TIDMTRAC
RNS Number : 8739N
T42 IOT Tracking Solutions PLC
27 September 2023
27 September 2023
t42 IoT Tracking Solutions Plc
("t42" or the "Company")
Interim Results
t42 IoT Tracking Solutions plc (AIM: TRAC) ("t42" or the
"Company"), which provides real-time tracking, security, and
monitoring solutions for the global supply chain, logistics,
container, and freight market, announces its unaudited results for
the six months ended 30 June 2023.
Business Overview Highlights
-- Continued to refocus the legacy business to shipping container tracking services
-- Further orders for Tetis and Lokies
-- Collaboration into the refrigerated air cargo supply chain,
following a partnership with a leading global firm providing
sustainable solutions across the cold chain
-- Post-period, secured $1.3m financing from strategic partner
H1 Financials Highlights
-- Revenues decreased to $1.7m (H1 2022: $2.2m).
-- Adjusted EBITDA loss of $248,000 (H1 2022: loss of $247,000).
-- Gross margin for the period was 48% (H1 2022: 46%).
-- General expenses decreased to $1.3m (H1 2022: $1.5m).
-- Strong pipeline of potential new orders for financial year 2023 and 2024
Avi Hartmann, CEO of t42, commented:
"It is positive to see the continued adoption of t42 technology
into numerous different channels, including port authorities,
distributors and direct customers. We now take on the challenge of
financing the increasing demand for our products using the
Company's new leasing structure. At the same time it is clear that
we are becoming an increasingly important player in the shipping
container tracking solutions market."
Contacts:
t42 IoT Tracking Solutions Plc
Michael Rosenberg, Chairman 07785 727595
Avi Hartmann, CEO +972 5477 35663
Strand Hanson Limited (Nominated Adviser
and Financial Adviser) James Harris / Richard
Johnson / Robert Collins 020 7409 3494
Peterhouse Capital Limited (Joint Broker)
Lucy Williams / Charles Goodfellow / Eran
Zucker 020 7469 0930
The information contained within this announcement is deemed by
the Company to constitute inside information pursuant to Article 7
of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended.
CHAIRMAN'S STATEMENT
We are pleased to report the unaudited results of t42 for the
half year ended 30 June 2023 ("H1 2023"). Total revenues were $1.7m
(H1 2022: $2.2m), due to the effects of continued supply chain
issues, together with supplier requirements for upfront payments,
which has impacted our ability to complete many orders in the first
half of this year. We hope to fulfil these orders in the remainder
of the second half of the year. The gross margin for the period
showed an improvement on the previous year to 48% compared to 46%,
with an operational loss prior to financing costs (including
exchange rate impacts) of $0.5m (H1 2022: $0.5m). As already
indicated in previous statements, the results for this year are
expected to be heavily weighted to the second half of the year
based on our expectations from the existing potential order
pipeline. Anticipated orders give management confidence that the
results for the second half of 2023 will show a significant
improvement on 2022 full year results.
Post-period, as announced on 26 July 2023, we successfully
raised $1.3m through a convertible loan provided by Ewave Mobile
Ltd. The loan, which carries an interest of 10%, has enabled us to
pay off the existing $0.55m loan from CSS Alpha Global Pte Ltd
which had a substantially higher interest rate . Ewave Mobile Ltd.
is an international group providing solutions across a range of
sectors including supply chain management. We hope to develop new
business opportunities from this relationship.
During H1 2023, sales of Tetis and Lokies represented 34% and
25% of hardware revenues respectively, compared to 3% and 19% for
the corresponding period in the previous year, demonstrating the
success of the Company's new focus on the more profitable shipping
and freight sectors, while sales of Helios represented 38% of
Company revenue (H1 2022: 70%).
