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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Elron Ventures Ltd (CE) | USOTC:ELRNF | OTCMarkets | 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% | 1.28 | 0.00 | 01:00:00 |
|
ELRON ELECTRONIC INDUSTRIES LTD.
(Registrant)
By:
/s/Yaron Elad
Yaron Elad
VP & CFO
|
"Board of Directors Report"
|
English Translation of Elron's Board of Directors Report for the Third Quarter of 2016, included in Part II of this report.
|
"Financial Statements"
|
English Translation of Elron's Interim Consolidated Financial Statements as of September 30, 2016, included in Part III of this report.
|
"20-F Annual Report"
|
Elron's Annual Report for the year ended December 31, 2015, filed with the SEC on Form 20-F.
|
1.
|
Item 4A – Information on the Company: History and Development of the Company
|
1.1. |
See Section 1.2 of the Board of Directors Report for details regarding developments in Elron during the period of this report and subsequent thereto.
|
1.2. |
Elron Distributions
|
1.3. |
Investments
|
1.4. |
First Investment in Nitinotes
|
1.5. |
First Investment in Secdo
|
2.
|
Item 8 – Legal Proceedings
|
2.1. |
For developments that took place in the legal proceedings with Elscint, see Note 4 to the Financial Statements.
|
Ari Bronshtein
CEO
|
Yaron Elad
CFO
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
Identifying and exploiting investment opportunities in companies with innovative technology and significant exit potential, mainly in the field of medical devices and cyber.
|
· |
Investing over the long term in order to maximize the possibility of enhancing the Group Companies' value.
|
· |
Focusing on investments which afford Elron influence and active involvement in their management.
|
· |
Actively enhancing the Group Companies' value by providing hands-on assistance to their management.
|
· |
Exploiting opportunities to exit Group Companies.
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
RDC (50.1%)
- See description in section 1.1.4 above.
|
· |
Pocared Diagnostics Ltd. (55% by Elron, 12% by RDC) ("Pocared")
- Pocared is developing a real-time and automated system for infectious diseases diagnosis using optical technology, intended for use by major microbiological laboratories and hospitals, as an alternative to current microbiological practice of bacteria culturing. The system is designed to reduce the average diagnostic time and significantly increase output in comparison with current diagnostic practice.
The system's first application is diagnosis of Urinary Tract Infection
.
|
· |
BrainsGate Ltd. (30%) ("BrainsGate")
- BrainsGate is developing a system for treating ischemic stroke. The system operates by electrically stimulating a nerve center located behind the nasal cavity using a miniature implantable electrode, in order to increase blood flow to the brain. The system is intended to significantly lengthen the approved stroke treatment window to 24 hours post-symptom onset, and to provide a more effective treatment than is currently available.
|
· |
Notal Vision Inc. (21%) ("Notal Vision")
- Notal Vision develops, manufactures and provides a system and services for remote monitoring of age-related macular degeneration, or AMD, patients at risk of vision loss, in order to enable early detection of visual changes before the disease progresses to the point of significant vision loss or blindness.
|
· |
CartiHeal (2009) Ltd. (35%) ("CartiHeal")
- Cartiheal is developing an implant for repairing cartilage and osteochondral defects in loadbearing joints, such as the knee. The implant has a unique structure, composed of calcium carbonate with hyaluronic acid. The implant biodegrades in the implantation site, and promotes the repair of cartilage and subchondral bone.
|
· |
Coramaze Technologies GmbH (28%) ("Coramaze")
- Coramaze is a German company developing a device for functional mitral valve regurgitation – backflow in the left side of the heart, caused by an enlarged left ventricle that prevents the valve from closing properly.
|
· |
Nitinotes Ltd. (14%) ("Nitinotes)
develops an endoscopic gastric sleeve procedure for treatment of obesity.
|
· |
SixGill Ltd. (22%) ("SixGill")
- SixGill
develops and provides an automated system that crawls the Dark Web and extracts information to provide its customers with relevant intelligence and alerts regarding possible or ongoing cyber-attacks against the enterprise
.
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
Alcide IO Ltd. (30%) ("Alcide")
- Alcide is developing a security solution for emerging data center environments to enable visibility and security policy enforcement for hybrid data centers.
|
· |
SecuredTouch Inc. (29% by RDC) ("SecuredTouch")
-
SecuredTouch develops
and provides
a real time identity verification platform for mobile apps and mobile websites, that profiles users based on their physical behavior with touchscreen devices, allowing for seamless and persistent identity verification.
|
· |
Cyber Secdo Ltd. (24% by RDC) ("Secdo")
- Secdo
operates in the field of automatic detection and investigation of cyber events in organizations through a platform that protects endpoints.
|
· |
RDSeed Ltd. (100% by RDC) ("RDSeed")
- RDSeed invests in early stage companies in cyber, information technology and enterprise software. RDSeed's holdings as of the date of filing this report include:
|
o |
Cloudyn Software Ltd. (40%) ("Cloudyn"),
which provides solutions for the optimization of cloud computing costs and resources;
|
o |
Open Legacy Technologies Ltd. (45%) ("Open Legacy"),
which provides an integration platform, delivering core enterprise applications as digital services (such as for digital banking);
|
o |
IronScales Ltd. ("IronScales") (27%),
which is developing and providing a SaaS solution whose goal is to interactively teach employees how to detect and resist spear phishing attempts.
|
· |
PlyMedia Israel (2006) Ltd. (23%) ("PlyMedia")
-
PlyMedia has developed and markets a digital advertising platform for ad networks.
|
· |
its share in the net losses of Group Companies;
|
· |
gains or losses from exit transactions or changes in holdings, and revaluation of investments recorded based on fair value;
|
· |
its corporate activities.
|
· |
the extent of its investments;
|
· |
proceeds from exit transactions;
|
· |
available credit lines or loans;
|
· |
dividends distributed to shareholders or received from Group Companies.
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
In the first nine months of 2016, Elron (directly and indirectly) invested approximately $36 million in the Group Companies. For further details see section 1.4 below and Note 3 to the Financial Statements.
|
· |
Investment in Pocared
- In January 2016, Elron and other shareholders invested in Pocared an amount of $5 million (Elron's share was approximately $4.5 million). In July 2016, RDC and other shareholders invested in Pocared a total amount of $10 million (RDC's share was approximately $9 million). In addition, according to the investment agreement, the entire balance of loans granted to Pocared during 2016 and 2015 in the amount of approximately $5.2 million(principal plus accrued interest) was converted into shares (Elron’s share in the loans including interest was approximately $4.8 million). Following the completion of this investment agreement, Elron's consolidated holding in Pocared's outstanding share capital increased from approximately 58% to 67% and from approximately 60% to 68% on a fully diluted basis (effective holding of approximately 61% outstanding share capital and 60% on a fully diluted basis) (for further details see Note 3.A to the Financial Statements)
|
· |
Investment in BrainsGate
- In January 2015, an investment agreement in BrainsGate in the amount of $26 million was signed, with the participation of Medtronic and additional shareholders of BrainsGate, including Elron. The first installment in the amount of $11 million was invested immediately (Elron's share in the first installment was approximately $3.3 million). In July 2016, the second installment was invested in the amount of approximately $15 million (Elron's share in the second installment was approximately $4.6 million) (for further details see Note 3.B to the Financial Statements). Elron's holdings in BrainsGat's share capital did not change following this investment.
|
· |
Investment in Open Legacy
– In October 2016, subsequent to the reporting date, an investment agreement with new investors and Open Legacy's shareholders, including RDSeed, in the amount of $4
.
5 million was completed (RDSeed's share in this amount was approximately $2
.
3 million). Following this investment, RDSeed's holding in Open Legacy's outstanding shares increased to approximately 45% (for further details see Note 3.E to the Financial Statements).
|
· |
New Investment in SixGill
-
In April 2016, Elron completed its first investment in SixGill
in the amount of $2.5 million as part of a $3 million financing round together with another SixGill shareholder. Following this investment, Elron holds approximately 22% of SixGill's outstanding shares (for further details see Note 3.F to the Financial Statements).
|
· |
New Investment in SecuredTouch
- In May 2016, RDC completed its first investment in SecuredTouch, in the amount of $2.2 million as part of a $2.5 million financing round together with other SecuredTouch shareholders. Following this investment, RDC holds approximately 29% of SecuredTouch's outstanding shares (for further details see Note 3.G to the Financial Statements).
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
New Investment in Alcide
- In June 2016, Elron completed its first investment in Alcide
in the amount of $1.5 million. Following this investment, Elron holds approximately 30% of Alcide's outstanding shares (for further details see Note 3.H to the Financial Statements).
|
· |
New Investment in Nitinotes -
In September 2016, Elron signed its first investment agreement in Nitinotes, together with other shareholders of Nitinotes, in the amount of $4.1 million, in three installments (Elron's share is $3 million), upon completion of which Elron will hold approximately 36% of Nitinotes's outstanding shares. The first installment in the amount of $1 million was invested immediately (Elron's share in the first installment was approximately $0.8 million). Following the first installment Elron holds 14% of Nitinotes's outstanding shares (for further details see Note 3.I to the Financial Statements).
|
· |
New Investment in Secdo
- In September 2016, RDC completed its first investment in Secdo, in the amount of $4 million, as part of a $6 million financing round together with other Secdo's shareholders. Following this investment, RDC holds approximately 24% of Secdo's outstanding shares (for further details see Note 3.J to the Financial Statements).
|
· |
BrainsGate's FDA Trial
- Further to Item 4B of Elron's 2015 Annual Report and as conveyed to Elron by BrainsGate, in May 2016, the Data Safety and Monitoring Board ("DSMB") of BrainsGate's study conducted an interim analysis of the results of 600 patients, after their follow-up period ended in April 2016. The purpose of the interim analysis was to support the continuation of the study according to the current format or to cease the study. Based on the interim analysis, the DSMB unanimously recommended to continue with the study in its current format. BrainsGate is continuing to recruit patients for the study and as of the date of filing this report, has recruited approximately 681 patients.
|
· |
Pocared's FDA Trial
- Further to Item 4B of Elron's 2015 Annual Report, as conveyed to Elron by Pocared in March 2016 regarding its FDA trial, the examination of the trial results conducted by Pocared revealed that there was a malfunction in some of the calibration components of its systems, which led to incorrect results. The source of the malfunction was identified and its substance was examined, inter alia, by running raw data collected in the trial on a system with properly calibrated components, and the results thereof met Pocared's expectations. Pocared has taken steps to prevent the recurrence of the malfunction and is preparing to conduct a new trial, the aim of which is to demonstrate the efficiency and performance of the system for the purposes of submission to the FDA, similar to the aims of the current trial which was stopped. Pocared is expected to conduct the new trial during 2017.
|
· |
CartiHeal's trial
- Further to Item 4B of Elron's 2015 Annual Report, in October 2016, CartiHeal received an approval from the FDA for the commencement of the trial, subject to certain conditions
.
