Note 5 - Acquisition of Shares of Telkoor

9 Months Ended

Sep. 30, 2012

Business Combination Disclosure [Text Block]

NOTE 5:-     ACQUISITION OF SHARES OF TELKOOR

On June 16, 2011 the Company has acquired 1,136,666 shares of Telkoor, a major shareholder of the Company and an Israeli company listed in the Tel Aviv stock exchange, for $0.88 (NIS 3) per share, which represents 8.8% of the outstanding shares of Telkoor. As a result of this transaction, an existing manufacturing agreement between Digital Power and Telkoor will be updated and extended. In the prior periods the investment was accounted for as available-for-sale securities. In September 2012, the investment has been accounted for under cost method as Telkoor shares do not have readily determinable fair value on the Tel Aviv Stock Exchange. The Company evaluated the fair value of the investment with assistance of a third party valuation. Other than temporary impairment loss of $218 was recognized in finance expenses in the three months ended September 30, 2012.