RADA ELECTRONIC INDUSTRIES LTD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of

September 2020

RADA ELECTRONIC INDUSTRIES LIMITED

(Name of Registrant)

7 Giborei Israel Street, Netanya4250407, Israel

(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ____________

This Form 6-K and its exhibits are being incorporated by reference into the Registrant’s Form F-3 Registration Statements (File Nos. 333-212643, 333-216973, 333-220304, 333-226387) and Form S-8 (File No. 333-213284 and 333-238502).

RADA ELECTRONIC INDUSTRIES LTD.

EXPLANATORY NOTE

The following exhibits are attached:

99.1	Rada Electronic Industries Ltd. and Its Subsidiaries Condensed Interim Consolidated Financial Statements as of June 30, 2020 (Unaudited)

99.2	Management’s Discussion and Analysis of Results of Operations for the Six Months ended June 30, 2020

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Rada Electronic Industries Ltd.
	(Registrant)

	By:	/s/ Dov Sella
		Dov Sella
		Chief Executive Officer

Date: September 29, 2020

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION

99.1		Rada Electronic Industries Ltd. and Its Subsidiaries Condensed Interim Consolidated Financial Statements as ofJune 30, 2020 (Unaudited)

99.2		Management’s Discussion and Analysis of Results of Operations for the Six Months ended June 30, 2020

RADA ELECTRONIC INDUSTRIES LTD

Exhibit 99.1

RADA ELECTRONIC INDUSTRIES LTD. AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2020

U.S. DOLLARS IN THOUSANDS

UNAUDITED

INDEX

	Page
Condensed Interim Consolidated Balance Sheets	F - 2 - F - 3
Condensed Interim Consolidated Statements of Operations	F - 4
Condensed Interim Consolidated Statements of Comprehensive Income	F - 5
Condensed Interim Consolidated Statements of Changes in Equity	F - 6
Condensed Interim Consolidated Statements of Cash Flows	F - 7 - F - 8
Notes to Condensed Interim Consolidated Financial Statements	F - 9 - F - 23

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	June 30, 2020		December 31, 2019
	Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	29,908	$	13,754
Restricted cash		495		380
Trade receivables, net		18,933		13,765
Contract assets (Note 4)		1,045		1,269
Other accounts receivable and prepaid expenses		2,412		1,673
Inventories (Note 5)		26,474		17,196

Total current assets		79,267		48,037

NON CURRENT ASSETS:
Long-term receivable and other deposits		63		97
Property, plant and equipment, net (Note 6)		11,282		9,127
Operating lease right-of-use assets		7,585		7,654

Total non-current assets		18,930		16,878

Total assets	$	98,197	$	64,915

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

F - 2

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share and per share data)

	June 30, 2020			December 31, 2019
	Unaudited

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Short term loan (Note 8c)	$	455		$	-
Trade payables		15,756			7,661
Other accounts payable and accrued expenses		6,378			5,572
Advances from customers (Note 4)		751			1,563
Contract liabilities (Note 4)		6			196
Operating lease short-term liabilities		1,594			1,240

Total current liabilities		24,940			16,232

LONG-TERM LIABILITIES:
Accrued severance pay and other long-term liabilities		668			764
Operating lease long-term liabilities		6,073			6,499

Total long-term liabilities		6,741			7,263

SHAREHOLDERS EQUITY:
Share capital (Note 9) -

Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2020 and December 31, 2019; Issued and outstanding: 43,485,065 at June 30, 2020 and 38,456,693 at December 31, 2019.		437			394
Additional paid-in capital		144,193			120,017	*)
Accumulated deficit		(78,114	)		(78,991	)

Total RADA shareholders’ equity		66,516			41,420

Total liabilities and shareholders’ equity	$	98,197		$	64,915

*) Reclassified

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

F - 3

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

U.S. dollars in thousands (except share and per share data)

	Six months ended June 30,
	2020		2019
	Unaudited
Revenues:
Products	$	31,812	$	18,364
Services		765		350
		32,577		18,714
Cost of revenues:
Products		20,840		11,899
Services		140		76
		20,980		11,975

Gross profit		11,597		6,739
Operating expenses:
Research and development, net		4,239		3,040
Marketing and selling		2,385		1,870
General and administrative		4,293		3,230

Total operating expenses		10,917		8,140

Operating income (loss)		680		(1,401	)

Total financial income, net (Note 10)		197		43

Net income (loss)		877		(1,358	)

Net loss attributable to non controlling shareholders	$	-	$	(309	)

Net income (loss) attributable to RADA Electronic Industries' shareholders		877		(1,049	)
Basic and diluted net income (loss) from continuing operations per ordinary share	$	0.02	$	(0.03	)
Basic and diluted net income from discontinued operations per ordinary share	$	0.00	$	0.00

Basic and diluted net income (loss) per ordinary share	$	0.02	$	(0.03	)
Weighted average number of ordinary shares used for computing basic net income (loss) per share		43,041,405		38,017,281
Weighted average number of ordinary shares used for computing diluted net income (loss) per share		44,002,634		38,570,290

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

F - 4

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

U.S. dollars in thousands (except share and per share data)

	Six months ended June 30,
	2020		2019
	Unaudited

Net income (loss)	$	877	$	(1,358	)

Other comprehensive loss, net:
Change in foreign currency translation adjustment		-		-

Total comprehensive loss		877		(1,358	)

Comprehensive loss attributable to non-controlling interest		-		-

Comprehensive loss attributable to RADA Electronic Industries' shareholders	$	877	$	(1,358	)

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

F - 5

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

U.S. dollars in thousands (except number of shares data)

	Number of Ordinary shares		Share capital		Additional paid-in capital		Accumulated other comprehensive income (loss)			Accumulated deficit			Non controlling interest			Total equity

Balance at January 1, 2019		37,516,891	$	386	$	118,568	$	220		$	(76,961	)	$	(352	)	$	41,861

Share-based compensation to employees		-		-		558		-			-			-			558
Issuance of shares		550,133		4		1,496											1,500
Net loss		-		-		-		-			(1,049	)		(309	)		(1,358	)
Other comprehensive loss		-		-		-		(220	)		-			-			(220	)

Balance at June 30, 2019 (unaudited)		38,067,024	$	390	$	120,622	$	-		$	(78,010	)	$	(661	)	$	42,341

	Number of Ordinary shares		Share capital		Additional paid-in capital			Accumulated other comprehensive loss			Accumulated deficit			Non controlling interest		Total equity

Balance at January 1, 2020		38,456,693	$	394	$	120,017	*)	$	-	*)	$	(78,991	)	$	-	$	41,420

Share-based compensation to employees		-		-		682			-			-			-		682
Issuance of shares ,net		4,819,052		41		23,494			-			-			-		23,535
Exercise of option		209,320		2													2
Net income		-		-		-						877			-		877

Balance at June 30, 2020 (unaudited)		43,485,065	$	437	$	144,193		$	-		$	(78,114	)	$	-	$	66,516

*) Reclassified

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

F - 6

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars in thousands

	Six months ended June 30,
	2020			2019
	Unaudited
Cash flows from operating activities:
Net income (loss)	$	877		$	(1,358	)
Adjustments required to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,014			539
Severance pay, net		(96	)		50
Operating lease right-of-use assets		506			-
Share-based compensation to employees		682			558
Increase in trade receivables, net		(5,168	)		(881	)
Operating lease long-term-liabilities		(511	)		-
Increase in other accounts receivable and prepaid expenses		(748	)		(178	)
Decrease (Increase) in contract assets		224			(497	)
Increase (decrease) in contract liabilities		(190	)		188
Increase in inventories		(9,629	)		(4,917	)
Increase (decrease) in trade payables		7,685			(401	)
Increase (decrease) in other accounts payable and accrued expenses		(3	)		142

Net cash used in operating activities		(5,357	)		(6,755	)

Cash flows from investing activities:
Purchase of property, plant and equipment		(2,406	)		(629	)
Increase (decrease) in long-term receivables and deposits		42			(23	)

Net cash used in investing activities		(2,364	)		(652	)

Cash flows from financing activities:
Issuance of shares, net		23,535			1,500
Proceeds from short term loan		455			-

Net cash provided by financing activities	$	23,990		$	1,500

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

F - 7

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars in thousands

	Six months ended June 30,
	2020			2019
	Unaudited

Increase (decrease) in cash and cash equivalents and restricted cash		16,269			(5,907	)
Cash and cash equivalents and restricted cash at the beginning of the period		14,134			21,236

Cash and cash equivalents and restricted cash at the end of the period	$	30,403	$		15,329

(a) Supplemental disclosures of cash flow activities:

Net cash paid during the period for income taxes	$	13		$	11

Net cash paid during the period for interest		-			-

(b) Non-cash transactions

Purchase of property, plant and equipment in credit	$	411		$	436

Transfer of inventory to property, plant and equipment	$	352		$	30

Proceeds from sale of discontinued operations, net	$	-		$	845

Right-of-use assets obtained in exchange for new operating lease liabilities	$	438		$	2,032

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

The following table provides a reconciliation of cash and cash equivalents and restricted deposits reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows:

	June 30, 2020		June 30, 2019
	Unaudited

Cash and cash equivalents	$	29,908	$	14,949
Restricted cash		495		380

Cash and cash equivalents and restricted cash	$	30,403	$	15,329

F - 8

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 1:-GENERAL

a.RADA Electronic Industries Ltd. (the "Company") is a global defense technology company focused on proprietary radar solutions and legacy avionics systems. The Company is a leader in mini-tactical radars serving attractive, high-growth markets, including critical infrastructure protection, border surveillance, active military protection and counter-drone applications. The Company also specializes in the design, development, production and sales of avionics systems, including inertial navigation systems, for fighter aircraft and UAVs.