We are in regular contact with the distributors in Latin
America, announced in December 2021 and July 2022. Whilst minimal
sales have been achieved through these channels to date, based on
discussions with the distributors, we continue to anticipate that
more substantial orders will be forthcoming as we seek to gain
traction in these important markets. As recently updated, the
distribution contract with OpenBox has not delivered any sales and
although we remain in contact with them, we are not anticipating
any major sales from them in the near future; as they do not
currently have exclusivity in the USA, this has allowed us to
progress other opportunities in the USA through alternative
channels. Consequently, we signed a contract with another US-based,
leading global company which provides a unified view of in-transit
logistics to detect and correct non-compliance within supply
chains, which, as announced, has already resulted in orders for
several thousand Tetis units during H1 2023.
t42 has incorporated AI technologies into its product design
cycle to improve its development and products. Lokies 2.0 is the
first result of the technologies. Our Lokies 2.0 product is being
appraised by our various customers and new orders are being placed.
Also, as previously notified, we are strengthening the research and
development collaboration with a leading global firm providing
sustainable solutions across the refrigerated air cargo supply
chain, which has the potential to develop into a significant
customer relationship.
The Company's new leasing structure, which offers services while
structuring payments for both devices and SaaS fees on a monthly
payment basis as a leasing contract, has been well-received, with
an increasing numbers of orders being achieved using this
mechanism. The Company has several large orders pending and
indications of more in the near future. .
In addition, the vehicle market is still contributing to the
Company's revenues, and we continue to receive very positive
feedback from our clients following the launch of the new Helios M
4G. During 2023, we also concluded a project in Africa for securing
and managing a fleet providing procurement, production, storage and
distribution of medical supplies.
FINANCIAL REVIEW
Group revenues for the period were $1.7m, compared with $2.2m
for the six-month ended 30 June 2022.
Gross margin for the 6 months to 30 June 2023 increased to 48%,
compared with 46% for the corresponding period in 2022.
Total operating expenses for the 6 months to 30 June 2023 were
$1.3m (2022: $1.5m).
Net loss after taxation for the six months to 30 June 2023
increased to $0.8m compared with the 2022 net loss of $0.2m, mainly
due to financing costs.
The Group recorded an exchange rate profit of $0.03m (2022:
$0.4m) resulting from the strengthening of the US dollar relative
to the Israeli Shekel.
The Group balance sheet showed a slight decrease in trade
receivables to $0.59m, compared with $0. 65 m as of 30 June 202 2
.
Group inventories at the period end were $1.5m compared to $2.2m
as of 30 June 2022.
Trade payables at the period end were stable at $1.3m, compared
with $1.6m and $1.1m as of 30 June 2022 and 31 December 2022,
respectively.
Net cash provided in operating activities for the 6 months to 30
June 2023 was $0.1m, compared with net cash used by operating
activities for the 6 months to 30 June 2022 of $0.8m.
LEASE MODEL AND SHORT TERM LIABILITIES
The Company has several large orders pending and indications of
more in the near future. However, since several of these orders are
based on the new leasing structure the Company may need to raise
additional funds towards the end of 2023 or early 2024 in order to
take advantage of these opportunities and others in the pipeline.
The Company is both investigating the most appropriate leasing
structure, and also exploring options to raise the desired capital,
including to assist with current short term obligations which may
hold back growth with a preference for non-equity should this be
available .
As further noted in Note 5a below, the Company has in issue
unsecured convertible loans enabling the lenders to convert such
loans at an exercise price of GBP0.15 per share at any time,
subject to regulatory provisions, up to December 31, 2023. If not
converted, the loans will be repayable on December 31, 2023.
Discussions are underway with the providers of these loans on the
structure and timing of the loan repayment. While the Company is
hopeful of a resolution to such discussions, the Company may
require additional financing for the repayment of such loans by 31
December 2023. It should be noted that there is no guarantee that
such funding will be available, or as to the terms of such
funding.
OUTLOOK
We anticipate that the second half of 2023 will show
significantly improved results based on existing and anticipated
orders from a wide number of clients. Increasingly however,
existing and potential customers are favoring placing orders under
the new leasing structure. Inevitably the scale of these future
orders, in the remainder of 2023 and beyond, will be dependent on
the necessary funding being secured, which may delay some future
opportunities. We expect that as additional funding is secured, we
will see a consequent increase in orders being received. In
addition, sales of both Tetis and Lockies are increasing alongside
the considerable market acceptance of our technology.
