20-F/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20–F/A

(Amendment No. 1)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report _____________

Commission file number 000-31215

MIND C.T.I. LTD.

(Exact name of Registrant as specified in its charter

and translation of Registrant’s name into English)

ISRAEL

(Jurisdiction of incorporation or organization)

2 HaCarmel Street, Yoqneam, 2066724, Israel

(Address of principal executive offices)

Arie Abramovich

c/o MIND C.T.I. Ltd.

2 HaCarmel Street

Yoqneam, 2066724, Israel

Tel: +972-4-9936666

investor@mindcti.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
Ordinary Shares, nominal value NIS 0.01 per share	Nasdaq Global Market

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of December 31, 2022, the Registrant had outstanding 20,124,326 Ordinary Shares, nominal value NIS 0.01 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the

registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

EXPLANATORY NOTE

This Amendment No. 1 (this “Amendment”) to the Annual Report on Form 20-F of MIND C.T.I. Ltd. (the “Company”) for the year ended December 31, 2022, filed on March 14, 2023 (the “Annual Report”), is being filed solely for the purpose of adding the report of the independent registered public accounting firm that audited the Company’s consolidated financial statements as of, and for the two years ended, December 31, 2021 (the “Report”), which was inadvertently omitted from the original filing.

This Amendment consists of a cover page, this explanatory note, the financial statements referenced in Item 18 (with the addition of the Report and resulting renumbering of the “F” pages), Item 19, the signature page and the Exhibits (as updated to include new certifications of our Chief Executive Officer and Chief Financial Officer).

Other than as expressly set forth above, this Amendment does not amend the information in any other item of the Annual Report or reflect any events that have occurred after the Annual Report was originally filed. 

Item 18. Financial Statements

See pages F-1 through F-27 of this annual report attached hereto. 

1

Item 19. Exhibits

The following exhibits are filed as part of this Annual Report:

Exhibit No.	Exhibit
1.1*	Memorandum of Association, as amended
1.2******	Articles of Association, as amended
2(d)****	Description of Ordinary Shares
4.1**	MIND 1998 Share Option Plan
4.2**	MIND 2000 Share Option Plan
4.3***	MIND 2011 Share Incentive Plan
4.4*****	Compensation Policy of Directors and Officers, dated May 26, 2019
8******	List of Subsidiaries
11***	Code of Ethics and Business Conduct
12.1	Certification of Principal Executive Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act
12.2	Certification of Principal Financial Officer pursuant to 17 CFR 240.13a-14(a), as adopted pursuant to §302 of the Sarbanes-Oxley Act
13.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act
13.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act
15.1******	Consent of Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network
15.2******	Consent of Fahn Kanne & Co. Grant Thornton Israel
15.3******	Letter from Brightman Almagor Zohar & Co., a firm in the Deloitte Global Network
101	The following financial information from MIND C.T.I. Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2022, formatted in XBRL (eXtensible Business Reporting Language):

	(i)	Consolidated Balance Sheets at December 31, 2021 and 2022;
	(ii)	Consolidated Statements of Operations for the years ended December 31, 2020, 2021 and 2022;
	(iii)	Consolidated Comprehensive Income for the years ended December 31, 2020, 2021 and 2022;
	(iv)	Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2020, 2021 and 2022;
	(v)	Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2021 and 2022; and
	(vi)	Notes to Consolidated Financial Statements, tagged as blocks of text
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Incorporated by reference to MIND C.T.I. Ltd.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2002.

** Incorporated by reference to MIND C.T.I. Ltd.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2003.

*** Incorporated by reference to MIND C.T.I. Ltd.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2011.

**** Incorporated by reference to MIND C.T.I. Ltd.’s Annual Report on Form 20-F for the fiscal year ended December 31, 2019.

*****	Incorporated by reference to MIND C.T.I. Ltd.’s Notice of Annual General Meeting of Shareholders on Form 6-K filed on April 16, 2019.
******	Included in the original filing of the Annual Report.

2

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and has duly caused and authorized the undersigned to sign this annual report on its behalf.

MIND CTI LTD.

	/s/ Monica Iancu
By:	Monica Iancu
Title:	President and Chief Executive Officer

Date:  March 15, 2023

3

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2022

TABLE OF CONTENTS

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID No. 1197)	F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID No. 1375)	F-3 - F-4
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated balance sheets	F-5
Consolidated statements of operations	F-6
Consolidated statements of comprehensive income	F-7
Consolidated statements of changes in shareholders’ equity	F-8
Consolidated statements of cash flows	F-9
Notes to consolidated financial statements	F-10

F-1

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of MIND C.T.I Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of MIND C.T.I Ltd. and subsidiaries (the "Company") as of December 31, 2021, the related consolidated statements of operations, comprehensive income, changes in shareholders' equity, and cash flows, for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Brightman Almagor Zohar & Co.

Brightman Almagor Zohar & Co.
Certified Public Accountants
A Firm in the Deloitte Global Network

Tel Aviv, Israel
April 10, 2022

We began serving as the Company's auditor since 2009. In 2022 we became the predecessor auditor.

F-2

  Fahn Kanne & Co. Head Office 32 Hamasger Street Tel-Aviv 6721118, ISRAEL PO Box 36172, 6136101   T +972 3 7106666 F +972 3 7106660 www.grantthornton.co.il

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of MIND C.T.I. Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of MIND C.T.I Ltd. and subsidiaries (the “Company”) as of December 31, 2022, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows, for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Certified Public Accountants

Fahn Kanne & Co. is the Israeli member firm of Grant Thornton International Ltd.

F-3

 

Critical Audit Matter Description

Goodwill Impairment Analysis

As described further in Note 1l and Note 4b to the consolidated financial statements, as of September 30, 2022, the Company performed goodwill impairment analysis with respect to goodwill balance with a total carrying amount of $7.8 million that was allocated to two reporting units. As disclosed in Note 1l, goodwill is not amortized but rather tested for impairment at least annually or most often if indicators of impairment are present. Management either assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill (qualitative assessment) or elects to proceed directly to the impairment test and bypass the qualitative assessment. As part of the qualitative assessment, if, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. Goodwill impairment is measured by comparing the fair value of a reporting unit with its carrying amount. The impairment test was based on a valuation performed by management. Judgments and assumptions used in the discounted cash flow model which included projected net cash flows from operations, short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions. We identified the goodwill impairment analysis as a critical audit matter.

The principal considerations for our determination that the goodwill impairment assessment is a critical audit matter are the high degree of auditor judgment, effort and subjectivity in performing procedures and evaluating management’s fair value estimate, which included projected net cash flows from operations, estimated weighted average cost of capital and short-term and long-term growth rates for the reporting units. Given the subjective nature and judgment applied by management, auditing these estimates required a high degree of auditor judgment and an increased extent of effort, including the use of our valuation specialist.

Our audit procedures related to the annual goodwill impairment analysis of the reporting units included, among others, the following:

● We evaluated the appropriateness of the discounted cash flow model; tested the completeness, accuracy and relevance of underlying data used in the model; and evaluated the reasonableness of significant assumptions used by management, including projected net cash flows from operations, estimated weighted average cost of capital and short-term and long-term growth rates for the reporting units. Our evaluation involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) the consistency of the assumptions used with evidence obtained in other areas of the audit.

● We utilized a valuation specialist to assess the appropriateness of the impairment methodology used and to assist us with testing the appropriateness of the discount rate used (the estimated weighted average cost of capital) in the discounted cash flow model.

/s/ Fahn Kanne & Co. Grant Thornton Israel

Fahn Kanne & Co. Grant Thornton Israel

Certified Public Accountants (Isr.)

Tel-Aviv, March 14, 2023

We have served as the Company’s auditor since 2022.

Certified Public Accountants

Fahn Kanne & Co. is the Israeli member firm of Grant Thornton International Ltd.

F-4

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

			December 31,
			2 0 2 2			2 0 2 1
	Note		U.S. dollars in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		8a	$	5,265		$	4,182
Short-term bank deposits		8a		12,040			14,071
Marketable securities				174			208
Trade receivables, net				2,357			1,803
Other current assets		8b		293			145
Prepaid expenses				169			124
Total current assets				20,298			20,533
NON-CURRENT ASSETS:
Trade receivables				58			-
Severance pay fund		5		1,914			2,325
Deferred income taxes		7c		143			184
Property and equipment, net		2		225			175
Right-of-use assets, net		3		946			1,463
Intangible assets, net		4a		374			522
Goodwill		4b		7,785			7,929
Total assets			$	31,743		$	33,131
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables			$	937		$	839
Other current liabilities and accruals		8c		1,978			2,265
Current maturities of lease liabilities		3		271			376
Deferred revenues				1,986			2,155
Total current liabilities				5,172			5,635
LONG-TERM LIABILITIES:
Deferred revenues				107			154
Lease liabilities, net of current maturities		3		615			1,098
Accrued severance pay		5		1,930			2,361
Deferred income taxes				112			157
Total liabilities				7,936			9,405
SHAREHOLDERS’ EQUITY:		6
Share capital - Ordinary shares of NIS 0.01 par value – Authorized: 88,000,000 shares at December 31, 2022 and 2021; Issued: 21,660,010 shares at December 31, 2022 and 2021; Outstanding: 20,124,326 and 20,057,326 shares at December 31, 2022 and 2021, respectively				54			54
Additional paid-in capital				27,546			27,324
Accumulated other comprehensive loss				(1,073	)		(836	)
Accumulated deficit				(1,662	)		(1,722	)
Treasury shares - 1,535,684 and 1,602,684 shares at December 31, 2022 and 2021, respectively				(1,058	)		(1,094	)
Total shareholders’ equity				23,807			23,726
Total liabilities and shareholders’ equity			$	31,743		$	33,131

The accompanying notes are an integral part of the consolidated financial statements.

F-5

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

			Years Ended December 31,
			2 0 2 2		2 0 2 1		2 0 2 0
			U.S. dollars in thousands,
	Note		except per share data
REVENUES:		9a
Sales of licenses			$	611	$	1,548	$	1,366
Services				20,940		24,783		22,008
Total revenues				21,551		26,331		23,374
COST OF REVENUES
Cost of sales of licenses				108		86		82
Cost of services				9,936		12,364		11,071
Total cost of revenues				10,044		12,450		11,153
GROSS PROFIT				11,507		13,881		12,221
OPERATING EXPENSES:
Research and development				3,495		4,048		3,963
Selling and marketing				965		1,403		973
General and administrative				1,523		1,602		1,822
Total operating expenses				5,983		7,053		6,758
OPERATING INCOME				5,524		6,828		5,463
FINANCIAL INCOME, net		9b		93		55		379
INCOME BEFORE TAXES ON INCOME				5,617		6,883		5,842
TAXES ON INCOME		7		330		936		459
NET INCOME			$	5,287	$	5,947	$	5,383
EARNINGS PER SHARE - in U.S. dollars:		9c
Basic			$	0.26	$	0.30	$	0.27
Diluted			$	0.26	$	0.29	$	0.27
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTATION OF EARNINGS PER SHARE – in thousands:		9c
Basic				20,099		20,006		19,907
Diluted				20,397		20,270		20,138

The accompanying notes are an integral part of the consolidated financial statements.

F-6

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
NET INCOME	$	5,287		$	5,947		$	5,383
OTHER COMPREHENSIVE INCOME (LOSS):
Translation adjustments		(237	)		(314	)		362
TOTAL COMPREHENSIVE INCOME	$	5,050		$	5,633		$	5,745

The accompanying notes are an integral part of the consolidated financial statements.

F-7

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Share capital							Accumulated
	Number of				Additional			other
	shares				paid-in			comprehensive			Accumulated			Treasury
	outstanding		Amount		capital			loss			deficit			shares			Total
	In thousands		U.S. dollars in thousands
BALANCE AS OF JANUARY 1, 2020		19,896	$	54	$	27,050		$	(884	)	$	(3,080	)	$	(1,204	)	$	21,936
CHANGES DURING 2020:
Comprehensive income		-		-		-			362			5,383			-			5,745
Dividend paid ($0.24 per share) (Note 6c)		-		-		-			-			(4,775	)		-			(4,775	)
Employees share-based compensation expenses		-		-		213			-			-			-			213
Exercise of options issued to employees from treasury shares		90		-		(61	)		-			-			61			-
BALANCE AS OF DECEMBER 31, 2020		19,986		54		27,202			(522	)		(2,472	)		(1,143	)		23,119
CHANGES DURING 2021:
Comprehensive income		-		-		-			(314	)		5,947			-			5,633
Dividend paid ($0.26 per share) (Note 6c)		-		-		-			-			(5,197	)		-			(5,197	)
Employees share-based compensation expenses		-		-		171			-			-			-			171
Exercise of options issued to employees from treasury shares		71		-		(49	)		-			-			49			-
BALANCE AS OF DECEMBER 31, 2021		20,057		54		27,324			(836	)		(1,722	)		(1,094	)		23,726
CHANGES DURING 2022:
Comprehensive income		-		-		-			(237	)		5,287			-			5,050
Dividend paid ($0.26 per share) (Note 6c)		-		-		-			-			(5,227	)		-			(5,227	)
Employees share-based compensation expenses		-		-		258			-			-			-			258
Exercise of options issued to employees from treasury shares		67		-		(36	)		-			-			36			-
BALANCE AS OF DECEMBER 31, 2022		20,124		54		27,546			(1,073	)		(1,662	)		(1,058	)		23,807

The accompanying notes are an integral part of the consolidated financial statements.

F-8

MIND C.T.I. LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	5,287		$	5,947		$	5,383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		193			194			200
Deferred income taxes, net		7			(96	)		(128	)
Accrued severance pay		41			83			118
Unrealized loss (gain) from marketable securities		34			1			(51	)
Realized loss (gain) on sale of marketable securities, net		11			(3	)		(25	)
Realized gain on sale of property and equipment		-			(3	)		-
Employees share-based compensation		258			171			213
Changes in operating asset and liability items:
Decrease (increase) in trade receivables, net		(666	)		243			1,073
Decrease (increase) in other current assets		(149	)		117			323
Decrease (increase) in prepaid expenses		(45	)		149			(45	)
Increase (decrease) in trade payables		139			(363	)		(901	)
Increase (decrease) in other current liabilities and accruals		(265	)		399			58
Change in operation lease liability		(71	)		(52	)		78
Increase (decrease) in deferred revenues		(216	)		111			203
Net cash provided by operating activities		4,558			6,898			6,499
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of (investment in) marketable securities, net		(11	)		1,370			545
Purchase of property and equipment		(130	)		(82	)		(68	)
Proceeds from sales of property and equipment		-			3			-
Severance pay funds		(61	)		(89	)		(126	)
Proceeds from (investment in) short-term bank deposits		2,031			(6,891	)		(385	)
Net cash provided by (used in) investing activities		1,829			(5,689	)		(34	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend paid		(5,227	)		(5,197	)		(4,775	)
Net cash used in financing activities		(5,227	)		(5,197	)		(4,775	)
TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVILENTS		(77	)		(90	)		91
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,083			(4,078	)		1,781
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		4,182			8,260			6,479
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR	$	5,265		$	4,182		$	8,260
SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH ACTIVITIES:
Taxes paid	$	413		$	903		$	454
Net lease liabilities arising from obtaining right-of-use asset	$	-		$	-		$	599

The accompanying notes are an integral part of the consolidated financial statements.

F-9

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

a. General:

1) Nature of operations:

MIND C.T.I. Ltd. (the “Company”) is an Israeli company which, together with its subsidiaries (the “Group”), provides integrated products and services. The Company designs, develops, markets, supports, implements and operates billing and customer care systems, including consulting and managed services, primarily to wireless, wireline, next-generation service providers throughout the world. The Company also provides a call management system used by enterprises for call accounting, traffic analysis, and fraud detection. The Company, through its subsidiaries, also provides enterprise and wholesale messaging.

The Company has wholly-owned subsidiaries in the United States (MIND Software Inc.), Romania (MIND Software Srl), United Kingdom (MIND Software Limited) and Germany (MIND CTI GmbH, Message Mobile GmbH (“Message Mobile”) and “GTX Messaging GmbH (“GTX”)).