In January 2018, the Company incorporated RADA Sensors Inc. (“RSI”), a fully owned subsidiary of the Company in Delaware. As of December 31, 2019, RSI is the holder of 100% of the interests in RADA Technologies LLC, also organized in January 2018. When organized, RSI was the owner of 75% of RADA Technologies LLC. During July 2019, RSI purchased the minority 25% interest in RADA Technologies LLC from an investor.

The Company is organized and operates as one operating segment.

b.Discontinued operations:

In December 2016, the Company committed to a plan to sell its test and repair services activity (provided through CACS, the Company’s then 80% owned subsidiary, in order to focus on its core business. In October 2018, a transaction with a non-controlling interest occurred and as a result, as of December 31, 2018, the Company owned 100% of CACS, which resulted in a $254 decrease in additional paid in capital.

In December 2018, the Company signed an agreement to sell its ownership interest in CACS for approximately $1,500. On March 14, 2019, the ownership was transferred to the buyer. As of December 31, 2019, the Company received 100% of the consideration, which is currently held in a trust account in China. The net consideration of $730 is recorded under other accounts receivables and prepaid expenses in the consolidated balance sheets as of December 31, 2019. The Company expects to receive the full amount by December 31, 2020.

The Company recorded in 2018 a provision of $159 for the expected loss resulting from the sale, which amount was included in accrued expenses in the consolidated balance sheets and in the net loss from discontinued operations in the consolidated statements of operations. In December 2019, the Company recorded an additional expected loss of $115, mainly due to exchange rate differences relating to the consideration held in a trust account in China, which decreased the net consideration presented under other accounts receivables and prepaid expenses in the consolidated balance sheets and was included in the net loss from discontinued operations in the consolidated statements of operations.

F - 9

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 1:-GENERAL (Cont.)

c.Liquidity and Capital Resources:

In January 2019, the Company’s shareholders approved the sale of 545,454 Ordinary shares to DBSI Investements Ltd at a price per share of $2.75 (approximately $1.5 million in the aggregate). In January 2020, the Company completed an underwritten public offering of 4,819,052 of its ordinary shares at a price of $5.25 per share, for a total consideration of $25,300 and net proceeds of approximately $23,500.

Since incorporation, the Company has incurred an accumulated deficit of $78,114. As of June 30, 2020, the Company's cash position (cash and cash equivalents) totaled $29,908 Management believes that its cash and cash equivalents are sufficient for the Company to meet its obligations as they come due at least for a period of twelve months from the date of these unaudited condensed interim consolidated financial statements.

NOTE 2:-UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments except as otherwise discussed) considered necessary for a fair presentation have been included.

Operating results for the six month period ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

NOTE 3:-SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements of the Company as of December 31, 2019, set forth in the Company's Annual Report on Form 20-F as filed with the U.S. Securities and Exchange Commission on April 7, 2020, except as discussed below:

a.Accounting for share-based compensation:

The Company accounts for share-based payment 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 on the date of grant using an option-pricing model.

The value of the portion of the award is recognized as an expense over the requisite service periods in the Company's statement of operations. The Company account for forfeitures as they occur.

F - 10

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 3:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The fair value for the Company's stock options granted to employees was estimated using a Black-Scholes option-pricing model with the following weighted average assumptions:

	Six months ended June 30,
	2020			2019

Dividend yield		0	%		0	%
Risk-free interest rate		0.31%-1.61	%		2.44	%
Expected term (in years)		4.22			4.22
Volatility		55.89%-58.17	%		66.69	%

The dividend yield assumption is based on the Company's historical and expectation of future dividend payouts and may be subject to changes in the future.

The computation of expected volatility is based on realized historical share price volatility of the Company's share.

The risk-free interest rate assumption is the implied yield currently available on the U.S treasury yield zero-coupon issues with a remaining term equal to the expected life term of the Company's options.

The expected term of the options represents the period of time that the options are expected to be outstanding and is based on the simplified method, as allowed under Staff Accounting Bulletin No. 110, which is the mid point between the vesting date and the end of the contractual of the option.

b.Recently issued and adopted accounting standards :

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in the more timely recognition of losses. The Company adopted Topic 326 effective January 1, 2020, based on the composition of the Company’s trade receivables and Contract assets. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements.

c.Reclassification

Certain amounts in prior years' financial statements have been reclassified to conform to the current interim's presentation. The reclassification had no effect on previously reported net income or shareholders' equity as of June 30, 2020.

F - 11

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 4:-REVENUES

In accordance with ASC 606 "Revenue From Contracts With Customers", unbilled accounts receivable were reclassified as contract assets and advance payments and billings in excess of revenue were reclassified as contract liabilities as of June 30, 2020 and December 31, 2019, none of which resulted in a change to total current assets or total current liabilities.

The following table presents the significant changes in the advances from customers balance during the six months ended June 30, 2020:

	Six months ended June 30
	2020			2019
	Unaudited
Balance, beginning of the period	$	1,563		$	727

New performance obligations		82			224
Reclassification to revenue as a result of satisfying performance obligation		(894	)		(84	)

Balance, end of the period	$	751		$	867

The following table summarizes our contract assets and liabilities balances:

	Six months ended June 30
	2020			2019
	Unaudited
Contract assets at January 1, 2020	$	1,269		$	899
Contract assets at June 30, 2020		1,045			1,396

Change in contract assets - increase (decrease)		(224	)		497

Contract liabilities at January 1, 2020		196			366
Contract liabilities at June 30, 2020		6			554

Change in contract liabilities - increase (decrease)	$	(190	)	$	188

Net change	$	34		$	309

For the six months ended June 30, 2020, 97% of the amount that was previously included in the beginning balance of contract liabilities was recognized.

F - 12

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 4:-REVENUES (Cont.)

The Company’s unsatisfied performance obligations as of June 30, 2020 and the estimated revenue expected to be recognized in the future related to long-term fixed price contracts amounts to $583. The Company expect to recognize approximately 72% of this amount as revenues during the next 12 months and the remainder thereafter.

The Company elected to apply the optional exemption under ASC 606 paragraph 10-50-14(a) not to disclose the remaining performance obligations that relate to contracts with an original expected duration of one year or less for which deferred revenues have not been recorded yet.

For information regarding disaggregated revenues, please refer to Note 12.

NOTE 5:-INVENTORIES

	June 30,		December 31,
	2020		2019
	Unaudited

Raw materials and components	$	20,280	$	11,990	*)
Work in progress, net		5,092		3,884
Finished goods		1,102		1,322	*)

	$	26,474	$	17,196

*)	Reclassified

NOTE 6:-PROPERTY, PLANT AND EQUIPMENT, NET

	June 30,		December 31,
	2020		2019
	Unaudited
Cost:
Factory building	$	1,722	$	2,081
Machinery and equipment *)		13,592		14,641
Office furniture and equipment		930		1,089
Leasehold improvements		2,238		2,004

		18,482		19,815
Accumulated depreciation:

Factory building		1,743		2,058
Machinery and equipment		5,133		8,043
Office furniture and equipment		191		389
Leasehold improvements		133		198

		7,200		10,688

Depreciated cost	$	11,282	$	9,127

*)	As of June 30, 2020 and December 31, 2019, $423 and $459 relate to construction-in-process of production infrastructure, respectively.

F - 13

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 6:-PROPERTY, PLANT AND EQUIPMENT, NET (Cont.)

Depreciation expense amounted to $1,014 and $539 for the six months period ended June 30, 2020 and 2019, respectively. The total cost of the fixed assets that disposed by the Company during the six months period ended June 30, 2020 amounts to $4,502, and it's depreciated cost amounts to $0.

NOTE 7:-FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures its financial instruments at fair value. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 1 -Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 -Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 -Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment and the investments are categorized as Level 3.

The carrying amount of cash and cash equivalents, restricted deposits, trade receivables, other accounts receivable, bank credit and current maturities of long term loans, trade payables and other accounts payable approximate their fair value due to the short-term maturity of these instruments.

Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

F - 14

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 7:-FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)

The following table presents the Company's liabilities measured at fair value on a recurring basis at June 30, 2020 and 2019:

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Financial assets:
Other accounts receivable and prepaid expenses:
Foreign currencies derivatives	$	-	$	202	$	-	$	202

Total	$	-	$	202	$	-	$	202

	June 30, 2019
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Other accounts payable and accrued expenses:
Foreign currencies derivatives	$	-	$	14	$	-	$	14

Total	$	-	$	14	$	-	$	14

NOTE 8:-COMMITMENTS AND CONTINGENT LIABILITIES

a.The Company's research and development efforts have been partially financed through royalty-bearing programs sponsored by the Israel Innovation Authority ("IIA"). In return for the IIA's participation, the Company is committed to pay royalties at a rate ranging from 3% to 5% of sales of the products whose research was supported by grants received from the IIA, up to 100% of the amount of such participation received linked to the U.S. dollar. The obligation to pay these royalties is contingent on actual sales of the product and in the absence of such sales, no payment is required. As of June 30, 2020, the Company received total grants from the IIA in the amount of $5,543.

The total amount of royalties charged to operations for the six months period ended June 30, 2020 and 2019 was approximately $123 and $0, respectively. As of June 30, 2020, the Company's contingent liability for royalties, that are linked to active programs, net of royalties paid or accrued, totaled approximately $123.

b.The Company provides bank guarantees to some of its customers and others in the ordinary course of business. The guarantees which are provided to customers are to secure advances received at the commencement of a project or to secure performance of operational milestones. The total amount of bank guarantees provided to customers and others as of June 30, 2020, is approximately $395.