Michael Rosenberg OBE
Non-Executive Chairman
_______________
T42 IOT TRACKING SOLUTIONS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2023
T42 IOT TRACKING SOLUTIONS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30, 2023
INDEX
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: PAGE
Independent Auditors' report on review of interim financial
information 2
Interim Condensed Consolidated Statements of Financial
Position 3
Interim Condensed Consolidated Statements of Comprehensive
Loss 4
Interim Condensed Consolidated Statements of Changes
in Deficit 5
Interim Condensed Consolidated Statements of Cash Flows 6
Notes to the Interim Condensed Consolidated Financial
Statements 7-14
Jerusalem, September 27, 2023
Review Report of Independent Auditors
to the Shareholders of
t42 IoT Tracking Solutions PLC
Introduction
We have reviewed the accompanying condensed consolidated interim statements
of financial position of t42 IoT Tracking Solutions PLC and its consolidated
companies (hereinafter - "the Group") as of June 30, 2023 and 2022
and the related condensed consolidated interim statements of comprehensive
loss, changes in shareholders' equity and cash flows for the six months
then ended. Preparation and presentation of these condensed consolidated
financial statements in conformity with International Accounting Standard
No. 34 "Interim Financial Reporting" are the responsibility of the
Group's board of directors and management. Our responsibility is to
express a conclusion on these interim consolidated financial statements
based on our review.
Scope of Review
We conducted our review in accordance with Review Standard ( Israel)
No. 2410 of the Israel Accounting Standards Board, "Review of Interim
Financial Information for Interim Periods Performed by the Auditor
of an Entity". A review consists principally of inquiries of Company
personnel, analytical procedures applied to the financial data and
other review procedures. A review is substantially less in scope than
an audit conducted in accordance with International Standards on Auditing
and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, we are not aware of any material modifications
that should be made to these interim consolidated financial statements
in order for them to be in conformity with International Accounting
Standard No. 34.
Without qualifying our conclusion, we draw attention to Note 1 (c)
in the financial statements regarding the Company's efforts to raise
additional funds.
Barzily & Co.
Certified Public Accountants.
A Member of MSI Worldwide
T42 IOT TRACKING SOLUTIONS PLC
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
U.S. Dollars in thousands
June 30 December
31
Note 2023 2022 2022
----------------- ------------- ------------
Unaudited Unaudited Audited
----------------- ------------- ------------
ASSETS
NON-CURRENT ASSETS :
Property, plant and equipment,
net 503 591 546
Rights of use assets, net 1,004 1,0 64 981
Intangible assets, net 3 998 1,028 1,021
Income Tax Authorities 57 58 57
----------------- ------------- ------------
Total Non-Current Assets 2,562 2,7 41 2,605
----------------- ------------- ------------
CURRENT ASSETS :
Cash and cash equivalents 215 311 174
Inventories 1,499 2,234 1,581
Trade receivables (net of allowance
for doubtful accounts of $ 67 ,
$462 and $ 450 thousand as of June
30, 2023 and 2022 and December
31, 2022) 587 645 488
Other accounts receivable 25 98 71
Short-term deposit 132 131 130
----------------- ------------- ------------
Total Current Assets 2,458 3,419 2,444
----------------- ------------- ------------
6,124
----------------- ------------- ------------
TOTAL ASSETS 5,020 6,1 60 5,049
============= ============
LIABILITIES AND EQUITY
EQUITY (DEFICIT) (1,289) 93 (538)