2) Accounting principles:

The consolidated financial statements were prepared in accordance with the United States Generally Accepted Accounting Principles (“GAAP”).

3) Use of estimates in preparation of financial statements:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates. The most significant estimates with regard to the Company’s consolidated financial statements relate to revenue recognition for projects that apply the percentage of completion measurement and goodwill impairment.

4) Functional currency:

The currency of the primary economic environment in which the operations of the Company and certain subsidiaries are conducted is the U.S. dollar (“dollar” or “$”). Most of the Company’s and its non-German subsidiaries’ revenues are derived from sales which are denominated primarily in dollars. In addition, the majority of the Company’s cash reserves and investments are denominated in dollars. Thus, the functional currency of the Company and certain subsidiaries is the dollar.

The Company and certain subsidiaries transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.

The currency of the primary economic environment in which the operations of the Company’s German subsidiaries, Message Mobile, GTX and MIND CTI GmbH, are conducted is the Euro. Most of the revenues of the German subsidiaries, are denominated primarily in Euros. Thus, the functional currency of such subsidiaries is the Euro. For those subsidiaries, assets and liabilities are translated at year-end exchange rates and statement of operations’ items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity.

F-10

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

b. Principles of consolidation:

The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries.

Inter-company balances and transactions have been eliminated in consolidation. Profits from inter-company sales, not yet realized outside the Company and its subsidiaries, have also been eliminated.

c. Comprehensive income (loss):

The purpose of reporting comprehensive income (loss) is to report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period resulting from transactions from non-owner sources.

d. Segment reporting:

The chief operating decision maker (the “CODM”) of the Company is the Chief Executive Officer. The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has two reporting segments, see Note 10.

e. Cash and cash equivalents:

The Company and its subsidiaries consider all highly liquid investments, which include short-term bank deposits (up to three months from original date of deposit) that are not restricted as to withdrawal or use, to be cash equivalents.

f. Fair value of financial instruments:

The Company records its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers.

The Company’s financial instruments, including cash, cash equivalents, short-term bank deposits, marketable securities, accounts receivable, accounts payable and accruals have carrying amounts which is equal or approximate fair value due to the short-term maturity of these instruments.

The measurement of cash and cash equivalents and marketable derivatives are classified within Level 1.

F-11

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

g. Short-term bank deposits:

Bank deposits with maturities of more than three months but less than one year are included in short-term bank deposits. These deposits are presented at cost and earn interest at market rates which present the fair value.

h. Marketable securities:

Marketable securities are classified as “financial assets held at fair value through profit or loss” when held for trading or are designated upon initial recognition as financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss are shown at fair value. Any gain or loss arising from changes in fair value, including those originating from changes in exchange rates is recognized in profit or loss in the period in which the change occurred. Net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset.

The Company invests in highly-rated marketable securities, and its policy limits the amount of credit exposure to any one issuer. The Company’s investment policy requires investments to be investment grade, rated BBB- or better, with the objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio, based on quoted prices in active markets.

i. Leases:

The Company adopted ASC 842, “Leases”. In accordance with ASC 842, the Company first determines if an arrangement contains a lease and the classification of that lease, if applicable, at inception. ASC 842 requires the recognition of right-of-use assets and lease liabilities for the Company’s operating leases.

The Company elected to adopt the package of practical expedients permitted under ASC 842. Therefore, the Company was not required to reassess: (i) whether any expired or existing contracts are or contain leases; (ii) the classification of any expired or existing leases; and (iii) initial direct costs for any existing leases.

j. Property and equipment:

These assets are stated at cost, less accumulated depreciation and amortization.

The assets are depreciated by the straight-line method, on basis of their estimated useful life which best reflects the pattern of use.

Annual rates of depreciation are as follows:

	%
Computers and electronic equipment		15-33
Office furniture and equipment		6-7
Vehicles		15

Leasehold improvements are amortized by the straight-line method over the term of the lease, which is shorter than the estimated useful life of the improvements.

F-12

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

k. Intangible assets:

Intangible assets with definite lives are amortized over their estimated useful lives using the straight-line method which best reflects the pattern of use, at the following annual periods ranges:

	Years
Core technology	10.75
Customer relationships	5.75

Recoverability of these assets is measured by a comparison of the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the assets. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets.

During the years ended December 31, 2022, 2021 and 2020, no impairment losses have been identified with respect to intangible assets.

l. Goodwill:

Goodwill reflects the excess of the purchase price of subsidiaries acquired over the fair value of net assets acquired. Under ASC 350, “Intangibles – Goodwill and Others”, goodwill is not amortized but rather tested for impairment at least annually or most often if indicators of impairment are present.

Events or changes in circumstances that could trigger an impairment review include macroeconomic and other industry specific factors including, among others, a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for its overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.

The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required.

Alternatively, the Company may elect to proceed directly to the impairment test and bypass the qualitative assessment. Goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount.

The Company performed the annual impairment tests as of September 30, 2022, 2021 and 2020 and did not identify any indication for impairment losses (see Note 4b). The impairment test was based on a valuation performed by management. Judgments and assumptions used in the discounted cash flow model which included projected net cash flows from operations, short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions.

m. Income taxes:

The Company accounts for income taxes, in accordance with the provisions of ASC 740, “Income Taxes”, under the liability method of accounting. Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax basis of assets and liabilities at enacted tax rates in effect in the year in which the differences are expected to reverse. Valuation allowances in respect of the deferred tax assets are provided for if, based upon the weight of available evidence, it is more likely than not that all or a portion of the deferred income tax assets will not be realized.

Deferred tax liabilities and assets are classified as non-current.

For uncertain tax positions, the Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate resolution. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income tax expenses.

F-13

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

n. Revenue recognition:

The Company generates its revenues from software licensing, sales of professional services including integration and implementation, maintenance services, managed services and mobile messaging services.

The Company applies ASC 606, “Revenue from Contracts with Customers”. Under ASC 606, revenue is measured as the amount of consideration the Company expects to be entitled to, in exchange for transferring products or providing services to its customers and is recognized when performance obligations under the terms of contracts with the Company’s customers are satisfied. ASC 606 prescribes a five-step model for recognizing revenue from contracts with customers: (i) identify contract(s) with the customer; (ii) identify the separate performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) each performance obligation is satisfied.

The Company applies the provisions of ASC 606, as follows:

i) Sale of standard licensed products

Revenue from perpetual licenses is classified as software license revenue. Software license revenue is recognized as a point in time upon transfer of control to the customer which usually occurs when the licensed product and the utility that enables the customer to access authorization keys is delivered, provided that a signed contract has been received.

ii) Services

Revenues from ongoing maintenance and support fees are recognized over time on a pro-rated basis over the duration of the contract. Revenues earned from time and material arrangements, usually based on a pre agreed monthly rates, recognized over time, based on the duration of the contract and the service time provided to date.

Ongoing work on customizations performed for existing customers is generally provided on a fixed price basis and as such revenue is recognized when the related services are performed.

Contracts may include a combination of the Company’s various products and services offerings, software, consulting services, and maintenance. For contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. Significant judgment may be required to identify distinct obligations within a contract.

The total transaction price is allocated to the individual performance obligations based on the ratio of the relative established standalone selling prices (SSP), or the Company’s best estimate of SSP, of each distinct product or service in the contract. Revenue is then recognized for each distinct performance obligation.

Measuring Progress towards Completion

Where a performance obligation is satisfied over time for an upgrade or implementation project that requires significant customer modifications and complex implementation, revenue is recognized over time, as the Company’s performance does not create an asset with an alternative use and the Company has an enforceable right to payment, including a reasonable profit, based on the percentage of completion using the input method. This method relies on the Group’s internal measure of progress, compared to the total effort to complete the modifications and implementation utilizing direct labor as the input measure. Estimates are based on the total number of hours performed on the project, compared to the total number of hours expected to complete the project. The estimate of the total number of hours to complete a project is inherently judgemental and depends upon the complexity of the work being undertaken, the customization being made to software and the customer environment being interfaced to. The scope of projects frequently changes, consequently, the judgement of total estimate at completion is subjected to a high level of review at all stages in a project life cycle.

Managed Services

Revenues from managed services include a monthly fee for services and a right to access the Company’s software and are recorded as service revenues. The Company does not provide the customer with the contractual right to take possession of the software at any time during the period under these contracts. The monthly fee is based mainly on the number of subscribers or customer’s business volume and the contracts include a minimum monthly charge. These revenues are recognized over time on a monthly basis when those services are satisfied.

F-14

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

iii) Mobile Messaging Transactions

Certain of the Company’s subsidiaries provide mobile messaging services, via text messages (SMS) and IP (Internet Protocol) messaging channels. Revenues from mobile messaging services are recognized when the messaging service has been rendered, i.e., the messages are delivered to recipient. The revenue amount is based on the price specified in the contract.

o. Research and development expenses:

Pursuant to ASC 985-20, “Software - Costs of Software to be Sold, Leased, or Marketed”, development costs related to software products are expensed as incurred until the “technological feasibility” of the product has been established. Because of the relatively short time period between “technological feasibility” and product release, and the insignificant amount of costs incurred during such period, no software development costs have been capitalized.

p. Allowance for doubtful accounts:

The allowance is determined for specific debts doubtful of collection.

q. Share-based compensation:

The Company accounts for share-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.

The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule using the straight-line method over the requisite service period for the entire award, net of estimated forfeitures.

r. Earnings per share (“EPS”):

Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the year, net of treasury shares.

Diluted EPS reflects the increase in the weighted average number of shares outstanding that would result from the assumed exercise of employee stock options, calculated using the treasury stock method.

s. Treasury shares:

Treasury shares are presented as a reduction of shareholders’ equity, at their cost to the Company, under “Treasury shares.”

t. Concentration of credit risks:

Most of the cash and cash equivalents and short-term deposits of the Company and its subsidiaries are deposited with Israeli, European and U.S. banks. The Company is not aware of any specific credit risks in respect of these banks.

The Company’s revenues have been generated from a large number of customers. Consequently, the exposure to credit risks relating to trade receivables is limited. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts.

F-15

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

u. Recently adopted accounting pronouncements:

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-10, ASC Topic 832, “Disclosures by Business Entities about Government Assistance”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (i) information about the nature of the transactions and the related accounting policy used to account for the transactions, (ii) the line items on the balance sheet and statement of operations that are affected by the transactions, and the amounts applicable to each financial statement line item, and (iii) significant terms and conditions of the transactions. The Company applied the guidance prospectively to all in-scope transactions beginning fiscal year 2022. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. Adopting the new guidance in an interim period other than the first fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance was adopted. The Company plans to adopt the new accounting standard effective January 1, 2023 and will apply the guidance prospectively to business combinations with an acquisition date occurring on or after January 2023.

The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its consolidated financial statements and related disclosures.

NOTE 2 - PROPERTY AND EQUIPMENT, NET

a. Composition of assets, grouped by major classification, is as follows:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Computers and electronic equipment	$	2,089		$	1,977
Office furniture and equipment		158			157
Vehicles		121			87
Leasehold improvements		27			27
		2,395			2,248
Less - accumulated depreciation and amortization		(2,170	)		(2,073	)
	$	225		$	175

b. Depreciation expenses totaled $77 thousand, $63 thousand and $77 thousand in the years ended December 31, 2022, 2021 and 2020, respectively.

F-16

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

c. Property and equipment, net - by geographical location:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Israel	$	74	$	62
Romania		70		67
Germany		81		46
Total	$	225	$	175

NOTE 3 – LEASES

The following represents the aggregate right-of-use assets and related lease liabilities from operating lease agreements for certain offices as:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Amounts recognized in the consolidated balance sheet – right-of-use assets, net	$	946	$	1,463
Current liabilities	$	271	$	376
Long-term liabilities		615		1,098
Total operating leased liabilities	$	886	$	1,474

In the third quarter of 2022, the Company returned one floor of office space in Romania, which resulted in a decrease of the right-of-use asset and in the lease liability in the amount of approximately $173 thousand. There were no additional changes in the lease terms.

The weighted average lease term and weighted average discount rate as of December 31, 2022 were as follows:

Weighted average lease term – operating lease	4.28 years
Weighted average discount rate – operating lease		6.9	%

The future cash flows related to the operating lease liabilities as of December 31, 2022 were as follows:

	U.S. dollars in thousands
Years ending December 31:
2023	$	294
2024		248
2025		146
2026		142
2027		142
Thereafter		38
Total lease payments (undiscounted)		1,010
Less – discount to net present value		(124	)
Present value of lease liabilities	$	886

F-17

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

a. Definite-lived intangible assets:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Core technology	$	312		$	312
Customer relationships		545			545
		857			857
Less – accumulated amortization		(524	)		(348	)
		333			509
Functional currency translation adjustments		41			13
Total intangible assets, net	$	374		$	522

b. Goodwill

	Billing and related services		Messaging			Total
	U.S. dollars in thousands
Balance as of January 1, 2021	$	5,430	$	2,709		$	8,139
Changes during the year ended December 31, 2021:
Functional currency translation adjustments		-		(210	)		(210	)
Balance as of December 31, 2021	$	5,430	$	2,499		$	7,929
Changes during the year ended December 31, 2022:
Functional currency translation adjustments		-		(144	)		(144	)
Balance as of December 31, 2022	$	5,430	$	2,355		$	7,785

NOTE 5 – SEVERANCE PAY

Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The severance pay liability of the Company to its Israeli employees, based upon the number of years of service and the latest monthly salary, is partially covered by regular deposits with severance pay funds and pension funds, and by purchase of insurance policies; under labor agreements, the deposits with recognized pension funds and the insurance policies, as above, are in the employees’ names and are, subject to certain limitations, the property of the employees.

The Company has entered into an agreement with some of its employees implementing Section 14 of the Israeli Severance Pay Law, 1963 and the general approval of the Minister of Labor dated June 30, 1998, issued in accordance with such Section 14. The agreement mandates that upon termination of such employees’ employment, all the amounts accrued in their severance funds, pension funds and by the insurance policies will be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet, as the severance pay risks have been irrevocably transferred to the severance funds, pension funds and insurance companies.

F-18

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amounts accrued and the portions funded, with severance pay funds, pension funds and by the insurance policies are reflected in the financial statements as follows:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Accrued severance pay	$	1,930		$	2,361
Severance pay fund		(1,914	)		(2,325	)
Unfunded balance	$	16		$	36

The amounts of accrued severance pay as above cover the Company’s severance pay liability in accordance with labor agreements in force and based on salary components which, in management’s opinion, create entitlement to severance pay. The Company records the obligation as if it was payable at each balance sheet date on an undiscounted basis.

Withdrawals from the funds are generally made for the purpose of paying severance pay.

The severance pay expenses were $61 thousand, $89 thousand and $126 thousand in the years ended December 31, 2022, 2021 and 2020, respectively.

NOTE 6 - SHAREHOLDERS’ EQUITY

a. Share capital:

The Company’s ordinary shares are traded in the United States on the Nasdaq Global Market, under the symbol MNDO. Ordinary shares of the Company confer upon their holders the right to receive notice to participate and vote in general meetings of the Company and the right to receive dividends, if and when, declared.

b. Treasury shares:

During the period between September 2008 and December 2009, the Company has purchased an aggregate number of 3,165,092 ordinary shares for a total consideration of approximately $2.8 million. Currently, the Company does not have an active buyback plan. As of December 31, 2022, the remaining treasury shares are 1,535,684 which amounted to $1,058 thousand. The treasury shares are mainly utilized by the Company to settle exercise of options by employees.

c. Dividend:

Dividends paid per share in the years ended December 31, 2022, 2021 and 2020 were $0.26, $0.26 and $0.24, respectively.