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
Dividend
- On March 10, 2016, the Board of Directors resolved to make an application to the Court for a dividend distribution of $15 million, constituting an amount of $0.504307 per share, not out of the Company's profits, pursuant to Section 303 of the Israeli Companies Law, 1999. In June 2016, the Court approved the distribution of this dividend. On August 29, 2016, in accordance with the approval of the Court, the Company's Board of Directors approved the distribution of a dividend in the amount of $15 million, not out of the Company's profits. On September 26, 2016 the dividend was distributed to the Company's shareholders.
|
· |
As of the date of filing this report, Elron's and RDC's non-consolidated liquid resources amounted to approximately $35.0 million and $52.4 million, respectively. These amounts include Elron's and RDC's short term bank deposits in the amounts of $2 million and $8 million, respectively and other short term investments in securities by Elron in the amount of approximately $25.2 million. As of the date of filing this report, Elron and RDC have no debt.
|
For the nine months
ended September 30
|
For the three months
ended September 30
|
For the year ended December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited |
Audited
|
|||||||||||||||||||
$ thousands | ||||||||||||||||||||
Net income (loss) attributable to Elron's shareholders
|
(17,536
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
2,451
|
|||||||||||||
Net income (loss) per share attributable to Elron's shareholders (in $)
|
(0.59
|
)
|
0.20
|
(0.28
|
)
|
0.21
|
0.08
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
For the nine months
en
ded September 30
|
For the three months
ended September 30
|
For the year ended December 31 | ||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
$ thousands | ||||||||||||||||||||
Losses in respect of Group Companies:
|
||||||||||||||||||||
Elron's share in net losses of Group Companies
|
(13,046
|
)
|
(13,793
|
)
|
(4,720
|
)
|
(4,858
|
)
|
(18,421
|
)
|
||||||||||
Excess cost amortization
|
(88
|
)
|
(15
|
)
|
(35
|
)
|
(5
|
)
|
(18
|
)
|
||||||||||
Total
|
(13,134
|
)
|
(13,808
|
)
|
(4,755
|
)
|
(4,863
|
)
|
(18,439
|
)
|
||||||||||
Gain from disposal and revaluation of investee companies and changes in holdings, net
|
672
|
24,511
|
16
|
14,356
|
27,660
|
|||||||||||||||
Corporate operating expenses
|
(2,629
|
)
|
(2,565
|
)
|
(947
|
)
|
(851
|
)
|
(4,608
|
)
|
||||||||||
Taxes on income
|
(1,200
|
)
|
(1,557
|
)
|
(1,057
|
)
|
(1,557
|
)
|
(1,653
|
)
|
||||||||||
Other
|
(1,245
|
)
|
(567
|
)
|
(1,592
|
)
|
(755
|
)
|
(509
|
)
|
||||||||||
Net income (loss) attributable to shareholders
|
(17,536
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
2,451
|
· |
A $8.7 million net gain recorded in the third quarter (net of non-controlling interest) due to the sale of Kyma Medical Technologies Ltd. ("Kyma", sold in September 2015) ($10.3 million before tax);
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
· |
A $4.0 million gain recorded in the third quarter due to an increase in the fair value of Jordan Valley Semiconductors Ltd. ("Jordan Valley", the sale was completed in October 2015).
|
· |
A $10.1 million gain recorded in the first quarter due to the initial consolidation of Pocared.
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
For the nine months
ended September 30,
|
For the three months
ended September 30,
|
||||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||||
Unaudited
|
|||||||||||||||||
$ thousands
|
Explanation
|
||||||||||||||||
Income from sales
|
-
|
715
|
-
|
266
|
Income from sales in 2015 resulted from revenues of Cloudyn. In December 2015 Elron lost control over Cloudyn and commencing from that date, ceased consolidating Cloudyn's results in its financial statements.
|
||||||||||||
Gain from disposal and revaluation of group companies, and changes in holdings, net
|
1,230
|
34,805
|
25
|
24,630
|
In the first nine months of 2016, this item mainly included a $1,078 thousand, recorded due to an increase in the value of the contingent consideration asset
in respect of the sale of Kyma
that took place in 2015.
In the first nine months of 2015, this item included mainly: a $10,120 thousand gain recorded in the first quarter from the initial consolidation of Pocared;
a $20,559 thousand gain recorded in the third quarter from the sale of Kyma and a
$4,026 thousand gain recorded in the third quarter due to an increase in Jordan Valley's fair value
.
|
||||||||||||
Financial income
|
2,525
|
784
|
1,177
|
271
|
Financial income in the third quarter and the first nine months of 2016 resulted mainly from interest income on deposits, increase in the value of marketable investments measured at fair value and USD-NIS exchange rate fluctuations, primarily in NIS bank deposits held by RDC.
Financial income in the third quarter and the first nine months of 2015 resulted mainly from interest income on deposits and other investments in securities.
|
||||||||||||
Total income
|
3,755
|
36,304
|
1,202
|
25,167
|
|||||||||||||
Cost of sales
|
-
|
190
|
-
|
81
|
See explanation under line item 'Income from sales' above.
|
||||||||||||
Research and development expenses, net |
4,899
|
9,400
|
1,287
|
3,934
|
|||||||||||||
Selling and marketing expenses |
296
|
1,431
|
72
|
476
|
See analysis of consolidated companies' operating expenses below. |
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
For the nine months
ended September 30,
|
For the three months
ended September 30,
|
||||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||||
Unaudited
|
|||||||||||||||||
$ thousands
|
Explanation | ||||||||||||||||
General and administrative expenses
|
4,637
|
4,720
|
1,722
|
1,516
|
See analysis of Elron's and consolidated companies' operating expenses below.
|
||||||||||||
Equity in losses of associates, net
|
9,853
|
7,072
|
4,750
|
1,839
|
Elron's share in the net losses of its associates results from its holdings in certain investments that are accounted for under the equity method.
As most of the Group Companies are companies whose operations have not yet generated significant revenues, if at all, and invest considerable resources in research and development and in marketing activities, Elron expects to continue to record losses in respect of these companies' ongoing operations in accordance with the accounting method applied to them in Elron's financial statements. In addition, see the analysis of the results of operations of main associate below.
The Increase in the third quarter and first nine months of 2016 as compared with the third quarter and first nine months of 2015 was mainly due to an increase in investments in new companies made by Elron and RDC in 2016 and recording its share in the losses of these companies (see section 1.2.1 above).
|
||||||||||||
Financial expenses
|
287
|
685
|
21
|
1,537
|
Financial expenses in the first nine months of 2016 resulted mainly from changes in the fair value of marketable investments measured at fair value.
Financial expenses in the first nine months of 2015 resulted mainly from changes in the fair value of marketable investments measured at fair value and USD exchange rate fluctuations.
|
||||||||||||
Other expenses
|
2,181
|
43
|
2,161
|
11
|
Other expenses in the third quarter and first nine months of 2016 resulted mainly from a change in the estimated provision in respect of contingent liabilities in regards with legal claims and indirect taxation.
|
||||||||||||
Total expenses
|
22,153
|
23,541
|
10,013
|
9,394
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
For the nine months
ended September 30,
|
For the three months
ended September 30,
|
||||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||||
Unaudited
|
|||||||||||||||||
$ thousands | Explanation | ||||||||||||||||
Income (loss) before taxes on income
|
(18,398
|
)
|
12,763
|
(8,811
|
)
|
15,773
|
|||||||||||
Taxes on income
|
(1,417
|
)
|
(3,150
|
)
|
(1,077
|
)
|
(3,125
|
)
|
Taxes on income in the third quarter and in the first nine months of 2016 resulted mainly from tax expenses in respect of prior years as a result of final tax assessments up to and including the year 2014. Taxes on income in the first nine months of 2015 resulted mainly from Elron's share in tax expenses recorded by RDC in respect with the sale of Kyma.
|
||||||||
Net income (loss)
|
(19,815
|
)
|
9,613
|
(9,888
|
)
|
12,648
|
|||||||||||
Net income (loss) attributable to the Company's shareholders
|
(17,356
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
|||||||||||
Net income (loss) attributable to non-controlling interest
|
(2,279
|
)
|
3,599
|
(1,553
|
)
|
6,318
|
The net income or loss attributable to non-controlling interests results mainly from the share of the non-controlling interest in the gain or loss recorded by RDC. In the first nine months of 2016 most of the loss was offset by financial income and the change in value of the contingent consideration asset in respect of the sale of Kyma, that was recorded by RDC.
In the third quarter and first nine months of 2015 the loss attributable to non-controlling interest resulted mainly from the share of the non-controlling interest in the gain from the sale of Kyma and the current loss recorded by RDC in respect of the losses of its subsidiaries.
|
||||||||||
Basic and diluted net income (loss) per share attributable to the Company's shareholders (in $)
|
(0.59
|
)
|
0.20
|
(0.28
|
)
|
0.21
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
For the nine months
ended September 30,
|
For the three months
ended September 30,
|
||||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||||
$ thousands
|
Explanation
|
||||||||||||||||
Corporate
|
2,628
|
2,565
|
946
|
851
|
|||||||||||||
RDC
|
686
|
1,368
|
200
|
317
|
The decrease was mainly due to a decrease in expenses related to incubating projects and changes in RDC's workforce.
|
||||||||||||
RDSeed
|
141
|
2,869
|
34
|
1,019
|
The change was mainly since RDSeed lost control over Cloudyn in December 2015, and therefore, ceased consolidating Cloudyn's results in its financial statements.
|
||||||||||||
Pocared
|
6,377
|
8,749
|
1,901
|
3,739
|
The operating expenses for the first nine months of 2015 displayed in the table are from the initial consolidation date of Pocared (February 2015) and until the end of the third quarter. Pocared's operating expenses for the first nine months of 2015 in full were $9,917 thousand. The decrease in 2016 resulted mainly from stopping the trial and preparing to conduct a new trial in 2017 (see section 1.2.2 above).
|
||||||||||||
Total
|
9,832
|
15,551
|
3,081
|
5,926
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
For the nine months
ended September 30,
|
For the three months
ended September 30,
|
||||||||||||||||
2016
|
2015
|
2016
|
2015
|
||||||||||||||
Unaudited
|
|||||||||||||||||
$ thousands
|
Explanation
|
||||||||||||||||
Loss
|
3,893
|
5,164
|
1,333
|
1,387
|
BrainsGate is in the development stage and has not yet commenced sales. BrainsGate's losses mainly result from research and development expenses. The decrease in loss in the first nine months of 2016 compared with the first nine months of 2015 was mainly due to share based payment expenses recorded in the first quarter of 2015, due to recapitalization of BrainsGate's equity, as part of the investment agreement from January 2015.
