Note 1 - Nature of Operations

Camtek Ltd. (“Camtek” or “Company”), an Israeli corporation, is controlled by (41.92%) Priortech Ltd. (“Parent”), an Israeli corporation listed on the Tel-Aviv Stock Exchange. Camtek provides automated and technologically advanced solutions dedicated to enhancing production processes, increasing products yield and reliability, enabling and supporting customers’ latest technologies in the semiconductor fabrication industry.

In September 2017, the Company completed the sale of its PCB inspection and metrology business unit. The buyers acquired the entire assets and liabilities related to the PCB business unit, including 100% equity interests in the Company’s Chinese and Taiwanese subsidiaries. The Company received a total cash consideration of $32,000 and may receive an additional amount of up to $3,000, net of working capital adjustments and conditioned upon the PCB business unit's financial performance in 2018. The Company records the contingent consideration portion of the arrangement when the consideration is determined to be realizable. As of December 31, 2018, no asset with respect of contingent consideration was recognized.

Due to the sale of the Company’s PCB business, the results of this unit ceased to be consolidated in 2017 and are accounted as discontinued operations. (See Note 19)

During 2016, the Company decided to re-organize its mode of operation with respect to its functional inkjet technology (FIT) activity. As part of this change, in the financial statements for the year ended December 31, 2016, an obsolescence provision was recorded against the remaining Gryphon inventory, fixed assets and intangible assets and an adjustment was made to related liabilities, as follows:

		Year ended
		December 31,
		2016
		U.S. Dollars
Account	Nature of impact	(in thousands)

Cost of Revenues	Inventory write-off and other		4,931
Reorganization and impairment	Revaluation of IIA liabilities		*(4,962	)
Reorganization and impairment	Other		903

*see Note 10E			872