The Company paid dividends to its shareholders in the amounts of approximately $5.2 million, $5.2 million and $4.8 million during the years ended December 31, 2022, 2021 and 2020, respectively.

d. Stock option plan:

In 2011, the Board of Directors and the Company’s shareholders approved a share incentive plan (the “2011 Share Incentive Plan”). Under the 2011 Share Incentive Plan, options for up to 1,800,000 ordinary shares of NIS 0.01 par value can be granted to employees, directors, consultants or contractors of the Company and its subsidiaries.

Each option can be exercised to purchase one ordinary share. Immediately upon issuance, the ordinary shares issuable upon the exercise of the options will confer on holders the same rights as the other ordinary shares.

The Board of Directors determines the exercise price and the vesting period of the options granted. The outstanding options granted under the abovementioned plan vest over 2-4 years on service basis. Options not exercised will expire five years after the day of grant.

F-19

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The compensation costs charged against income for the 2011 Share Incentive Plan were comprised as follows:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
Cost of revenues	$	63	$	49	$	65
Research and development expenses		159		90		109
Selling and marketing expenses		1		4		9
General and administrative expenses		35		28		30
	$	258	$	171	$	213

Under Section 102 of the Israeli Income Tax Ordinance, pursuant to an election made by the Company thereunder, Israeli employees (except for employees who are deemed “Controlling Members” under the Israeli Income Tax Ordinance) are subject to a lower tax rate on part of the capital gains accruing to them in respect of Section 102 awards. However, the Company is not allowed to claim as an expense for tax purposes the amounts credited to such employees.

1) The following is a summary of the status of the 2011 Share Incentive Plan as of December 31, 2022, 2021 and 2020, and changes during the years ended on those dates:

	Years Ended December 31,
	2 0 2 2					2 0 2 1					2 0 2 0
	Number			Weighted average exercise price		Number			Weighted average exercise price		Number			Weighted average exercise price
Options outstanding at the beginning of year		269,500		$	0.003		266,500		$	0.003		352,000		$	0.23
Changes during year:
Granted (a)		304,000		$	0.003		172,000		$	0.003		64,000		$	0.003
Exercised		(67,000	)	$	0.003		(71,500	)	$	0.003		(89,500	)	$	0.003
Forfeited		(54,000	)	$	0.003		(96,500	)	$	0.003		(56,000	)	$	1.233
Expired		-		$	0.003		(1,000	)	$	0.003		(4,000	)	$	2.688
Options outstanding at the end of year		452,500		$	0.003		269,500		$	0.003		266,500		$	0.003
Options exercisable at the end of year		25,500		$	0.003		30,000		$	0.003		23,000		$	0.003
Weighted average grant date fair value of options granted during the year (b)				$	1.58				$	1.79				$	1.32

(a) In the years ended December 31, 2022 and 2021 and 2020, the options were granted with an exercise price equal to par value of NIS 0.01 ($0.003).

F-20

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(b) The fair value of each stock option granted is computed on the date of grant according to the Black-Scholes option pricing model with the following assumptions:

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
Dividend yield		9.69	%		8.73	%		10.3	%
Expected volatility*		30	%		34	%		22	%
Average risk-free interest rate		1.99	%		0.81	%		0.53	%
Expected average term - in years		3.88			3.88			3.88

* Volatility is based on historical volatility of the Company’s share price for periods matching the expected term of the option until exercise.

As of December 31, 2022, there were approximately $623 thousand of total unrecognized compensation costs, net of expected forfeitures, related to unvested share-based compensation awards granted under the 2011 Share Incentive Plan. The costs are expected to be recognized over a weighted average period of 1.54 years.

2) The following table summarizes information about options outstanding and exercisable as of December 31, 2022:

Options Outstanding

Options Exercisable

Number

Weighted

Number

Weighted

outstanding

average

Weighted

exercisable

average

Weighted

Range of

at

remaining

average

at

remaining

average

exercise

December 31,

contractual

exercise

December 31,

contractual

exercise

prices

2022

life

price

2022

life

price

Years

Years

$

0.003

452,500

3.7

$

0.003

25,500

1.45

$

0.003

The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 were approximately $184 thousand, $235 thousand and $212 thousand, respectively. As of December 31, 2022 the aggregate intrinsic value of the outstanding options is $949 thousand, and the aggregate intrinsic value of the exercisable options is $53 thousand.

NOTE 7 - TAXES ON INCOME

a. Israeli corporate tax 

1) Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969:

The Company is an “Industrial Company”, as defined by this law. As such, the Company is entitled to claim depreciation at increased rates for equipment used in industrial activity, as stipulated by regulations published under the Income Tax (Inflationary Adjustments) Law, 1985.

2) Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”):

On February 18, 2018 and on February 16, 2022, the Company received a status of “Technologic Preferred Enterprise” as defined under the Investment Law (the “Approvals”). In accordance with the Approvals, starting in 2017 and until 2026, income originating from granting the right of use as defined in the Approval, will be defined as Technologic Preferred Income, as defined under the Law, and will be subject to a tax rate of 7.5%. The reduced tax rate applies only with respect to the revenue attributable to the portion of intellectual property developed in Israel. The Preferred Technological Income is calculated for each tax year by applying the “Nexus” formula as detailed in the Israeli regulations.

Dividend distributed from income which is attributed to a “Technologic Preferred Enterprise” will be subject to withholding tax of 20%, subject to a reduced tax rate under the provisions of an applicable double taxation treaty.

F-21

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

b. Other applicable tax rates:

1) Income from other sources in Israel

The tax rate relevant to corporates in Israel in the year 2021 and thereafter is 23%.

2) Income of non-Israeli subsidiaries

Non-Israeli subsidiaries are taxed according to tax laws in their countries of residence (19% in the U.K, 30% in Germany, 21% in U.S. and 16% in Romania).

3) On October 8, 2021, 136 countries approved a statement known as the OECD BEPS Inclusive Framework, which builds upon the OECD’s continuation of the BEPS project. The first pillar is focused on the allocation of taxing rights between countries for in-scope multinational enterprises that sell goods and services into countries with little or no local physical presence. The second pillar is focused on developing a global minimum tax rate of at least 15 percent applicable to in-scope multinational enterprises. The Company is monitoring the developments closely to ensure that the Company is compliant with the various requirements.

c. Deferred income taxes:

1) Provided in respect of the following:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Research and development expenses	$	105		$	104
Carryforward tax losses, see (2) below		1,388			1,588
Other		10			18
Less - valuation allowance, see (2) below		(1,360	)		(1,526	)
	$	143		$	184

Deferred income tax assets are presented in the balance sheet among non-current assets. Also, as of December 31, 2022 and 2021, the Company has deferred income tax liability in amount of $112 thousand and $157 thousand, respectively which is calculated on temporary difference on intangible assets, which were recorded as a part of Message Mobile’s acquisition. Deferred income tax liability is presented in the balance sheet among long-term liabilities.

2) As of December 31, 2022 and 2021, the Company has provided valuation allowances in respect of certain deferred tax assets in certain subsidiaries resulting from tax losses carryforward due to uncertainty concerning their realization.

F-22

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Taxes on income included in the statements of operations:

1) As follows:

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Current:
In Israel	$	335		$	687		$	420
Outside Israel		(12	)		346			167
		323			1,033			587
Deferred:
In Israel		1			(18	)		(59	)
Outside Israel		6			(79	)		(69	)
	$	330		$	936		$	459

2) Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies in Israel (see b above), and the actual tax expense: 

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Income before taxes on income, as reported in the statements of operations*	$	5,617		$	6,883		$	5,842
Theoretical tax expense		1,292			1,583			1,344
Less - tax benefits arising from Technologic Preferred Enterprise status, see a. above		(797	)		(739	)		(796	)
		495			844			548
Increase (decrease) in taxes resulting from other differences:
Disallowable deductions		20			38			52
Taxes on income from previous years		(80	)		169			-
Changes in valuation allowance		(119	)		(127	)		(152	)
Other		14			12			11
Taxes on income for the reported years:	$	330		$	936		$	459
* As follows:
Taxable in Israel	$	5,144		$	4,936		$	5,135
Taxable outside Israel		473			1,947			707
	$	5,617		$	6,883		$	5,842

d. Tax assessments:

As of December 31, 2022, the Company’s tax assessments through the 2017 tax year, are deemed final.

F-23

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - SUPPLEMENTARY BALANCE SHEET INFORMATION

a. Cash and short-term bank deposits:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Cash	$	4,535	$	4,182
Cash equivalents		730		-
Total cash and cash equivalents	$	5,265	$	4,182
Short-term bank deposits*	$	12,040	$	14,071

* The average interest rate of short-term deposits is 4.15% and 0.73%, as of December 31, 2022 and 2021, respectively.

b. Other current assets:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Government institutions	$	36	$	55
Employees		31		27
Interest receivable		185		24
Sundry		41		39
	$	293	$	145

c. Other current liabilities and accruals:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Payroll and related expenses	$	840	$	946
Government institutions		277		453
Accrued vacation pay		64		87
Accrued expenses and sundry		797		779
	$	1,978	$	2,265

F-24

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - SELECTED STATEMENT OF OPERATIONS DATA

a. Revenues:

1) The Company’s revenues derive from sale of software products and services in two operating segments. The Company has three product lines: (i) product line “A” - billing and customer care solutions for service providers; (ii) product line “B” - call accounting and call management solutions for enterprises; and (iii) product line “C” – mobile messaging and communication solutions. Product lines “A” and “B” relate to the billing and related services reporting segment and product line “C” relates to the messaging reporting segment.

The following table sets forth the revenues classified by product lines:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
Product line “A”	$	11,545	$	12,069	$	11,986
Product line “B”		2,343		2,286		2,642
Product line “C”		7,663		11,976		8,746
	$	21,551	$	26,331	$	23,374

2) The following table sets forth the geographical revenues classified by geographical location of the customers:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
The Americas	$	8,536	$	9,421	$	10,355
Europe		11,382		14,702		11,734
Israel		825		1,366		893
Other		808		842		392
	$	21,551	$	26,331	$	23,374

b. Financial income, net:

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Income:
Interest on bank deposits and short-term investments	$	262		$	110		$	172
Interest on non-current trade receivables		58			-			-
Non-dollar currency gains, net		-			-			147
Income from marketable securities		-			-			83
Realized gain from sale of available-for-sale securities		-			3			-
		320			113			402
Expenses:
Non-dollar currency losses, net		(99	)		(8	)		-
Interest		(60	)		-			-
Unrealized loss from marketable securities		(34	)		(1	)		-
Realized loss from sale of marketable securities		(11	)		-			-
Bank commissions and charges		(23	)		(49	)		(23	)
		(227	)		(58	)		(23	)
	$	93		$	55		$	379

F-25

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

c. Earnings per ordinary share (“EPS”):

The following table sets forth the computation of the Company’s basic and diluted EPS:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	In thousands
Weighted average number of shares issued and outstanding - used in computation of basic EPS		20,099		20,006		19,907
Incremental shares from assumed exercise of options		298		264		231
Weighted average number of shares used in computation of diluted EPS		20,397		20,270		20,138

NOTE 10 - REPORTABLE SEGMENTS

The Company applies ASC 280, “Segment Reporting”. ASC 280 establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance.

As mentioned in Note 1d, the CODM of the Company is the Chief Executive Officer. The CODM assesses the performance of each segment and allocates resources to those segments based on net revenues and operating results and does not evaluate the Company’s reportable segments using discrete asset information.

	Year Ended December 31, 2022
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	13,888	$	7,663	$	21,551
Operating income	$	5,105	$	419	$	5,524

F-26

MIND C.T.I. LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Year Ended December 31, 2021
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	14,355	$	11,976	$	26,331
Operating income	$	4,818	$	2,010	$	6,828

	Year Ended December 31, 2020
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	14,628	$	8,746	$	23,374
Operating income	$	4,412	$	1,051	$	5,463

Revenues from one customer of the Company’s billing and related services segment represents approximately 12%, 7% and 9% of the total revenues for the years ended December 31, 2022, 2021 and 2020, respectively.

NOTE 11 - RELATED PARTIES

a. Balances

As of December 31, 2022 and 2021, the Company had an accrual in the amount of $240 thousand, pursuant to the compensation policy regarding the Chief Executive Officer’s annual bonus.

b. Transactions

During the years ended December 31, 2022, 2021 and 2020, the Company recorded salary expenses, cash bonus and directors’ fees to its related parties in the amount of $615 thousand, $596 thousand and $596 thousand, respectively.

NOTE 12 - SUBSEQUENT EVENT

On March 8, 2023, the Company declared a cash dividend to its shareholders in the amount of approximately $4.8 million ($0.24 per share).

F-27

EX-12.1

Exhibit 12.1

Certification of Principal Executive Officer pursuant to 17 CFR 240.13a-14(a),

as adopted pursuant to §302 of the Sarbanes-Oxley Act

I, Monica Iancu, certify that:

1. I have reviewed this annual report on Form 20-F of MIND C.T.I. Ltd.;

2. Based on my knowledge, this report does 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 this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 15, 2023	/s/ Monica Iancu
	Monica Iancu
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-12.2

Exhibit 12.2

Certification of Principal Financial Officer pursuant to 17 CFR 240.13a-14(a),

as adopted pursuant to §302 of the Sarbanes-Oxley Act

I, Arie Abramovich, certify that:

1. I have reviewed this annual report on Form 20-F of MIND C.T.I. Ltd.;

2. Based on my knowledge, this report does 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 this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: March 15, 2023	/s/ Arie Abramovich
	Arie Abramovich
	Chief Financial Officer
	(Principal Financial Officer)

EX-13.1

Exhibit 13.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. § 1350,

as adopted pursuant to § 906 of the Sarbanes-Oxley Act

In connection with the annual report on Form 20-F for the fiscal year ended December 31, 2022 of MIND C.T.I. Ltd. (the “Company”) as filed with the U.S. Securities and Exchange Commission (the “Commission”) on the date hereof (the “Report”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Monica Iancu, certify that:

● the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

● the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 15, 2023

/s/ Monica Iancu

Monica Iancu

President and Chief Executive Officer

(Principal Executive Officer)

EX-13.2

Exhibit 13.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. § 1350,

as adopted pursuant to § 906 of the Sarbanes-Oxley Act

In connection with the annual report on Form 20-F for the fiscal year ended December 31, 2022 of MIND C.T.I. Ltd. (the “Company”) as filed with the U.S. Securities and Exchange Commission (the “Commission”) on the date hereof (the “Report”) and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Arie Abramovich, certify that:

● The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

● The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 15, 2023

/s/ Arie Abramovich

Arie Abramovich
Chief Financial Officer

(Principal Financial Officer)

XML

Document And Entity Information	12 Months Ended
	Dec. 31, 2022 shares
Document Information Line Items
Entity Registrant Name	MIND CTI LTD
Trading Symbol	MNDO
Document Type	20-F/A
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	20,124,326
Amendment Flag	true
Amendment Description	This Amendment No. 1 (this “Amendment”) to the Annual Report on Form 20-F of MIND C.T.I. Ltd. (the “Company”) for the year ended December 31, 2022, filed on March 14, 2023 (the “Annual Report”), is being filed solely for the purpose of adding the report of the independent registered public accounting firm that audited the Company’s consolidated financial statements as of, and for the two years ended, December 31, 2021 (the “Report”), which was inadvertently omitted from the original filing.This Amendment consists of a cover page, this explanatory note, the financial statements referenced in Item 18 (with the addition of the Report and resulting renumbering of the “F” pages), Item 19, the signature page and the Exhibits (as updated to include new certifications of our Chief Executive Officer and Chief Financial Officer).Other than as expressly set forth above, this Amendment does not amend the information in any other item of the Annual Report or reflect any events that have occurred after the Annual Report was originally filed.
Entity Central Index Key	0001119083
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Emerging Growth Company	false
Entity Shell Company	false
ICFR Auditor Attestation Flag	false
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	000-31215
Entity Incorporation, State or Country Code	L3
Entity Address, Address Line One	2 HaCarmel Street
Entity Address, City or Town	Yoqneam
Entity Address, Postal Zip Code	2066724
Entity Address, Country	IL
Title of 12(b) Security	Ordinary Shares, nominal value NIS 0.01 per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Document Accounting Standard	U.S. GAAP
Auditor Firm ID	1375
Auditor Name	Fahn Kanne & Co. Grant Thornton Israel
Auditor Location	Tel-Aviv
Business Contact
Document Information Line Items
Entity Address, Address Line One	2 HaCarmel Street
Entity Address, City or Town	Yoqneam
Entity Address, Postal Zip Code	2066724
Entity Address, Country	IL
Contact Personnel Name	Arie Abramovich
City Area Code	+972
Local Phone Number	-4-9936666
Contact Personnel Email Address	investor@mindcti.com

