TIDMTRAC
RNS Number : 3530Z
T42 IOT Tracking Solutions PLC
14 September 2022
14 September 2022
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 results for the six
months ended 30 June 2022.
Business Overview Highlights
-- Continued to refocus the legacy business to shipping containers tracking services
-- Over $55 million in shipping containers tracking solutions
potential sales for the next 5 years via signed agreements in Latin
America now going into execution stage
-- First commercial orders received from DHL
-- Pilot programme completed with the security division of Philip Morris Israel Ltd
-- Pilot programme agreed with DB Schenker, one of the world's
largest global logistics providers
-- Signed agreement for shipping container tracking solutions with Olimp Bulgaria Ltd.
-- Post-period end, signed significant distribution agreement in Argentina
H1 Financials Highlights
-- Revenues decreased by 4% to $2.18m (H1 2021: $2.27m).
-- Recurring SaaS revenues increased by 2% to $1.091m (H1 2021: $1.071m).
-- Adjusted EBITDA* loss of $247,000 (H1 2021: loss of $167,000).
-- Gross margin for the period was 46% (H1 2021:40%).
-- General expenses increased by 10% to $1.5m (H1 2021: $1.4m).
-- Strong pipeline of potential new orders for fiscal year 2022 and 2023
Avi Hartmann, CEO of t42, commented:
"The strategy of t42 to focus on shipping containers tracking
solutions is now taking form. The Company is redefining itself and
now beginning to execute its new strategy. Our contract wins are
starting to deliver first sales and we believe the impact of our
strategy change will begin to be felt in H2 of this year. While the
financials for this half are not yet representative of the new
business, as more contracts for advanced solutions convert into
orders, we can expect to see continued growth in revenues and a
noticeable shift to higher margin SaaS. The growing pipeline of
potential orders underpins our confidence in future growth."
*Adjusted EBITDA is earnings before interest, tax, depreciation,
amortization and share-based payment expense.
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) 020 7469 0930
Lucy Williams/Charles Goodfellow/Eran Zucker
Yellow Jersey PR (Financial PR) 020 3004 9512
Tom Randell/Henry Wilkinson/Annabelle Wills T42@Yellowjerseypr.com
CHAIRMAN'S STATEMENT
During the first half of the year, as we transition from the
legacy business to the new shipping containers tracking business,
our focus has been on securing new opportunities with leaders at
the forefront of the freight and logistics industry around the
world, which are expected to bear fruit starting from H2 of this
year.
It is pleasing to see contract wins begin to deliver revenues,
with newly signed contracts expected to grow revenues in the second
half of 2022, and with the knowledge that that our pipeline of
opportunities and further contract wins can be expected to lead to
additional growth, albeit with some time lag after contract
signing.
The shortage in the supply of microchips continues to present
challenges for many industries. Although we are managing this
problem with creative R&D solutions, it inevitably impacts our
short-term growth. In particular, the demand pressures from other
industries create additional cash requirements as manufacturers
have frequently been demanding significant up-front payments to
ensure timely delivery. We are confident we can address these
issues, but they present new management challenges and our future
performance remains reliant on our ability to do so.
The Company has continued its rapid technological development,
and in August this year a new version of Lokies 2.0 was released.
It includes several significant improvements: a new cellular module
for improved remote wireless coverage, a new universal charging
port, an enhanced CPU (Central Processing Unit) for better
performance, and a new BLE (Bluetooth Low Energy) 5.2 for improved
energy consumption and future-proofing the product. These
improvements meet customer preferences in the market and are
influenced by our existing customers' feedback on their
requirements. In addition, the Company has upgraded its online
portal and enabled different alerts across multiple communication
networks, such as Telegram, SMS, e-mail, Olympia Tracking App,
etc.
It is exciting to report the completion of the integration of
the t42 system with the Argentinian Customs systems in support of
the commercial agreement signed on 13 July 2022. This complex
systems integration capability demonstrates the deep technical and
operational capacity within the t42 team as well as the
capabilities of the technology. It will be an important
demonstration of t42's ability to implement at scale for future
contract tenders.
