UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of September 2015 (Report No. 1)
Commission File Number: 0-29452
RADCOM LTD.
(Translation of registrant’s name into English)
24 Raoul Wallenberg Street, Tel Aviv 69719, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F x Form:40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A
THIS FORM 6-K IS HEREBY INCORPORATED BY REFERENCE INTO RADCOM LTD.’S REGISTRATION STATEMENTS ON FORM S-8 (REGISTRATION STATEMENT NOS. 333-13250, 333-111931, 333-123981, 333-190207, 333-195465 AND 333-203087) AND FORM F-3 (REGISTRATION STATEMENT NOS. 333-170512 AND 333-189111), AND SHALL BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FILED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
CONTENTS
This report on Form 6-K of the registrant consists of the following document, which is attached hereto and incorporated by reference herein:
Exhibit 99.1 Management’s Discussion and Analysis of financial Condition and Result of Operations
Exhibit 99.2 Interim Consolidated Financial Statements as of June 30, 2015
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
RADCOM LTD.
|
|
| |
|
|
|
|
Date: September 9, 2015
|
By:
|
/s/ Uri Birenberg
|
|
| |
Name:
|
Uri Birenberg
|
|
| |
Title:
|
CFO
|
|
| |
|
|
|
EXHIBIT INDEX
|
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
|
Exhibit 99.1
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Statements
Except for the historical information contained in the following sections, the statements contained in the following sections are “forward-looking statements” within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Statements preceded by, followed by, or that otherwise include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. Because such statements deal with future events, they are subject to various risks and uncertainties and actual results could differ materially from our current expectations.
General
You should read the following discussion and analysis in conjunction with our interim unaudited consolidated financial statements for the six months ended June 30, 2015 and notes thereto, and together with our audited consolidated financial statements for the year ended December 31, 2014 filed on March 26, 2015, with the Securities and Exchange Commission ("SEC") as part of the Company’s annual report on Form 20-F for the year ended December 31, 2014.
Unless indicated otherwise by the context, all references below to:
|
·
|
"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.
|
Overview
We provide innovative service assurance and customer experience management solutions for leading telecom operators and communications service providers. We specialize in solutions for next-generation mobile and fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile broadband. Our 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.
In February 2014, we officially launched and started selling our MaveriQ solution, an NFV-ready software-based solution. The MaveriQ solution replaced our OmniQ solution, a hardware-based solution, and our transition from a hardware-based solution to a software-based solution has contributed to our first six months results of 2014 and 2015.
Financial Highlights
Total revenues in the first six months of 2015 increased by 7.2% to approximately $11.2 million from approximately $10.4 million in the first six months of 2014. The increase reflects the Company’s delivery of orders in backlog and continued momentum in the emerging markets of Latin America and Asia.
Operating Income for the first six months of 2015 was approximately $1.1 million, compared to Operating Income of approximately $60,000 for the same period of 2014. The positive increase in operating income is explained by growth in revenues, as well as a decrease in cost of revenues-products resulting from initial sales of MaveriQ, the Company’s software-based solution, as part of the Company's transition to a software-driven business model.
Net Income for the first six months of 2015 was approximately $0.6 million, or $0.07 per diluted share, compared to approximately $0.3 million, or $0.04 per diluted share, in the same period last year.
Cash and cash equivalents were approximately $9.9 million as of June 30, 2015, compared to approximately $6.8 million as of December 31, 2014. The increase was mainly due to an improvement in collections in the first six months of 2015.
Shareholders' equity increased to approximately $11.4 million as of June 30, 2015, compared to approximately $10.2 million as of December 31, 2014, as a result of net income of approximately $0.6 million, the exercise of options and warrants in the amount of approximately $0.5 million and share-based compensation of approximately $0.8 million, offset by increase in foreign currency translation capital fund of approximately $0.7 million.
| |
|
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 |
% |
Revenues. Total revenues in the first six months of 2015 increased by 7.2% to approximately $11.2 million from approximately $10.4 million in the first six months of 2014. Revenues from Products increased by 9.8% to approximately $9.9 million in the first six months of 2015 from approximately $9.0 million in the first six months of 2014, reflecting the Company’s delivery of orders in backlog and continued momentum in the emerging markets of Latin America and Asia. Revenues from services decreased by 9.6% from approximately $1.4 million in the first six months of 2014 to approximately $1.3 million in the first six months of 2015.