F - 15

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 8:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

c.In April 2020, the RADA Technologies LLC received approximately $455 in proceeds from an approved loan under the Paycheck Protection Program. Interest will accrue on outstanding principal balance at a rate of 1% per annum, computed on a simple interest basis. The loan principal and accrued interest will be eligible for forgiveness provided that (i) the Company will use the loan proceeds exclusively for allowed costs including payroll, employee group health benefits, rent and utilities and (ii) employee and compensation levels are maintained. If the loan is not forgiven, the Company will be required to repay the loan proceeds of $ 455 immediately, at which time any unpaid principal and accrued interest will be due and payable. The loan is included in the captions "Short term loan" in the condensed consolidated balance sheet as of June 30, 2020.

NOTE 9:-SHAREHOLDERS' EQUITY

a.Share capital:

Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company.

In June 2018, the Company's shareholders approved an increase of the Company's authorized share capital by NIS 1,875,000 and as a result the authorized share capital is equal to NIS 3,000,000 divided into 100,000,000 Ordinary shares, par value NIS 0.03 each.

In January 2020, the Company completed an underwritten public offering of 4,819,052 of its Ordinary shares at a price of $5.25 per share, for a total consideration of $25,300 and net proceeds of approximately $23,500.

b.Stock option plans:

In April 2015, the Company's Board of Directors adopted the "2015 Share Option Plan" (the "Plan"), which authorized the grant of options to purchase Ordinary shares to officers, directors, consultants and key employees of the Company and its subsidiaries. Options granted under the Plan expire within a maximum of twenty years from adoption of the plan.

In January 2019, the Company granted options to its employees to purchase a total of 60,000 Ordinary shares at an exercise price range $2.76 - $2.85 per share. The options will vest as follows: 25% will vest in January 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until January 2023. These options will be exercisable for 48 months following the date of vesting.

F - 16

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

In March 2019, the Company granted options to its officers and employees to purchase a total of 75,000 Ordinary shares at an exercise price of $2.73 per share. The options vest as follows: 25% vested in March 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until March 2023. These options will be exercisable for 48 months following the date of vesting.

In May 2019, the Company granted options to one of its employees to purchase a total of 7,500 Ordinary shares at an exercise price of $3.11 per share. The options vest as follows: 25% vested in May 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until May 2023. These options will be exercisable for 48 months following the date of vesting.

In August 2019, the Company granted options to its officers and employees to purchase a total of 100,000 and 50,000 Ordinary shares at an exercise price of $3.64 and 4.87 per share, respectively. The options vest as follows: 25% vested in August 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until August 2023. These options will be exercisable for 48 months following the date of vesting.

In September 2019, the Company granted options to employees to purchase a total of 15,000 Ordinary shares at exercise prices of between $3.99 to $4.40 per share. The options vest as follows: 25% will vest in September 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until September 2023. These options will be exercisable for 48 months following the date of vesting.

In September 2019, the Company granted options to one of its officers to purchase a total of 30,000 Ordinary shares at an exercise price of $4.83 per share. The options vest as follows: 25% will vest in September 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until September 2023. These options will be exercisable for 48 months following the date of vesting.

In November 2019, the Company granted options to one of its employees to purchase a total of 17,500 Ordinary shares at an exercise price of $5.25 per share. The options vest as follows: 25% will vest in November 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until November 2023. These options will be exercisable for 48 months following the date of vesting.

In December 2019, the Company granted options to officers and employees to purchase a total of 70,000 and 45,000 Ordinary shares at exercise prices of $5.24 and 5.44 per share, respectively. The options vest as follows: 25% will vest in December 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until December 2023. These options will be exercisable for 48 months following the date of vesting.

F - 17

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

In January and February 2020, the Company granted options to its employees to purchase a total of 35,000 and 10,000 Ordinary shares, respectively, at an exercise price range of $5.28 to $5.92 per share. The options vest as follows: 25% will vest in January and February 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until January and February 2024. These options will be exercisable for 48 months following the date of vesting.

In March 2020, the Company granted options to one of its officers to purchase a total of 200,000 Ordinary shares at an exercise price of $5.90 per share. The options vest as follows: 25% will vest in March 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until March 2024. These options will be exercisable for 48 months following the date of vesting.

In April 2020, the Company's Board of Directors approved the repricing of 342,500 outstanding employee stock options (issued, to 16 employees of the Company), which reduced the exercise price to $3.92 per share from $4.83 to 5.90 per share. The impact of the repricing resulted in an incremental value of the options repriced of approximately $140. During the six months period ended June 30, 2020, the Company recorded $ 9 of such incremental expenses. The remaining $ 131 is expected to be recorded through 2024.

In April 2020, the Company granted options to officers and employees to purchase a total of 440,000 Ordinary shares at an exercise price of $3.92 per share. The options vest as follows: 25% will vest in April 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until April 2024. These options will be exercisable for 48 months following the date of vesting.

As of June 30, 2020, options to purchase 359,124 Ordinary shares are available for future grant under the Plan.

F - 18

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

A summary of the Company’s activity for options granted to employees and directors under the Plan is as follows:

	Six months ended June 30, 2020
	Unaudited
	Number of options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate Intrinsic Value Price

Outstanding at the beginning of the period		3,110,938		$	7.6		8.23	$	7,579
Granted		690,000			4.6		-		-
Exercised		(275,005	)		1.44		-		-
Forfeiture		(78,437	)		3.29		-		-

Outstanding at the end of the period		3,447,496			3.22		8.24		11,437

Exercisable		1,195,933		$	2.58		7.49	$	4,735

F - 19

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

Intrinsic value of exercisable options (the difference between the closing share price of the Company’s Ordinary Shares on the last trading day in the period and the exercise price, multiplied by the number of in-the-money options) represents the amount that would have been received by the option holders had all option holders exercised their options on June 30, 2020. This amount changes based on the fair market value of the Company’s Ordinary shares.

As of June 30, 2020, unamortized compensation expenses related to stock options to be recognized over an average time of approximately 4 years is approximately $3,705.

During the six months period ended June 30, 2020, the Company recognized compensation expenses related to stock options in the amount of $682, as follows:

	Six months ended June 30,
	2020			2019
	Unaudited

Cost of revenues	$	122		$	76
Research and development		178			115
Marketing and selling		(18	)		20
General and administrative		400			347

	$	682		$	558

F - 20

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 10:-FINANCIAL INCOME, NET

	Six months ended June 30,
	2020			2019
	Unaudited
Income:

Foreign currency exchange differences	$	172		$	79
Interest on cash equivalents and restricted deposits		166			259

		338			338
Expenses:

Bank commissions and others		22			49
Foreign currency exchange differences		119			246

		(141	)		(295	)

Total financial income, net	$	197		$	43

NOTE 11:-RELATED PARTY BALANCE AND TRANSACTIONS

In January 2017, the Company’s shareholders approved that in addition to the directors’ fees to be paid to all of the Company’s directors, commencing as of January 1, 2017, the Company will pay DBSI Investements Ltd. (see Note 1c) an additional monthly payment of approximately $4.6 (NIS 17,500) for time devoted to the Company by the Executive Chairman of the Board of Directors, who is also a co-owner of DBSI Investements Ltd. Such payment will increase in the event the Company achieves profitable operations. In 2017, the Company’s consolidated audited financial statements reflected net income (before taxes), so such additional payment increased to approximately $9 (NIS 35) . On June 4, 2020, the Company's General Meeting approved the agreement following the Compensation Committee approval.

As of June 30, 2020 and 2019 a total of $60 and $58, respectively, had been paid for the Executive Chairman’s services.

Balances with related parties:

	June 30,		December 31,
	2020		2019

Accrued expenses	$	49	$	50

F - 21

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 11:-RELATED PARTY BALANCE AND TRANSACTIONS (Cont.)

Related parties’ expenses:

	Six months ended June 30,
	2020		2019
	Unaudited

Directors and management fees	$	83	$	94

NOTE 12:-MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION

a.In accordance with Statement of ASC 280, "Segment Reporting", the Company is organized and operates as one business segment, which develops, manufactures and sells tactical land radars for ground forces and border protection and avionics systems (including inertial navigation systems) for fighter aircraft and UAVs (see also Note 1a).

b.Revenues by geographic areas:

Revenues are attributed to geographic area based on the location of the end customers as follows:

	Six months ended
	June 30,
	2020		2019
	Unaudited

Israel	$	11,035	$	6,184
Asia & Australia		1,210		1,838
USA		12,871		7,876
Latin America		527		759
Europe		3,615		379
Italy		3,319		1,678

Total	$	32,577	$	18,714

F - 22

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 12:-MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Cont.)

c.Major customers:

Revenues from single customers that exceed 10% of the total revenues in the reported periods as a percentage of total revenues are as follows:

	Six months ended
	June 30,
	2020		2019
	Unaudited
	%

Customer A		6		13
Customer B		12		11
Customer D		5		15
Customer G		13		-
Customer H		12		5
Customer I		10		9

F - 23

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OPERATIONS AND FINANCIAL CONDITION

The discussion and analysis which follows contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial results. These include statements regarding our earnings, projected growth and forecasts, and similar matters which are not historical facts. We remind shareholders that forward-looking statements are merely predictions and therefore are inherently subject to uncertainties and other factors which could cause the actual future events or results to differ materially from those described in the forward-looking statements including, without limitation, the risk factors discussed in our Annual Report on Form 20-F for the year ended December 31, 2019 (the “Annual Report”). All of these factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements. Any statements that are forward-looking statements are intended to enable the Company’s shareholders to view the anticipated performance and prospects of the Company from management’s perspective at the time such statements are made, and they are subject to the risks that are inherent in all forward-looking statements, as described above, as well as difficulties in forecasting the Company’s financial results and performance for future periods, particularly over longer periods, given changes in technology and the Company’s business strategy, evolving industry standards, intense competition and short product life cycles that characterize the industries in which the Company operates.