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 5,265	$ 4,182
Short-term bank deposits	12,040	14,071
Marketable securities	174	208
Trade receivables, net	2,357	1,803
Other current assets	293	145
Prepaid expenses	169	124
Total current assets	20,298	20,533
NON-CURRENT ASSETS:
Trade receivables	58
Severance pay fund	1,914	2,325
Deferred income taxes	143	184
Property and equipment, net	225	175
Right-of-use assets, net	946	1,463
Intangible assets, net	374	522
Goodwill	7,785	7,929
Total assets	31,743	33,131
CURRENT LIABILITIES:
Trade payables	937	839
Other current liabilities and accruals	1,978	2,265
Current maturities of lease liabilities	271	376
Deferred revenues	1,986	2,155
Total current liabilities	5,172	5,635
LONG-TERM LIABILITIES:
Deferred revenues	107	154
Lease liabilities, net of current maturities	615	1,098
Accrued severance pay	1,930	2,361
Deferred income taxes	112	157
Total liabilities	7,936	9,405
Share capital - Ordinary shares of NIS 0.01 par value – Authorized: 88,000,000 shares at December 31, 2022 and 2021; Issued: 21,660,010 shares at December 31, 2022 and 2021; Outstanding: 20,124,326 and 20,057,326 shares at December 31, 2022 and 2021, respectively	54	54
Additional paid-in capital	27,546	27,324
Accumulated other comprehensive loss	(1,073)	(836)
Accumulated deficit	(1,662)	(1,722)
Treasury shares - 1,535,684 and 1,602,684 shares at December 31, 2022 and 2021, respectively	(1,058)	(1,094)
Total shareholders’ equity	23,807	23,726
Total liabilities and shareholders’ equity	$ 31,743	$ 33,131

XML

Consolidated Balance Sheets (Parentheticals) - ₪ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Ordinary shares, par value (in New Shekels per share)	₪ 0.01	₪ 0.01
Ordinary shares, shares authorized	88,000,000	88,000,000
Ordinary shares, shares issued	21,660,010	21,660,010
Ordinary shares, shares outstanding	20,124,326	20,057,326
Treasury shares	1,535,684	1,602,684

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Sales of licenses	$ 611	$ 1,548	$ 1,366
Services	20,940	24,783	22,008
Total revenues	21,551	26,331	23,374
COST OF REVENUES
Cost of sales of licenses	108	86	82
Cost of services	9,936	12,364	11,071
Total cost of revenues	10,044	12,450	11,153
GROSS PROFIT	11,507	13,881	12,221
OPERATING EXPENSES:
Research and development	3,495	4,048	3,963
Selling and marketing	965	1,403	973
General and administrative	1,523	1,602	1,822
Total operating expenses	5,983	7,053	6,758
OPERATING INCOME	5,524	6,828	5,463
FINANCIAL INCOME, net	93	55	379
INCOME BEFORE TAXES ON INCOME	5,617	6,883	5,842
TAXES ON INCOME	330	936	459
NET INCOME	$ 5,287	$ 5,947	$ 5,383
Basic (in Dollars per share)	$ 0.26	$ 0.3	$ 0.27
Diluted (in Dollars per share)	$ 0.26	$ 0.29	$ 0.27
Basic (in Shares)	20,099	20,006	19,907
Diluted (in Shares)	20,397	20,270	20,138

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
NET INCOME	$ 5,287	$ 5,947	$ 5,383
OTHER COMPREHENSIVE INCOME (LOSS):
Translation adjustments	(237)	(314)	362
TOTAL COMPREHENSIVE INCOME	$ 5,050	$ 5,633	$ 5,745

XML

Consolidated Statements of Changes in Shareholders’ Equity - USD ($) shares in Thousands, $ in Thousands	Share capital	Additional paid-in capital	Accumulated other comprehensive loss	Accumulated deficit	Treasury shares	Total
Balance at Dec. 31, 2019	$ 54	$ 27,050	$ (884)	$ (3,080)	$ (1,204)	$ 21,936
Balance (in Shares) at Dec. 31, 2019	19,896
Comprehensive income			362	5,383		5,745
Dividend paid (Note 6c)				(4,775)		(4,775)
Employees share-based compensation expenses		213				213
Exercise of options issued to employees from treasury shares		(61)			61
Exercise of options issued to employees from treasury shares (in Shares)	90
Balance at Dec. 31, 2020	$ 54	27,202	(522)	(2,472)	(1,143)	23,119
Balance (in Shares) at Dec. 31, 2020	19,986
Comprehensive income			(314)	5,947		5,633
Dividend paid (Note 6c)				(5,197)		(5,197)
Employees share-based compensation expenses		171				171
Exercise of options issued to employees from treasury shares		(49)			49
Exercise of options issued to employees from treasury shares (in Shares)	71
Balance at Dec. 31, 2021	$ 54	27,324	(836)	(1,722)	(1,094)	23,726
Balance (in Shares) at Dec. 31, 2021	20,057
Comprehensive income			(237)	5,287		5,050
Dividend paid (Note 6c)				(5,227)		(5,227)
Employees share-based compensation expenses		258				258
Exercise of options issued to employees from treasury shares		(36)			36
Exercise of options issued to employees from treasury shares (in Shares)	67
Balance at Dec. 31, 2022	$ 54	$ 27,546	$ (1,073)	$ (1,662)	$ (1,058)	$ 23,807
Balance (in Shares) at Dec. 31, 2022	20,124

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Consolidated Statements of Changes in Shareholders’ Equity (Parentheticals) - $ / shares	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]
Dividend paid per share	$ 0.26	$ 0.26	$ 0.24

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 5,287	$ 5,947	$ 5,383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	193	194	200
Deferred income taxes, net	7	(96)	(128)
Accrued severance pay	41	83	118
Unrealized loss (gain) from marketable securities	34	1	(51)
Realized loss (gain) on sale of marketable securities, net	11	(3)	(25)
Realized gain on sale of property and equipment		(3)
Employees share-based compensation	258	171	213
Changes in operating asset and liability items:
Decrease (increase) in trade receivables, net	(666)	243	1,073
Decrease (increase) in other current assets	(149)	117	323
Decrease (increase) in prepaid expenses	(45)	149	(45)
Increase (decrease) in trade payables	139	(363)	(901)
Increase (decrease) in other current liabilities and accruals	(265)	399	58
Change in operation lease liability	(71)	(52)	78
Increase (decrease) in deferred revenues	(216)	111	203
Net cash provided by operating activities	4,558	6,898	6,499
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of (investment in) marketable securities, net	(11)	1,370	545
Purchase of property and equipment	(130)	(82)	(68)
Proceeds from sales of property and equipment		3
Severance pay funds	(61)	(89)	(126)
Proceeds from (investment in) short-term bank deposits	2,031	(6,891)	(385)
Net cash provided by (used in) investing activities	1,829	(5,689)	(34)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend paid	(5,227)	(5,197)	(4,775)
Net cash used in financing activities	(5,227)	(5,197)	(4,775)
TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVILENTS	(77)	(90)	91
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,083	(4,078)	1,781
BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	4,182	8,260	6,479
BALANCE OF CASH AND CASH EQUIVALENTS AT END OF YEAR	5,265	4,182	8,260
SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH ACTIVITIES:
Taxes paid	413	903	454
Net lease liabilities arising from obtaining right-of-use asset			$ 599

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

a. General:

1) Nature of operations:

MIND C.T.I. Ltd. (the “Company”) is an Israeli company which, together with its subsidiaries (the “Group”), provides integrated products and services. The Company designs, develops, markets, supports, implements and operates billing and customer care systems, including consulting and managed services, primarily to wireless, wireline, next-generation service providers throughout the world. The Company also provides a call management system used by enterprises for call accounting, traffic analysis, and fraud detection. The Company, through its subsidiaries, also provides enterprise and wholesale messaging.

The Company has wholly-owned subsidiaries in the United States (MIND Software Inc.), Romania (MIND Software Srl), United Kingdom (MIND Software Limited) and Germany (MIND CTI GmbH, Message Mobile GmbH (“Message Mobile”) and “GTX Messaging GmbH (“GTX”)).

2) Accounting principles:

The consolidated financial statements were prepared in accordance with the United States Generally Accepted Accounting Principles (“GAAP”).

3) Use of estimates in preparation of financial statements:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates. The most significant estimates with regard to the Company’s consolidated financial statements relate to revenue recognition for projects that apply the percentage of completion measurement and goodwill impairment.

4) Functional currency:

The currency of the primary economic environment in which the operations of the Company and certain subsidiaries are conducted is the U.S. dollar (“dollar” or “$”). Most of the Company’s and its non-German subsidiaries’ revenues are derived from sales which are denominated primarily in dollars. In addition, the majority of the Company’s cash reserves and investments are denominated in dollars. Thus, the functional currency of the Company and certain subsidiaries is the dollar.

The Company and certain subsidiaries transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.

The currency of the primary economic environment in which the operations of the Company’s German subsidiaries, Message Mobile, GTX and MIND CTI GmbH, are conducted is the Euro. Most of the revenues of the German subsidiaries, are denominated primarily in Euros. Thus, the functional currency of such subsidiaries is the Euro. For those subsidiaries, assets and liabilities are translated at year-end exchange rates and statement of operations’ items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity.

b. Principles of consolidation:

The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries.

Inter-company balances and transactions have been eliminated in consolidation. Profits from inter-company sales, not yet realized outside the Company and its subsidiaries, have also been eliminated.

c. Comprehensive income (loss):

The purpose of reporting comprehensive income (loss) is to report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period resulting from transactions from non-owner sources.

d. Segment reporting:

The chief operating decision maker (the “CODM”) of the Company is the Chief Executive Officer. The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has two reporting segments, see Note 10.

e. Cash and cash equivalents:

The Company and its subsidiaries consider all highly liquid investments, which include short-term bank deposits (up to three months from original date of deposit) that are not restricted as to withdrawal or use, to be cash equivalents.

f. Fair value of financial instruments:

The Company records its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers.

The Company’s financial instruments, including cash, cash equivalents, short-term bank deposits, marketable securities, accounts receivable, accounts payable and accruals have carrying amounts which is equal or approximate fair value due to the short-term maturity of these instruments.

The measurement of cash and cash equivalents and marketable derivatives are classified within Level 1.

g. Short-term bank deposits:

Bank deposits with maturities of more than three months but less than one year are included in short-term bank deposits. These deposits are presented at cost and earn interest at market rates which present the fair value.

h. Marketable securities:

Marketable securities are classified as “financial assets held at fair value through profit or loss” when held for trading or are designated upon initial recognition as financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss are shown at fair value. Any gain or loss arising from changes in fair value, including those originating from changes in exchange rates is recognized in profit or loss in the period in which the change occurred. Net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset.

The Company invests in highly-rated marketable securities, and its policy limits the amount of credit exposure to any one issuer. The Company’s investment policy requires investments to be investment grade, rated BBB- or better, with the objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio, based on quoted prices in active markets.

i. Leases:

The Company adopted ASC 842, “Leases”. In accordance with ASC 842, the Company first determines if an arrangement contains a lease and the classification of that lease, if applicable, at inception. ASC 842 requires the recognition of right-of-use assets and lease liabilities for the Company’s operating leases.

The Company elected to adopt the package of practical expedients permitted under ASC 842. Therefore, the Company was not required to reassess: (i) whether any expired or existing contracts are or contain leases; (ii) the classification of any expired or existing leases; and (iii) initial direct costs for any existing leases.

j. Property and equipment:

These assets are stated at cost, less accumulated depreciation and amortization.

The assets are depreciated by the straight-line method, on basis of their estimated useful life which best reflects the pattern of use.

Annual rates of depreciation are as follows:

	%
Computers and electronic equipment		15-33
Office furniture and equipment		6-7
Vehicles		15

Leasehold improvements are amortized by the straight-line method over the term of the lease, which is shorter than the estimated useful life of the improvements.

k. Intangible assets:

Intangible assets with definite lives are amortized over their estimated useful lives using the straight-line method which best reflects the pattern of use, at the following annual periods ranges:

	Years
Core technology	10.75
Customer relationships	5.75

Recoverability of these assets is measured by a comparison of the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the assets. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets.

During the years ended December 31, 2022, 2021 and 2020, no impairment losses have been identified with respect to intangible assets.

l. Goodwill:

Goodwill reflects the excess of the purchase price of subsidiaries acquired over the fair value of net assets acquired. Under ASC 350, “Intangibles – Goodwill and Others”, goodwill is not amortized but rather tested for impairment at least annually or most often if indicators of impairment are present.

Events or changes in circumstances that could trigger an impairment review include macroeconomic and other industry specific factors including, among others, a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for its overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.

The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required.

Alternatively, the Company may elect to proceed directly to the impairment test and bypass the qualitative assessment. Goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount.

The Company performed the annual impairment tests as of September 30, 2022, 2021 and 2020 and did not identify any indication for impairment losses (see Note 4b). The impairment test was based on a valuation performed by management. Judgments and assumptions used in the discounted cash flow model which included projected net cash flows from operations, short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions.

m. Income taxes:

The Company accounts for income taxes, in accordance with the provisions of ASC 740, “Income Taxes”, under the liability method of accounting. Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax basis of assets and liabilities at enacted tax rates in effect in the year in which the differences are expected to reverse. Valuation allowances in respect of the deferred tax assets are provided for if, based upon the weight of available evidence, it is more likely than not that all or a portion of the deferred income tax assets will not be realized.

Deferred tax liabilities and assets are classified as non-current.

For uncertain tax positions, the Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate resolution. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income tax expenses.

n. Revenue recognition:

The Company generates its revenues from software licensing, sales of professional services including integration and implementation, maintenance services, managed services and mobile messaging services.

The Company applies ASC 606, “Revenue from Contracts with Customers”. Under ASC 606, revenue is measured as the amount of consideration the Company expects to be entitled to, in exchange for transferring products or providing services to its customers and is recognized when performance obligations under the terms of contracts with the Company’s customers are satisfied. ASC 606 prescribes a five-step model for recognizing revenue from contracts with customers: (i) identify contract(s) with the customer; (ii) identify the separate performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) each performance obligation is satisfied.

The Company applies the provisions of ASC 606, as follows:

i) Sale of standard licensed products

Revenue from perpetual licenses is classified as software license revenue. Software license revenue is recognized as a point in time upon transfer of control to the customer which usually occurs when the licensed product and the utility that enables the customer to access authorization keys is delivered, provided that a signed contract has been received.

ii) Services

Revenues from ongoing maintenance and support fees are recognized over time on a pro-rated basis over the duration of the contract. Revenues earned from time and material arrangements, usually based on a pre agreed monthly rates, recognized over time, based on the duration of the contract and the service time provided to date.

Ongoing work on customizations performed for existing customers is generally provided on a fixed price basis and as such revenue is recognized when the related services are performed.

Contracts may include a combination of the Company’s various products and services offerings, software, consulting services, and maintenance. For contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. Significant judgment may be required to identify distinct obligations within a contract.

The total transaction price is allocated to the individual performance obligations based on the ratio of the relative established standalone selling prices (SSP), or the Company’s best estimate of SSP, of each distinct product or service in the contract. Revenue is then recognized for each distinct performance obligation.