----------------- ------------- ------------
NON- CURRENT LIABILITIES:
Long-term loans from banks, net
of current maturities 103 178 142
Amortized cost of a convertible
loan 5 306 824 292
Conversion component of a convertible
loan at fair value 5 14 215 27
Long term leasehold liabilities 778 8 88 790
Warrants at fair value 5 - 87 -
----------------- ------------- ------------
Total Non-Current Liabilities 1,201 2,1 92 1,251
----------------- ------------- ------------
CURRENT LIABILITIES:
Short-term bank credit 40 61 42
Short-term loans and current maturities
of long-term loans 620 927 789
Warrants at fair value 5 52 - 77
Trade payables 1, 302 1,606 1,144
Related parties 6 7 72 708 744
Other accounts payable 645 442 260
Leasehold liabilities 119 131 112
Conversion component of a convertible
loan at fair value 5 - - 7
Amortized cost of a loan and a
convertible loan 5 1,558 - 1,161
----------------- ------------- ------------
Total Current Liabilities 5,108 3,8 75 4,336
----------------- ------------- ------------
TOTAL LIABILITIES AND EQUITY 5, 020 6,160 5,049
================= ============= ============
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
September 27, 2023
--------------------------------- --------
Date of Approval of the Financial
Statements Director
T42 IOT TRACKING SOLUTIONS PLC
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
U.S. Dollars in thousands
Year Ended
Six Months Ended December
June 30 31
Note 2023 2022 2022
--------- --------- ----------
Unaudited Unaudited Audited
--------- --------- ----------
Revenues 1,707 2,177 4,041
Cost of sales 7 (895) (1,181) (2,358)
Gross profit 812 996 1,683
Operating expenses:
Research and development (52) (60) (125)
Selling and marketing (263) (323) (652)
General and administrative (974) (1,098) (2,250)
Other income (expenses) 1 6 (40) (29)
--------- --------- ----------
(1, 27 3) (1,521) (3,056)
--------- --------- ----------
Operating loss ( 46 1) (525) (1,373)
Finance income 25 413 814
Finance expenses (318) (110) (447)
--------- --------- ----------
Net finance Income (expenses) 8 (293) 303 367
--------- --------- ----------
Total comprehensive loss for
the year ( 75 4) (222) (1,006)
========= ========= ==========
Loss per share:
Basic and diluted loss per
share (in dollars) 4 (0.014) (0.004) (0.019)
========= ========= ==========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
T42 IOT TRACKING SOLUTIONS PLC
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
U.S. Dollars in thousands
Capital
Share Reserve
Capital Premium Capital for Share-based Accumulated
* on Shares Reserve payment Loss Total
------------ ----------- -------- ---------------- ------------------ --------
(Unaudited) - 13,531 89 1,246 (15,404) (538)
Balance- January
1,
2023
Share based
payment
- Note 4 - - 4 - 4
Comprehensive loss
for the period - - - (754) (754)
----------------
Balance - June 30,
2023 - 13,531 89 1,250 (16,158) (1,288)
============= =========== ======== ================ ================== ========
(Unaudited)
Balance- January
1,
2022 - 13,351 89 1,151 (14,398) 193
Exercise of
options
(Note 4) - 74 74
Share based
payment - 48 - 48
Comprehensive loss
for the period - - - - (222) (222)
----------------
Balance- June 30,
2022 - 13,425 89 1,199 (14,620) 93
============= =========== ======== ================ ================== ========
(Audited)
Balance- January
1,
2022 - 13,351 89 1,151 (14,398) 193
Issuance of share
capital
(net of expenses) - 180 - - - 180
Share based
payment - - - 95 - 95
Comprehensive loss
for the year - - - - (1,006) (1,006)
----------------
Balance- December
31, 2022 - 13,531 89 1,246 (15,404) (538)
============= =========== ======== ================ ================== ========
* An amount less than one thousand.