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
September 30, 2016
|
December 31, 2015
|
|||||||
Unaudited
|
Audited
|
|||||||
$ thousands
|
||||||||
Total assets in the consolidated statement of financial position
|
183,064
|
214,869
|
||||||
Investments in associates and other companies
|
46,147
|
34,924
|
||||||
Current assets
|
111,199
|
151,084
|
||||||
Long-term receivables
|
7,039
|
10,395
|
||||||
Intangible assets
|
17,438
|
17,438
|
||||||
Current liabilities
|
8,221
|
6,363
|
||||||
Long-term liabilities
|
2,185
|
2,104
|
||||||
Equity including non-controlling interest
|
172,658
|
206,402
|
For the nine months
ended September 30,
|
For the three months
ended September 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Unaudited
|
||||||||||||||||
$ thousands
|
||||||||||||||||
Investments in Elron's and RDC's group companies
|
(36,452
|
)
|
(22,031
|
)
|
(19,401
|
)
|
(10,322
|
)
|
||||||||
Proceeds from disposal of Elron's and RDC's non-current investments, net of tax
|
60
|
16,702
|
25
|
16,647
|
||||||||||||
Dividend distributed by Elron
|
(15,000
|
)
|
-
|
(15,000
|
)
|
-
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
Elron
|
RDC
|
|||||||||||||||
For the nine months ended September 30, 2016
|
For the nine months ended September 30, 2015
|
For the nine months ended September 30, 2016
|
For the nine months ended September 30, 2015
|
|||||||||||||
Unaudited
|
||||||||||||||||
$ thousands
|
||||||||||||||||
Consolidated Companies (1)
|
||||||||||||||||
Pocared
|
6,453
|
11,590
|
8,987
|
-
|
||||||||||||
6,453
|
11,590
|
8,987
|
-
|
|||||||||||||
Associates and Other Investments
|
||||||||||||||||
BrainsGate
|
4,603
|
3,284
|
-
|
-
|
||||||||||||
CartiHeal
|
-
|
1,282
|
-
|
-
|
||||||||||||
Coramaze
|
1,963
|
2,020
|
-
|
-
|
||||||||||||
Notal Vision (2)
|
2,335
|
597
|
-
|
-
|
||||||||||||
Cloudyn | - | - | - | 750 | ||||||||||||
Open Legacy (3)
|
-
|
-
|
950
|
730
|
||||||||||||
SixGill
|
2,500
|
-
|
-
|
-
|
||||||||||||
SecuredTouch
|
-
|
-
|
2,200
|
-
|
||||||||||||
Alcide
|
1,500
|
-
|
-
|
-
|
||||||||||||
Nitinotes
|
761
|
-
|
-
|
-
|
||||||||||||
Secdo
|
-
|
-
|
4,000
|
-
|
||||||||||||
Kyma (4)
|
-
|
-
|
-
|
1,625
|
||||||||||||
Other
|
200
|
80
|
-
|
73
|
||||||||||||
13,862
|
7,263
|
7,150
|
3,178
|
|||||||||||||
Total investments
|
20,315
|
18,853
|
16,137
|
3,178
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
Cash flows from operating activities
|
Liquid resources balance
|
|||||||||||||||||||||||
For the nine months ended September 30, 2016
|
For the nine months ended September 30, 2015
|
For the three months ended September 30, 2016
|
For the three months ended September 30, 2015
|
As of September 30,
2016
|
As of December 31,
2015
|
|||||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||
BrainsGate
(*)
|
(4,155
|
)
|
(3,972
|
)
|
(1,444
|
)
|
(1,363
|
)
|
19,534
|
8,264
|
||||||||||||||
Pocared
|
(6,633
|
)
|
(8,447
|
)
|
(1,691
|
)
|
(3,312
|
)
|
11,872
|
1,955
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
NIS
(CPI
linked)
|
USD
(or USD
linked)
|
NIS
(unlinked)
|
Non-
monetary item (2)
|
Total
|
||||||||||||||||
Assets
(1)
|
||||||||||||||||||||
Cash and cash equivalents
|
-
|
18,248
|
16,848
|
-
|
35,096
|
|||||||||||||||
Other investments in securities
|
-
|
25,198
|
-
|
-
|
25,198
|
|||||||||||||||
Other accounts receivable
|
6
|
25
|
638
|
117
|
786
|
|||||||||||||||
Bank deposits
|
151
|
33,745
|
11,695
|
-
|
45,591
|
|||||||||||||||
Investments in associates
|
-
|
-
|
-
|
24,412
|
24,412
|
|||||||||||||||
Investments in other companies measured at fair value
|
-
|
-
|
-
|
21,735
|
21,735
|
|||||||||||||||
Property, plant and equipment, net
|
-
|
-
|
-
|
1,241
|
1,241
|
|||||||||||||||
Intangible assets
|
-
|
-
|
-
|
17,438
|
17,438
|
|||||||||||||||
Long-term receivables
|
-
|
11,413
|
154
|
-
|
11,567
|
|||||||||||||||
Total assets
|
157
|
88,629
|
29,335
|
64,943
|
183,064
|
|||||||||||||||
Liabilities (1)
|
||||||||||||||||||||
Trade payables
|
-
|
171
|
303
|
-
|
474
|
|||||||||||||||
Other account payables
|
-
|
767
|
3,570
|
3,410
|
7,747
|
|||||||||||||||
Long-term taxes
|
-
|
-
|
-
|
2,185
|
2,185
|
|||||||||||||||
Total liabilities
|
-
|
938
|
3,873
|
5,595
|
10,406
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
NIS
(CPI
linked)
|
USD
(or USD
linked)
|
NIS
(unlinked)
|
Non-
monetary item (2)
|
Total
|
||||||||||||||||
Assets
(1)
|
||||||||||||||||||||
Cash and cash equivalents
|
-
|
41,867
|
10,084
|
-
|
51,951
|
|||||||||||||||
Other investments in securities, net
|
-
|
23,115
|
-
|
4,930
|
28,045
|
|||||||||||||||
Other accounts receivable
|
2
|
47
|
677
|
174
|
900
|
|||||||||||||||
Bank deposits
|
-
|
55,192
|
14,996
|
-
|
70,188
|
|||||||||||||||
Investments in associates
|
-
|
-
|
-
|
15,529
|
15,529
|
|||||||||||||||
Investments in other companies measured at fair value
|
-
|
-
|
-
|
19,395
|
19,395
|
|||||||||||||||
Property, plant and equipment, net
|
-
|
-
|
-
|
1,028
|
1,028
|
|||||||||||||||
Intangible assets
|
-
|
-
|
-
|
17,438
|
17,438
|
|||||||||||||||
Long-term receivables
|
-
|
10,242
|
153
|
-
|
10,395
|
|||||||||||||||
Total assets
|
2
|
130,463
|
25,910
|
58,494
|
214,869
|
|||||||||||||||
Liabilities (1)
|
||||||||||||||||||||
Trade payables
|
-
|
133
|
312
|
-
|
445
|
|||||||||||||||
Other account payables
|
-
|
1,741
|
3,779
|
398
|
5,918
|
|||||||||||||||
Long-term taxes
|
-
|
-
|
-
|
2,104
|
2,104
|
|||||||||||||||
Total liabilities
|
-
|
1,874
|
4,091
|
2,502
|
8,467
|
NIS
(CPI
linked)
|
USD
(or USD
linked)
|
Other currencies
|
NIS
(unlinked)
|
Non-
monetary item (2)
|
Total
|
|||||||||||||||||||
Assets
(1)
|
||||||||||||||||||||||||
Cash and cash equivalents
|
-
|
47,855
|
-
|
10,498
|
-
|
58,353
|
||||||||||||||||||
Short term investments
|
-
|
18,477
|
-
|
-
|
4,844
|
23,321
|
||||||||||||||||||
Bank deposits
|
-
|
61,951
|
-
|
12,182
|
-
|
74,133
|
||||||||||||||||||
Other accounts receivable
|
67
|
2
|
64
|
771
|
343
|
1,247
|
||||||||||||||||||
Investments in associates
|
-
|
-
|
-
|
-
|
4,186
|
4,186
|
||||||||||||||||||
Investments in financial assets measured at fair value
|
-
|
-
|
-
|
-
|
18,907
|
18,907
|
||||||||||||||||||
Property, plant and equipment, net
|
-
|
-
|
-
|
-
|
1,036
|
1,036
|
||||||||||||||||||
Intangible assets, net
|
-
|
-
|
-
|
-
|
17,654
|
17,654
|
||||||||||||||||||
Long-term receivables
|
-
|
7,391
|
-
|
50
|
-
|
7,441
|
||||||||||||||||||
Assets held for sale
|
-
|
-
|
-
|
-
|
13,056
|
13,056
|
||||||||||||||||||
Total assets
|
67
|
135,676
|
64
|
23,501
|
60,026
|
219,334
|
||||||||||||||||||
Liabilities (1)
|
||||||||||||||||||||||||
Trade payables
|
-
|
88
|
-
|
328
|
-
|
416
|
||||||||||||||||||
Other account payables
|
-
|
2,190
|
79
|
5,394
|
272
|
7,935
|
||||||||||||||||||
Long-term taxes
|
-
|
-
|
-
|
-
|
1,959
|
1,959
|
||||||||||||||||||
Total liabilities
|
-
|
2,278
|
79
|
5,722
|
2,231
|
10,310
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
1. |
The exchange rates used in the sensitivity tests are the closing rates on the day of calculation.
|
2. |
For details regarding the influence of exchange rate changes on financial assets and liabilities, see the reports on linkage bases above.
|
3. |
Sensitivity tests for the influence of NIS interest rate changes were not presented due to their negligible influence on their fair value.