Measuring Progress towards Completion

Where a performance obligation is satisfied over time for an upgrade or implementation project that requires significant customer modifications and complex implementation, revenue is recognized over time, as the Company’s performance does not create an asset with an alternative use and the Company has an enforceable right to payment, including a reasonable profit, based on the percentage of completion using the input method. This method relies on the Group’s internal measure of progress, compared to the total effort to complete the modifications and implementation utilizing direct labor as the input measure. Estimates are based on the total number of hours performed on the project, compared to the total number of hours expected to complete the project. The estimate of the total number of hours to complete a project is inherently judgemental and depends upon the complexity of the work being undertaken, the customization being made to software and the customer environment being interfaced to. The scope of projects frequently changes, consequently, the judgement of total estimate at completion is subjected to a high level of review at all stages in a project life cycle.

Managed Services

Revenues from managed services include a monthly fee for services and a right to access the Company’s software and are recorded as service revenues. The Company does not provide the customer with the contractual right to take possession of the software at any time during the period under these contracts. The monthly fee is based mainly on the number of subscribers or customer’s business volume and the contracts include a minimum monthly charge. These revenues are recognized over time on a monthly basis when those services are satisfied.

iii) Mobile Messaging Transactions

Certain of the Company’s subsidiaries provide mobile messaging services, via text messages (SMS) and IP (Internet Protocol) messaging channels. Revenues from mobile messaging services are recognized when the messaging service has been rendered, i.e., the messages are delivered to recipient. The revenue amount is based on the price specified in the contract.

o. Research and development expenses:

Pursuant to ASC 985-20, “Software - Costs of Software to be Sold, Leased, or Marketed”, development costs related to software products are expensed as incurred until the “technological feasibility” of the product has been established. Because of the relatively short time period between “technological feasibility” and product release, and the insignificant amount of costs incurred during such period, no software development costs have been capitalized.

p. Allowance for doubtful accounts:

The allowance is determined for specific debts doubtful of collection.

q. Share-based compensation:

The Company accounts for share-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.

The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule using the straight-line method over the requisite service period for the entire award, net of estimated forfeitures.

r. Earnings per share (“EPS”):

Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the year, net of treasury shares.

Diluted EPS reflects the increase in the weighted average number of shares outstanding that would result from the assumed exercise of employee stock options, calculated using the treasury stock method.

s. Treasury shares:

Treasury shares are presented as a reduction of shareholders’ equity, at their cost to the Company, under “Treasury shares.”

t. Concentration of credit risks:

Most of the cash and cash equivalents and short-term deposits of the Company and its subsidiaries are deposited with Israeli, European and U.S. banks. The Company is not aware of any specific credit risks in respect of these banks.

The Company’s revenues have been generated from a large number of customers. Consequently, the exposure to credit risks relating to trade receivables is limited. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts.

u. Recently adopted accounting pronouncements:

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-10, ASC Topic 832, “Disclosures by Business Entities about Government Assistance”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (i) information about the nature of the transactions and the related accounting policy used to account for the transactions, (ii) the line items on the balance sheet and statement of operations that are affected by the transactions, and the amounts applicable to each financial statement line item, and (iii) significant terms and conditions of the transactions. The Company applied the guidance prospectively to all in-scope transactions beginning fiscal year 2022. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. Adopting the new guidance in an interim period other than the first fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance was adopted. The Company plans to adopt the new accounting standard effective January 1, 2023 and will apply the guidance prospectively to business combinations with an acquisition date occurring on or after January 2023.

The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its consolidated financial statements and related disclosures.

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Property and Equipment, Net

12 Months Ended

Dec. 31, 2022

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

NOTE 2 - PROPERTY AND EQUIPMENT, NET

a. Composition of assets, grouped by major classification, is as follows:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Computers and electronic equipment	$	2,089		$	1,977
Office furniture and equipment		158			157
Vehicles		121			87
Leasehold improvements		27			27
		2,395			2,248
Less - accumulated depreciation and amortization		(2,170	)		(2,073	)
	$	225		$	175

b. Depreciation expenses totaled $77 thousand, $63 thousand and $77 thousand in the years ended December 31, 2022, 2021 and 2020, respectively.

c. Property and equipment, net - by geographical location:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Israel	$	74	$	62
Romania		70		67
Germany		81		46
Total	$	225	$	175

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Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

NOTE 3 – LEASES

The following represents the aggregate right-of-use assets and related lease liabilities from operating lease agreements for certain offices as:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Amounts recognized in the consolidated balance sheet – right-of-use assets, net	$	946	$	1,463
Current liabilities	$	271	$	376
Long-term liabilities		615		1,098
Total operating leased liabilities	$	886	$	1,474

In the third quarter of 2022, the Company returned one floor of office space in Romania, which resulted in a decrease of the right-of-use asset and in the lease liability in the amount of approximately $173 thousand. There were no additional changes in the lease terms.

The weighted average lease term and weighted average discount rate as of December 31, 2022 were as follows:

Weighted average lease term – operating lease	4.28 years
Weighted average discount rate – operating lease		6.9	%

The future cash flows related to the operating lease liabilities as of December 31, 2022 were as follows:

	U.S. dollars in thousands
Years ending December 31:
2023	$	294
2024		248
2025		146
2026		142
2027		142
Thereafter		38
Total lease payments (undiscounted)		1,010
Less – discount to net present value		(124	)
Present value of lease liabilities	$	886

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

a. Definite-lived intangible assets:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Core technology	$	312		$	312
Customer relationships		545			545
		857			857
Less – accumulated amortization		(524	)		(348	)
		333			509
Functional currency translation adjustments		41			13
Total intangible assets, net	$	374		$	522

b. Goodwill

	Billing and related services		Messaging			Total
	U.S. dollars in thousands
Balance as of January 1, 2021	$	5,430	$	2,709		$	8,139
Changes during the year ended December 31, 2021:
Functional currency translation adjustments		-		(210	)		(210	)
Balance as of December 31, 2021	$	5,430	$	2,499		$	7,929
Changes during the year ended December 31, 2022:
Functional currency translation adjustments		-		(144	)		(144	)
Balance as of December 31, 2022	$	5,430	$	2,355		$	7,785

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Severance Pay

12 Months Ended

Dec. 31, 2022

Severance Pay [Abstract]

SEVERANCE PAY

NOTE 5 – SEVERANCE PAY

Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The severance pay liability of the Company to its Israeli employees, based upon the number of years of service and the latest monthly salary, is partially covered by regular deposits with severance pay funds and pension funds, and by purchase of insurance policies; under labor agreements, the deposits with recognized pension funds and the insurance policies, as above, are in the employees’ names and are, subject to certain limitations, the property of the employees.

The Company has entered into an agreement with some of its employees implementing Section 14 of the Israeli Severance Pay Law, 1963 and the general approval of the Minister of Labor dated June 30, 1998, issued in accordance with such Section 14. The agreement mandates that upon termination of such employees’ employment, all the amounts accrued in their severance funds, pension funds and by the insurance policies will be released to them. The severance pay liabilities and deposits covered by these plans are not reflected in the balance sheet, as the severance pay risks have been irrevocably transferred to the severance funds, pension funds and insurance companies.

The amounts accrued and the portions funded, with severance pay funds, pension funds and by the insurance policies are reflected in the financial statements as follows:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Accrued severance pay	$	1,930		$	2,361
Severance pay fund		(1,914	)		(2,325	)
Unfunded balance	$	16		$	36

The amounts of accrued severance pay as above cover the Company’s severance pay liability in accordance with labor agreements in force and based on salary components which, in management’s opinion, create entitlement to severance pay. The Company records the obligation as if it was payable at each balance sheet date on an undiscounted basis.

Withdrawals from the funds are generally made for the purpose of paying severance pay.

The severance pay expenses were $61 thousand, $89 thousand and $126 thousand in the years ended December 31, 2022, 2021 and 2020, respectively.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

NOTE 6 - SHAREHOLDERS’ EQUITY

a. Share capital:

The Company’s ordinary shares are traded in the United States on the Nasdaq Global Market, under the symbol MNDO. Ordinary shares of the Company confer upon their holders the right to receive notice to participate and vote in general meetings of the Company and the right to receive dividends, if and when, declared.

b. Treasury shares:

During the period between September 2008 and December 2009, the Company has purchased an aggregate number of 3,165,092 ordinary shares for a total consideration of approximately $2.8 million. Currently, the Company does not have an active buyback plan. As of December 31, 2022, the remaining treasury shares are 1,535,684 which amounted to $1,058 thousand. The treasury shares are mainly utilized by the Company to settle exercise of options by employees.

c. Dividend:

Dividends paid per share in the years ended December 31, 2022, 2021 and 2020 were $0.26, $0.26 and $0.24, respectively.

The Company paid dividends to its shareholders in the amounts of approximately $5.2 million, $5.2 million and $4.8 million during the years ended December 31, 2022, 2021 and 2020, respectively.

d. Stock option plan:

In 2011, the Board of Directors and the Company’s shareholders approved a share incentive plan (the “2011 Share Incentive Plan”). Under the 2011 Share Incentive Plan, options for up to 1,800,000 ordinary shares of NIS 0.01 par value can be granted to employees, directors, consultants or contractors of the Company and its subsidiaries.

Each option can be exercised to purchase one ordinary share. Immediately upon issuance, the ordinary shares issuable upon the exercise of the options will confer on holders the same rights as the other ordinary shares.

The Board of Directors determines the exercise price and the vesting period of the options granted. The outstanding options granted under the abovementioned plan vest over 2-4 years on service basis. Options not exercised will expire five years after the day of grant.

The compensation costs charged against income for the 2011 Share Incentive Plan were comprised as follows:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
Cost of revenues	$	63	$	49	$	65
Research and development expenses		159		90		109
Selling and marketing expenses		1		4		9
General and administrative expenses		35		28		30
	$	258	$	171	$	213

Under Section 102 of the Israeli Income Tax Ordinance, pursuant to an election made by the Company thereunder, Israeli employees (except for employees who are deemed “Controlling Members” under the Israeli Income Tax Ordinance) are subject to a lower tax rate on part of the capital gains accruing to them in respect of Section 102 awards. However, the Company is not allowed to claim as an expense for tax purposes the amounts credited to such employees.

1) The following is a summary of the status of the 2011 Share Incentive Plan as of December 31, 2022, 2021 and 2020, and changes during the years ended on those dates:

	Years Ended December 31,
	2 0 2 2					2 0 2 1					2 0 2 0
	Number			Weighted average exercise price		Number			Weighted average exercise price		Number			Weighted average exercise price
Options outstanding at the beginning of year		269,500		$	0.003		266,500		$	0.003		352,000		$	0.23
Changes during year:
Granted (a)		304,000		$	0.003		172,000		$	0.003		64,000		$	0.003
Exercised		(67,000	)	$	0.003		(71,500	)	$	0.003		(89,500	)	$	0.003
Forfeited		(54,000	)	$	0.003		(96,500	)	$	0.003		(56,000	)	$	1.233
Expired		-		$	0.003		(1,000	)	$	0.003		(4,000	)	$	2.688
Options outstanding at the end of year		452,500		$	0.003		269,500		$	0.003		266,500		$	0.003
Options exercisable at the end of year		25,500		$	0.003		30,000		$	0.003		23,000		$	0.003
Weighted average grant date fair value of options granted during the year (b)				$	1.58				$	1.79				$	1.32

(a) In the years ended December 31, 2022 and 2021 and 2020, the options were granted with an exercise price equal to par value of NIS 0.01 ($0.003).

(b) The fair value of each stock option granted is computed on the date of grant according to the Black-Scholes option pricing model with the following assumptions:

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
Dividend yield		9.69	%		8.73	%		10.3	%
Expected volatility*		30	%		34	%		22	%
Average risk-free interest rate		1.99	%		0.81	%		0.53	%
Expected average term - in years		3.88			3.88			3.88

* Volatility is based on historical volatility of the Company’s share price for periods matching the expected term of the option until exercise.

As of December 31, 2022, there were approximately $623 thousand of total unrecognized compensation costs, net of expected forfeitures, related to unvested share-based compensation awards granted under the 2011 Share Incentive Plan. The costs are expected to be recognized over a weighted average period of 1.54 years.

2) The following table summarizes information about options outstanding and exercisable as of December 31, 2022:

Options Outstanding

Options Exercisable

Number

Weighted

Number

Weighted

outstanding

average

Weighted

exercisable

average

Weighted

Range of

at

remaining

average

at

remaining

average

exercise

December 31,

contractual

exercise

December 31,

contractual

exercise

prices

2022

life

price

2022

life

price

Years

Years

$

0.003

452,500

3.7

$

0.003

25,500

1.45

$

0.003

The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 were approximately $184 thousand, $235 thousand and $212 thousand, respectively. As of December 31, 2022 the aggregate intrinsic value of the outstanding options is $949 thousand, and the aggregate intrinsic value of the exercisable options is $53 thousand.

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Taxes on Income

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

TAXES ON INCOME

NOTE 7 - TAXES ON INCOME

a. Israeli corporate tax 

1) Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969:

The Company is an “Industrial Company”, as defined by this law. As such, the Company is entitled to claim depreciation at increased rates for equipment used in industrial activity, as stipulated by regulations published under the Income Tax (Inflationary Adjustments) Law, 1985.

2) Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”):

On February 18, 2018 and on February 16, 2022, the Company received a status of “Technologic Preferred Enterprise” as defined under the Investment Law (the “Approvals”). In accordance with the Approvals, starting in 2017 and until 2026, income originating from granting the right of use as defined in the Approval, will be defined as Technologic Preferred Income, as defined under the Law, and will be subject to a tax rate of 7.5%. The reduced tax rate applies only with respect to the revenue attributable to the portion of intellectual property developed in Israel. The Preferred Technological Income is calculated for each tax year by applying the “Nexus” formula as detailed in the Israeli regulations.

Dividend distributed from income which is attributed to a “Technologic Preferred Enterprise” will be subject to withholding tax of 20%, subject to a reduced tax rate under the provisions of an applicable double taxation treaty.

b. Other applicable tax rates:

1) Income from other sources in Israel

The tax rate relevant to corporates in Israel in the year 2021 and thereafter is 23%.

2) Income of non-Israeli subsidiaries

Non-Israeli subsidiaries are taxed according to tax laws in their countries of residence (19% in the U.K, 30% in Germany, 21% in U.S. and 16% in Romania).

3) On October 8, 2021, 136 countries approved a statement known as the OECD BEPS Inclusive Framework, which builds upon the OECD’s continuation of the BEPS project. The first pillar is focused on the allocation of taxing rights between countries for in-scope multinational enterprises that sell goods and services into countries with little or no local physical presence. The second pillar is focused on developing a global minimum tax rate of at least 15 percent applicable to in-scope multinational enterprises. The Company is monitoring the developments closely to ensure that the Company is compliant with the various requirements.

c. Deferred income taxes:

1) Provided in respect of the following:

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Research and development expenses	$	105		$	104
Carryforward tax losses, see (2) below		1,388			1,588
Other		10			18
Less - valuation allowance, see (2) below		(1,360	)		(1,526	)
	$	143		$	184

Deferred income tax assets are presented in the balance sheet among non-current assets. Also, as of December 31, 2022 and 2021, the Company has deferred income tax liability in amount of $112 thousand and $157 thousand, respectively which is calculated on temporary difference on intangible assets, which were recorded as a part of Message Mobile’s acquisition. Deferred income tax liability is presented in the balance sheet among long-term liabilities.

2) As of December 31, 2022 and 2021, the Company has provided valuation allowances in respect of certain deferred tax assets in certain subsidiaries resulting from tax losses carryforward due to uncertainty concerning their realization.