The Company has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

The interim condensed consolidated financial statements appearing elsewhere in this report should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report . The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the operating results for the full fiscal year.

Overview

Our activity is primarily focused on the defense electronics market. Our aim is to provide not only state-of-the-art products, but to also provide comprehensive solutions for one or more systems. Our current product lines are:

•

Tactical radars for maneuver forces and border protection systems (land based); and

•

Military avionics (data/video recorders, core avionics and inertial navigation systems for aircraft and UAVs).

We were incorporated under the laws of the State of Israel on December 8, 1970. We are a public limited liability company under the Israeli Companies Law 1999-5759, or the Israeli Companies Law, and operate under this law and associated legislation.

General

Our interim condensed consolidated financial statements, appearing in this report, are prepared in dollars and in accordance with U.S. GAAP. Transactions and balances originally denominated in dollars are presented at their original amounts. Transactions and balances in other currencies are remeasured into dollars in accordance with the principles set forth in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC 830. The majority of our sales are made outside of Israel and a substantial part of them are in dollars. In addition, a substantial portion of our costs are incurred in dollars. Since the dollar is the primary currency of the economic environment in which we operate, the dollar is our functional and reporting currency and, accordingly, monetary accounts maintained in currencies other than the dollar are remeasured using the foreign exchange rate at the balance sheet date. Operational accounts and non-monetary balance sheet accounts are measured and recorded at the exchange rate in effect at the date of the transaction. All monetary balance sheet accounts have been remeasured using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been remeasured using the average exchange rate for the period. All balance sheet amounts have been translated using the exchange rates in effect at balance sheet date. Statement of operation amounts have been translated using the average exchange rate prevailing during the year. Such translation adjustments are reported as a component of accumulated other comprehensive loss in shareholders' equity.

Discussion of Critical Accounting Policies and Estimations

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the notes to our consolidated financial statements. These policies have been consistently applied in all material respects. While the estimates and judgments associated with the application of these policies may be affected by different assumptions or conditions, we believe the estimates and judgments associated with the reported amounts are appropriate under the circumstances. We believe the following accounting policies are the most critical in fully understanding and evaluating our financial condition and results of our operations under U.S. GAAP.

Revenue Recognition. We account for revenue recognition when (or as) it satisfies performance obligations by transferring promised goods or services to its customers in an amount that reflects the consideration the Company expects to receive. In order to achieve that core principle, we apply the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

The Company generally satisfies performance obligations at a point in time, once the customer has obtained the legal title to the items purchased or service provided. Revenues from long-term and short-term fixed price contracts are usually recognized over time based on the cost-to-cost input method that best depicts the transfer of control over the performance obligation to the customer. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

Impairment of Long-Lived Assets. We are required to assess the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We assess the impairment of our assets based on a number of factors, including any significant changes in the manner of our use of the respective assets or the strategy of our overall business and significant negative industry or economic trends. Upon determination that the carrying value of a long-lived asset may not be recoverable, based upon a comparison of expected undiscounted future cash flows to the carrying amount of the asset, an impairment charge is recorded in the amount of the carrying value of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. As of December 31, 2019 and 2018, no impairment losses have been identified.

Accounting for income taxes. we adopted FASB ASC 740-10 “Income Taxes,” which contains a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with ASC 740-10. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement ASC 740-10. We provided a valuation allowance in respect to the deferred tax assets resulting from operating loss carryforwards and other temporary differences. Our management currently believes that since our company has a history of losses, it is more likely than not that the deferred tax regarding the loss carryforwards and other temporary differences will not be realized in the foreseeable future.

Inventory Valuation. The majority of our inventory consists of work in progress, raw materials and components. Inventories are valued at the lower of cost or market. Cost of finished goods is determined on the basis of direct manufacturing costs plus allocable indirect costs representing allocable operating overhead expenses and manufacturing costs. Raw material is valued using the “FIFO” method. We assess the valuation of our inventory on a quarterly basis and periodically write down the value for different finished goods and raw material items based on their potential utilization. If we consider specific inventory to be damaged, we write such inventory down to zero. Inventory write-offs are provided to cover risks arising from slow-moving items, discontinued products, and excess inventories. The process for evaluating these write-offs often requires us to make subjective judgments and estimates concerning the future utilization of the inventory items. Inventory write-offs were $230,000, $39,000, $0 and $61,000 for the year ended December 31, 2019 and 2018 and the six months ended June 30, 2020 and 2019, respectively.

- Allowance for credit losses. Our trade receivables are derived from sales to customers all over the world. We perform ongoing credit evaluations of our customers. In certain circumstances, we may require letters of credit or prepayments. We maintain an allowance for credit losses for estimated losses from the inability of our customers to make required payments that we have determined to be doubtful of collection. We determine the adequacy of this allowance by regularly reviewing our accounts receivable and evaluating individual customers’ receivables, considering customers’ financial condition, credit history and other current economic conditions. If a customer’s financial condition were to deteriorate which might impact its ability to make payment, then additional allowances may be required. Provisions for doubtful accounts are recorded in general and administrative expenses. Our allowance for doubtful accounts was $2,000, $2,000, $14,000 for six months ended June 30, 2020 and the years ended December 31, 2019 and 2018, respectively.

Stock-based compensation. We accounts for share-based payment 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 on the date of grant using an option-pricing model. The value of the portion of the award is recognized as an expense over the requisite service periods in the Company's statement of operations. The Company account for forfeitures as they occur.

Recently Issued Accounting Standards

Explanation of Key Income Statement Items

Revenues. Our revenues are mainly derived from sales of defense electronics and their supporting ground systems.

Cost of Revenues. Cost of revenues consists primarily of salaries, raw materials, subcontractor expenses, related depreciation costs, inventories write-downs and overhead allocated to cost of revenues activities.

Research and Development Expenses, net. Research and development expenses consist primarily of salaries for research and development personnel, use of subcontractors and other costs incurred in the process of developing product prototypes.

Marketing and Selling Expenses. Marketing and selling expenses consist primarily of salaries for marketing and business development personnel, marketing activities, public relations, promotional materials, travel expenses, trade shows and exhibitions expenses, and success fees to business development consultants.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related expenses for executive, accounting, legal, administrative personnel, professional fees, provisions for doubtful accounts and other general corporate expenses.

Financial Expenses, Net. Financial expenses consist of interest and bank expenses, interest on convertible note and loans, amortization expenses of discount on convertible note, deferred charges and currency re-measurement losses. Financial income consists of interest on cash and cash equivalent balances and currency re-measurement gains.

Results of Operations

Revenues. Revenues increased by 74% to $32.6 million in the first half of 2020 compared with revenues of $18.7 million in the first half of 2019. The increase is primarily attributable to the continued acceptance of the Company’s proprietary radar solutions.

Cost of Revenues. Cost of revenues increased by 75% to $21.0 million for the six months ended June 30, 2020 from $12.0 million for the six months ended June 30, 2019. The increase in our cost of revenues was mainly attributable to the increase in revenues.

Gross profit. Gross profit totaled $11.6 million in the first half (36% of revenues), an increase of 72% compared to gross profit of $6.7 million in the first half of 2019 (36% of revenues). The increase is attributable to the increase in Revenues.

Operating expense. Our operating expenses increased by 34% to $11 million in the first six months of 2020 compared to $8.1 million in the first six months of 2019, reflecting the increase in our revenues.

Financial Expenses, Net. We had net financial income of $197,000 in first six months of 2020 compared to net financial income of $43,000 in the first six months of 2019, as a result of interest obtained on the net proceeds from our January offering of Ordinary shares.

Net income. As a result of the foregoing we had net income of $877,000 in the six months ended June 30, 2020 compared to a net loss $1.3 million in the first six months of 2019.

Liquidity and Capital Resources

We have historically met our financial requirements primarily through cash generated by operations, funds generated by our public offerings, private placements of our Ordinary shares and debt securities, loans from our principal shareholders, short-term loans and credit facilities from banks, research and development grants from the government of Israel and the Israel-U.S. Binational Industrial Research and Development Foundation, investment grants for approved enterprise programs and marketing grants from the government of Israel.

As of June 30, 2020, our cash position (cash and cash equivalents) totaled $29.9 million compared with $13.8 million in cash and cash equivalents as of December 31, 2019. Our improved financial position is attributable to our January 2020 an underwritten public offering of 4,819,052 of our Ordinary shares which provided us with net proceeds of approximately $23.5 million.

Net cash used in operating activities for the first six months of 2020 was $5.4 million. This was primarily due to the increase in inventory to support our increased revenues. For the first six months of 2019, net cash used by operating activities was $6.8 million.

Net cash used by investing activities during the first six months of 2020 was $2.4 million. This was primarily due to the purchase of property, plant and equipment. Net cash used by investing activities during the first six months of 2018 was $0.7 million

Net cash provided by financing activities during the first six months of 2020 was $24 million, reflecting proceeds received in this period from our January public offering. During the first six months of 2019 $1.5 million was provided by financing activities.

Corporate Tax Rate

Israeli companies are generally subject to corporate tax at a rate of 23%.

