REG - MTI Wireless Edge - 3rd Quarter Results <Origin Href="QuoteRef">MWEE.L</Origin> - Part 2

MTI Wireless EdgeAnnouncement

14/11/2016 07:06

- Part 2: For the preceding part double click  ID:nRSN0306Pa 

1,374   
                                                                                             
 Other                                                                                       
 Depreciation and amortization            561                    32                  593     
                                                                                             
 
 
593 
 
(*)  Results for seven month ending December 31, 2015. 
 
Note 4-TRANSACTIONS AND BALANCES WITH RELATED PARTIES: 
 
The following transactions occurred with the Parent Company and other related
parties: 
 
                    Nine monthsended       September 30,    Year ended December 31,    
                    2016                                    2015                       2015   
                    U.S. $ in thousands                   
                    Unaudited                               Audited                  
 Purchased Goods    221                                     218                        328    
 Management Fee     320                                     314                        410    
 Services Fee       187                                     159                        212    
 Leaseincome        (54)                                    (86)                       (104)  
                                                                                                  
 
 
Compensation of key management personnel of the Group: 
 
                                    Nine monthsended       September 30,    Year ended December 31,    
                                    2016                                    2015                       2015  
                                    U.S. $ in thousands                   
                                    Unaudited                               Audited                  
 Short-term employee benefits *)    584                                     560                        738   
                                                                                                             
                                                                                                                 
 
 
*) Including Management fees for the CEO, Directors Executive Management and
other related parties 
 
All Transactions were made at market value. 
 
Balances with related parties: 
 
                                              As at                
                                              30.9.2016              30.9.2015    31.12.2015  
                                              U.S. $ in thousands  
                                              Unaudited              Audited    
 Other receivables (Other accounts payables)  (113)                  (17)         50          
                                                                                              
 
 
50 
 
Amendment to Service Agreement with controlling shareholder: 
 
Following the receipt of recommendations of both the remuneration committee
and the board of directors of the Company, an amendment to the service
agreement between the Company and the controlling shareholders (via their
management company) was approved at a shareholders' meeting held on May 18,
2016. According to the amendment, the agreement is in place for 3 years
starting September 1, 2016, after which it will be renewed for periods of 3
years in accordance to the relevant rules and regulations. Nevertheless the
agreement can be terminated by either party by providing 90 days' notice. The
agreement includes remuneration (per month) of: 
 
1.     25,000 NIS to Mr. Zvi Borovitz (raised from 20,000 NIS prior to this
approval) for his service as a chairman of the board of the Company in
capacity of at least 25% and 
 
2.     65,000 NIS to Mr. Moni Borovitz (raised from 60,000 NIS prior to this
approval) for his service as CFO of the Company in capacity of at least 80%. 
 
All amounts are prior to VAT which will be added to the invoices and are
linked to the increase in the consumer price index. 
 
In addition to the above, and in accordance with the remuneration policy
adopted by the Company, as required under rule 20 to the Israeli Companies
Law, a bonus scheme was granted to each of the managers. The bonus scheme
states that Zvi Borovitz and Moni Borovitz will be entitled (each one of them)
to a bonus amounting 2.5% of the company's net profit exceeding US$400,000 per
year (raised from US$250,000 prior to this approval), prior to any bonuses
grant in the Company. In case of a loss in a year the bonus for the next year
will be for a net profit exceeding US$400,000 above the loss made in the
previous year. In addition Mr. Moni Borovitz shall be entitled to a bonus
equal to two months management fee, based on the meeting of targets specified
by the remuneration committee at the beginning of each year. 
 
A ceiling to the bonuses was set at 8 months management fees for Mr. Moni
Borovitz and US$100,000 for Mr. Zvi Borovitz. 
 
The agreement also states that the Company shall reimburse the management of
the Company for any expense made in performance of the manager's duty. The
Company shall also provide each of the managers with a car and phones and will
be responsible for all its related expenses, including all relevant taxes. 
 
Note 5 - SIGNIFICANT EVENTS: 
 
a.  On January 12, 2016, following the approval of its shareholders, the
Company adopted a change to its article of association allowing the Company
the ability to pay dividends by way of scrip, meaning the board would be able
to announce a dividend which could be paid in cash or through the issue of new
shares in the Company (the "Scrip Dividend Policy").Under the Scrip Dividend
Policy, shareholders could, in the future, be given the option to elect to
receive dividends in new shares of the Company rather than in cash. The
default arrangement will be for the payment of dividends in cash, and if the
shareholder prefers to receive their dividends in new shares of the Company,
then they would have to make an election. There would be no ability to make
mixed elections and each shareholder would be able to choose either cash or
new shares but not both. The decision to offer shareholders a scrip dividend
alternative for future dividend payments will be at the sole discretion of the
Board. 
 
b.  During the first half of 2016 several employees exercised options over
167.5 thousand shares in exchange for an approximately of US$22,000. 
 
c.  On April 1, 2016 the company paid a dividend of 1.1 US cents per share
totaling approximately $568,000. 
 
d.  On May 2, 2016 shares in Mottech Water Management (Pty) Ltd. in South
Africa ("Mottech SA") were allotted to its general manager. Following this
allotment the Company owns 85% of Mottech SA. 
 
e.  A new option scheme for key Employees was approved at the Company's Annual
General Meeting on May 18, 2016. Under the plan, options to purchase 800,000
ordinary shares were granted (with each option being over one ordinary share).
This represents approximately 1.5% of the Company's current issued and voting
share capital on a fully diluted basis. The vesting period of the options
shall be as follows: 2 years for 50% of the options, 3 years for additional
25% of the options and 4 years for the reminder of the options. Unexercised
options expire nine years after date of the grant, after which they will be
void. Options are forfeited when the employee leaves the Company. There is no
cash settlement of the options. 
 
The weighted average fair value of the options as at the grant date is 6 pence
(approximately 9 US cents) per option, which was estimated using a Black and
Scholes option pricing model based on the following significant data and
assumptions: 
 
Share price - 19.88 pence (representing approximately 29 US cents) 
 
Exercise price - 27 pence (representing approximately 39 US cents) 
 
Expected volatility - 45.34% 
 
Risk-free interest rate - 0.85% 
 
And expected average life of options 4.375 years 
 
The volatility measured at the standard deviation of expected share price
returns is based on the historical volatility of the Company's share price.
The options were granted as part of a plan that was adopted in accordance with
the provision of section 102 of the Israeli Income Tax Ordinance. 
 
This information is provided by RNS
The company news service from the London Stock Exchange