Taxes on income included in the statements of operations:

1) As follows:

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Current:
In Israel	$	335		$	687		$	420
Outside Israel		(12	)		346			167
		323			1,033			587
Deferred:
In Israel		1			(18	)		(59	)
Outside Israel		6			(79	)		(69	)
	$	330		$	936		$	459

2) Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates applicable to companies in Israel (see b above), and the actual tax expense: 

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Income before taxes on income, as reported in the statements of operations*	$	5,617		$	6,883		$	5,842
Theoretical tax expense		1,292			1,583			1,344
Less - tax benefits arising from Technologic Preferred Enterprise status, see a. above		(797	)		(739	)		(796	)
		495			844			548
Increase (decrease) in taxes resulting from other differences:
Disallowable deductions		20			38			52
Taxes on income from previous years		(80	)		169			-
Changes in valuation allowance		(119	)		(127	)		(152	)
Other		14			12			11
Taxes on income for the reported years:	$	330		$	936		$	459
* As follows:
Taxable in Israel	$	5,144		$	4,936		$	5,135
Taxable outside Israel		473			1,947			707
	$	5,617		$	6,883		$	5,842

d. Tax assessments:

As of December 31, 2022, the Company’s tax assessments through the 2017 tax year, are deemed final.

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Supplementary Balance Sheet Information

12 Months Ended

Dec. 31, 2022

Supplementary Balance Sheet Information [Abstract]

SUPPLEMENTARY BALANCE SHEET INFORMATION

NOTE 8 - SUPPLEMENTARY BALANCE SHEET INFORMATION

a. Cash and short-term bank deposits:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Cash	$	4,535	$	4,182
Cash equivalents		730		-
Total cash and cash equivalents	$	5,265	$	4,182
Short-term bank deposits*	$	12,040	$	14,071

* The average interest rate of short-term deposits is 4.15% and 0.73%, as of December 31, 2022 and 2021, respectively.

b. Other current assets:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Government institutions	$	36	$	55
Employees		31		27
Interest receivable		185		24
Sundry		41		39
	$	293	$	145

c. Other current liabilities and accruals:

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Payroll and related expenses	$	840	$	946
Government institutions		277		453
Accrued vacation pay		64		87
Accrued expenses and sundry		797		779
	$	1,978	$	2,265

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Selected Statement of Operations Data

12 Months Ended

Dec. 31, 2022

Selected Statement of Operations Data [Abstract]

SELECTED STATEMENT OF OPERATIONS DATA

NOTE 9 - SELECTED STATEMENT OF OPERATIONS DATA

a. Revenues:

1) The Company’s revenues derive from sale of software products and services in two operating segments. The Company has three product lines: (i) product line “A” - billing and customer care solutions for service providers; (ii) product line “B” - call accounting and call management solutions for enterprises; and (iii) product line “C” – mobile messaging and communication solutions. Product lines “A” and “B” relate to the billing and related services reporting segment and product line “C” relates to the messaging reporting segment.

The following table sets forth the revenues classified by product lines:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
Product line “A”	$	11,545	$	12,069	$	11,986
Product line “B”		2,343		2,286		2,642
Product line “C”		7,663		11,976		8,746
	$	21,551	$	26,331	$	23,374

2) The following table sets forth the geographical revenues classified by geographical location of the customers:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
The Americas	$	8,536	$	9,421	$	10,355
Europe		11,382		14,702		11,734
Israel		825		1,366		893
Other		808		842		392
	$	21,551	$	26,331	$	23,374

b. Financial income, net:

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Income:
Interest on bank deposits and short-term investments	$	262		$	110		$	172
Interest on non-current trade receivables		58			-			-
Non-dollar currency gains, net		-			-			147
Income from marketable securities		-			-			83
Realized gain from sale of available-for-sale securities		-			3			-
		320			113			402
Expenses:
Non-dollar currency losses, net		(99	)		(8	)		-
Interest		(60	)		-			-
Unrealized loss from marketable securities		(34	)		(1	)		-
Realized loss from sale of marketable securities		(11	)		-			-
Bank commissions and charges		(23	)		(49	)		(23	)
		(227	)		(58	)		(23	)
	$	93		$	55		$	379

c. Earnings per ordinary share (“EPS”):

The following table sets forth the computation of the Company’s basic and diluted EPS:

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	In thousands
Weighted average number of shares issued and outstanding - used in computation of basic EPS		20,099		20,006		19,907
Incremental shares from assumed exercise of options		298		264		231
Weighted average number of shares used in computation of diluted EPS		20,397		20,270		20,138

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Reportable Segments

12 Months Ended

Dec. 31, 2022

Reportable Segments [Abstract]

REPORTABLE SEGMENTS

NOTE 10 - REPORTABLE SEGMENTS

The Company applies ASC 280, “Segment Reporting”. ASC 280 establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance.

As mentioned in Note 1d, the CODM of the Company is the Chief Executive Officer. The CODM assesses the performance of each segment and allocates resources to those segments based on net revenues and operating results and does not evaluate the Company’s reportable segments using discrete asset information.

	Year Ended December 31, 2022
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	13,888	$	7,663	$	21,551
Operating income	$	5,105	$	419	$	5,524

	Year Ended December 31, 2021
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	14,355	$	11,976	$	26,331
Operating income	$	4,818	$	2,010	$	6,828

	Year Ended December 31, 2020
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	14,628	$	8,746	$	23,374
Operating income	$	4,412	$	1,051	$	5,463

Revenues from one customer of the Company’s billing and related services segment represents approximately 12%, 7% and 9% of the total revenues for the years ended December 31, 2022, 2021 and 2020, respectively.

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Related Parties

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTIES

NOTE 11 - RELATED PARTIES

a. Balances

As of December 31, 2022 and 2021, the Company had an accrual in the amount of $240 thousand, pursuant to the compensation policy regarding the Chief Executive Officer’s annual bonus.

b. Transactions

During the years ended December 31, 2022, 2021 and 2020, the Company recorded salary expenses, cash bonus and directors’ fees to its related parties in the amount of $615 thousand, $596 thousand and $596 thousand, respectively.

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Subsequent Event

12 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 12 - SUBSEQUENT EVENT

On March 8, 2023, the Company declared a cash dividend to its shareholders in the amount of approximately $4.8 million ($0.24 per share).

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Nature of operations

1) Nature of operations:

MIND C.T.I. Ltd. (the “Company”) is an Israeli company which, together with its subsidiaries (the “Group”), provides integrated products and services. The Company designs, develops, markets, supports, implements and operates billing and customer care systems, including consulting and managed services, primarily to wireless, wireline, next-generation service providers throughout the world. The Company also provides a call management system used by enterprises for call accounting, traffic analysis, and fraud detection. The Company, through its subsidiaries, also provides enterprise and wholesale messaging.

The Company has wholly-owned subsidiaries in the United States (MIND Software Inc.), Romania (MIND Software Srl), United Kingdom (MIND Software Limited) and Germany (MIND CTI GmbH, Message Mobile GmbH (“Message Mobile”) and “GTX Messaging GmbH (“GTX”)).

Accounting principles

2) Accounting principles:

The consolidated financial statements were prepared in accordance with the United States Generally Accepted Accounting Principles (“GAAP”).

Use of estimates in preparation of financial statements

3) Use of estimates in preparation of financial statements:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting years. Actual results could differ from those estimates. The most significant estimates with regard to the Company’s consolidated financial statements relate to revenue recognition for projects that apply the percentage of completion measurement and goodwill impairment.

Functional currency

4) Functional currency:

The currency of the primary economic environment in which the operations of the Company and certain subsidiaries are conducted is the U.S. dollar (“dollar” or “$”). Most of the Company’s and its non-German subsidiaries’ revenues are derived from sales which are denominated primarily in dollars. In addition, the majority of the Company’s cash reserves and investments are denominated in dollars. Thus, the functional currency of the Company and certain subsidiaries is the dollar.

The Company and certain subsidiaries transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.

The currency of the primary economic environment in which the operations of the Company’s German subsidiaries, Message Mobile, GTX and MIND CTI GmbH, are conducted is the Euro. Most of the revenues of the German subsidiaries, are denominated primarily in Euros. Thus, the functional currency of such subsidiaries is the Euro. For those subsidiaries, assets and liabilities are translated at year-end exchange rates and statement of operations’ items are translated at average exchange rates prevailing during the year. Such translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss) in shareholders’ equity.

Principles of consolidation

b. Principles of consolidation:

The consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries.

Inter-company balances and transactions have been eliminated in consolidation. Profits from inter-company sales, not yet realized outside the Company and its subsidiaries, have also been eliminated.

Comprehensive income (loss)

c. Comprehensive income (loss):

The purpose of reporting comprehensive income (loss) is to report a measure of all changes in equity of an entity that result from recognized transactions and other economic events of the period resulting from transactions from non-owner sources.

Segment reporting

d. Segment reporting:

The chief operating decision maker (the “CODM”) of the Company is the Chief Executive Officer. The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has two reporting segments, see Note 10.

Cash equivalents

e. Cash and cash equivalents:

The Company and its subsidiaries consider all highly liquid investments, which include short-term bank deposits (up to three months from original date of deposit) that are not restricted as to withdrawal or use, to be cash equivalents.

Fair value of financial instruments

f. Fair value of financial instruments:

The Company records its financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers.

The Company’s financial instruments, including cash, cash equivalents, short-term bank deposits, marketable securities, accounts receivable, accounts payable and accruals have carrying amounts which is equal or approximate fair value due to the short-term maturity of these instruments.

The measurement of cash and cash equivalents and marketable derivatives are classified within Level 1.

Short-term bank deposits

g. Short-term bank deposits:

Bank deposits with maturities of more than three months but less than one year are included in short-term bank deposits. These deposits are presented at cost and earn interest at market rates which present the fair value.

Marketable securities

h. Marketable securities:

Marketable securities are classified as “financial assets held at fair value through profit or loss” when held for trading or are designated upon initial recognition as financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss are shown at fair value. Any gain or loss arising from changes in fair value, including those originating from changes in exchange rates is recognized in profit or loss in the period in which the change occurred. Net gain or loss recognized in profit or loss incorporates any dividend or interest earned on the financial asset.

The Company invests in highly-rated marketable securities, and its policy limits the amount of credit exposure to any one issuer. The Company’s investment policy requires investments to be investment grade, rated BBB- or better, with the objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio, based on quoted prices in active markets.

Leases

i. Leases:

The Company adopted ASC 842, “Leases”. In accordance with ASC 842, the Company first determines if an arrangement contains a lease and the classification of that lease, if applicable, at inception. ASC 842 requires the recognition of right-of-use assets and lease liabilities for the Company’s operating leases.

The Company elected to adopt the package of practical expedients permitted under ASC 842. Therefore, the Company was not required to reassess: (i) whether any expired or existing contracts are or contain leases; (ii) the classification of any expired or existing leases; and (iii) initial direct costs for any existing leases.

Property and equipment

j. Property and equipment:

These assets are stated at cost, less accumulated depreciation and amortization.

The assets are depreciated by the straight-line method, on basis of their estimated useful life which best reflects the pattern of use.

Annual rates of depreciation are as follows:

	%
Computers and electronic equipment		15-33
Office furniture and equipment		6-7
Vehicles		15

Leasehold improvements are amortized by the straight-line method over the term of the lease, which is shorter than the estimated useful life of the improvements.

Intangible assets

k. Intangible assets:

Intangible assets with definite lives are amortized over their estimated useful lives using the straight-line method which best reflects the pattern of use, at the following annual periods ranges:

	Years
Core technology	10.75
Customer relationships	5.75

Recoverability of these assets is measured by a comparison of the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the assets. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets.

During the years ended December 31, 2022, 2021 and 2020, no impairment losses have been identified with respect to intangible assets.

Goodwill

l. Goodwill:

Goodwill reflects the excess of the purchase price of subsidiaries acquired over the fair value of net assets acquired. Under ASC 350, “Intangibles – Goodwill and Others”, goodwill is not amortized but rather tested for impairment at least annually or most often if indicators of impairment are present.

Events or changes in circumstances that could trigger an impairment review include macroeconomic and other industry specific factors including, among others, a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for its overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.

The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required.

Alternatively, the Company may elect to proceed directly to the impairment test and bypass the qualitative assessment. Goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount.

The Company performed the annual impairment tests as of September 30, 2022, 2021 and 2020 and did not identify any indication for impairment losses (see Note 4b). The impairment test was based on a valuation performed by management. Judgments and assumptions used in the discounted cash flow model which included projected net cash flows from operations, short-term and long-term growth rates, weighted average cost of capital, interest, capital expenditures, cash flows, and market conditions.

Income taxes

m. Income taxes:

The Company accounts for income taxes, in accordance with the provisions of ASC 740, “Income Taxes”, under the liability method of accounting. Under the liability method, deferred taxes are determined based on the differences between the financial statement and tax basis of assets and liabilities at enacted tax rates in effect in the year in which the differences are expected to reverse. Valuation allowances in respect of the deferred tax assets are provided for if, based upon the weight of available evidence, it is more likely than not that all or a portion of the deferred income tax assets will not be realized.

Deferred tax liabilities and assets are classified as non-current.

For uncertain tax positions, the Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate resolution. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within income tax expenses.

Revenue recognition

n. Revenue recognition:

The Company generates its revenues from software licensing, sales of professional services including integration and implementation, maintenance services, managed services and mobile messaging services.

The Company applies ASC 606, “Revenue from Contracts with Customers”. Under ASC 606, revenue is measured as the amount of consideration the Company expects to be entitled to, in exchange for transferring products or providing services to its customers and is recognized when performance obligations under the terms of contracts with the Company’s customers are satisfied. ASC 606 prescribes a five-step model for recognizing revenue from contracts with customers: (i) identify contract(s) with the customer; (ii) identify the separate performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the separate performance obligations in the contract; and (v) recognize revenue when (or as) each performance obligation is satisfied.

The Company applies the provisions of ASC 606, as follows:

i) Sale of standard licensed products

Revenue from perpetual licenses is classified as software license revenue. Software license revenue is recognized as a point in time upon transfer of control to the customer which usually occurs when the licensed product and the utility that enables the customer to access authorization keys is delivered, provided that a signed contract has been received.

ii) Services

Revenues from ongoing maintenance and support fees are recognized over time on a pro-rated basis over the duration of the contract. Revenues earned from time and material arrangements, usually based on a pre agreed monthly rates, recognized over time, based on the duration of the contract and the service time provided to date.

Ongoing work on customizations performed for existing customers is generally provided on a fixed price basis and as such revenue is recognized when the related services are performed.

Contracts may include a combination of the Company’s various products and services offerings, software, consulting services, and maintenance. For contracts with multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. Significant judgment may be required to identify distinct obligations within a contract.

The total transaction price is allocated to the individual performance obligations based on the ratio of the relative established standalone selling prices (SSP), or the Company’s best estimate of SSP, of each distinct product or service in the contract. Revenue is then recognized for each distinct performance obligation.

Measuring Progress towards Completion

Where a performance obligation is satisfied over time for an upgrade or implementation project that requires significant customer modifications and complex implementation, revenue is recognized over time, as the Company’s performance does not create an asset with an alternative use and the Company has an enforceable right to payment, including a reasonable profit, based on the percentage of completion using the input method. This method relies on the Group’s internal measure of progress, compared to the total effort to complete the modifications and implementation utilizing direct labor as the input measure. Estimates are based on the total number of hours performed on the project, compared to the total number of hours expected to complete the project. The estimate of the total number of hours to complete a project is inherently judgemental and depends upon the complexity of the work being undertaken, the customization being made to software and the customer environment being interfaced to. The scope of projects frequently changes, consequently, the judgement of total estimate at completion is subjected to a high level of review at all stages in a project life cycle.

Managed Services

Revenues from managed services include a monthly fee for services and a right to access the Company’s software and are recorded as service revenues. The Company does not provide the customer with the contractual right to take possession of the software at any time during the period under these contracts. The monthly fee is based mainly on the number of subscribers or customer’s business volume and the contracts include a minimum monthly charge. These revenues are recognized over time on a monthly basis when those services are satisfied.

iii) Mobile Messaging Transactions

Certain of the Company’s subsidiaries provide mobile messaging services, via text messages (SMS) and IP (Internet Protocol) messaging channels. Revenues from mobile messaging services are recognized when the messaging service has been rendered, i.e., the messages are delivered to recipient. The revenue amount is based on the price specified in the contract.