Impact of Currency Fluctuation and of Inflation

A significant portion of the cost of our Israeli operations, primarily personnel and facility-related, is incurred in NIS. Therefore, our NIS related costs, as expressed in dollars, are influenced by the exchange rate between the dollar and the NIS. In addition, if the rate of inflation in Israel will exceed the rate of devaluation of the NIS in relation to the dollar, or if the timing of such devaluations were to lag considerably behind inflation, our cost as expressed in dollars may increase. NIS linked balance sheet items, may also create foreign exchange gains or losses, depending upon the relative dollar values of the NIS at the beginning and end of the reporting period, affecting our net income and earnings per share. Although we may use hedging techniques, we may not be able to eliminate the effects of currency fluctuations. Therefore, exchange rate fluctuations could have a material adverse impact on our operating results and share price.

Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2020
Document And Entity Information
Entity Registrant Name	RADA ELECTRONIC INDUSTRIES LTD
Entity Central Index Key	0000761238
Document Type	6-K
Document Period End Date	Jun. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Entity Address, Address Line One	7 Giborei Israel Street
Entity Address, City or Town	Netanya
Entity Address Country	IL
Entity Address, Postal Zip Code	4250407

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands

Jun. 30, 2020

Dec. 31, 2019

CURRENT ASSETS:

Cash and cash equivalents

$ 29,908

$ 13,754

Restricted cash

495

380

Trade receivables, net

18,933

13,765

Contract assets (Note 4)

1,045

1,269

Other accounts receivable and prepaid expenses

2,412

1,673

Inventories (Note 5)

26,474

17,196

Total current assets

79,267

48,037

NON CURRENT ASSETS:

Long-term receivable and other deposits

Property, plant and equipment, net (Note 6)

11,282

9,127

Operating lease right-of-use assets

7,585

7,654

Total non-current assets

18,930

16,878

Total assets

98,197

64,915

CURRENT LIABILITIES:

Short term loan (Note 8c)

455

Trade payables

15,756

7,661

Other accounts payable and accrued expenses

6,378

5,572

Advances from customers (Note 4)

751

1,563

Contract liabilities (Note 4)

196

Operating lease short-term liabilities

1,594

1,240

Total current liabilities

24,940

16,232

LONG-TERM LIABILITIES:

Accrued severance pay and other long-term liabilities

668

764

Operating lease long-term liabilities

6,073

6,499

Total long-term liabilities

6,741

7,263

SHAREHOLDERS EQUITY:

Share capital (Note 9) - Ordinary shares of NIS 0.03 par value - Authorized: 100,000,000 shares at June 30, 2020 and December 31, 2019; Issued and outstanding: 43,485,065 at June 30, 2020 and 38,456,693 at December 31, 2019.

437

394

Additional paid-in capital

144,193

120,017

^[1]

Accumulated deficit

(78,114)

(78,991)

Total RADA shareholders' equity

66,516

41,420

Total liabilities and shareholders' equity

$ 98,197

$ 64,915

[1]	***Reclassified

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) - ₪ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Ordinary shares, par value	₪ 0.03	₪ 0.03
Ordinary shares, shares authorized	100,000,000	100,000,000
Ordinary shares, shares issued	43,485,065	38,456,693
Ordinary shares, shares outstanding	43,485,065	38,456,693

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Total revenues	$ 32,577	$ 18,714
Total cost of revenues	20,980	11,975
Gross profit	11,597	6,739
Operating expenses:
Research and development, net	4,239	3,040
Marketing and selling	2,385	1,870
General and administrative	4,293	3,230
Total operating expenses	10,917	8,140
Operating income (loss)	680	(1,401)
Total financial income, net (Note 10)	197	43
Net income (loss)	877	(1,358)
Net loss attributable to non controlling shareholders		(309)
Net income (loss) attributable to RADA Electronic Industries' shareholders	$ 877	$ (1,049)
Basic and diluted net income (loss) from continuing operations per ordinary share	$ 0.02	$ (0.03)
Basic and diluted net income from discontinued operations per ordinary share	0.00	0.00
Basic and diluted net income (loss) per ordinary share	$ 0.02	$ (0.03)
Weighted average number of ordinary shares used for computing basic net income (loss) per share	43,041,405	38,017,281
Weighted average number of ordinary shares used for computing diluted net income (loss) per share	44,002,634	38,570,290
Products [Member]
Total revenues	$ 31,812	$ 18,364
Total cost of revenues	20,840	11,899
Services [Member]
Total revenues	765	350
Total cost of revenues	$ 140	$ 76

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Condensed Interim Consolidated Statements Of Comprehensive Income
Net income (loss)	$ 877	$ (1,358)
Other comprehensive loss, net:
Change in foreign currency translation adjustment
Total comprehensive loss	877	(1,358)
Comprehensive loss attributable to non-controlling interest
Comprehensive loss attributable to RADA Electronic Industries' shareholders	$ 877	$ (1,358)

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) - USD ($)
$ in Thousands

Number of Ordinary Shares [Member]

Additional Paid-in Capital [Member]

Accumulated Other Comprehensive Income (Loss) [Member]

Accumulated Deficit [Member]

Noncontrolling Interest [Member]

Total

Balance at Dec. 31, 2018

$ 386

$ 118,568

$ 220

$ (76,961)

$ (352)

$ 41,861

Balance, shares at Dec. 31, 2018

37,516,891

Share-based compensation to employees

558

Issuance of shares, net

$ 4

1,496

1,500

Issuance of shares, net shares

550,133

Net income (loss)

(1,049)

(309)

(1,358)

Other comprehensive loss

(220)

Balance at Jun. 30, 2019

$ 390

120,622

(78,010)

$ (661)

42,341

Balance, shares at Jun. 30, 2019

38,067,024

Balance at Dec. 31, 2019

$ 394

120,017

^[1]

(78,991)

41,420

Balance, shares at Dec. 31, 2019

38,456,693

Share-based compensation to employees

682

Issuance of shares, net

$ 41

23,494

23,535

Issuance of shares, net shares

4,819,052

Exercise of option

$ 2

Exercise of option, shares

209,320

Net income (loss)

877

Balance at Jun. 30, 2020

$ 437

$ 144,193

$ (78,114)

$ 66,516

Balance, shares at Jun. 30, 2020

43,485,065

[1]	***Reclassified

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ 877	$ (1,358)
Adjustments required to reconcile net income to net cash used in operating activities:
Depreciation and amortization	1,014	539
Severance pay, net	(96)	50
Operating lease right-of-use assets	506
Share-based compensation to employees	682	558
Increase in trade receivables, net	(5,168)	(881)
Operating lease long-term-liabilities	(511)
Increase in other accounts receivable and prepaid expenses	(748)	(178)
Decrease (Increase) in contract assets	224	(497)
Increase (decrease) in contract liabilities	(190)	188
Increase in inventories	(9,629)	(4,917)
Increase (decrease) in trade payables	7,685	(401)
Increase (decrease) in other accounts payable and accrued expenses	(3)	142
Net cash used in operating activities	(5,357)	(6,755)
Cash flows from investing activities:
Purchase of property, plant and equipment	(2,406)	(629)
Increase (decrease) in long-term receivables and deposits	42	(23)
Net cash used in investing activities	(2,364)	(652)
Cash flows from financing activities:
Issuance of shares, net	23,535	1,500
Proceeds from short term loan	455
Net cash provided by financing activities	23,990	1,500
Increase (decrease) in cash and cash equivalents and restricted cash	16,269	(5,907)
Cash and cash equivalents and restricted cash at the beginning of the period	14,134	21,236
Cash and cash equivalents and restricted cash at the end of the period	30,403	15,329
(a) Supplemental disclosures of cash flow activities:
Net cash paid during the period for income taxes	13	11
Net cash paid during the period for interest
(b) Non-cash transactions
Purchase of property, plant and equipment in credit	411	436
Transfer of inventory to property, plant and equipment	352	30
Proceeds from sale of discontinued operations, net		845
Right-of-use assets obtained in exchange for new operating lease liabilities	438	2,032
Cash and cash equivalents	29,908	14,949
Restricted cash	$ 495	$ 380

GENERAL

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1:-GENERAL

The Company is organized and operates as one operating segment.

b.Discontinued operations:

F - 9

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 1:-GENERAL (Cont.)

c.Liquidity and Capital Resources:

UNAUDITED INTERIM FINANCIAL INFORMATION

6 Months Ended

Jun. 30, 2020

Quarterly Financial Information Disclosure [Abstract]

UNAUDITED INTERIM FINANCIAL INFORMATION

NOTE 2:-UNAUDITED INTERIM FINANCIAL INFORMATION

Operating results for the six month period ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 3:-SIGNIFICANT ACCOUNTING POLICIES

a.Accounting for share-based compensation:

The value of the portion of the award is recognized as an expense over the requisite service periods in the Company's statement of operations. The Company account for forfeitures as they occur.

F - 10

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 3:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The fair value for the Company's stock options granted to employees was estimated using a Black-Scholes option-pricing model with the following weighted average assumptions:

	Six months ended June 30,
	2020			2019

Dividend yield		0	%		0	%
Risk-free interest rate		0.31%-1.61	%		2.44	%
Expected term (in years)		4.22			4.22
Volatility		55.89%-58.17	%		66.69	%

The dividend yield assumption is based on the Company's historical and expectation of future dividend payouts and may be subject to changes in the future.

The computation of expected volatility is based on realized historical share price volatility of the Company's share.

b.Recently issued and adopted accounting standards :

c.Reclassification

REVENUES

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUES

NOTE 4:-REVENUES

The following table presents the significant changes in the advances from customers balance during the six months ended June 30, 2020:

	Six months ended June 30
	2020			2019
	Unaudited
Balance, beginning of the period	$	1,563		$	727

New performance obligations		82			224
Reclassification to revenue as a result of satisfying performance obligation		(894	)		(84	)

Balance, end of the period	$	751		$	867

The following table summarizes our contract assets and liabilities balances:

	Six months ended June 30
	2020			2019
	Unaudited
Contract assets at January 1, 2020	$	1,269		$	899
Contract assets at June 30, 2020		1,045			1,396

Change in contract assets - increase (decrease)		(224	)		497

Contract liabilities at January 1, 2020		196			366
Contract liabilities at June 30, 2020		6			554

Change in contract liabilities - increase (decrease)	$	(190	)	$	188

Net change	$	34		$	309

For the six months ended June 30, 2020, 97% of the amount that was previously included in the beginning balance of contract liabilities was recognized.