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
T42 IOT TRACKING SOLUTIONS PLC
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. Dollars in thousands
Six Months Ended Year Ended
June 30 December
31
2023 2022 2022
--------- ---------- -----------------
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: Unaudited Unaudited Audited
--------- ---------- -----------------
Comprehensive loss (754) (222) (1,006)
Adjustments to reconcile net loss to
net cash provided by
(used in) operating activities:
Depreciation and amortization 225 211 437
Interest expense and exchange rate differences 55 (221) (374)
Share-based payment expense 4 48 95
Inventory write down - - -
Intangible assets impairment - - -
Capital gain - - (24)
Changes in assets and liabilities:
Decrease (Increase) in inventories 82 (444) 209
Decrease in trade receivables, net (99) 34 191
Decrease (Increase) in other receivables 46 62 89
Increase in Income Tax Authorities - (1) -
Increase (Decrease) in trade payables 158 72 (90)
Increase (Decrease) in other payables 385 (297) (478)
Net cash provided by (used in) operating
activities 102 (758) (951)
--------- ---------- -----------------
CASH FLOWS FOR INVESTING ACTIVITIES:
Purchases of property and equipment (8) (333) (318)
Decrease (Increase) in short-term deposits (2) 23 24
Purchase of intangible assets (72) (83) (166)
Net cash used in investing activities (82) (393) (460)
--------- ---------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term bank credit,
net (2) 37 (152)
Receipt (Repayment) of short-term loans
from banks, net (135) (65) -
Receipt of l ong-term loans - - -
Receipt of loans , net 250 - 250
Proceeds from (Repayment to) shareholders
and related parties, net 28 (4) 28
Repayment of Leasehold liability (86) (80) (174)
Receipt (Repayment) of long-term loans (34) (34) (81)
Proceeds from issue of shares , net - 74 180
--------- ---------- -----------------
Net cash provided by (used in) financing
activities 21 (72) 51
--------- ---------- -----------------
Increase (Decrease) in cash and cash
equivalents 41 (1,223) (1,360)
Cash and cash equivalents at the beginning
of the period 174 1,534 1,534
--------- ---------- -----------------
Cash and cash equivalents at the end
of the period 215 311 174
========= ========== =================
Appendix A - Additional Information
Interest paid during the period 189 (73) 251
========= ========== =================
Appendix B - Non-cash financing activities
Issuance of shares to a related party
in payment of debt 103 - -
==== === =======
Issuance, of a convertible loan note
in lieu of settlement of a supplier debt - 418 319
==== === =======
The Company had non-cash activities in the period of entering into
new lease agreements of 103 thousand $.
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 1 GENERAL INFORMATION
-
a. The Reporting Entity
1. t42 IoT Tracking Solutions PLC ("the Company") was incorporated
in Jersey on November 28, 2012. The Group provides real-time
tracking, security, and monitoring solutions for the global
supply chain, logistics, container, and freight market.
See Note 1 (c) regarding the Company's efforts to raise additional
funds.
The Company fully owns t42 Ltd., an Israeli company that engages
in the same field, and Starcom Systems Limited, a company in
Jersey.
The Company's shares are admitted for trading on the London
Stock Exchange's AIM market.
Address of the official Company office in Israel of t42 Ltd.
is:
96 Derech Ramatayim, Hod-Hasharon, Israel.
Address of the Company's registered office in Jersey of Starcom
Systems Limited is:
IFC5, St Helier, Jersey, JE1 1ST
b. Definitions in these financial statements:
1. International Financial Reporting Standards (hereinafter:
"IFRS") - Standards and interpretations adopted by the International
Accounting Standards Board (hereafter: "IASB") that include international
financial reporting standards (IFRS) and international accounting
standards (IAS), with the addition of interpretations to these
Standards as determined by the International Financial Reporting
Interpretations Committee (IFRIC) or interpretations determined
by the Standards Interpretation Committee (SIC), respectively.
2. The Company - t42 IoT Tracking Solutions PLC
3. The subsidiaries - t42 Ltd. and Starcom Systems Limited.
4. Starcom Jersey - Starcom Systems Limited.
5. T42 Israel - t42 Ltd.
6. The Group - t42 IoT Tracking Solutions PLC and the Subsidiaries.
7. Related party - As determined by International Accounting
Standard No. 24 in regard to related parties.
Significant event during and
c. after the period:
During July 2023, the Company raised $1.3m (before expenses) to
support both existing orders and the Company's new lease-based
order strategy and to repay certain existing loans. The funding is
in the form of a secured convertible loan ("Loan") provided to t42
Limited by Ewave Mobile Ltd.) ("Lender"), an international group
providing solutions across a range of sectors, including supply
chain management.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S.
Dollars
in
thousands
The Loan, which carries interest at 10% per annum, payable
quarterly on the principal drawn, was drawn down as
to $600,000 immediately, $400,000 in three equal tranches
during August 2023, and the balance of $300,000 by 30
September 2023.
The Loan, together with accrued interest at the time
of conversion, may be converted, at the discretion of
the Lender, at any time prior to the Loan repayment
date of 20 January 2025, into such number of new t42
ordinary shares as corresponds to 29.5% of the Company's
issued ordinary share capital immediately following
such conversion. The Loan may be converted in part,
on a pro rata basis to the above terms.