Research and development expenses

o. Research and development expenses:

Pursuant to ASC 985-20, “Software - Costs of Software to be Sold, Leased, or Marketed”, development costs related to software products are expensed as incurred until the “technological feasibility” of the product has been established. Because of the relatively short time period between “technological feasibility” and product release, and the insignificant amount of costs incurred during such period, no software development costs have been capitalized.

Allowance for doubtful accounts

p. Allowance for doubtful accounts:

The allowance is determined for specific debts doubtful of collection.

Share-based compensation

q. Share-based compensation:

The Company accounts for share-based compensation in accordance with ASC 718, “Compensation - Stock Compensation”, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based payment awards made to employees. ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.

The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule using the straight-line method over the requisite service period for the entire award, net of estimated forfeitures.

Earnings per share (“EPS”)

r. Earnings per share (“EPS”):

Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the year, net of treasury shares.

Diluted EPS reflects the increase in the weighted average number of shares outstanding that would result from the assumed exercise of employee stock options, calculated using the treasury stock method.

Treasury shares

s. Treasury shares:

Treasury shares are presented as a reduction of shareholders’ equity, at their cost to the Company, under “Treasury shares.”

Concentration of credit risks

t. Concentration of credit risks:

Most of the cash and cash equivalents and short-term deposits of the Company and its subsidiaries are deposited with Israeli, European and U.S. banks. The Company is not aware of any specific credit risks in respect of these banks.

The Company’s revenues have been generated from a large number of customers. Consequently, the exposure to credit risks relating to trade receivables is limited. The Company performs ongoing credit evaluations of its customers for the purpose of determining the appropriate allowance for doubtful accounts.

Recently adopted accounting pronouncements

u. Recently adopted accounting pronouncements:

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-10, ASC Topic 832, “Disclosures by Business Entities about Government Assistance”, which requires annual disclosures that increase the transparency of transactions involving government grants, including (i) information about the nature of the transactions and the related accounting policy used to account for the transactions, (ii) the line items on the balance sheet and statement of operations that are affected by the transactions, and the amounts applicable to each financial statement line item, and (iii) significant terms and conditions of the transactions. The Company applied the guidance prospectively to all in-scope transactions beginning fiscal year 2022. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers”. The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. Adopting the new guidance in an interim period other than the first fiscal quarter requires an entity to apply the new guidance to all prior business combinations that have occurred since the beginning of the annual period in which the new guidance was adopted. The Company plans to adopt the new accounting standard effective January 1, 2023 and will apply the guidance prospectively to business combinations with an acquisition date occurring on or after January 2023.

The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its consolidated financial statements and related disclosures.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of annual rates of depreciation property and equipment

	%
Computers and electronic equipment		15-33
Office furniture and equipment		6-7
Vehicles		15

Schedule of intangible assets amortized over their estimated useful lives

	Years
Core technology	10.75
Customer relationships	5.75

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Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2022

Property and Equipment [Abstract]

Schedule of composition of assets, grouped by major classification

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Computers and electronic equipment	$	2,089		$	1,977
Office furniture and equipment		158			157
Vehicles		121			87
Leasehold improvements		27			27
		2,395			2,248
Less - accumulated depreciation and amortization		(2,170	)		(2,073	)
	$	225		$	175

Schedule of property and equipment by geographical location

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Israel	$	74	$	62
Romania		70		67
Germany		81		46
Total	$	225	$	175

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Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Schedule of right-of-use assets of lease liabilities

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Amounts recognized in the consolidated balance sheet – right-of-use assets, net	$	946	$	1,463
Current liabilities	$	271	$	376
Long-term liabilities		615		1,098
Total operating leased liabilities	$	886	$	1,474

Schedule of weighted average lease term and weighted average discount rate

Weighted average lease term – operating lease	4.28 years
Weighted average discount rate – operating lease		6.9	%

Schedule of cash flows related operating lease liabilities

	U.S. dollars in thousands
Years ending December 31:
2023	$	294
2024		248
2025		146
2026		142
2027		142
Thereafter		38
Total lease payments (undiscounted)		1,010
Less – discount to net present value		(124	)
Present value of lease liabilities	$	886

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets [Abstract]

Schedule of definite-lived intangible assets

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Core technology	$	312		$	312
Customer relationships		545			545
		857			857
Less – accumulated amortization		(524	)		(348	)
		333			509
Functional currency translation adjustments		41			13
Total intangible assets, net	$	374		$	522

Schedule of goodwill

	Billing and related services		Messaging			Total
	U.S. dollars in thousands
Balance as of January 1, 2021	$	5,430	$	2,709		$	8,139
Changes during the year ended December 31, 2021:
Functional currency translation adjustments		-		(210	)		(210	)
Balance as of December 31, 2021	$	5,430	$	2,499		$	7,929
Changes during the year ended December 31, 2022:
Functional currency translation adjustments		-		(144	)		(144	)
Balance as of December 31, 2022	$	5,430	$	2,355		$	7,785

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Severance Pay (Tables)

12 Months Ended

Dec. 31, 2022

Severance Pay [Abstract]

Schedule of amounts accrued and the portions funded, with severance pay funds and by the insurance policies

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Accrued severance pay	$	1,930		$	2,361
Severance pay fund		(1,914	)		(2,325	)
Unfunded balance	$	16		$	36

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Schedule of compensation costs charged against income for the 2011 share incentive plan

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
Cost of revenues	$	63	$	49	$	65
Research and development expenses		159		90		109
Selling and marketing expenses		1		4		9
General and administrative expenses		35		28		30
	$	258	$	171	$	213

Schedule of status of the 2011 share incentive plan

	Years Ended December 31,
	2 0 2 2					2 0 2 1					2 0 2 0
	Number			Weighted average exercise price		Number			Weighted average exercise price		Number			Weighted average exercise price
Options outstanding at the beginning of year		269,500		$	0.003		266,500		$	0.003		352,000		$	0.23
Changes during year:
Granted (a)		304,000		$	0.003		172,000		$	0.003		64,000		$	0.003
Exercised		(67,000	)	$	0.003		(71,500	)	$	0.003		(89,500	)	$	0.003
Forfeited		(54,000	)	$	0.003		(96,500	)	$	0.003		(56,000	)	$	1.233
Expired		-		$	0.003		(1,000	)	$	0.003		(4,000	)	$	2.688
Options outstanding at the end of year		452,500		$	0.003		269,500		$	0.003		266,500		$	0.003
Options exercisable at the end of year		25,500		$	0.003		30,000		$	0.003		23,000		$	0.003
Weighted average grant date fair value of options granted during the year (b)				$	1.58				$	1.79				$	1.32

(a) In the years ended December 31, 2022 and 2021 and 2020, the options were granted with an exercise price equal to par value of NIS 0.01 ($0.003).

(b) The fair value of each stock option granted is computed on the date of grant according to the Black-Scholes option pricing model with the following assumptions:

Schedule of stock option granted is computed on the date of grant according to the black-scholes option pricing model

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
Dividend yield		9.69	%		8.73	%		10.3	%
Expected volatility*		30	%		34	%		22	%
Average risk-free interest rate		1.99	%		0.81	%		0.53	%
Expected average term - in years		3.88			3.88			3.88

* Volatility is based on historical volatility of the Company’s share price for periods matching the expected term of the option until exercise.

Schedule of information about options outstanding and exercisable

Options Outstanding

Options Exercisable

Number

Weighted

Number

Weighted

outstanding

average

Weighted

exercisable

average

Weighted

Range of

at

remaining

average

at

remaining

average

exercise

December 31,

contractual

exercise

December 31,

contractual

exercise

prices

2022

life

price

2022

life

price

Years

Years

$

0.003

452,500

3.7

$

0.003

25,500

1.45

$

0.003

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Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of deferred income taxes

	December 31,
	2 0 2 2			2 0 2 1
	U.S. dollars in thousands
Research and development expenses	$	105		$	104
Carryforward tax losses, see (2) below		1,388			1,588
Other		10			18
Less - valuation allowance, see (2) below		(1,360	)		(1,526	)
	$	143		$	184

Schedule of taxes on income included in statements of operations

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Current:
In Israel	$	335		$	687		$	420
Outside Israel		(12	)		346			167
		323			1,033			587
Deferred:
In Israel		1			(18	)		(59	)
Outside Israel		6			(79	)		(69	)
	$	330		$	936		$	459

Schedule of reconciliation of theoretical tax expense

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Income before taxes on income, as reported in the statements of operations*	$	5,617		$	6,883		$	5,842
Theoretical tax expense		1,292			1,583			1,344
Less - tax benefits arising from Technologic Preferred Enterprise status, see a. above		(797	)		(739	)		(796	)
		495			844			548
Increase (decrease) in taxes resulting from other differences:
Disallowable deductions		20			38			52
Taxes on income from previous years		(80	)		169			-
Changes in valuation allowance		(119	)		(127	)		(152	)
Other		14			12			11
Taxes on income for the reported years:	$	330		$	936		$	459
* As follows:
Taxable in Israel	$	5,144		$	4,936		$	5,135
Taxable outside Israel		473			1,947			707
	$	5,617		$	6,883		$	5,842

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Supplementary Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2022

Supplementary Balance Sheet Information [Abstract]

Schedule of cash and short term bank deposits

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Cash	$	4,535	$	4,182
Cash equivalents		730		-
Total cash and cash equivalents	$	5,265	$	4,182
Short-term bank deposits*	$	12,040	$	14,071

* The average interest rate of short-term deposits is 4.15% and 0.73%, as of December 31, 2022 and 2021, respectively.

Schedule of other current assets

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Government institutions	$	36	$	55
Employees		31		27
Interest receivable		185		24
Sundry		41		39
	$	293	$	145

Schedule of other current liabilities and accruals

	December 31,
	2 0 2 2		2 0 2 1
	U.S. dollars in thousands
Payroll and related expenses	$	840	$	946
Government institutions		277		453
Accrued vacation pay		64		87
Accrued expenses and sundry		797		779
	$	1,978	$	2,265

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Selected Statement of Operations Data (Tables)

12 Months Ended

Dec. 31, 2022

Selected Statement of Operations Data [Abstract]

Schedule of revenues classified by product lines

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
Product line “A”	$	11,545	$	12,069	$	11,986
Product line “B”		2,343		2,286		2,642
Product line “C”		7,663		11,976		8,746
	$	21,551	$	26,331	$	23,374

Schedule of geographical revenues classified by geographical location of the customers

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	U.S. dollars in thousands
The Americas	$	8,536	$	9,421	$	10,355
Europe		11,382		14,702		11,734
Israel		825		1,366		893
Other		808		842		392
	$	21,551	$	26,331	$	23,374

Schedule of financial income, net

	Years Ended December 31,
	2 0 2 2			2 0 2 1			2 0 2 0
	U.S. dollars in thousands
Income:
Interest on bank deposits and short-term investments	$	262		$	110		$	172
Interest on non-current trade receivables		58			-			-
Non-dollar currency gains, net		-			-			147
Income from marketable securities		-			-			83
Realized gain from sale of available-for-sale securities		-			3			-
		320			113			402
Expenses:
Non-dollar currency losses, net		(99	)		(8	)		-
Interest		(60	)		-			-
Unrealized loss from marketable securities		(34	)		(1	)		-
Realized loss from sale of marketable securities		(11	)		-			-
Bank commissions and charges		(23	)		(49	)		(23	)
		(227	)		(58	)		(23	)
	$	93		$	55		$	379

Schedule of earnings per ordinary share EPS

	Years Ended December 31,
	2 0 2 2		2 0 2 1		2 0 2 0
	In thousands
Weighted average number of shares issued and outstanding - used in computation of basic EPS		20,099		20,006		19,907
Incremental shares from assumed exercise of options		298		264		231
Weighted average number of shares used in computation of diluted EPS		20,397		20,270		20,138

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Reportable Segments (Tables)

12 Months Ended

Dec. 31, 2022

Reportable Segments [Abstract]

Schedule of reportable segments using discrete asset information

	Year Ended December 31, 2022
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	13,888	$	7,663	$	21,551
Operating income	$	5,105	$	419	$	5,524

	Year Ended December 31, 2021
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	14,355	$	11,976	$	26,331
Operating income	$	4,818	$	2,010	$	6,828

	Year Ended December 31, 2020
	Billing and Related Services		Messaging		Total
	U.S. dollars in thousands
Revenues	$	14,628	$	8,746	$	23,374
Operating income	$	4,412	$	1,051	$	5,463

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Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2022
Accounting Policies [Abstract]
Tax benefit, percentage	50.00%

XML

Significant Accounting Policies (Details) - Schedule of annual rates of depreciation property and equipment	12 Months Ended
	Dec. 31, 2022
Computers and electronic equipment [Member] | Minimum [Member]
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation property and equipment [Line Items]
Property, plant and equipment, depreciation percentage	15.00%
Computers and electronic equipment [Member] | Maximum [Member]
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation property and equipment [Line Items]
Property, plant and equipment, depreciation percentage	33.00%
Office furniture and equipment [Member] | Minimum [Member]
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation property and equipment [Line Items]
Property, plant and equipment, depreciation percentage	6.00%
Office furniture and equipment [Member] | Maximum [Member]
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation property and equipment [Line Items]
Property, plant and equipment, depreciation percentage	7.00%
Vehicles [Member]
Significant Accounting Policies (Details) - Schedule of annual rates of depreciation property and equipment [Line Items]
Property, plant and equipment, depreciation percentage	15.00%

XML

Significant Accounting Policies (Details) - Schedule of intangible assets amortized over their estimated useful lives	12 Months Ended
	Dec. 31, 2022
Core technology [Member]
Significant Accounting Policies (Details) - Schedule of intangible assets amortized over their estimated useful lives [Line Items]
Intangible assets amortized over their estimated useful lives	10 years 9 months
Customer relationships [Member]
Significant Accounting Policies (Details) - Schedule of intangible assets amortized over their estimated useful lives [Line Items]
Intangible assets amortized over their estimated useful lives	5 years 9 months

XML

Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation expenses	$ 77	$ 63	$ 77

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Property and Equipment, Net (Details) - Schedule of composition of assets, grouped by major classification - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,395	$ 2,248
Less - accumulated depreciation and amortization	(2,170)	(2,073)
Property and equipment, net	225	175
Computers and electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,089	1,977
Office furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	158	157
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	121	87
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 27	$ 27

XML

Property and Equipment, Net (Details) - Schedule of property and equipment by geographical location - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property and Equipment, Net (Details) - Schedule of property and equipment by geographical location [Line Items]
Property, Plant and Equipment, Net	$ 225	$ 175
Israel [Member]
Property and Equipment, Net (Details) - Schedule of property and equipment by geographical location [Line Items]
Property, Plant and Equipment, Net	74	62
Romania [Member]
Property and Equipment, Net (Details) - Schedule of property and equipment by geographical location [Line Items]
Property, Plant and Equipment, Net	70	67
Germany [Member]
Property and Equipment, Net (Details) - Schedule of property and equipment by geographical location [Line Items]
Property, Plant and Equipment, Net	$ 81	$ 46

XML

Leases (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2022 USD ($)
Leases [Abstract]
Right-of-use asset	$ 173

XML

Leases (Details) - Schedule of right-of-use assets of lease liabilities - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Schedule Of Right Of Use Assets Of Lease Liabilities Abstract
Amounts recognized in the consolidated balance sheet – right-of-use assets, net	$ 946	$ 1,463
Current liabilities	271	376
Long-term liabilities	615	1,098
Total operating leased liabilities	$ 886	$ 1,474

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Leases (Details) - Schedule of weighted average lease term and weighted average discount rate	Dec. 31, 2022
Schedule Of Weighted Average Lease Term And Weighted Average Discount Rate Abstract
Weighted average lease term – operating lease	4 years 3 months 10 days
Weighted average discount rate – operating lease	6.90%

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Leases (Details) - Schedule of cash flows related operating lease liabilities $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Schedule Of Cash Flows Related Operating Lease Liabilities Abstract
2023	$ 294
2024	248
2025	146
2026	142
2027	142
Thereafter	38
Total lease payments (undiscounted)	1,010
Less – discount to net present value	(124)
Present value of lease liabilities	$ 886