Cost of revenues. Our cost of revenues decreased by 22.2% from approximately $3.0 million in the first six months of 2014 to approximately $2.4 million in the first six months of 2015. Cost of revenues from products decreased by 22.2% from approximately $2.8 million in the first six months of 2014 to approximately $2.2 million in the first six months of 2015, reflecting the transition to a software-driven business model and initial sales of MaveriQ, the Company’s software-based solution which reduced our cost of materials. Cost of revenues from services decreased by 22.1% to approximately $141,000 in the first six months of 2015 from approximately $181,000 in the first six months of 2014 reflecting slight decrease in revenues from services as well as related head count savings.
Gross margin increased to 79.0% in the first six months of 2015 from 71.0% in the first six months of 2014, reflecting higher margins and lower fixed costs.
Research and Development, net. Research and development expenses increased by 17.0% to approximately $2.9 million in the first six months of 2015 from approximately $2.5 million in the first six months of 2014, mainly due to delays in receiving approvals for grants from the Office of the Chief Scientist in Israel for fiscal year 2015.
Selling and Marketing, net. Selling and Marketing expenses, net, decreased by 3.6% to approximately $3.6 million in the first six months of 2015 from approximately $3.7 million in the first six months of 2014, mainly due to an increase in the US dollar exchange rate compared to the New Israeli Shekel.
General and Administrative. General and Administrative expenses increased by 6.2% to approximately $1.2 million in the first six months of 2015 from approximately $1.1 million in the first six months of 2014, mainly due to the grant of restricted stock units to employees and directors during the first six months of 2015.
Financial Income (Expenses), Net. In the first six months of 2015 we recorded financial expense of approximately $374,000, compared to financial income of approximately $257,000 in the first six months of 2014. This change is mainly due to exchange rate differences on a short term intercompany balance in Brazil.
Taxes on income. Taxes on income are comprised of withholding taxes that were deducted by several of our customers.
LIQUIDITY AND CAPITAL RESOURCES
In the past few years, we financed our operations through cash generated by operations, private placements of equity securities, short-term loans and credit facilities.
Working Capital and Cash Flows
Liquidity refers to liquid financial assets available to fund our business operations and pay for near-term obligations. These liquid financial assets mostly consist of cash and cash equivalents. As of June 30, 2015, we had approximately $9.9 million in cash and cash equivalents, compared to approximately $6.8 million as of December 31, 2014.
Net cash provided by operating activities was approximately $3.0 million in the first six months of 2015 compared to approximately $1.5 million net cash provided by operating activities in the first six months of 2014. The positive cash flow in the first six months of 2015 was primarily due to net income of approximately $0.6 million, a decrease of approximately $1.8 million in trade receivables, an increase of approximately $0.3 in deferred revenues and advances from customers, and a decrease of approximately $1.0 million in inventories, which was partially offset by a decrease of approximately $1.1 million in trade payables and a decrease of approximately $0.2 million in employees and payroll accrual. The positive cash flow in the first six months of 2014 was primarily due to net income of approximately $0.3 million, a decrease of approximately $1.5 million in trade receivables, an increase of approximately $0.5 in deferred revenues and advances from customers, and a decrease of approximately $0.3 million in inventories, which was partially offset by a decrease of approximately $1.1 million in trade payables and a decrease of approximately $0.3 million in other account payables and accrued expenses.
Net cash used in investing activities was approximately $56,000 in the first six months of 2015 compared to net cash provided by investing activities of approximately $1.4 million in the first six months of 2014. In the first six months of 2013 we invested in short-term restricted bank deposits which were required in order to secure bonds provided to certain customers. Those restricted bank deposits were repaid in full during the first six months of 2014.
Net cash provided by financing activities was approximately $0.5 million in the first six months of 2015 compared to approximately $0.4 million net cash used in the first six months of 2014. Cash provided in the first six months of 2015 was mainly due to proceeds from the exercise of options and warrants into ordinary shares while in the first six months of 2014 cash was used for repaying a short-term credit line of approximately $0.6 million, offset by proceeds from the exercise of options and warrants of approximately $0.2 million.
The Company believes that its existing capital resources and expected cash flows from operations will be adequate to satisfy its expected liquidity requirements at least for the next 12 months.
