning of the period
|
6,848 | 1,185 | ||||||
Cash and cash equivalents at end of the period
|
$ | 9,883 | $ | 3,853 |
(a)
|
Non-cash investing activities:
|
||||||||
Purchase of property and equipment
|
$ | 8 | $ | 3 | |||||
(b)
|
Cash paid for interest
|
$ | - | $ | 8 | ||||
(c)
|
Cash paid for taxes
|
$ | 107 | $ | - |
NOTE 1:-
|
GENERAL
|
|
a.
|
RADCOM Ltd (the "Company") is an Israeli corporation which provides innovative service assurance and customer experience management solutions for leading telecom operators and communications service providers. The Company specializes in solutions for next-generation mobile and fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile broadband. RADCOM's comprehensive, carrier-grade solutions are designed for big data analytics on terabit networks, and are used to prevent service provider revenue leakage and to enhance customer care management. The Company's products interact with policy management to provide self-optimizing network solutions. RADCOM's shares are listed on the NASDAQ Capital Market under the symbol RDCM.
In February 2014, the MaveriQ was officially launched, and replaced the Company's OmniQ solution. The MaveriQ is a unique, comprehensive, next-generation probe-based service assurance and CEM solution, designed to enable telecommunications carriers to carry out end-to-end voice and data quality monitoring and to manage their networks and services. The MaveriQ offers users a full array of drilldown and troubleshooting tools, delivering a comprehensive, integrated network service view that facilitates performance monitoring, fault detection and network and service troubleshooting.
The Company has wholly-owned subsidiaries in the United States, Brazil and India that are primarily engaged in the sales, marketing and customer support of the Company's products in North America, Brazil and India, respectively.
|
b.
|
In December 2014, one of the Company's customers in Latin America sent a termination announcement to the agreement between the parties, claiming for refund of all amounts previously paid and damages. The Company currently believes that no potential loss with respect to claim to refund or damages fee is considered probable. See also Note 1b to the audited financial statement as of December 31, 2014.
|
|
c.
|
The Company has an accumulated deficit of $56,456 as of June 30, 2015. In addition, the Company's net cash provided by operating activities during the six months ended June 30, 2015 was $2,964. The Company has managed its liquidity needs through a series of cost reduction initiatives, including reduction in workforce and private placement transactions. The Company believes that its existing capital resources and expected cash flows from operations will be adequate to satisfy its expected liquidity needs at least for the next 12 months. The Company’s foregoing estimate is based, among others, on its current backlog and pipeline.
|
NOTE 2:-
|
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
NOTE 3:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
NOTE 4:-
|
INVENTORIES
|
June 30,
|
December 31,
|
|||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Raw materials
|
$ | 174 | $ | 919 | ||||
Finished products (*)
|
1,308 | 1,780 | ||||||
$ | 1,482 | $ | 2,699 |
|
(*)
|
Includes amounts of $282 and $1,208 at June 30, 2015 and December 31, 2014, respectively, with respect to inventory delivered to customers but for which revenue recognition criteria have not been met.
|
NOTE 6:-
|
SHAREHOLDERS' EQUITY
|
|
a.
|
On April 3, 2013, the Company approved a new Share Option Plan (the "2013 Share Option Plan"). The 2013 Share Option Plan grants options to purchase Ordinary Shares. These options are granted pursuant to the 2013 Share Option Plan for the purpose of providing incentives to employees, directors, consultants and contractors of the Company. In accordance with Section 102 of the Income Tax Ordinance (New Version) - 1961, the Company's Board of Directors (the "Board") elected the "Capital Gains Route".
On February 2, 2015, our Board of Directors resolved to increase the number of outstanding shares reserved under the 2013 Share Option Plan, from 500,000 to 750,000.
|
|
b.
|
On February 19, 2015, the Company's Board of Directors adopted an amendment to the 2013 Share Option Plan (the "2013 Plan") pursuant to which the Company may grant options to purchase its ordinary shares, restricted shares and Restricted Share Units ("RSUs") to its employees, directors, consultants and contractors. The 2013 Plan expires on April 2, 2023.
|
|
c.