|
Gain (loss) from changes in dollar interest rates
|
||||||||||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||||||||||
Fair value
|
2% Absolute value
|
10%
|
5%
|
0% interest
|
10%
|
5%
|
||||||||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||||||||||
Short term bank deposits
|
33,758
|
(129
|
)
|
(15
|
)
|
(7
|
)
|
150
|
15
|
7
|
Gain (loss) from changes in the
price of shares
|
||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||
Fair value
|
10%
|
5%
|
10%
|
5%
|
||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||
Investments in other companies measured at fair value
|
21,735
|
2,174
|
1,087
|
(2,174
|
)
|
(1,087
|
)
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
Gain (loss) from changes in the
Fair value
|
||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||
Fair value
|
10%
|
5%
|
10%
|
5%
|
||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||
Other investments in securities
|
25,198
|
2,520
|
1,260
|
(2,520
|
)
|
(1,260
|
)
|
|||||||||||||
Other accounts receivable
|
7,916
|
792
|
396
|
(792
|
)
|
(396
|
)
|
|||||||||||||
33,114
|
3,311
|
1,656
|
(3,311
|
)
|
(1,656
|
)
|
Gain (loss) from changes in dollar interest rates
|
||||||||||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||||||||||
Fair value
|
2% absolute value
|
10%
|
5%
|
0% interest
|
10%
|
5%
|
||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||||||
Short term bank deposits
|
55,261
|
(592
|
)
|
(30
|
)
|
(15
|
)
|
301
|
30
|
15
|
Gain (loss) from changes in the
price of shares
|
||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||
Fair value
|
10%
|
5%
|
10%
|
5%
|
||||||||||||||||
$ thousands
|
||||||||||||||||||||
Investments in other companies measured at fair value
|
19,396
|
1,940
|
970
|
(1,940
|
)
|
(970
|
)
|
Gain (loss) from changes in the
price of shares
|
||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||
Fair value
|
10%
|
5%
|
10%
|
5%
|
||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||
Other investments in securities, net
|
28,045
|
2,443
|
1,288
|
(2,580
|
)
|
(1,402
|
)
|
|||||||||||||
Long-term receivables
|
6,740
|
674
|
337
|
(674
|
)
|
(337
|
)
|
|||||||||||||
34,785
|
3,117
|
1,625
|
(3,254
|
)
|
(1,739
|
)
|
Elron Electronic Industries Ltd.
Part II
English Translation of Board of Directors Report
for the Third Quarter of 2016
|
Gain (loss) from changes in dollar interest rates
|
||||||||||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||||||||||
Fair value
|
2% Absolute value
|
10%
|
5%
|
0% interest
|
10%
|
5%
|
||||||||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||||||||||
Short term bank deposits
|
61,937
|
(600
|
)
|
(36
|
)
|
(18
|
)
|
360
|
36
|
18
|
Gain (loss) from changes in the
price of shares
|
||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||
Fair value
|
10%
|
5%
|
10%
|
5%
|
||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||
Other investments measured at fair value (including assets held for sale)
|
31,963
|
3,196
|
1,598
|
(3,196
|
)
|
(1,598
|
)
|
Gain (loss) from changes in the
Fair value
|
||||||||||||||||||||
Increase
|
Decrease
|
|||||||||||||||||||
Fair value
|
10%
|
5%
|
10%
|
5%
|
||||||||||||||||
Section
|
$ thousands
|
|||||||||||||||||||
Other investments in securities
|
23,320
|
2,201
|
1,166
|
(1,927
|
)
|
(1,003
|
)
|
|||||||||||||
Long term receivables
|
5,170
|
517
|
259
|
(517
|
)
|
(259
|
)
|
|||||||||||||
28,490
|
2,718
|
1,425
|
(2,444
|
)
|
(1,262
|
)
|
Ari Bronshtein
CEO
|
Eduardo Elsztain
Chairman of the Board of Directors |
Elron Electronic Industries Ltd.
Part III
English Translation of
Interim
Consolidated Financial Statements
As of
September 30, 2016
Unaudited
|
2
|
|
3-4
|
|
5
|
|
6
|
|
7-11
|
|
12-13
|
|
14-23
|
|
24
|
Tel-Aviv, Israel
|
KOST FORER GABBAY & KASIERER
|
|
November 24, 2016
|
A Member of Ernst & Young Global
|
September 30
|
December 31
|
|||||||||||
2016
|
2015
|
2015
|
||||||||||
Unaudited
|
Audited
|
|||||||||||
$ thousands
|
||||||||||||
Current assets
|
||||||||||||
35,096
|
58,353
|
51,951
|
||||||||||
Bank deposits
|
45,591
|
74,133
|
70,188
|
|||||||||
Other investments in securities, net
|
25,198
|
23,321
|
28,045
|
|||||||||
Other accounts receivable
|
5,314
|
1,247
|
900
|
|||||||||
Investment in financial asset classified as held for sale
|
-
|
13,056
|
-
|
|||||||||
111,199
|
170,110
|
151,084
|
||||||||||
Non‑current assets
|
||||||||||||
Investments in associates
|
24,412
|
4,186
|
15,529
|
|||||||||
Investments in other companies measured at fair value
|
21,735
|
18,907
|
19,395
|
|||||||||
Long-term receivables
|
7,039
|
7,441
|
10,395
|
|||||||||
Property, plant and equipment, net
|
1,241
|
1,036
|
1,028
|
|||||||||
Intangible assets, net
|
17,438
|
17,654
|
17,438
|
|||||||||
71,865
|
49,224
|
63,785
|
||||||||||
Total assets
|
183,064
|
219,334
|
214,869
|
September 30
|
December 31
|
|||||||||||
2016
|
2015
|
2015
|
||||||||||
Unaudited
|
Audited
|
|||||||||||
$ thousands
|
||||||||||||
Current liabilities
|
||||||||||||
Trade payables
|
474
|
416
|
445
|
|||||||||
Other accounts payable
|
7,747
|
7,935
|
5,918
|
|||||||||
8,221
|
8,351
|
6,363
|
||||||||||
Long-term liabilities
|
||||||||||||
Long term taxes
|
2,185
|
1,959
|
2,104
|
|||||||||
2,185
|
1,959
|
2,104
|
||||||||||
Equity attributable to the Company's shareholders
|
||||||||||||
Issued capital
|
9,573
|
9,573
|
9,573
|
|||||||||
Share premium
|
190,753
|
190,753
|
190,753
|
|||||||||
Capital reserves
|
4,244
|
3,178
|
3,085
|
|||||||||
Accumulated deficit
|
(77,740
|
)
|
(41,641
|
)
|
(45,204
|
)
|
||||||
126,830
|
161,863
|
158,207
|
||||||||||
Non-controlling interests
|
45,828
|
47,161
|
48,195
|
|||||||||
Total equity
|
172,658
|
209,024
|
206,402
|
|||||||||
Total liabilities and equity
|
183,064
|
219,334
|
214,869
|
Eduardo Elsztain
|
Ari Bronshtein
|
Yaron Elad
|
||
Chairman of the Board of Directors
|
Chief Executive Officer
|
Vice President &
Chief Financial Officer
|
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
(except for income (loss) per share data)
|
||||||||||||||||||||
Income
|
||||||||||||||||||||
Income from sales
|
-
|
715
|
-
|
266
|
889
|
|||||||||||||||
Gain from disposal and revaluation of investee
companies and changes in holdings, net
|
1,230
|
34,805
|
25
|
24,630
|
40,590
|
|||||||||||||||
Financial income
|
2,525
|
784
|
1,177
|
271
|
1,112
|
|||||||||||||||
3,755
|
36,304
|
1,202
|
25,167
|
42,591
|
||||||||||||||||
Expenses
|
||||||||||||||||||||
Cost of sales
|
-
|
190
|
-
|
81
|
267
|
|||||||||||||||
Research and development expenses
|
4,899
|
9,400
|
1,287
|
3,934
|
13,129
|
|||||||||||||||
296
|
1,431
|
72
|
476
|
2,008
|
||||||||||||||||
General and administrative expenses
|
4,637
|
4,720
|
1,722
|
1,516
|
7,556
|
|||||||||||||||
Equity in losses of associates, net
|
9,853
|
7,072
|
4,750
|
1,839
|
8,566
|
|||||||||||||||
Financial expenses
|
287
|
685
|
21
|
1,537
|
650
|
|||||||||||||||
Other expenses, net
|
2,181
|
43
|
2,161
|
11
|
22
|
|||||||||||||||
22,153
|
23,541
|
10,013
|
9,394
|
32,198
|
||||||||||||||||
Income (loss) before taxes on income
|
(18,398
|
)
|
12,763
|
(8,811
|
)
|
15,773
|
10,393
|
|||||||||||||
Taxes on income
|
(1,417
|
)
|
(3,150
|
)
|
(1,077
|
)
|
(3,125
|
)
|
(3,348
|
)
|
||||||||||
Net income (loss)
|
(19,815
|
)
|
9,613
|
(9,888
|
)
|
12,648
|
7,045
|
|||||||||||||
Attributable to:
|
||||||||||||||||||||
The Company's shareholders
|
(17,536
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
2,451
|
|||||||||||||
Non-controlling interests
|
(2,279
|
)
|
3,599
|
(1,553
|
)
|
6,318
|
4,594
|
|||||||||||||
(19,815
|
)
|
9,613
|
(9,888
|
)
|
12,648
|
7,045
|
||||||||||||||
Net income (loss) per share attributable to the Company's shareholders (in $):
|
||||||||||||||||||||
Basic and diluted net income (loss) per share
|
(0.59
|
)
|
0.20
|
(0.28
|
)
|
0.21
|
0.08
|
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Net income (loss)
|
(19,815
|
)
|
9,613
|
(9,888
|
)
|
12,648
|
7,045
|
|||||||||||||
Other comprehensive income (loss) (net of tax):
|
||||||||||||||||||||
Amounts that would never be reclassified to profit or loss:
|
||||||||||||||||||||
Gain (loss) from financial assets measured at fair value through other comprehensive income, net
|
-
|
(30
|
)
|
-
|
5
|
(30
|
)
|
|||||||||||||
Total gain (loss) that would never be reclassified to profit or loss
|
-
|
(30
|
)
|
-
|
5
|
(30
|
)
|
|||||||||||||
Amounts that are classified or may be reclassified to profit or loss under certain conditions:
|
||||||||||||||||||||
Foreign currency translation differences for foreign operation
|
35
|
-
|
10
|
-
|
(93
|
)
|
||||||||||||||
Total gain (loss) that would be reclassified to profit or loss under certain conditions
|
35
|
-
|
10
|
-
|
(93
|
)
|
||||||||||||||
Total other comprehensive income (loss)
|
35
|
(30
|
)
|
10
|
5
|
(123
|
)
|
|||||||||||||
Total comprehensive income (loss)
|
(19,780
|
)
|
9,583
|
(9,878
|
)
|
12,653
|
6,922
|
|||||||||||||
Attributable to:
|
||||||||||||||||||||
Company's shareholders
|
(17,501
|
)
|
5,984
|
(8,325
|
)
|
6,335
|
2,328
|