CERTAIN CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of Consolidated Financial Statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 2 to the Consolidated Financial Statements in our Annual Report on Form 20-F for the fiscal year ended December 31, 2014 filed with the SEC on March 26, 2015 describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements.
RISK FACTORS
There are no material changes to the risk factors previously disclosed in our Annual Report on Form 20-F for the year ended December 31, 2014 filed with the SEC on March 26, 2015.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Reference is made to “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 20-F for the year ended December 31, 2014 filed with the SEC on March 26, 2015.
Not applicable.
4
Exhibit 99.2
RADCOM LTD. AND ITS SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2015
UNAUDITED
INDEX
| |
Page
|
| |
|
|
|
F - 2 - F - 3
|
| |
|
|
|
F - 4
|
| |
|
|
|
F - 5
|
| |
|
|
|
F - 6
|
| |
|
|
|
F - 7 - F - 15
|
RADCOM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
| |
|
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 |
|
The accompanying notes are an integral part of the consolidated financial statements.
RADCOM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and share data
| |
|
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 |
|
The accompanying notes are an integral part of the consolidated financial statements.
RADCOM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except share and share data
| |
|
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 |
|
The accompanying notes are an integral part of the consolidated financial statements.
RADCOM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
U.S. dollars in thousands, except share and share data
| |
|
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 |
|
The accompanying notes are an integral part of the consolidated financial statements.
RADCOM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
| |
|
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 |
|
|
$ |
- |
|
The accompanying notes are an integral part of the consolidated financial statements.
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
|
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.
|
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
NOTE 2:-
|
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
The accompanying unaudited interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") and standards of the Public Company Accounting Oversight Board for interim financial information. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals, except as otherwise indicated) considered necessary for a fair presentation of the Company's consolidated financial position as of June 30, 2015, consolidated results of operations and consolidated cash flows for the period of six months ended June 30, 2015 and 2014, have been included. The results for the period of six months ended June 30, 2015, are not necessarily indicative of the results that may be expected for the year to end on December 31, 2015.
|
NOTE 3:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
The significant accounting policies applied in the annual consolidated financial statements of the Company as disclosed in the Company's Annual Report on Form 20-F for the period ended December 31, 2014 filed with the Securities and Exchange Commission ("SEC") on March 26, 2015, are applied consistently in these interim consolidated financial statements except:
Revenue recognition:
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Insurance contracts do not fall within the scope of this ASU. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2017. In July 2015, the FASB decided to defer by one year the effective date of this ASU. The ASU has not yet been adopted and the Company is currently evaluating the impact that the adoption of ASU 2014-09 will have on its financial statements.
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
| |
|
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 5:- COMMITMENTS AND CONTINGENCIES
Royalty commitments:
The Company receives research and development grants from the Office of the Chief Scientist ("OCS"). In consideration for the research and development grants received from the OCS, the Company has undertaken to pay royalties as a percentage of revenues from products developed from research and development projects financed. If the Company will not generate sales of products developed with funds provided by the OCS, the Company is not obligated to pay royalties or repay the grants.
Royalties are payable at the rate of 3.5% from the time of commencement of sales of all of these products until the cumulative amount of the royalties paid equals 100% of the dollar-linked amounts of the grants received, the maximum to be repaid is 100% plus interest at LIBOR.
The total research and development grants that the Company has received from the OCS as of June 30, 2015 were $38,442 which excluding accumulated interest of $13,360. As of June 30, 2015, the accumulated royalties paid to the OCS were $11,359. Accordingly, the Company's total commitment with respect to royalty-bearing participation received or accrued, net of royalties paid or accrued, amounted to $40,443 as of June 30, 2015.
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
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 |
|
*) Excluding 35,500 RSUs granted as described in Note 6c.
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
NOTE 6:-
|
SHAREHOLDERS' EQUITY (Cont.)
|
The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on the last day of the second quarter of 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2015. This amount is impacted by the changes in the fair market value of the Ordinary Shares.
|
|
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.
|
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
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
|
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
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 |
|
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
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.
|
RADCOM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and share data
|
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 |
|
F - 15
Radcom (NASDAQ:RDCM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Radcom (NASDAQ:RDCM)
Historical Stock Chart
From Apr 2023 to Apr 2024