|
During the period of six months ended June 30, 2015, the Company's Board of Directors approved the grant of 157,750 options and 35,500 RSUs to certain employees (6,000 out of which are subject to shareholders approval). The options were granted at an exercise price ranged among $9.64 to $11.12 per share which is equal to the market value of the Company’s ordinary shares (the "Ordinary Shares") at the date of grant. Such options and RSUs have vesting schedule of one year over four equal quarterly installments, commencing as of the effective date of the grant.
|
|
d.
|
The following is a summary of the Company's stock options activity for the period of six months ended June 30, 2015:
|
Number of options(in thousands)
|
Weighted-average exercise price
|
Weighted- average remaining contractual term
(in years)
|
Aggregate intrinsic value
|
|||||||||||||
Outstanding at December 31, 2014
|
766,125 | 5.38 | 3.55 | $ | 5,221 | |||||||||||
Granted *)
|
157,750 | 11.11 | ||||||||||||||
Exercised
|
(117,865 | ) | 3.40 | |||||||||||||
Expired & Forfeited
|
(4,500 | ) | 12.14 | |||||||||||||
Outstanding at June 30, 2015
|
801,510 | 6.76 | 3.44 | $ | 3,243 | |||||||||||
Vested and expected to vest at June 30, 2015
|
801,510 | 6.76 | 3.44 | $ | 3,243 | |||||||||||
Exercisable at June 30, 2015
|
605,698 | 6.17 | 3.11 | $ | 2,794 |
NOTE 6:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
|
e.
|
As of June 30, 2015, stock options under the 2013 Share Option Plan are as follows for the periods indicated:
|
Options outstanding
at June 30, 2015
|
Options exercisable
at June 30, 2015
|
||||||||||||||||||||||||
Exercise price
|
Number outstanding
|
Weighted average exercise price
|
Weighted average remaining contractual life
|
Number exercisable
|
Weighted average exercise price
|
Weighted average remaining contractual life
|
|||||||||||||||||||
$
|
$
|
In years
|
$
|
In years
|
|||||||||||||||||||||
0.7 - 1.95 | 7,950 | 1.23 | 0.94 | 7,950 | 1.23 | 0.94 | |||||||||||||||||||
2.56 - 4.86 | 304,435 | 3.46 | 3.37 | 264,435 | 3.51 | 3.23 | |||||||||||||||||||
5.0 - 8.60 | 230,725 | 6.13 | 3.68 | 191,225 | 6.01 | 3.55 | |||||||||||||||||||
10.80 - 13.16 | 258,400 | 11.38 | 3.40 | 142,088 | 11.60 | 2.42 | |||||||||||||||||||
801,510 | 605,698 |
|
f.
|
The weighted average fair value of options and RSU's granted during the period of six months ended June 30, 2015 was $4.3 and $9.85, respectively.
|
|
g.
|
Share-based compensation and RSU's expenses:
As of June 30, 2015, the total amount of unrecognized stock-based compensation and RSU's expenses was approximately $379 which will be recognized over a weighted average period of 0.37 years.
|
NOTE 6:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
|
h.
|
The total compensation cost related to all of the Company’s equity-based awards, recognized during the six months ended June 30, 2015 and 2014 (unaudited) was comprised as follows:
|
Six months ended
June 30,
|
||||||||
2015*) | 2014 | |||||||
Unaudited
|
||||||||
Cost of revenue
|
$ | 22 | $ | 8 | ||||
Research and development, net
|
324 | 102 | ||||||
Selling and marketing, net
|
224 | 104 | ||||||
General and administrative
|
216 | 77 | ||||||
$ | 786 | $ | 291 |
|
*)
|
Including $140 compensation cost related to RSUs for the six months period ended June 30, 2015.
|
|
i.
|
Warrants:
During the period of six months ended June 30, 2015, 22,921 warrants have been exercised into 22,921 Ordinary Shares.