In order to meet the cashflow requirements deriving
from the growing current and future backlog of orders
and managing current and potential activities in the
remainder of 2023, the Company will be dependent on
the necessary funding being secured.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 2 - BASIS OF PREPARATION AND CHANGE IN THE GROUP'S ACCOUNTING
POLICIES
Basis of preparation
a.
The interim consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles for the preparation of financial statements
for interim periods, as prescribed in International Accounting
Standard No. 34 ("Interim Financial Reporting").
The interim consolidated financial information should
be read in conjunction with the annual financial statements
as of December 31, 2022 and for the year ended on that
date and with the notes thereto.
The significant accounting policies applied in the annual
financial statements of the Company as of December 31,
2022 are applied consistently in these interim consolidated
b. financial statements.
Revenue from a contract with a customer with a significant
finance component
The Group entered a contract with a client that has a
significant financing component considering the length
of time between the customers' payment and the transfer
of the products, as well as the prevailing interest rate
c. in the market. As such, the transaction price for these
contracts is discounted, using the interest rate implicit
in the contract and finance income is recorded accordingly.
Use of estimates and judgments
The preparation of financial statements in conformity
with IFRS requires management of the Company to make
judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
The judgment of management, when implementing the Group
accounting policies and the basic assumptions utilized
in the estimates that are bound up in uncertainties are
consistent with those that were utilized to prepare the
annual financial statements.
Information about critical judgment in applying accounting
policies that have a significant effect on the amounts
recognized in the consolidated financial statements is
included in the following Notes:
Note 5 - financial liabilities of convertible loans and
warrants.
Exchange rates:
d.
As of June 30 As of December
31
2023 2022 2022
Exchange rate of NIS
in U.S. $ 0.27 0.286 0.284
Exchange rate of U.S.
$ in GBP 0.79 0.826 0.83
Year Ended
Six Months Ended December 31
June 30
2023 2022 2022
Change of NIS in U.S.
$ (4.9%) (11.27%) (11.6%)
Change of U.S. $ in GBP (4.6%) 11.68% 12.2%
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 3 INTANGIBLE ASSETS, NET
-
Total
Cost: Unaudited
Balance as of January
1, 2023 1,884
Additions during the period 72
Balance as of June 30,
2023 1,956
------------
Accumulated Depreciation:
Balance as of January
1, 2023 (863)
Amortization during the
period (95)
Balance as of June 30,
2023 (958)
------------
Impairment of assets -
Net book value as of June
30, 2023 998
============
Total
Cost: Unaudited
Balance as of January
1, 2022 1,718
Additions during the period 83
Balance as of June 30,
2022 1,801
-----------
Accumulated Depreciation
:
Balance as of January
1, 2022 (684)
Amortization during the
period (89)
Balance as of June 30,
2022 (773)
-----------
Impairment of assets -
-----------
Net book value as of June
30, 2022 1,02 8
===========
Total
Cost: Unaudited
Balance as of January
1, 2022 1,718
Additions during the year 166
Balance as of December
31, 2022 1,884
--------------
Accumulated Amortization
:
Balance as of January
1, 2022 (684)
Depreciation during the
year (179)
Balance as of December
31, 2022 (863)
--------------
Net book value as of December
31, 2022 1,021
==============
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 4 SHARE CAPITAL
-
a. Composition - ordinary shares of no-par value, issued
and outstanding - 5 4 ,026,822 shares and 54,026,822
shares as of June 30, 202 3 , and December 31, 2022,
respectively.
b. A Company share grants to its holder voting rights, rights
to receive dividends and rights to net assets upon dissolution.