|||||||||||||
Non-controlling interests
|
(2,279
|
)
|
3,599
|
(1,553
|
)
|
6,318
|
4,594
|
|||||||||||||
(19,780
|
)
|
9,583
|
(9,878
|
)
|
12,653
|
6,922
|
Attributable to the Company's shareholders
|
||||||||||||||||||||||||||||||||||||||||
Issued capital
|
Share Premium
|
Capital reserve for transaction with controlling shareholders
|
Capital reserve
for financial
assets measured at fair value through other comprehensive income
|
Capital reserve from translation
differences
|
Capital reserve from transactions
with non-controlling interests
|
Accumulated deficit
|
Total
|
Non- controlling interests
|
Total equity
|
|||||||||||||||||||||||||||||||
Unaudited
|
||||||||||||||||||||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2016 (audited)
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
(93
|
)
|
4,019
|
(45,204
|
)
|
158,207
|
48,195
|
206,402
|
|||||||||||||||||||||||||||
Total comprehensive income (loss)
|
-
|
-
|
-
|
-
|
35
|
-
|
(17,536
|
)
|
(17,501
|
)
|
(2,279
|
)
|
(19,780
|
)
|
||||||||||||||||||||||||||
Dividend to equity holders of the Company
|
-
|
-
|
-
|
-
|
-
|
-
|
(15,000
|
)
|
(15,000
|
)
|
-
|
(15,000
|
)
|
|||||||||||||||||||||||||||
Share-based payments in respect of awards issued by subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
68
|
68
|
||||||||||||||||||||||||||||||
Investment in a consolidated company by RDC (see Note 3.A)
|
-
|
-
|
-
|
-
|
-
|
1,124
|
-
|
1,124
|
(1,124
|
)
|
-
|
|||||||||||||||||||||||||||||
Investment of non-controlling interests in consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
968
|
968
|
||||||||||||||||||||||||||||||
Balance at
September 30
, 2016
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
(58
|
)
|
5,143
|
(77,740
|
)
|
126,830
|
45,828
|
172,658
|
Attributable to the Company's shareholders
|
||||||||||||||||||||||||||||||||||||
Issued capital
|
Share Premium
|
Capital reserve for transaction with controlling shareholders
|
Capital reserve
for financial
assets measured at fair value through other comprehensive income
|
Capital reserve from transactions
with non-controlling interests
|
Retained earnings (accumulated deficit)
|
Total
|
Non- controlling interests
|
Total equity
|
||||||||||||||||||||||||||||
Unaudited
|
||||||||||||||||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||||||||||||||
Balance at January 1, 2015 (audited)
|
9,573
|
190,753
|
351
|
(2,304
|
)
|
4,019
|
(46,513
|
)
|
155,879
|
36,898
|
192,777
|
|||||||||||||||||||||||||
Total comprehensive loss
|
-
|
-
|
-
|
(30
|
)
|
-
|
6,014
|
5,984
|
3,599
|
9,583
|
||||||||||||||||||||||||||
Share-based payments in respect of awards issued by subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
42
|
42
|
|||||||||||||||||||||||||||
Non-controlling interests created due to initially consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
5,434
|
5,434
|
|||||||||||||||||||||||||||
Investment of non-controlling interests in consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,136
|
1,136
|
|||||||||||||||||||||||||||
Change in non-controlling interests due to sale of a subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
52
|
52
|
|||||||||||||||||||||||||||
Sale of financial assets measured at fair value through other comprehensive income
|
-
|
-
|
-
|
1,142
|
-
|
(1,142
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Balance at September 30, 2015
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
4,019
|
(41,641
|
)
|
161,863
|
47,161
|
209,024
|
Attributable to the Company's shareholders
|
||||||||||||||||||||||||||||||||||||||||
Issued capital
|
Share Premium
|
Capital reserve for transaction with controlling shareholders
|
Capital reserve
for financial
assets measured at fair value through other comprehensive income
|
Capital reserve from translation
differences
|
Capital reserve from transactions
with non-controlling interests
|
Accumulated deficit
|
Total
|
Non- controlling interests
|
Total equity
|
|||||||||||||||||||||||||||||||
Unaudited
|
||||||||||||||||||||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||||||||||||||||||
Balance at July 1, 2016
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
(68
|
)
|
4,019
|
(54,405
|
)
|
149,031
|
47,723
|
196,754
|
|||||||||||||||||||||||||||
Total comprehensive income (loss)
|
-
|
-
|
-
|
-
|
10
|
-
|
(8,335
|
)
|
(8,325
|
)
|
(1,553
|
)
|
(9,878
|
)
|
||||||||||||||||||||||||||
Dividend to equity holders of the Company
|
-
|
-
|
-
|
-
|
-
|
-
|
(15,000
|
)
|
(15,000
|
)
|
-
|
(15,000
|
)
|
|||||||||||||||||||||||||||
Share-based payments in respect of awards issued by subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6
|
6
|
||||||||||||||||||||||||||||||
Investment in a consolidated company by RDC (see Note 3.A)
|
-
|
-
|
-
|
-
|
-
|
1,124
|
-
|
1,124
|
(1,124
|
)
|
-
|
|||||||||||||||||||||||||||||
Investment of non-controlling interests in consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
776
|
776
|
||||||||||||||||||||||||||||||
Balance at
September 30
, 2016
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
(58
|
)
|
5,143
|
(77,740
|
)
|
126,830
|
45,828
|
172,658
|
Attributable to the Company's shareholders
|
||||||||||||||||||||||||||||||||||||
Issued
capital
|
Share
Premium
|
Capital
reserve
for
transaction
with
controlling
interests
|
Capital
reserve
for
financial
assets measured at fair value through other comprehensive income
|
Capital
reserve
from
transactions
with non-
controlling
interests
|
Retained earnings (accumulated deficit)
|
Total
|
Non-
controlling
interests
|
Total
equity
|
||||||||||||||||||||||||||||
Unaudited
|
||||||||||||||||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||||||||||||||
Balance at July 1, 2015
|
9,573
|
190,753
|
351
|
(1,349
|
)
|
4,019
|
(47,819
|
)
|
155,528
|
39,636
|
195,164
|
|||||||||||||||||||||||||
Total comprehensive income
|
-
|
-
|
-
|
5
|
-
|
6,330
|
6,335
|
6,318
|
12,653
|
|||||||||||||||||||||||||||
Share-based payments in respect of awards issued by subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
19
|
19
|
|||||||||||||||||||||||||||
Investment of non-controlling interests in consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,136
|
1,136
|
|||||||||||||||||||||||||||
Change in non-controlling interests due to sale of a subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
52
|
52
|
|||||||||||||||||||||||||||
Sale of financial assets measured at fair value through other comprehensive income
|
-
|
-
|
-
|
152
|
-
|
(152
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Balance at September 30, 2015
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
4,019
|
(41,641
|
)
|
161,863
|
47,161
|
209,024
|
Attributable to the Company's shareholders
|
||||||||||||||||||||||||||||||||||||||||
Issued capital
|
Share Premium
|
Capital reserve for transaction with controlling shareholders
|
Capital reserve
for financial
assets measured at fair value through other comprehensive income
|
Capital reserve from translation
differences
|
Capital reserve from transactions
with non-controlling interests
|
Accumulated deficit
|
Total
|
Non- controlling interests
|
Total equity
|
|||||||||||||||||||||||||||||||
Audited
|
||||||||||||||||||||||||||||||||||||||||
$ thousands
|
||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2015 (audited)
|
9,573
|
190,753
|
351
|
(2,304
|
)
|
-
|
4,019
|
(46,513
|
)
|
155,879
|
36,898
|
192,777
|
||||||||||||||||||||||||||||
Total comprehensive income (loss)
|
-
|
-
|
-
|
(30
|
)
|
(93
|
)
|
-
|
2,451
|
2,328
|
4,594
|
6,922
|
||||||||||||||||||||||||||||
Share-based payments in respect of awards issued by subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
7
|
7
|
||||||||||||||||||||||||||||||
Non-controlling interests created due to initially consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
5,434
|
5,434
|
||||||||||||||||||||||||||||||
Investment of non-controlling interests in consolidated company
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,073
|
1,073
|
||||||||||||||||||||||||||||||
Change in non-controlling interests due to loss of control over subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
189
|
189
|
||||||||||||||||||||||||||||||
Sale of financial assets measured at fair value through other comprehensive income
|
-
|
-
|
-
|
1,142
|
-
|
-
|
(1,142
|
)
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Balance at December 31, 2015
|
9,573
|
190,753
|
351
|
(1,192
|
)
|
(93
|
)
|
4,019
|
(45,204
|
)
|
158,207
|
48,195
|
206,402
|
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||
Net income (loss)
|
(19,815
|
)
|
9,613
|
(9,888
|
)
|
12,648
|
7,045
|
|||||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
||||||||||||||||||||
Adjustment to the profit or loss items:
|
||||||||||||||||||||
Depreciation and amortization
|
237
|
377
|
82
|
130
|
494
|
|||||||||||||||
Financial expenses (income), net
|
(2,247
|
)
|
(558
|
)
|
(1,261
|
)
|
1,236
|
(1,329
|
)
|
|||||||||||
Stock based compensation and changes in liability in respect of options
|
68
|
42
|
6
|
19
