Note 6 - Intangible Asset, Net

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE

6:

INTANGIBLE ASSET, NET

On

August

25,

2010,

the Company entered into an agreement with Telkoor Power Supplies Ltd. ("TPS"), a subsidiary of Telkoor, pursuant to which, (i) TPS sold, assigned and conveyed to the Company all of its rights, title and interest in and to the intellectual property associated with the Compact Peripheral Component Interface

600

W AC/DC power supply series (the “Assets” or “IP”) and (ii) the Company granted to TPS an irrevocable license to sell the  Assets  in Israel on an exclusive basis. The IP was purchased in order to decrease lead time and costs of the production process. In consideration for the purchase of the IP, the Company paid TPS an amount of

$480.

The consideration for the right to sell the Assets in Israel will be paid to the Company as a yearly royalty fee of

15%

of TPS's direct production costs of sales.

TPS will provide the Company training and technical support, if necessary, for a period of

60

months in order to enable the Company to properly and effectively use the IP to manufacture the Assets.  In accordance with the agreement, the consideration for the IP

may

be reduced over a

four

-year period in the event that annual sales for each year between

2011

and

2014

are less than a fixed threshold of units on an annual basis based on an offset value per unit as described in the agreement. If there is a shortfall in sale of units in

one

annual period and in the subsequent period the Company sells more than the fixed unit threshold, this difference will be offset from any reduced consideration in any annual periods between

2011

and

2014.

As a result of lower than anticipated sales by the Company

of the Compact Peripheral Component Interface

600

W AC/DC power supply series (CPCI

600W)

through

2013,

the Company amended its agreement with Telkoor (effective

January

1,

2014

for the duration of the original agreement or until the shortfall of CPCI

600W

product sales will be offset) to include additional products in addition to the original CPCI

600W

product. The Company will not be required to make any royalty payments to Telkoor under the manufacturing agreement with Telkoor until the shortfall of CPCI

600W

product sales will be offset. As of

December

31

2015

the remaining shortfall balance was

$86

. During the year

2016

, the Company paid royalties to Advice, Telkoor refunded

$40

from this amount by services to the Company and the balance cancelled with the recession agreement. (See Note

7)

The useful life of the IP has been determined to be

five

years and the amortization method is the straight-line method, as management considers this method as the most appropriate.

	December 31,
	201 6			201 5
Beginning balance of IP	$	480		$	480
Accumulated amortization		(480	)		(480	)
Ending balance of IP	$	-		$	-

Amortization expense was

$0

and

$66

for the years ended

December

31,

2016

and

December

31,

2015,

respectively.