c. Weighted average number of shares used for calculation
of basic and diluted loss per share:
June 30 June 30 December 31
2023 2022 2022
----------------- ----------------- -------------------
Unaudited Unaudited Audited
----------------- ----------------- -------------------
Number 54,026,822 52,833,452 52,830,858
================= ================= ===================
The following table lists the number of share options and
warrants with the exercise prices of share options during the
reported period:
Six months ended Twelve months ended
June 30, 2023 December 31, 2022
------------------------ ----------------------------
Unaudited Audited
------------------------ ----------------------------
Weighted
Number of average
options exercise Number of Weighted average
and warrants price options exercise price
------------- --------- ---------- ----------------
GBP GBP
------------------------ ----------------------------
Share options outstanding at
beginning of period 12,545,222 0.177 10,122,112 0.2 06
Share options granted during
the period - - 2,976,185 0.07
Shares options exercised during
the period - - (500,000) 0.12
Share options expired during
the period 1,138,339 0.37 (53,075) 0.12
Share options outstanding at
end of period 11,406,883 0.158 12,545,222 0.177
============= ========= ========== ================
Share options exercisable at
end of period 11,243,883 0. 152 12,215,555 0.171
============= ========= ========== ================
For the six months ended June 30, 2023 and 2022 the Company
recognized share based payment expenses, in the amount of $4 and
$48, respectively.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 5 - FINANCIAL LIABILITIES OF CONVERTIBLE LOANS AND WARRANTS
a. During December 2021, the Company received, from third parties,
loans in the total amount of $1,251,000 (GBP925,000) in the form
of unsecured convertible loans enabling the lenders to convert
the loans at an exercise price of GBP0.15 per share at any time,
subject to regulatory provisions, up to December 31, 2023.
The convertible loans attract interest at the rate of 8% per annum
calculated by reference to the principal amount of the convertible
loans. If not converted, the loans will be repayable on December
31, 2023.
In addition, the lenders received:
- fully vested warrants to subscribe a total of 1,541,667 further
shares at an exercise price of GBP0.17 per share; any unexercised
warrants expire at the end of two-years from grant, and fully vested
warrants to subscribe a total of 1,541,667 further shares at an
exercise price of GBP0.19 per share; any unexercised warrants expire
at the end of three-years from grant.
The loan was evaluated and divided into different components by
an independent appraiser: Conversion component at fair value, Warrants
at fair value and Amortized cost of loan, with Transaction costs
allocated according to the component's fair value ratio (please
see table in 5(d) below). The part of the expenses that is attributed
to the amortized cost of the loan was reduced from its cost. An
effective interest rate was calculated for the liability of the
loan, based on its amortization table.
b. During December 2022, the Israeli subsidiary entered into a
loan agreement with CSS Alpha Global Pte Ltd for the provision
of a 12-month secured US$500,000 debt facility. The Agreement provided,
inter alia, for interest at 2 per cent per month, with 9 monthly
repayments starting 3 months after drawdown. Security is by way
of a second charge on assets, a personal, guarantee from the Company's
CEO, limited to 20 per cent of the loan and a deposit with CSS
of 3,000,000 new t42 shares. In addition, warrants for a total
of 2,976,185 shares in t42 were issued to CSS, exercisable at 7p
per share over 5 years. The initial drawdown was provided in December
2022, the second and last drawdown was provided in January, 2023.
The Company repaid $42,000 during the 6 month reported period,
and another $300,000 after the reported period. This loan will
shortly be fully repaid.
c. In December 2022, the Company issued a GBP265,000 convertible
loan note (CLN) to a supplier, to be applied in lieu of settlement
of a supplier debt, assisting with the Company's cashflow management.
The CLN bears interest at 3% per annum, payable quarterly, and
is repayable by 31 December 2024. The CLN is convertible at 9p
per share at the discretion of the holder. In addition, the Company
has the right to enforce conversion of GBP100,000 of the CLN in
the event t42's share price exceeds 12p and the balance if the
share price exceeds 15p.
7
d. Total revaluation expenses regarding the loan's components in
the statement of comprehensive loss for the reported period are
set below:
Loan component Conversion Warrant
component
--------------- ----------- --------
Balance as of January
1, 2022 857 279 118
Additions during the year 480 27 77
Finance (income) expenses 131 (272) (117)
Payments (15) - -
Balance as of December
31, 31, 2022 1,453 34 78
Additions during the year 250 - -
Finance (income) expenses 2 74 (20) (26)
Payments (113)
Conversion - - -
Balance as of June 30,
2023 1,864 14 52
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
e. For the period ended June 30, 2023, the estimated fair values
of the Warrants and the Convertible component were measured by an
independent appraiser as follows:
Period ended
June 30,
2023
-----------------
Expected term 0.5-4.5 Years
Expected average volatility 40%
Expected dividend yield -
Risk-free interest rate 5.341%
Fair value at the end of the period GBP0-0.0176
The level of the fair value hierarchy is level two.