|
7
|
|||||||||||||||
Gain from disposal and revaluation of investee companies and changes in holdings, net
|
(1,230
|
)
|
(34,805
|
)
|
(25
|
)
|
(24,630
|
)
|
(40,590
|
)
|
||||||||||
Equity in losses of associates, net
|
9,853
|
7,072
|
4,750
|
1,839
|
8,566
|
|||||||||||||||
Tax on income
|
1,417
|
3,150
|
1,077
|
3,125
|
3,348
|
|||||||||||||||
Other
|
68
|
(5
|
)
|
32
|
(7
|
)
|
(13
|
)
|
||||||||||||
8,166
|
(24,727
|
)
|
4,661
|
(18,288
|
)
|
(29,517
|
)
|
|||||||||||||
Changes in Assets and Liabilities:
|
||||||||||||||||||||
Decrease (increase) in other accounts receivable
|
119
|
(542
|
)
|
216
|
(194
|
)
|
(561
|
)
|
||||||||||||
Increase (decrease) in trade payables
|
29
|
57
|
76
|
(126
|
)
|
252
|
||||||||||||||
Increase (decrease) in other accounts payable
|
(433
|
)
|
538
|
1,875
|
581
|
990
|
||||||||||||||
(285
|
)
|
53
|
2,167
|
261
|
681
|
|||||||||||||||
Cash paid and received during the year for:
|
||||||||||||||||||||
Taxes paid
|
-
|
(11
|
)
|
-
|
-
|
(24
|
)
|
|||||||||||||
Interest received
|
918
|
816
|
462
|
586
|
1,167
|
|||||||||||||||
918
|
805
|
462
|
586
|
1,143
|
||||||||||||||||
Net cash used in operating activities
|
(11,016
|
)
|
(14,256
|
)
|
(2,598
|
)
|
(4,793
|
)
|
(20,648
|
)
|
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Cash flows from investment activities
|
||||||||||||||||||||
Purchase of property and equipment
|
(450
|
)
|
(310
|
)
|
(305
|
)
|
(152
|
)
|
(452
|
)
|
||||||||||
Investment in associates and other companies
|
(21,037
|
)
|
(9,650
|
)
|
(10,419
|
)
|
(2,466
|
)
|
(16,631
|
)
|
||||||||||
Cash provided from acquisition of investments in subsidiaries
|
-
|
1,893
|
-
|
-
|
1,893
|
|||||||||||||||
Proceeds from sale of investments in subsidiaries net of cash disposed of due to deconsolidation
|
-
|
(8
|
)
|
-
|
(8
|
)
|
(1,625
|
)
|
||||||||||||
Proceeds from sale of associates and other companies
|
60
|
16,701
|
25
|
16,646
|
27,482
|
|||||||||||||||
Proceeds from sale of financial assets measured at fair value
|
-
|
188
|
-
|
21
|
188
|
|||||||||||||||
Sale of (investment in) other investments in securities, net
|
2,822
|
(23,762
|
)
|
-
|
(12,391
|
)
|
(28,325
|
)
|
||||||||||||
Taxes paid
|
-
|
-
|
-
|
-
|
(1,721
|
)
|
||||||||||||||
Withdrawal of deposits, net
|
25,482
|
20,322
|
32,170
|
11,303
|
24,423
|
|||||||||||||||
Net cash provided by (used in) investment activities
|
6,877
|
5,374
|
21,471
|
12,953
|
5,232
|
|||||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||
Dividend distributed to the Company's shareholders
|
(15,000
|
)
|
-
|
(15,000
|
)
|
-
|
-
|
|||||||||||||
Investment of non-controlling interests in subsidiaries
|
1,815
|
1,612
|
1,267
|
1,612
|
1,641
|
|||||||||||||||
Net cash provided by (used in) financing activities
|
(13,185
|
)
|
1,612
|
(13,733
|
)
|
1,612
|
1,641
|
|||||||||||||
Exchange rate differences in respect of cash and cash equivalents
|
469
|
(340
|
)
|
207
|
(570
|
)
|
(
237
|
)
|
||||||||||||
Increase (decrease) in cash and cash equivalents
|
(16,855
|
)
|
(7,610
|
)
|
5,347
|
9,202
|
(14,012
|
)
|
||||||||||||
Cash and cash equivalents as of beginning of the period
|
51,951
|
65,963
|
29,749
|
49,151
|
65,963
|
|||||||||||||||
Cash and cash equivalents as of end of the period
|
35,096
|
58,353
|
35,096
|
58,353
|
51,951
|
A. |
Pocared
|
A. |
Pocared (Cont.)
|
B. |
BrainsGate
|
C. |
Notal
|
D. |
Coramaze
|
E. |
Open Legacy
|
F . |
SixGill
|
G . |
SecuredTouch
|
H. |
Alcide
|
I. |
Nitinotes
|
J . |
Secdo
|
K . |
Dividend
|
L . |
Taxes on income
|
Note 4 – |
Contingent Liabilities
Further to Note 14 to the
annual consolidated financial statements in regards with legal proceedings in the matter of Elscint
, on April 5, 2016, an application was submitted to the court to approve a partial settlement (between all plaintiffs and all the defendants in the process, except for the Company and a group of directors on behalf of the Company). The settlement was attached to the request, according to which, inter alia, to the extent the settlement is approved, the compensation (also including compensation for the plaintiffs, expenses and attorneys' fees) in the final total amount of NIS 46,000 thousand (approximately $12,000) will be paid.
The proceedings between the plaintiffs and the Company and the group of directors on behalf of the Company are continuing. Notwithstanding the above, in November 2016, subsequent to the reporting date, a progress between the Company and the group of directors on its behalf and the plaintiffs was made towards a settlement, through their representatives. Insofar as the agreement of the parties to the said settlement is obtained, it will be subject to the approval of the authorized organs of the parties and will also require the approval of the court in order to give effect to the settlement. The line item, Other Expenses, in the Statement of Income includes an update to the provisions considering the progress in the processes of said action and in respect of indirect taxation.
|
Note 5 – |
Summarized data of the financial statements of associate, unadjusted to the Group's rate of holdings
|
Current assets
|
Non-current assets
|
Total assets
|
Current liabilities
|
Non-current liabilities
|
Total liabilities
|
Equity attributable to shareholders of the company
|
Equity attributable to non-controlling interests
|
|||||||||||||||||||||||||
As of September 30, 2016 (unaudited)
|
||||||||||||||||||||||||||||||||
BrainsGate Ltd.
|
19,681
|
67
|
19,748
|
1,874
|
2,411
|
4,285
|
15,463
|
-
|
||||||||||||||||||||||||
As of September 30, 2015 (unaudited)
|
||||||||||||||||||||||||||||||||
BrainsGate Ltd.
|
9,900
|
86
|
9,986
|
2,457
|
2,042
|
4,499
|
5,487
|
-
|
||||||||||||||||||||||||
As of December 31, 2015
(audited)
|
||||||||||||||||||||||||||||||||
BrainsGate Ltd.
|
8,436
|
76
|
8,512
|
2,291
|
1,687
|
3,978
|
4,534
|
-
|
Revenues
|
Gross profit
|
Operating loss
|
Loss from continuing operations
|
Loss for the period
|
Loss attributable to shareholders of the company
|
Loss attributable to non-controlling interests
|
||||||||||||||||||||||
For the nine months period ended September 30, 2016 (unaudited)
|
||||||||||||||||||||||||||||
BrainsGate Ltd.
|
-
|
-
|
(3,981
|
)
|
(3,893
|
)
|
(3,893
|
)
|
(3,893
|
)
|
-
|
|||||||||||||||||
For the nine months period ended September 30, 2015 (unaudited)
|
||||||||||||||||||||||||||||
BrainsGate Ltd.
|
-
|
-
|
(4,876
|
)
|
(5,164
|
)
|
(5,164
|
)
|
(5,164
|
)
|
-
|
|||||||||||||||||
For the three months period ended September 30, 2016 (unaudited)
|
||||||||||||||||||||||||||||
BrainsGate Ltd.
|
-
|
-
|
(1,295
|
)
|
(1,333
|
)
|
(1,333
|
)
|
(1,333
|
)
|
-
|
|||||||||||||||||
For the three months period ended September 30, 2015 (unaudited)
|
||||||||||||||||||||||||||||
BrainsGate Ltd.
|
-
|
-
|
(1,323
|
)
|
(1,387
|
)
|
(1,387
|
)
|
(1,387
|
)
|
-
|
|||||||||||||||||
For the year ended December 31, 2015 (audited)
|
||||||||||||||||||||||||||||
BrainsGate Ltd.
|
-
|
-
|
(6,378
|
)
|
(6,213
|
)
|
(6,213
|
)
|
(6,213
|
)
|
-
|
A. |
Fair value
|
B. |
Classification of financial instruments by fair value hierarchy
|
Level 1
|
-
|
quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
Level 2
|
-
|
inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
|
Level 3
|
-
|
inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).
|
As of September 30, 2016
|
||||||||||||
Unaudited
|
||||||||||||
Level 1
|
Level 2 (*)
|
Level 3
|
||||||||||
Investments in other companies measured at fair value
|
-
|
-
|
21,735
|
|||||||||
Other investments in securities
|
-
|
25,198
|
-
|
|||||||||
Other accounts receivable
|
-
|
-
|
7,916
|
|||||||||
-
|
25,198
|
29,651
|
As of September 30, 2015
|
||||||||||||
Unaudited
|
||||||||||||
Level 1
|
Level 2 (*)
|
Level 3
|
||||||||||
Investments in other companies measured at fair value
|
-
|
-
|
31,963
|
|||||||||
Other investments in securities, net
|
4,844
|
18,477
|
-
|
|||||||||
Long term receivables
|
-
|
-
|
5,170
|
|||||||||
4,844
|
18,477
|
37,133
|
As of December 31, 2015
|
||||||||||||
Audited
|
||||||||||||
Level 1
|
Level 2 (*)
|
Level 3
|
||||||||||
Investments in other companies measured at fair value
|
-
|
-
|
19,395
|
|||||||||
Other investments in securities, net
|
4,930
|
23,115
|
-
|
|||||||||
Long term receivables
|
-
|
-
|
6,740
|
|||||||||
4,930
|
23,115
|
26,135
|
*) |
Comprised of investment in debentures denominated in USD, carrying an interest linked to the Libor. These debentures are measured at fair value using fair value quotes from several information resources.
|
Financial assets measured at fair value
|
||||
Unaudited
|
||||
Balance as of January 1, 2016 (audited)
|
26,135
|
|||
Total recognized income in profit or loss (*)
|
1,176
|
|||
Investment
|
2,340
|
|||
Balance as of September 30, 2016 (unaudited)
|
29,651
|
|||
Balance as of July 1, 2016 (unaudited)
|
28,846
|
|||
Investment
|
805
|
|||
Balance as of September 30, 2016(unaudited)
|
29,651
|
(*) |
The entire gain included in profit or loss relating to assets held at the end of the reporting period.
