Note P - Government Grants

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Government Grants [Text Block]

NOTE P

—

GOVERNMENT GRANTS

Government grants received by the Company’s Israeli subsidiary relating to categories of operating expenditures are credited to the consolidated statements of income during the period during which the expenditure to which they relate is charged. Royalty and non-royalty-bearing grants from the Israeli Innovation Authority ("IIA") for funding certain approved research and development projects are recognized at the time when the Company’s Israeli subsidiary is entitled to such grants, on the basis of the related costs incurred, and are included as a deduction from research and development expenses, net.

The Company recorded grants in the amount of

$304

and

$200

for the

three

month periods ended

September 30, 2019

and

2018,

respectively.

The Company recorded grants in the amount of

$1,305

and

$1,200

for the

nine

month periods ended

September 30, 2019

and

2018,

respectively.

The Company’s Israeli subsidiary is obligated to pay royalties amounting to

5%

of the sales of certain products, the development of which benefited from grants received from the IIA in previous years. The obligation to pay these royalties is contingent on actual sales of such products. Grants received from the IIA

may

become repayable if certain criteria under the grants are

not

met. In addition, the grants

may

be required to be repaid with a multiple of up to

six

times the initial grant amount in case the technology that was developed using these grants are transferred, directly or indirectly, to a

third

party.