F - 12

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 4:-REVENUES (Cont.)

For information regarding disaggregated revenues, please refer to Note 12.

INVENTORIES

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 5:-INVENTORIES

	June 30,		December 31,
	2020		2019
	Unaudited

Raw materials and components	$	20,280	$	11,990	*)
Work in progress, net		5,092		3,884
Finished goods		1,102		1,322	*)

	$	26,474	$	17,196

*)	Reclassified

PROPERTY, PLANT AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 6:-PROPERTY, PLANT AND EQUIPMENT, NET

	June 30,		December 31,
	2020		2019
	Unaudited
Cost:
Factory building	$	1,722	$	2,081
Machinery and equipment *)		13,592		14,641
Office furniture and equipment		930		1,089
Leasehold improvements		2,238		2,004

		18,482		19,815
Accumulated depreciation:

Factory building		1,743		2,058
Machinery and equipment		5,133		8,043
Office furniture and equipment		191		389
Leasehold improvements		133		198

		7,200		10,688

Depreciated cost	$	11,282	$	9,127

*)	As of June 30, 2020 and December 31, 2019, $423 and $459 relate to construction-in-process of production infrastructure, respectively.

F - 13

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 6:-PROPERTY, PLANT AND EQUIPMENT, NET (Cont.)

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2020

Investments, All Other Investments [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 7:-FAIR VALUE OF FINANCIAL INSTRUMENTS

A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Level 2 -Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 -Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

F - 14

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 7:-FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)

The following table presents the Company's liabilities measured at fair value on a recurring basis at June 30, 2020 and 2019:

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Financial assets:
Other accounts receivable and prepaid expenses:
Foreign currencies derivatives	$	-	$	202	$	-	$	202

Total	$	-	$	202	$	-	$	202

	June 30, 2019
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Other accounts payable and accrued expenses:
Foreign currencies derivatives	$	-	$	14	$	-	$	14

Total	$	-	$	14	$	-	$	14

COMMITMENTS AND CONTINGENT LIABILITIES

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 8:-COMMITMENTS AND CONTINGENT LIABILITIES

F - 15

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 8:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

NOTE 9:-SHAREHOLDERS' EQUITY

a.Share capital:

Ordinary shares confer upon their holders voting rights, the right to receive cash dividends and the right to share in excess assets upon liquidation of the Company.

b.Stock option plans:

F - 16

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

F - 17

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

As of June 30, 2020, options to purchase 359,124 Ordinary shares are available for future grant under the Plan.

F - 18

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

A summary of the Company’s activity for options granted to employees and directors under the Plan is as follows:

	Six months ended June 30, 2020
	Unaudited
	Number of options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate Intrinsic Value Price

Outstanding at the beginning of the period		3,110,938		$	7.6		8.23	$	7,579
Granted		690,000			4.6		-		-
Exercised		(275,005	)		1.44		-		-
Forfeiture		(78,437	)		3.29		-		-

Outstanding at the end of the period		3,447,496			3.22		8.24		11,437

Exercisable		1,195,933		$	2.58		7.49	$	4,735

F - 19

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 9:-SHAREHOLDERS' EQUITY (Cont.)

As of June 30, 2020, unamortized compensation expenses related to stock options to be recognized over an average time of approximately 4 years is approximately $3,705.

During the six months period ended June 30, 2020, the Company recognized compensation expenses related to stock options in the amount of $682, as follows:

	Six months ended June 30,
	2020			2019
	Unaudited

Cost of revenues	$	122		$	76
Research and development		178			115
Marketing and selling		(18	)		20
General and administrative		400			347

	$	682		$	558

FINANCIAL INCOME, NET

6 Months Ended

Jun. 30, 2020

Other Income and Expenses [Abstract]

FINANCIAL INCOME, NET

NOTE 10:-FINANCIAL INCOME, NET

	Six months ended June 30,
	2020			2019
	Unaudited
Income:

Foreign currency exchange differences	$	172		$	79
Interest on cash equivalents and restricted deposits		166			259

		338			338
Expenses:

Bank commissions and others		22			49
Foreign currency exchange differences		119			246

		(141	)		(295	)

Total financial income, net	$	197		$	43

RELATED PARTY BALANCE AND TRANSACTIONS

6 Months Ended

Jun. 30, 2020

RELATED PARTY BALANCE AND TRANSACTIONS

NOTE 11:-RELATED PARTY BALANCE AND TRANSACTIONS

As of June 30, 2020 and 2019 a total of $60 and $58, respectively, had been paid for the Executive Chairman’s services.

Balances with related parties:

	June 30,		December 31,
	2020		2019

Accrued expenses	$	49	$	50

F - 21

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 11:-RELATED PARTY BALANCE AND TRANSACTIONS (Cont.)

Related parties’ expenses:

	Six months ended June 30,
	2020		2019
	Unaudited

Directors and management fees	$	83	$	94

MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION

NOTE 12:-MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION

b.Revenues by geographic areas:

Revenues are attributed to geographic area based on the location of the end customers as follows:

	Six months ended
	June 30,
	2020		2019
	Unaudited

Israel	$	11,035	$	6,184
Asia & Australia		1,210		1,838
USA		12,871		7,876
Latin America		527		759
Europe		3,615		379
Italy		3,319		1,678

Total	$	32,577	$	18,714

F - 22

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 12:-MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Cont.)

c.Major customers:

Revenues from single customers that exceed 10% of the total revenues in the reported periods as a percentage of total revenues are as follows:

	Six months ended
	June 30,
	2020		2019
	Unaudited
	%

Customer A		6		13
Customer B		12		11
Customer D		5		15
Customer G		13		-
Customer H		12		5
Customer I		10		9

SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Accounting for share-based compensation

a.Accounting for share-based compensation:

The value of the portion of the award is recognized as an expense over the requisite service periods in the Company's statement of operations. The Company account for forfeitures as they occur.

F - 10

RADA ELECTRONIC INDUSTRIES LTD.

AND ITS SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data)

NOTE 3:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The fair value for the Company's stock options granted to employees was estimated using a Black-Scholes option-pricing model with the following weighted average assumptions:

	Six months ended June 30,
	2020			2019

Dividend yield		0	%		0	%
Risk-free interest rate		0.31%-1.61	%		2.44	%
Expected term (in years)		4.22			4.22
Volatility		55.89%-58.17	%		66.69	%

The dividend yield assumption is based on the Company's historical and expectation of future dividend payouts and may be subject to changes in the future.

The computation of expected volatility is based on realized historical share price volatility of the Company's share.

Recently issued and adopted accounting standards

b.Recently issued and adopted accounting standards :

Reclassification

c.Reclassification

SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Schedule of Fair Value of Stock Options Valuation Assumptions

The fair value for the Company's stock options granted to employees was estimated using a Black-Scholes option-pricing model with the following weighted average assumptions:

	Six months ended June 30,
	2020			2019

Dividend yield		0	%		0	%
Risk-free interest rate		0.31%-1.61	%		2.44	%
Expected term (in years)		4.22			4.22
Volatility		55.89%-58.17	%		66.69	%

REVENUES (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Changes in Advances from Customers

The following table presents the significant changes in the advances from customers balance during the six months ended June 30, 2020:

	Six months ended June 30
	2020			2019
	Unaudited
Balance, beginning of the period	$	1,563		$	727

New performance obligations		82			224
Reclassification to revenue as a result of satisfying performance obligation		(894	)		(84	)

Balance, end of the period	$	751		$	867

Schedule of Contract Assets and Liabilities

The following table summarizes our contract assets and liabilities balances:

	Six months ended June 30
	2020			2019
	Unaudited
Contract assets at January 1, 2020	$	1,269		$	899
Contract assets at June 30, 2020		1,045			1,396

Change in contract assets - increase (decrease)		(224	)		497

Contract liabilities at January 1, 2020		196			366
Contract liabilities at June 30, 2020		6			554

Change in contract liabilities - increase (decrease)	$	(190	)	$	188

Net change	$	34		$	309

INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

	June 30,		December 31,
	2020		2019
	Unaudited

Raw materials and components	$	20,280	$	11,990	*)
Work in progress, net		5,092		3,884
Finished goods		1,102		1,322	*)

	$	26,474	$	17,196

*)	Reclassified

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment, Net

	June 30,		December 31,
	2020		2019
	Unaudited
Cost:
Factory building	$	1,722	$	2,081
Machinery and equipment *)		13,592		14,641
Office furniture and equipment		930		1,089
Leasehold improvements		2,238		2,004

		18,482		19,815
Accumulated depreciation:

Factory building		1,743		2,058
Machinery and equipment		5,133		8,043
Office furniture and equipment		191		389
Leasehold improvements		133		198

		7,200		10,688

Depreciated cost	$	11,282	$	9,127

*)	As of June 30, 2020 and December 31, 2019, $423 and $459 relate to construction-in-process of production infrastructure, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Investments, All Other Investments [Abstract]

Schedule of Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company's liabilities measured at fair value on a recurring basis at June 30, 2020 and 2019:

	June 30, 2020
	Level 1		Level 2		Level 3		Total
Financial assets:
Other accounts receivable and prepaid expenses:
Foreign currencies derivatives	$	-	$	202	$	-	$	202