|
Financial assets measured at fair value
|
||||
Unaudited
|
||||
Balance as of January 1, 2015 (audited)
|
27,339
|
|||
Total recognized income in profit or loss
|
4,027
|
|||
Contingent consideration
|
5,170
|
|||
Investment
|
597
|
|||
Balance as of September 30, 2015 (unaudited)
|
37,133
|
|||
Balance as of July 1, 2015 (unaudited)
|
27,936
|
|||
Total recognized income in profit or loss
|
4,027
|
|||
Contingent consideration
|
5,170
|
|||
Balance as of September 30, 2015 (unaudited)
|
37,133
|
Financial assets measured at fair value
|
||||
Audited
|
||||
Balance as of January 1, 2015
|
27,339
|
|||
Total recognized income in profit or loss
|
5,074
|
|||
Investment
|
603
|
|||
Contingent consideration
|
6,157
|
|||
Sale
|
(13,038
|
)
|
||
Balance as of December 31, 2015
|
26,135
|
C. |
Valuation techniques
|
Rate of holdings in equity
|
Consolidated rate of
holdings in
|
Elron's effective
rate of
holdings
|
Fully diluted consolidated
rate of
|
Elron's fully diluted effective
rate of
|
Consolidated carrying value of investment
September 30,
|
|||||||||||||||||||||||
Elron (1)
|
RDC (2)
|
equity
|
in equity (3)
|
holdings
|
holdings (3)
|
2016
|
||||||||||||||||||||||
%
|
$ thousands
|
|||||||||||||||||||||||||||
Investments in investee companies
|
||||||||||||||||||||||||||||
Subsidiaries:
|
||||||||||||||||||||||||||||
Pocared Diagnostics Ltd.
|
55.11
|
11.65
|
66.76
|
60.95
|
68.06
|
60.10
|
21,476
|
|||||||||||||||||||||
Associates:
|
||||||||||||||||||||||||||||
BrainsGate Ltd.
|
29.82
|
-
|
29.82
|
29.82
|
26.69
|
26.69
|
3,824
|
|||||||||||||||||||||
Cartiheal (2009) Ltd.
|
35.21
|
-
|
35.21
|
35.21
|
28.21
|
28.21
|
4,369
|
|||||||||||||||||||||
coramaze technologies GmbH
|
28.00
|
-
|
28.00
|
28.00
|
28.00
|
28.00
|
2,142
|
|||||||||||||||||||||
Cloudyn Software Ltd.
|
-
|
39.99
|
39.99
|
20.03
|
33.58
|
16.82
|
4,196
|
|||||||||||||||||||||
SixGill Ltd.
|
21.99
|
-
|
21.99
|
21.99
|
24.65
|
24.65
|
2,003
|
|||||||||||||||||||||
SecuredTouch Inc.
|
-
|
29.07
|
29.07
|
14.57
|
24.64
|
12.35
|
1,791
|
|||||||||||||||||||||
Alcide IO Ltd.
|
29.88
|
-
|
29.88
|
29.88
|
25.00
|
25.00
|
1,350
|
|||||||||||||||||||||
M.G. Therapeutics Ltd.
|
17.00
|
-
|
17.00
|
17.00
|
24.11
|
24.11
|
-
|
|||||||||||||||||||||
Plymedia Israel (2006) Ltd.
|
23.33
|
-
|
23.33
|
23.33
|
17.97
|
17.97
|
-
|
|||||||||||||||||||||
Audioburst Ltd.
|
16.88
|
-
|
16.88
|
16.88
|
15.12
|
15.12
|
-
|
|||||||||||||||||||||
Open Legacy Technologies Ltd.
|
-
|
36.43
|
36.43
|
18.25
|
29.69
|
14.87
|
107
|
|||||||||||||||||||||
Page 2 Site Ltd.
|
-
|
25.45
|
25.45
|
12.75
|
21.83
|
10.94
|
124
|
|||||||||||||||||||||
IronScales Ltd.
|
-
|
15.63
|
15.63
|
7.83
|
20.75
|
10.40
|
(429
|
)
|
||||||||||||||||||||
SinuSafe Ltd.
|
21.90
|
-
|
21.90
|
21.90
|
19.74
|
19.74
|
150
|
|||||||||||||||||||||
Nitiniotes Ltd.
|
14.16
|
-
|
14.16
|
14.16
|
12.49
|
12.49
|
761
|
|||||||||||||||||||||
Cyber Secdo Ltd.
|
-
|
24.30
|
24.30
|
12.18
|
21.05
|
10.55
|
4,000
|
|||||||||||||||||||||
Other investments:
|
||||||||||||||||||||||||||||
Notal Vision Inc.
|
21.36
|
-
|
21.36
|
21.36
|
18.00
|
18.00
|
17,040
|
|||||||||||||||||||||
Atlantium Technologies Ltd.
|
6.16
|
-
|
6.16
|
6.16
|
5.49
|
5.49
|
130
|
|||||||||||||||||||||
Aqwise – Wise Water Technologies Ltd.
|
19.81
|
-
|
19.81
|
19.81
|
17.94
|
17.94
|
4,500
|
(1) |
Including holdings through Elron's fully-owned subsidiaries.
|
(2) |
Including holdings through RDSeed.
|
(3) |
Elron's effective holdings include holdings by RDC and RDSeed multiplied by 50.10%. (Elron's holding rate in RDC).
|
Elron Electronic Industries Ltd.
English Translation of
Financial Data from the
Interim Consolidated Financial Statements
Attributable to the Company
As of
September 30, 2016
Unaudited
|
Page | |
2
|
|
3
|
|
4-5 | |
6
|
|
7 | |
8-9
|
|
10
|
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Tel-Aviv, Israel
|
KOST FORER GABBAY & KASIERER
|
November 24, 2016
|
A Member of Ernst & Young Global
|
■ |
Financial position data
attributable to the Company include balances in respect of the Company's subsidiaries which were eliminated in the interim consolidated financial statements.
|
■ |
Income and loss data attributable to the Company include income and expenses of the Company resulting from transactions with its subsidiaries, which were eliminated in the interim consolidated financial statements.
|
■ |
Cash flow data attributable to the Company include cash flows between the Company and its subsidiaries which were eliminated in the interim consolidated financial statements.
|
September 30
|
December 31
|
|||||||||||
2016
|
2015
|
2015
|
||||||||||
Unaudited
|
Audited
|
|||||||||||
$ thousands
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
3,876
|
13,075
|
13,895
|
|||||||||
Bank deposits
|
8,608
|
40,168
|
39,145
|
|||||||||
Other investments in securities
|
25,198
|
18,477
|
23,115
|
|||||||||
Other accounts receivable
|
2,767
|
471
|
406
|
|||||||||
Investment in financial asset classified as held for sale
|
-
|
13,056
|
-
|
|||||||||
40,449
|
85,247
|
76,561
|
||||||||||
Non‑current assets
|
||||||||||||
Investments in subsidiaries and associates, net
|
146,363
|
133,089
|
136,783
|
|||||||||
Investments in other companies measured at fair value
|
21,447
|
18,619
|
19,107
|
|||||||||
Long-term receivables
|
90
|
-
|
2,303
|
|||||||||
Property, plant and equipment, net
|
5
|
14
|
10
|
|||||||||
167,905
|
151,722
|
158,203
|
||||||||||
Total assets
|
208,354
|
236,969
|
234,764
|
September 30
|
December 31
|
|||||||||||
2016
|
2015
|
2015
|
||||||||||
Unaudited
|
Audited
|
|||||||||||
$ thousands
|
||||||||||||
Current liabilities
|
||||||||||||
Trade payables
|
216
|
55
|
87
|
|||||||||
Other accounts payable
|
4,930
|
1,885
|
2,910
|
|||||||||
5,146
|
1,940
|
2,997
|
||||||||||
Long-term liabilities
|
||||||||||||
Other long term liabilities (Note 2)
|
76,378
|
73,166
|
73,560
|
|||||||||
76,378
|
73,166
|
73,560
|
||||||||||
Equity attributable to the Company's shareholders
|
||||||||||||
Issued capital
|
9,573
|
9,573
|
9,573
|
|||||||||
Share premium
|
190,753
|
190,753
|
190,753
|
|||||||||
Capital reserves
|
4,244
|
3,178
|
3,085
|
|||||||||
Accumulated deficit
|
(77,740
|
)
|
(41,641
|
)
|
(45,204
|
)
|
||||||
Total equity
|
126,830
|
161,863
|
158,207
|
|||||||||
208,354
|
236,969
|
234,764
|
Eduardo Elsztain
|
Ari Bronshtein
|
Yaron Elad
|
||
Chairman of the Board of Directors
|
Chief Executive Officer
|
Vice President &
Chief Financial Officer
|
For the
|
||||||||||||||||||||
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended
December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Income
|
||||||||||||||||||||
Financial income (Note 2)
|
801
|
1,082
|
365
|
2,908
|
899
|
|||||||||||||||
Expense
|
||||||||||||||||||||
General and administrative expenses
|
2,629
|
2,565
|
947
|
851
|
4,608
|
|||||||||||||||
Financial expenses (Note 2)
|
2,666
|
101
|
1,628
|
72
|
101
|
|||||||||||||||
Other expenses
|
2,181
|
43
|
2,161
|
11
|
43
|
|||||||||||||||
7,476
|
2,709
|
4,736
|
934
|
4,752
|
||||||||||||||||
(6,675
|
)
|
(1,627
|
)
|
(4,371
|
)
|
1,974
|
(3,853
|
)
|
||||||||||||
Gain from disposal of subsidiaries and associates, revaluation of investee companies and changes in holdings, net
|
108
|
14,174
|
7
|
4,038
|
14,674
|
|||||||||||||||
Company's share of loss (income) of subsidiaries and associates
|
(9,912
|
)
|
(6,533
|
)
|
(2,914
|
)
|
318
|
(8,370
|
)
|
|||||||||||
Income (loss) before taxes on income
|
(16,479
|
)
|
6,014
|
(7,278
|
)
|
6,330
|
2,451
|
|||||||||||||
Taxes on income
|
(1,057
|
)
|
-
|
(1,057
|
)
|
-
|
-
|
|||||||||||||
Net income (loss) attributable to the Company's shareholders
|
(17,536
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
2,451
|
For the
|
||||||||||||||||||||
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended
December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Net income (loss) attributable to the Company's shareholders
|
(17,536
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
2,451
|
|||||||||||||
Other comprehensive income (loss):
|
||||||||||||||||||||
Amounts that would never be reclassified to profit or loss:
|
||||||||||||||||||||
Gain (loss) from financial assets measured at fair value through other comprehensive income, net
|
-
|
(30
|
)
|
-
|
5
|
(30
|
)
|
|||||||||||||
Total gain (loss) that would never be reclassified to profit or loss
|
-
|
(30
|
)
|
-
|
5
|
(30
|
)
|
|||||||||||||
Amounts that are classified or may be reclassified to profit or loss under certain conditions:
|
||||||||||||||||||||
Foreign currency translation differences for foreign operation
|
35
|
-
|
10
|
-
|
(93
|
)
|
||||||||||||||
Total income (loss) that would be reclassified to profit or loss under certain conditions
|
35
|
-
|
10
|
-
|
(93
|
)
|
||||||||||||||
Total other comprehensive income (loss) attributable to the Company
|
35
|
(30
|
)
|
10
|
5
|
(123
|
)
|
|||||||||||||
Total comprehensive income (loss) attributable to the Company's shareholders
|
(17,501
|
)
|
5,984
|
(8,325
|
)
|
6,335
|
2,328
|
For the
|
||||||||||||||||||||
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended
December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Cash flows from operating activities
|
||||||||||||||||||||
Net income (loss) attributable to the Company
|
(17,536
|
)
|
6,014
|
(8,335
|
)
|
6,330
|
2,451
|