The Company's outstanding warrants and rights as of June 30, 2015 are as follows:
|
Issuance date
|
Outstanding and exercisable
|
Exercise price
|
Exercisable through
|
|||
April 24, 2013
|
310,985
|
3.49
|
April 23, 2016
|
NOTE 7:-
|
SELECTED STATEMENTS OF OPERATIONS DATA
|
|
|
|
a.
|
Financial expenses (income), net:
|
Six months ended
June 30
|
||||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Financial income:
|
||||||||
Foreign currency translation adjustments
|
$ | 22 | $ | 262 | ||||
Interest from banks
|
$ | 64 | $ | 101 | ||||
86 | 363 | |||||||
Financial expenses:
|
||||||||
Interest and bank charges
|
(7 | ) | (25 | ) | ||||
Foreign currency translation adjustments
|
(453 | ) | (81 | ) | ||||
(460 | ) | (106 | ) | |||||
Financial income (expenses), net
|
$ | (374 | ) | $ | 257 |
|
b.
|
Net income per share:
The following table sets forth the computation of basic and diluted net income per share:
|
Six months ended
June 30
|
||||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Numerator:
|
||||||||
Numerator for basic net income per share
|
$ | 640 | $ | 317 | ||||
Effect of dilutive securities:
|
||||||||
Option and warrants issued to grantees and investors, respectively
|
- | - | ||||||
Numerator for dilutive net income per share
|
$ | 640 | $ | 317 | ||||
Denominator:
|
||||||||
Denominator for dilutive net income per share - weighted average number of ordinary share
|
8,501,254 | 7,995,073 | ||||||
Effect of dilutive securities:
|
||||||||
Option and warrants issued to grantees and investors, respectively
|
565,370 | 487,126 | ||||||
Denominator for diluted net income per share - adjusted weighted average number of ordinary share
|
9,066,624 | 8,482,199 |
NOTE 8:-
|
RELATED PARTY BALANCES AND TRANSACTIONS
|
|
a.
|
The Company carries out transactions with related parties as detailed below. Certain principal shareholders of the Company are also principal shareholders of affiliates known as the RAD-BYNET Group. The Company's transactions with related parties are carried out on an arm's-length basis.
|
|
1.
|
The Company was a party to a distribution agreement with Bynet Electronics Ltd. ("BYNET"), a related party, giving BYNET the exclusive right to distribute the Company's products in Israel.
Revenues related to this distribution agreement are included in Note 8c below as "revenues". These revenues are aggregated for total amount of $62 and $12 for the period of six months ended June 30, 2015 and 2014, respectively.
|
|
2.
|
Certain premises occupied by the Company and the US subsidiary are rented from related parties. The US subsidiary also sub-leases certain premises to a related party. The aggregate net amounts for lease payments for the period of six months ended June 30, 2015 and 2014 were $198 and $222, respectively.
|
|
3.
|
In December 2012, the Company entered into an initial consulting agreement ("Agreement") with certain consultant which is also the domestic partner of one of its principal shareholder and Chairman of the Company's Board of Directors. On April 27, 2015, the Audit Committee and Board of Directors of the Company approved an extension of the Agreement with the consultant for another year expiring on January 11, 2016 or as otherwise agreed to between the parties.
Based on the key terms of the Agreement being extended, the consultant provides advisory services to the Company’s management with respect to business operations in consideration for a monthly amount which shall not exceed the average monthly salary of employees in Israel, plus Israeli Value Added Tax. During the period of six months ended June 30, 2015 and 2014, the Company recorded expenses incurred under this Agreement in amount of $18 and $20, respectively.
|
NOTE 8:-
|
RELATED PARTY BALANCES AND TRANSACTIONS (Cont.)
|
|
b.
|
Balances with related parties:
|
June 30,
|
December 31,
|
|||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Assets:
|
||||||||
Trade receivables
|
$ | 2 | $ | 2 | ||||
Other account receivables
|
$ | 139 | $ | - | ||||
Liabilities:
|
||||||||
Trade payables
|
$ | 132 | $ | 155 | ||||
Other account payables and accrued expenses
|
$ | 15 | $ | 11 |
|
c.
|
Transactions with related parties:
|
Six months ended
June 30,
|
||||||||
2015
|
2014
|
|||||||
Unaudited
|
||||||||
Revenues
|
$ | 62 | $ | 12 | ||||
Expenses:
|
||||||||
Cost of sales
|
$ | 21 | $ | 28 | ||||
Operating expenses:
|
||||||||
Research and development, net
|
$ | 128 | $ | 105 | ||||
Sales and marketing, net
|
$ | 59 | $ | 85 | ||||
General and administrative
|
$ | 28 | $ | 35 |
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