Total	$	-	$	202	$	-	$	202

	June 30, 2019
	Level 1		Level 2		Level 3		Total
Financial liabilities:
Other accounts payable and accrued expenses:
Foreign currencies derivatives	$	-	$	14	$	-	$	14

Total	$	-	$	14	$	-	$	14

SHAREHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Schedule of Stock Options Activity

A summary of the Company’s activity for options granted to employees and directors under the Plan is as follows:

	Six months ended June 30, 2020
	Unaudited
	Number of options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate Intrinsic Value Price

Outstanding at the beginning of the period		3,110,938		$	7.6		8.23	$	7,579
Granted		690,000			4.6		-		-
Exercised		(275,005	)		1.44		-		-
Forfeiture		(78,437	)		3.29		-		-

Outstanding at the end of the period		3,447,496			3.22		8.24		11,437

Exercisable		1,195,933		$	2.58		7.49	$	4,735

Schedule of Recognized Stock-based Compensation

During the six months period ended June 30, 2020, the Company recognized compensation expenses related to stock options in the amount of $682, as follows:

	Six months ended June 30,
	2020			2019
	Unaudited

Cost of revenues	$	122		$	76
Research and development		178			115
Marketing and selling		(18	)		20
General and administrative		400			347

	$	682		$	558

FINANCIAL INCOME, NET (Tables)

6 Months Ended

Jun. 30, 2020

Other Income and Expenses [Abstract]

Schedule of Financial Income, Net

	Six months ended June 30,
	2020			2019
	Unaudited
Income:

Foreign currency exchange differences	$	172		$	79
Interest on cash equivalents and restricted deposits		166			259

		338			338
Expenses:

Bank commissions and others		22			49
Foreign currency exchange differences		119			246

		(141	)		(295	)

Total financial income, net	$	197		$	43

RELATED PARTY BALANCE AND TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Balance with Related Parties

Balances with related parties:

	June 30,		December 31,
	2020		2019

Accrued expenses	$	49	$	50

Schedule of Related Party Expenses

Related parties’ expenses:

	Six months ended June 30,
	2020		2019
	Unaudited

Directors and management fees	$	83	$	94

MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Revenues by Geographic Areas

Revenues are attributed to geographic area based on the location of the end customers as follows:

	Six months ended
	June 30,
	2020		2019
	Unaudited

Israel	$	11,035	$	6,184
Asia & Australia		1,210		1,838
USA		12,871		7,876
Latin America		527		759
Europe		3,615		379
Italy		3,319		1,678

Total	$	32,577	$	18,714

Schedule of Revenue from Major Customers

Revenues from single customers that exceed 10% of the total revenues in the reported periods as a percentage of total revenues are as follows:

	Six months ended
	June 30,
	2020		2019
	Unaudited
	%

Customer A		6		13
Customer B		12		11
Customer D		5		15
Customer G		13		-
Customer H		12		5
Customer I		10		9

GENERAL (Details Narrative) $ / shares in Units, $ in Thousands	1 Months Ended		6 Months Ended		12 Months Ended
	Jan. 31, 2020 USD ($) $ / shares shares	Jan. 31, 2019 USD ($) $ / shares shares	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2020 ₪ / shares	Jun. 30, 2020 USD ($)	Dec. 31, 2019 ₪ / shares	Dec. 31, 2019 USD ($)	Jul. 31, 2019	Jun. 30, 2018 ₪ / shares	Jan. 31, 2018	Dec. 31, 2016
Loss from sale of subsidiary					$ 115
Percentage of consideration received from transaction					100.00%
Other accounts receivable and prepaid expenses								$ 2,412		$ 1,673
Accumulated deficit								78,114		78,991
Cash and cash equivalents				$ 14,949				$ 29,908		13,754
Net proceeds from underwritten public offering			$ 23,535	$ 1,500
Issue price \| ₪ / shares							₪ 0.03		₪ 0.03			₪ 0.03
Ordinary Shares Underwritten Public Offering [Member]
Number of ordinary shares issued, shares \| shares	4,819,052
Number of ordinary shares issued, price per share \| $ / shares	$ 5.25
Net proceeds from underwritten public offering	$ 23,500
Gross proceeds from underwritten public offering	$ 25,300
CACS [Member]
Ownership percentage														80.00%
Percentage on ownership acquired						100.00%
Decrease of additional paid in capital						$ 254
Proceeds from noncontrolling interests						150,000
Loss from sale of subsidiary						$ 159
Other accounts receivable and prepaid expenses										$ 730
RADA Sensors Inc [Member]
Ownership percentage													75.00%
RADA Sensors Inc. ownership percentage of RADA Technologies LLC										100.00%
RADA Technologies LLC [Member]
Ownership percentage											25.00%
DBSI [Member]
Number of ordinary shares issued, shares \| shares		545,454
Number of ordinary shares issued, price per share \| $ / shares		$ 2.75
Number of ordinary shares issued		$ 15

SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value of Stock Options Valuation Assumptions (Details)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Accounting Policies [Abstract]
Dividend yield	0.00%	0.00%
Risk-free interest rate		2.44%
Risk-free interest rate minimum	0.31%
Risk-free interest rate maximum	1.61%
Expected term (in years)	4 years 2 months 19 days	4 years 2 months 19 days
Volatility		66.69%
Volatility minimum	55.89%
Volatility maximum	58.17%

REVENUES (Details Narrative) $ in Thousands	6 Months Ended
REVENUES (Details Narrative) $ in Thousands	Jun. 30, 2020 USD ($)
Revenue from Contract with Customer [Abstract]
Percentage of amount recognized from contract liabilities	97.00%
Revenue performance obligations	$ 583
Revenue, performance obligation, percentage	72.00%

REVENUES - Schedule of Changes in Advances from Customers (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Balance, beginning of the period	$ 1,563	$ 727
New performance obligations	82	224
Reclassification to revenue as a result of satisfying performance obligation	(894)	(84)
Balance, end of the period	$ 751	$ 867

REVENUES - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Contract assets, beginning	$ 1,269
Contract assets, ending	1,045
Change in contract assets - increase (decrease)	224	$ (497)
Contract liabilities, beginning	196
Contract liabilities, ending	6
Change in contract liabilities - increase (decrease)	(190)	188
Contract Assets and Liabilities [Member]
Contract assets, beginning	1,269	899
Contract assets, ending	1,045	1,396
Change in contract assets - increase (decrease)	(224)	497
Contract liabilities, beginning	196	366
Contract liabilities, ending	6	554
Change in contract liabilities - increase (decrease)	(190)	188
Net change	$ 34	$ 309

INVENTORIES - Schedule of Inventories (Details) - USD ($)
$ in Thousands

Jun. 30, 2020

Dec. 31, 2019

Inventory Disclosure [Abstract]

Raw materials and components

$ 20,280

$ 11,990

^[1]

Work in progress, net

5,092

3,884

Finished goods

1,102

1,322

^[1]

Inventory net

$ 26,474

$ 17,196

[1]	***Reclassified

PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment, Net [Abstract]
Depreciation expense	$ 1,014	$ 539
Write-offs of machinery and equipment	$ 4,502	$ 0

PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property Plant and Equipment (Details) - USD ($)
$ in Thousands

Jun. 30, 2020

Dec. 31, 2019

Total cost

$ 18,482

$ 19,815

Total accumulated depriciation

7,200

10,688

Depreciated cost

11,282

9,127

Factory Building [Member]

Total cost

1,722

2,081

Total accumulated depriciation

1,743

2,058

Machinery and Equipment [Member]

Total cost

^[1]

13,592

14,641

Total accumulated depriciation

5,133

8,043

Office Furniture and Equipment [Member]

Total cost

930

1,089

Total accumulated depriciation

191

389

Leasehold Improvements [Member]

Total cost

2,238

2,004

Total accumulated depriciation

$ 133

$ 198

[1]	As of June 30, 2020 and December 31, 2019, $423 and $459 relate to construction-in-process of production infrastructure, respectively.

PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property Plant and Equipment (Details) (Parenthetical) - USD ($)
$ in Thousands

6 Months Ended

12 Months Ended

Jun. 30, 2020

Dec. 31, 2019

Property, Plant and Equipment, Net [Abstract]

Construction-in-process of production infrastructure

^[1]

$ 423

$ 459

[1]	As of June 30, 2020 and December 31, 2019, $423 and $459 relate to construction-in-process of production infrastructure, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Liabilities Measured at Fair Value on a Recurring Basis (Details) - Other accounts receivable and prepaid expenses [Member] - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019
Financial assets:
Foreign currencies derivatives	$ 202	$ 14
Total	202	14
Level 1 [Member]
Financial assets:
Foreign currencies derivatives
Total
Level 2 [Member]
Financial assets:
Foreign currencies derivatives	202	14
Total	202	14
Level 3 [Member]
Financial assets:
Foreign currencies derivatives
Total

COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Apr. 30, 2020	Jun. 30, 2020	Jun. 30, 2019
Royalties		$ 123	$ 0
Contingent liability for royalties		123
Total bank guarantees provided to customers and others		$ 395
Paycheck Protection Program [Member]
Proceeds from Issuance of debt	$ 455
Debt interest rate	1.00%
Debt repayment	$ 455
Israel Innovation Authority [Member]
Grants received percentage		100.00%
Grants received		$ 5,543
Israel Innovation Authority [Member] \| Minimum [Member]
Royalties payable, percent of sales		3.00%
Israel Innovation Authority [Member] \| Maximum [Member]
Royalties payable, percent of sales		5.00%