Common Stock Market Value measured in calculation $0.05 5
f. In March 2022, 500,000 ordinary shares of no par value were
issued at a price of 12p per share following the exercise of
warrants by directors.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 6 SHAREHOLDERS AND RELATED PARTIES
-
a. Related parties that own the controlling shares in the
Group are:
Mr. Avraham Hartman ( 10.53 %) and Mr. Uri Hartman ( 5.56
%) .
b. Short-term balances: June 30 December
31
2023 2022 2022
---------- ------------------ ---------
Unaudited Unaudited Audited
---------- ------------------ ---------
Credit balance
Avi Hartmann (21) (15) (20)
Uri Hartmann (554) (508) (545)
Total Credit balance (575) (523) (565)
---------- ------------------ ---------
Loans
Avi Hartmann 49 53 69
Uri Hartmann (246) (238) (248)
---------- ------------------ ---------
Total Loans (197) (185) (179)
---------- ------------------ ---------
Total Short-term
balances (772) (708) (744)
========== ================== =========
c. Transactions: Six Months Ended Year Ended
June 30 December
31
2023 2022 2022
---------- ---------- -------------
Unaudited Unaudited Audited
---------- ---------- -------------
Total salaries, services
rendered and related
expenses for shareholders 178 195 381
========== ========== =============
Total share-based payment
expenses 2 2 3
========== ========== =============
Non-executive directors'
fees 38 56 95
========== ========== =============
Interest to related
parties 5 5 10
========== ========== =============
NOTE 7 - COST OF SALES
Six Months Ended Year Ended
June 30 December
31
2023 2022 2022
---------- ---------- -----------
Unaudited Unaudited Audited
---------- ---------- -----------
Purchases and other 882 1,536 1,970
Amortization 95 89 180
(Decrease) Increase in
Inventory (82) (444) 208
895 1,181 2,358
========== ========== ===========
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 8 - NET FINANCE (INCOME) EXPENSES
Six Months Ended Year Ended
June 30 December
31
2023 2022 2022
---------- ---------- -----------
Unaudited Unaudited Audited
---------- ---------- -----------
Exchange rate differences 25 292 455
Evaluation of Warrants
and Convertible component
of loan (117) 96 359
Bank charges (31) (40) (50)
Interest to banks and
others (163) (40) (382)
Interest to suppliers - - (5)
Interest to related parties (5) (5) (10)
Interest income from - - -
deposits
Net finance income (expenses) (291) 30 3 367
========== ========== ===========
NOTE 9 SEGMENTATION REPORTING
-
Differentiation policy for the segments:
The Company's management has defined its segmentation policy
based on the financial essence of the different segments.
This refers to services versus goods, delivery method and
allocated resources per sector.
On this basis, the following segments were defined: Hardware
and SaaS.
Segment information regarding the reported segments:
Hardware SaaS Total
---------- ------- ---------
Period Ended 30.06.2023:
(Unaudited)
Segment revenues 728 979 1,707
Cost of sales (753) (142) (895)
---------- ------- ---------
Gross profit (25) 837 812
Period Ended 30.06.2022:
(Unaudited)
Segment revenues 1,086 1,091 2,177
Cost of sales (1,056) (125) (1,181)
---------- ------- ---------
Gross profit 30 966 996
Year Ended 31.12.2022:
(Audited)
Segment revenues 2,065 1,976 4,041
Gross profit (loss) (2,105) (253) (2,358)
---------- ------- ---------
(40) 1,723 1,683
NOTE 10 SIGNIFICANT EVENTS DURING AND AFTER THE REPORTED PERIOD
-
See Note 1 (c).
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END
IR BDGDCCXDDGXR
(END) Dow Jones Newswires
September 27, 2023 08:43 ET (12:43 GMT)
T42 Iot Tracking Solutions (LSE:TRAC)
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