|||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||||||||||
Adjustment to the profit or loss items:
|
||||||||||||||||||||
Company’s share of loss (income) of subsidiaries and associates
|
9,912
|
6,533
|
2,914
|
(318
|
)
|
8,370
|
||||||||||||||
Depreciation
|
5
|
12
|
1
|
4
|
16
|
|||||||||||||||
Financial income, net
|
(1,024
|
)
|
(988
|
)
|
(596
|
)
|
(574
|
)
|
(1,240
|
)
|
||||||||||
Taxes on income
|
1,057
|
-
|
1,057
|
-
|
-
|
|||||||||||||||
Gain from disposal of subsidiaries and associates, revaluation of investee companies and changes in holdings, net
|
(108
|
)
|
(14,174
|
)
|
(7
|
)
|
(4,038
|
)
|
(14,674
|
)
|
||||||||||
Other
|
(333
|
)
|
27
|
(163
|
)
|
225
|
(39
|
)
|
||||||||||||
9,509
|
(8,590
|
)
|
3,206
|
(4,701
|
)
|
(7,567
|
)
|
|||||||||||||
Changes in assets and liabilities of the Company:
|
||||||||||||||||||||
Decrease (increase) in other accounts receivable
|
(68
|
)
|
(210
|
)
|
130
|
(215
|
)
|
(145
|
)
|
|||||||||||
Increase (decrease) in trade payables
|
129
|
6
|
(12
|
)
|
11
|
34
|
||||||||||||||
Increase (decrease) in other accounts payable
|
963
|
(895
|
)
|
2,222
|
90
|
134
|
||||||||||||||
Increase (decrease) in other long term liabilities
|
2,818
|
(646
|
)
|
1,748
|
(2,989
|
)
|
(252
|
)
|
||||||||||||
3,842
|
(1,745
|
)
|
4,088
|
(3,103
|
)
|
(229
|
)
|
|||||||||||||
Cash received during the period for:
|
||||||||||||||||||||
Interest received
|
631
|
698
|
364
|
544
|
899
|
|||||||||||||||
Net cash used in operating activities
|
(3,554
|
)
|
(3,623
|
)
|
(677
|
)
|
(930
|
)
|
(4,446
|
)
|
||||||||||
For the
|
||||||||||||||||||||
Nine months ended
September 30
|
Three months ended
September 30
|
Year ended
December 31
|
||||||||||||||||||
2016
|
2015
|
2016
|
2015
|
2015
|
||||||||||||||||
Unaudited
|
Audited
|
|||||||||||||||||||
$ thousands
|
||||||||||||||||||||
Cash flows from investment activities
|
||||||||||||||||||||
Investment in associates and subsidiaries
|
(20,340
|
)
|
(18,853
|
)
|
(6,169
|
)
|
(9,238
|
)
|
(24,443
|
)
|
||||||||||
Proceeds from sale of investments in associates and subsidiaries
|
28
|
28
|
-
|
12
|
10,799
|
|||||||||||||||
Proceeds from sale of financial assets measured at fair value
|
-
|
188
|
-
|
21
|
188
|
|||||||||||||||
Other investments in securities
|
(1,970
|
)
|
(18,598
|
)
|
-
|
(12,207
|
)
|
(23,307
|
)
|
|||||||||||
Withdrawal of deposits, net
|
30,817
|
20,603
|
20,750
|
10,503
|
21,748
|
|||||||||||||||
Dividend from investee company
|
-
|
-
|
-
|
-
|
26
|
|||||||||||||||
Net cash provided by (used in) investment activities
|
8,535
|
(16,632
|
)
|
14,581
|
(10,909
|
)
|
(14,989
|
)
|
||||||||||||
Cash flows from financing activities
|
||||||||||||||||||||
Dividend distributed to the Company's shareholders
|
(15,000
|
)
|
-
|
(15,000
|
)
|
-
|
-
|
|||||||||||||
Net cash used in financing activities
|
(15,000
|
)
|
-
|
(15,000
|
)
|
-
|
-
|
|||||||||||||
Decrease in cash and cash equivalents
|
(10,019
|
)
|
(20,255
|
)
|
(1,096
|
)
|
(11,839
|
)
|
(19,435
|
)
|
||||||||||
Cash and cash equivalents as of beginning of the period
|
13,895
|
33,330
|
4,972
|
24,914
|
33,330
|
|||||||||||||||
Cash and cash equivalents as of end of the period
|
3,876
|
13,075
|
3,876
|
13,075
|
13,895
|
1. |
General
|
2. |
Other long term liabilities
|
3. |
Dividend
|
(1)
|
I have examined the quarterly report of Elron Electronic Industries Ltd. (the "
Corporation
") for the third quarter of 2016 (the "
Reports
");
|
(2)
|
Based on my knowledge, the Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the Reports;
|
(3)
|
Based on my knowledge, the financial statements and other financial information included in the Reports, fairly present, in all material respects, the financial condition, results of operations and cash flows of the Corporation, as of, and for the periods presented in the Reports;
|
(4)
|
I have disclosed to the Corporation's independent auditors, board of directors and audit committee of the Corporation's board of directors, based on my most recent assessment of internal control over financial reporting and disclosure:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and disclosure, which are reasonably likely to adversely affect the Corporation's ability to record, process, summarize or report financial information in a manner which may cast doubt on the reliability of the financial reporting and preparation of the financial statements in accordance with the provisions of the law; and –
|
(b)
|
Any fraud, whether or not material, which involves the principal executive officer, a direct subordinate of the principal executive officer, or other employees who have a significant role in the internal control over financial reporting and disclosure.
|
(5)
|
I, alone or together with others in the Corporation, have:
|
(a)
|
Designed such controls and procedures, or caused such controls and procedures to be designed and maintained under my supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries as defined in the Israel Securities Law (Annual Financial Statements), 5770-2010, is made known to me by others within the Corporation and the consolidated subsidiaries, particularly during the period in which the Reports are being prepared; and –
|
(b)
|
Designed such controls and procedures, or caused such controls and procedures to be designed and maintained under my supervision, to reasonably ensure the reliability of the financial reporting and preparation of the financial statements in accordance with the provisions of the law, including in accordance with GAAP;
|
(c)
|
No event or matter was brought to my attention during the period between the date of the last report (quarterly or periodic, as relevant) and the date of this report, which would change the conclusion of the board of directors and management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation.
|
(1)
|
I have examined the interim financial statements and other financial information which is included in the interim reports of Elron Electronic Industries Ltd. (the "
Corporation
") for the third quarter of 2016 (the "
Reports
" or the "
Interim Reports
");
|
(2)
|
Based on my knowledge, the interim financial statements and other financial information which is included in the Interim Reports do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the Reports;
|
(3)
|
Based on my knowledge, the interim financial statements and other financial information included in the Interim Reports fairly present, in all material respects, the financial condition, results of operations and cash flows of the Corporation, as of, and for the periods presented in the Reports;
|
(4)
|
I have disclosed to the Corporation's independent auditor, board of directors and the audit committee of the Corporation's board of directors, based on my most recent assessment of internal control over financial reporting and disclosure:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and disclosure, insofar as the same refers to the interim financial statements and other financial information which is included in the Interim Reports, which are reasonably likely to adversely affect the Corporation's ability to record, process, summarize or report financial information in a manner which may cast doubt on the reliability of the financial reporting and preparation of the financial statements in accordance with the provisions of the law; and –
|
(b)
|
Any fraud, whether or not material, which involves the principal executive officer, a direct subordinate of the principal executive officer, or other employees who have a significant role in the internal control over the financial reporting and disclosure.
|
(5)
|
I, alone or together with others in the Corporation, have:
|
(a)
|
Designed controls and procedures, or caused such controls and procedures to be designed and maintained under our supervision, to ensure that material information relating to the Corporation, including its consolidated subsidiaries as defined in the Israel Securities Law (Annual Financial Statements), 5770-2010, is made known to me by others in the Corporation and the consolidated subsidiaries, particularly during the period in which the Reports are being prepared; and –
|
(b)
|
Designed such controls and procedures, or caused such controls and procedures to be designed and maintained under my supervision, to reasonably ensure the reliability of the financial reporting and preparation of the financial statements in accordance with the provisions of the law, including in accordance with GAAP;
|
(c)
|
No event or matter was brought to my attention during the period between the date of the last report (quarterly or periodic, as relevant) and the date of this report, relating to the interim financial statements and other financial information included in the Interim Reports, which would change, in my assessment, the conclusion of the board of directors and management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation.
|
L.
|
(1) Cash and cash equivalents, marketable securities and short-term deposits based on the Company's separate financial data (NIS in thousands) |
141,609
|
|
(2) Cash and cash equivalents, marketable securities and short-term deposits based on the Company's consolidated Statements (NIS in thousands) |
397,916
|
1 Year Elron Ventures (CE) Chart |
1 Month Elron Ventures (CE) Chart |
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