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Goodwill and Other Intangible Assets (Details) - Schedule of definite-lived intangible assets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Other Intangible Assets (Details) - Schedule of definite-lived intangible assets [Line Items]
Other intangible assets, gross	$ 857	$ 857
Less – accumulated amortization	(524)	(348)
Total Intangible assets	333	509
Functional currency translation adjustments	41	13
Total intangible assets, net	374	522
Core technology [Member]
Goodwill and Other Intangible Assets (Details) - Schedule of definite-lived intangible assets [Line Items]
Other intangible assets, gross	312	312
Customer relationships [Member]
Goodwill and Other Intangible Assets (Details) - Schedule of definite-lived intangible assets [Line Items]
Other intangible assets, gross	$ 545	$ 545

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Goodwill and Other Intangible Assets (Details) - Schedule of goodwill - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Goodwill [Line Items]
Balance at beginning	$ 7,929	$ 8,139
Changes during the year ended December 31, 2021:
Functional currency translation adjustments	(144)	(210)
Balance at ending	7,785	7,929
Billing and related services [Member]
Goodwill [Line Items]
Balance at beginning	5,430	5,430
Changes during the year ended December 31, 2021:
Functional currency translation adjustments
Balance at ending	5,430	5,430
Messaging [Member]
Goodwill [Line Items]
Balance at beginning	2,499	2,709
Changes during the year ended December 31, 2021:
Functional currency translation adjustments	(144)	(210)
Balance at ending	$ 2,355	$ 2,499

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Severance Pay (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Employee Severance [Member]
Severance Pay (Details) [Line Items]
Severance pay expenses	$ 61	$ 89	$ 126

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Severance Pay (Details) - Schedule of amounts accrued and the portions funded, with severance pay funds and by the insurance policies - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Schedule Of Amounts Accrued And The Portions Funded With Severance Pay Funds And By The Insurance Policies Abstract
Accrued severance pay	$ 1,930	$ 2,361
Severance pay fund	(1,914)	(2,325)
Unfunded balance	$ 16	$ 36

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Shareholders' Equity (Details) $ / shares in Units, $ in Thousands	1 Months Ended		12 Months Ended
	Dec. 31, 2009 USD ($) shares	Sep. 30, 2008 USD ($) shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) $ / shares	Dec. 31, 2011 ₪ / shares shares
Shareholders' Equity (Details) [Line Items]
Purchased an aggregate amount of ordinary shares (in Shares) | shares	3,165,092	3,165,092
Total consideration	$ 2,800	$ 2,800
Treasury shares (in Shares) | shares			1,535,684	1,602,684
Treasury value			$ 1,058	$ 1,094
Dividends paid per share (in Dollars per share) | $ / shares			$ 0.26	$ 0.26	$ 0.24
Paid dividends to shareholders			$ 5,200	$ 5,200	$ 4,800
Options granted exercise price of ordinary shares term			5 years
Total unrecognized compensation costs			$ 623
Total compensation cost not yet recognized, weighted average period for recognition			1 year 6 months 14 days
Total intrinsic value of options exercised			$ 184	$ 235	$ 212
Aggregate intrinsic value of the outstanding options			949
Aggregate intrinsic value of the exercisable options			$ 53
2011 Share Incentive Plan [Member]
Shareholders' Equity (Details) [Line Items]
Options granted exercise price of ordinary shares, description			In the years ended December 31, 2022 and 2021 and 2020, the options were granted with an exercise price equal to par value of NIS 0.01 ($0.003).
Minimum [Member]
Shareholders' Equity (Details) [Line Items]
Outstanding options granted, vesting period			2 years
Maximum [Member]
Shareholders' Equity (Details) [Line Items]
Outstanding options granted, vesting period			4 years
Israel, New Shekels [Member] | 2011 Share Incentive Plan [Member]
Shareholders' Equity (Details) [Line Items]
Options for ordinary shares (in Shares) | shares						1,800,000
Par value granted to employees (in New Shekels per share) | ₪ / shares						₪ 0.01

XML

Shareholders' Equity (Details) - Schedule of compensation costs charged against income for the 2011 share incentive plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Compensation Costs Charged Against Income For The2011 Share Incentive Plan Abstract
Cost of revenues	$ 63	$ 49	$ 65
Research and development expenses	159	90	109
Selling and marketing expenses	1	4	9
General and administrative expenses	35	28	30
Total	$ 258	$ 171	$ 213

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Shareholders' Equity (Details) - Schedule of status of the 2011 share incentive plan - Common Stock [Member] - $ / shares		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Shareholders' Equity (Details) - Schedule of status of the 2011 share incentive plan [Line Items]
Number, options outstanding at the beginning of year (in Shares)		269,500	266,500	352,000
Weighted average exercise price, options outstanding at the beginning of year		$ 0.003	$ 0.003	$ 0.23
Number, granted (in Shares)	[1]	304,000	172,000	64,000
Weighted average exercise price, granted	[1]	$ 0.003	$ 0.003	$ 0.003
Number of options, exercised (in Shares)		(67,000)	(71,500)	(89,500)
Weighted average exercise price, exercised		$ 0.003	$ 0.003	$ 0.003
Number, forfeited (in Shares)		(54,000)	(96,500)	(56,000)
Weighted average exercise price, forfeited		$ 0.003	$ 0.003	$ 1.233
Number, expired (in Shares)			(1,000)	(4,000)
Weighted average exercise price, expired		$ 0.003	$ 0.003	$ 2.688
Number, outstanding at end of year (in Shares)		452,500	269,500	266,500
Weighted average exercise price, exercisable at end of year		$ 0.003	$ 0.003	$ 0.003
Number, exercisable at end of year (in Shares)		25,500	30,000	23,000
Weighted average exercise price, exercisable at end of year		$ 0.003	$ 0.003	$ 0.003
Weighted average grant date fair value of options granted during the year	[2]	$ 1.58	$ 1.79	$ 1.32

[1] In the years ended December 31, 2022 and 2021 and 2020, the options were granted with an exercise price equal to par value of NIS 0.01 ($0.003).

[2] The fair value of each stock option granted is computed on the date of grant according to the Black-Scholes option pricing model with the following assumptions:

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Shareholders' Equity (Details) - Schedule of stock option granted is computed on the date of grant according to the black-scholes option pricing model		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Stock Option Granted Is Computed On The Date Of Grant According To The Black Scholes Option Pricing Model Abstract
Dividend yield		9.69%	8.73%	10.30%
Expected volatility	[1]	30.00%	34.00%	22.00%
Average risk-free interest rate		1.99%	0.81%	0.53%
Expected average term - in years		3 years 10 months 17 days	3 years 10 months 17 days	3 years 10 months 17 days

[1] Volatility is based on historical volatility of the Company’s share price for periods matching the expected term of the option until exercise.

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Shareholders' Equity (Details) - Schedule of information about options outstanding and exercisable - 0.003 [Member]	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices	$ 0.003
Options Outstanding, Number outstanding (in Shares) | shares	452,500
Options Outstanding, Weighted average remaining contractual life	3 years 8 months 12 days
Options Outstanding, Weighted average exercise price	$ 0.003
Options Exercisable, Number exercisable (in Shares) | shares	25,500
Options Exercisable, Weighted average remaining contractual life	1 year 5 months 12 days
Options Exercisable, Weighted average exercise price	$ 0.003

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Taxes on Income (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Oct. 08, 2021	Feb. 18, 2018	Dec. 31, 2022	Dec. 31, 2021
Taxes on Income (Details) [Line Items]
Tax rate, percentage		7.50%
Withholding tax rate, percentage			20.00%
Tax rate, percentage	15.00%
Deferred income tax liability (in Dollars)			$ 112	$ 157
Non-Israeli subsidiaries [Member] | U.K [Member]
Taxes on Income (Details) [Line Items]
Tax rate, percentage			19.00%
Non-Israeli subsidiaries [Member] | Germany [Member]
Taxes on Income (Details) [Line Items]
Tax rate, percentage			30.00%
Non-Israeli subsidiaries [Member] | U.S [Member]
Taxes on Income (Details) [Line Items]
Tax rate, percentage			21.00%
Non-Israeli subsidiaries [Member] | Romania [Member]
Taxes on Income (Details) [Line Items]
Tax rate, percentage			16.00%
Israel [Member]
Taxes on Income (Details) [Line Items]
Tax rate, percentage				23.00%

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Taxes on Income (Details) - Schedule of deferred income taxes - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Schedule Of Deferred Income Taxes Abstract
Research and development expenses	$ 105	$ 104
Carryforward tax losses, see (2) below	1,388	1,588
Other	10	18
Less - valuation allowance, see (2) below	(1,360)	(1,526)
Deferred income taxes	$ 143	$ 184

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Taxes on Income (Details) - Schedule of taxes on income included in statements of operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current:
Current income tax expense benefit	$ 323	$ 1,033	$ 587
Deferred:
Deferred income tax expense benefit	330	936	459
In Israel [Member]
Current:
Current income tax expense benefit	335	687	420
Deferred:
Deferred income tax expense benefit	1	(18)	(59)
Outside Israel [Member]
Current:
Current income tax expense benefit	(12)	346	167
Deferred:
Deferred income tax expense benefit	$ 6	$ (79)	$ (69)

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Taxes on Income (Details) - Schedule of reconciliation of theoretical tax expense - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Reconciliation Of Theoretical Tax Expense Abstract
Income before taxes on income, as reported in the statements of operations	$ 5,617	$ 6,883	$ 5,842
Theoretical tax expense	1,292	1,583	1,344
Less - tax benefits arising from Technologic Preferred Enterprise status, see a. above	(797)	(739)	(796)
Theoretical tax expense net of tax benefits	495	844	548
Increase (decrease) in taxes resulting from other differences:
Disallowable deductions	20	38	52
Taxes on income from previous years	(80)	169
Changes in valuation allowance	(119)	(127)	(152)
Other	14	12	11
Taxes on income for the reported years:	330	936	459
* As follows:
Taxable in Israel	5,144	4,936	5,135
Taxable outside Israel	473	1,947	707
Total	$ 5,617	$ 6,883	$ 5,842

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Supplementary Balance Sheet Information (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Selected Statement of Operations Data [Abstract]
Average interest rate of short-term deposit	4.15%	0.73%

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Supplementary Balance Sheet Information (Details) - Schedule of cash and short term bank deposits - USD ($) $ in Thousands		Dec. 31, 2022	Dec. 31, 2021
Schedule Of Cash And Short Term Bank Deposits Abstract
Cash		$ 4,535	$ 4,182
Cash equivalents		730
Total cash and cash equivalents		5,265	4,182
Short-term bank deposits	[1]	$ 12,040	$ 14,071

[1] The average interest rate of short-term deposits is 4.15% and 0.73%, as of December 31, 2022 and 2021, respectively.

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Supplementary Balance Sheet Information (Details) - Schedule of other current assets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Supplementary Balance Sheet Information (Details) - Schedule of other current assets [Line Items]
Other current assets	$ 293	$ 145
Government institutions [Member]
Supplementary Balance Sheet Information (Details) - Schedule of other current assets [Line Items]
Other current assets	36	55
Employees [Member]
Supplementary Balance Sheet Information (Details) - Schedule of other current assets [Line Items]
Other current assets	31	27
Interest Receivable [Member]
Supplementary Balance Sheet Information (Details) - Schedule of other current assets [Line Items]
Other current assets	185	24
Sundry [Member]
Supplementary Balance Sheet Information (Details) - Schedule of other current assets [Line Items]
Other current assets	$ 41	$ 39

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Supplementary Balance Sheet Information (Details) - Schedule of other current liabilities and accruals - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Schedule of Other Current Liabilities and Accruals [Abstract]
Payroll and related expenses	$ 840	$ 946
Government institutions	277	453
Accrued vacation pay	64	87
Accrued expenses and sundry	797	779
Other current liabilities and accruals	$ 1,978	$ 2,265

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Selected Statement of Operations Data (Details)	12 Months Ended
	Dec. 31, 2022
Selected Statement of Operations Data [Abstract]
Operating segments	2

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Selected Statement of Operations Data (Details) - Schedule of revenues classified by product lines - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Product Information [Line Items]
Revenues	$ 21,551	$ 26,331	$ 23,374
Product line “A” [Member]
Product Information [Line Items]
Revenues	11,545	12,069	11,986
Product line “B” [Member]
Product Information [Line Items]
Revenues	2,343	2,286	2,642
Product line "C" [Member]
Product Information [Line Items]
Revenues	$ 7,663	$ 11,976	$ 8,746

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Selected Statement of Operations Data (Details) - Schedule of geographical revenues classified by geographical location of the customers - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Selected Statement of Operations Data (Details) - Schedule of geographical revenues classified by geographical location of the customers [Line Items]
Revenues	$ 21,551	$ 26,331	$ 23,374
The Americas [Member]
Selected Statement of Operations Data (Details) - Schedule of geographical revenues classified by geographical location of the customers [Line Items]
Revenues	8,536	9,421	10,355
Europe [Member]
Selected Statement of Operations Data (Details) - Schedule of geographical revenues classified by geographical location of the customers [Line Items]
Revenues	11,382	14,702	11,734
Israel [Member]
Selected Statement of Operations Data (Details) - Schedule of geographical revenues classified by geographical location of the customers [Line Items]
Revenues	825	1,366	893
Other [Member]
Selected Statement of Operations Data (Details) - Schedule of geographical revenues classified by geographical location of the customers [Line Items]
Revenues	$ 808	$ 842	$ 392

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Selected Statement of Operations Data (Details) - Schedule of financial income, net - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income:
Interest on bank deposits and short-term investments	$ 262	$ 110	$ 172
Interest on non-current trade receivables	58
Non-dollar currency gains, net			147
Income from marketable securities			83
Realized gain from sale of available-for-sale securities		3
Other Nonoperating Income	320	113	402
Expenses:
Non-dollar currency losses, net	(99)	(8)
Interest	(60)
Unrealized loss from marketable securities	(34)	(1)
Realized loss from sale of marketable securities	(11)
Bank commissions and charges	(23)	(49)	(23)
Other Nonoperating Expense	(227)	(58)	(23)
Financial income (expense) - net	$ 93	$ 55	$ 379

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Selected Statement of Operations Data (Details) - Schedule of earnings per ordinary share EPS - shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Earnings Per Ordinary Share Eps Abstract
Weighted average number of shares issued and outstanding - used in computation of basic EPS	20,099	20,006	19,907
Incremental shares from assumed exercise of options	298	264	231
Weighted average number of shares used in computation of diluted EPS	20,397	20,270	20,138

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Reportable Segments (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Reconciliation [Abstract]
Number of customers	1
Total revenues percentage	12.00%	7.00%	9.00%

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Reportable Segments (Details) - Schedule of reportable segments using discrete asset information - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Reportable Segments (Details) - Schedule of reportable segments using discrete asset information [Line Items]
Revenues	$ 21,551	$ 26,331	$ 23,374
Operating income	5,524	6,828	5,463
Billing and Related Services [Member]
Reportable Segments (Details) - Schedule of reportable segments using discrete asset information [Line Items]
Revenues	13,888	14,355	14,628
Operating income	5,105	4,818	4,412
Messaging [Member]
Reportable Segments (Details) - Schedule of reportable segments using discrete asset information [Line Items]
Revenues	7,663	11,976	8,746
Operating income	$ 419	$ 2,010	$ 1,051

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Related Parties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Related Party Transactions [Abstract]
Accrual amount	$ 240	$ 240
Salary expenses, cash bonus and directors' fee to its related parties in the amount	$ 615	$ 596	$ 596

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Subsequent Event (Details) - Subsequent Event [Member] $ / shares in Units, $ in Millions	Mar. 08, 2023 USD ($) $ / shares
Subsequent Event (Details) [Line Items]
Declared dividend to its shareholders | $	$ 4.8
Dividend per share | $ / shares	$ 0.24