SHAREHOLDERS' EQUITY (Details Narrative) ₪ / shares in Units, $ / shares in Units, ₪ in Thousands, $ in Thousands	1 Months Ended														6 Months Ended
	Apr. 30, 2024 USD ($)	Apr. 30, 2020 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares	Feb. 28, 2020 USD ($) $ / shares	Jan. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($)	Nov. 30, 2019 $ / shares shares	Sep. 30, 2019 $ / shares shares	Aug. 31, 2019 $ / shares shares	May 31, 2019 $ / shares shares	Mar. 31, 2019 $ / shares shares	Jan. 31, 2019 $ / shares shares	Jan. 31, 2019 $ / shares shares	Apr. 30, 2015	Jun. 30, 2020 USD ($) shares	Jun. 30, 2019 USD ($)	Jun. 30, 2020 ₪ / shares	Jun. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2019 ₪ / shares shares	Dec. 31, 2019 $ / shares shares	Jun. 30, 2018 ILS (₪) ₪ / shares shares
Ordinary shares, shares authorized \| shares																		100,000,000	100,000,000	100,000,000	100,000,000
Ordinary shares, par value \| ₪ / shares																	₪ 0.03		₪ 0.03		₪ 0.03
Shares issued under underwritten public offering \| shares																		43,485,065	38,456,693	38,456,693
Stock-based compensation expense \| $															$ 682	$ 558
Incremental expenses \| $															9
Net proceeds from underwritten public offering \| $															$ 23,535	$ 1,500
Employees [Member]
Number of stock options shares grant to purchase \| shares									50,000				60,000
Stock option exercise price									$ 4.87
Stock option vesting description									The options vest as follows: 25% vested in August 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until August 2023.				The options will vest as follows: 25% will vest in January 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until January 2023.
Employees and Officers [Member]
Offering cost \| $		$ 440,000		$ 10,000	$ 35,000	$ 70,000
Number of stock options shares grant to purchase \| shares											75,000
Stock option exercise price		$ 3.92		$ 5.92	$ 5.28						$ 2.73									$ 5.24
Stock option vesting description		The options vest as follows: 25% will vest in April 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until April 2024.		The options vest as follows: 25% will vest in January and February 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until January and February 2024.	The options vest as follows: 25% will vest in January and February 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until January and February 2024.	The options vest as follows: 25% will vest in December 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until December 2023.					The options vest as follows: 25% vested in March 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until March 2023.
Employee [Member]
Number of stock options shares grant to purchase \| shares		342,500					17,500	15,000		7,500
Stock option exercise price		$ 3.92					$ 5.25			$ 3.11
Stock option vesting description							The options vest as follows: 25% will vest in November 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until November 2023.	The options vest as follows: 25% will vest in September 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until September 2023.		The options vest as follows: 25% vested in May 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until May 2023.
Incremental value of options repriced \| $		$ 140
Employee [Member] \| Subsequent Event [Member]
Incremental value of options repriced \| $	$ 131
Officers [Member]
Offering cost \| $			$ 200,000
Number of stock options shares grant to purchase \| shares								30,000	100,000
Stock option exercise price			$ 5.90					$ 4.83	$ 3.64
Stock option vesting description			The options vest as follows: 25% will vest in March 2021; and 75% will vest in twelve equal quarterly installments of 6.25% each until March 2024.					The options vest as follows: 25% will vest in September 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until September 2023.	The options vest as follows: 25% vested in August 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until August 2023.
Employees and Officers One [Member]
Offering cost \| $						$ 45,000
Stock option exercise price																				5.44
Stock option vesting description						The options vest as follows: 25% will vest in December 2020; and 75% will vest in twelve equal quarterly installments of 6.25% each until December 2023.
Employees and Directors [Member]
Number of stock options shares grant to purchase \| shares															690,000
Stock option exercise price																		$ 3.22		$ 7.6
Stock option vested \| shares																		1,195,933
Unamortized compensation expenses period															4 years
Unamortized compensation expenses \| $																		$ 3,705
2015 Share Option Plan [Member]
Option expire term														20 years
Number of shares available for grant \| shares																		359,124
Ordinary Shares Underwritten Public Offering [Member]
Net proceeds from underwritten public offering \| $					$ 23,500
Gross proceeds from underwritten public offering \| $					$ 25,300
Number of ordinary shares issued, shares \| shares					4,819,052
Number of ordinary shares issued, price per share					$ 5.25
DBSI [Member]
Number of ordinary shares issued, shares \| shares												545,454
Number of ordinary shares issued, price per share												$ 2.75	$ 2.75
Maximum [Member] \| Employees [Member]
Stock option exercise price												2.85	2.85
Maximum [Member] \| Employee [Member]
Stock option exercise price		$ 5.90						$ 4.40
Minimum [Member] \| Employees [Member]
Stock option exercise price												$ 2.76	$ 2.76
Minimum [Member] \| Employee [Member]
Stock option exercise price		$ 4.83						$ 3.99
NIS [Member]
Value of shares authorized \| ₪																					₪ 1,875
NIS [Member] \| Maximum [Member]
Value of shares authorized \| ₪																					₪ 3,000

SHAREHOLDERS' EQUITY - Schedule of Stock Options Activity (Details) - Employees and Directors [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($) $ / shares shares
Number of Options, Outstanding at the beginning of the period \| shares	3,110,938
Number of Options, Granted \| shares	690,000
Number of Options, Exercised \| shares	(275,005)
Number of Options, Forfeiture \| shares	(78,437)
Number of Options, Outstanding at the end of the period \| shares	3,447,496
Number of Options, Exercisable \| shares	1,195,933
Weighted average exercise price, Outstanding at the beginning of the period \| $ / shares	$ 7.6
Weighted average exercise price, Granted \| $ / shares	4.6
Weighted average exercise price, Exercised \| $ / shares	1.44
Weighted average exercise price, Canceled \| $ / shares	3.29
Weighted average exercise price, Outstanding at the end of the period \| $ / shares	3.22
Weighted average exercise price, Exercisable \| $ / shares	$ 2.58
Weighted average remaining contractual term, beginning of the period	8 years 2 months 23 days
Weighted average remaining contractual term, end of the period	8 years 2 months 26 days
Weighted average remaining contractual term, exercisable	7 years 5 months 26 days
Aggregate Intrinsic Value Price, Outstanding at the beginning of the period \| $	$ 7,579
Aggregate Intrinsic Value Price, Outstanding at the end of the period \| $	11,437
Aggregate Intrinsic Value Price, Exercisable \| $	$ 4,735

SHAREHOLDERS' EQUITY - Schedule of Recognized Stock-based Compensation (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Stock-based compensation expense	$ 682	$ 558
Cost of revenues [Member] \| Employees and Directors [Member]
Stock-based compensation expense	122	76
Research and development [Member] \| Employees and Directors [Member]
Stock-based compensation expense	178	115
Marketing and Selling [Member] \| Employees and Directors [Member]
Stock-based compensation expense	(18)	20
General and Administrative [Member] \| Employees and Directors [Member]
Stock-based compensation expense	$ 400	$ 347

FINANCIAL INCOME, NET - Schedule of Financial Income, Net (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Other Income and Expenses [Abstract]
Foreign currency exchange differences	$ 172	$ 79
Interest on cash equivalents and restricted deposits	166	259
Total income	338	338
Bank commissions and others	22	49
Foreign currency exchange differences	119	246
Total expenses	(141)	(295)
Total financial income, net	$ 197	$ 43

RELATED PARTY BALANCE AND TRANSACTIONS (Details Narrative)	6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 ILS (₪)	Jan. 31, 2017 USD ($)	Jan. 31, 2017 ILS (₪)
Board of Directors Chairman [Member]
Related Party Transaction [Line Items]
Additional monthly payment to be paid to related party for devoted time					$ 4,600
Increased additional monthly payment to be paid to related party for devoted time, as a result of acheiving net income before taxes in the Company's first calendar year audited financial statements			$ 9,000
Board of Directors Chairman [Member] \| NIS [Member]
Related Party Transaction [Line Items]
Additional monthly payment to be paid to related party for devoted time \| ₪						₪ 17,500
Increased additional monthly payment to be paid to related party for devoted time, as a result of acheiving net income before taxes in the Company's first calendar year audited financial statements \| ₪				₪ 35,000
Executive Chairman [Member]
Related Party Transaction [Line Items]
Repayment to related party	$ 60,000	$ 58,000

RELATED PARTY BALANCE AND TRANSACTIONS - Schedule of Balance with Related Parties (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Related Party Transactions [Abstract]
Accrued expenses	$ 49	$ 50

RELATED PARTY BALANCE AND TRANSACTIONS - Schedule of Related Party Expenses (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Related Party Transactions [Abstract]
Directors and management fees	$ 83	$ 94

MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Details Narrative)	6 Months Ended
	Jun. 30, 2020 Segments
Segment Reporting [Abstract]
Business reporting segment	1

MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Schedule of Revenues by Geographic Areas (Details) - Operating Segments [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Total	$ 32,577	$ 18,714
Israel [Member]
Total	11,035	6,184
Asia & Australia [Member]
Total	1,210	1,838
USA [Member]
Total	12,871	7,876
Latin America [Member]
Total	527	759
Europe [Member]
Total	3,615	379
Italy [Member]
Total	$ 3,319	$ 1,678

MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Schedule of Revenue from Major Customers (Details)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Customer A [Member]
Total revenue percentage	6.00%	13.00%
Customer B [Member]
Total revenue percentage	12.00%	11.00%
Customer D [Member]
Total revenue percentage	5.00%	15.00%
Customer G [Member]
Total revenue percentage	13.00%
Customer H [Member]
Total revenue percentage	12.00%	5.00%
Customer I [Member]
Total revenue percentage	10.00%	9.00%