FINANCIAL REVIEW
Group revenues for the 6 months to 30 June 2022 were $2.18m,
compared with $2.27m for the six months ended 30 June 2021, a
decrease of 4%. SaaS revenues showed a slight increase over the
equivalent period last year. Hardware sales were restricted by our
ability to obtain some of the components required, although we
expect these orders to be fulfilled in the second half of the year
and hardware sales to show a corresponding increase.
Gross margin for the 6 months to 30 June 2022 increased to 46%,
compared with 40% for the corresponding period in 2021.
Total operating expenses for the 6 months to 30 June 2022 were
$1.5m (2021: $1.4m). The increase is mainly due to additional
re-branding expenses as the Company continued to focus on the
container and freight market.
Net loss after taxation for the six months to 30 June 2022
decreased to $0.2m compared with the 2021 net loss of $0.53m.
The Group recorded an exchange rate profit of $0.4m
(2021:$0.03m) resulting from the strengthening of the US dollar
relative to the Israeli Shekel.
The Group balance sheet showed a decrease in trade receivables
to $0.65m, compared with $0.73m as at 30 June 2021.
Inventories at the period end were $2.2m compared with $2.0m as
at 30 June 2021 and $1.8m as at 31 December 2021, as the Company
increased its holding of critical components to better manage its
supply chain.
Trade payables at the period end were stable at $1.61m, compared
with $1.37m and $1.55m as at 30 June 2021 and 31 December 2021,
respectively.
Net cash used in operating activities for the 6 months to 30
June 2002 was $0.76m, compared with net cash provided by operating
activities for the 6 months to 30 June 2021 of $0.183m.
In fixed assets, one-off expenditures of $0.3m were incurred in
relation to the establishment of the Company's new office. The
impact of the new office lease is reflected in the increased Right
of Use asset, increasing from $0.7m as at 31 December 2021 to
$1.06m as at 30 June 2022 ($0.26m as at 30 June 2021), offset by an
increase in Leasehold Liabilities within non-current liabilities
from $0.56m as at 31 December 2021 to $0.89m as at 30 June 2022
($0.17m as at 30 June 2021).
OUTLOOK
At this crucial time, when global supply chains are being
disrupted, it is more critical than ever that authorities and
companies rely on reliable and actionable data. As we look ahead to
the remainder of 2022 and 2023, we see strong tailwinds and
increased demand for IoT tracking and monitoring solutions.
As a result of our strong and growing pipeline, we are confident
about demand robustness and our rationale for focusing the T42
business on the freight and logistics markets. We offer the
best-in-class solutions to one of the world's most traditional
industries, a multi-billion-dollar industry, with innovative
monitoring capabilities.
In particular, the new contract in Latin America has raised the
awareness and recognition of our container and freight solutions.
We are currently conducting reviews and pilots with several
potential customers in new geographies and markets. Over the next
few months, we expect further agreements to be reached.
We are focused on satisfying growing numbers of new orders, and
we expect to benefit as our focused activities and investments
mature bringing results in the near future. We anticipate solid
performance and growth in 2022 and in succeeding years.
Michael Rosenberg
Non-Executive Chairman
__________________
Jerusalem,
Review Report of Independent Auditors
to the Shareholders of
t42 IoT Tracking Solutions PLC (formerly: Starcom PLC)
Introduction
We have reviewed the accompanying condensed consolidated interim statements
of financial position of t42 IoT Tracking Solutions PLC (formerly:
Starcom PLC) and its consolidated subsidiaries (hereinafter - "the
Group") as at June 30, 2022 and the related condensed consolidated
interim statements of comprehensive loss, changes in shareholders'
equity and cash flows for the six months to June 30, 2022. The preparation
and presentation of these condensed consolidated financial statements
are in conformity with International Accounting Standard No. 34 "Interim
Financial Reporting" and 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 10 in
the financial statements regarding the global uncertainties caused
by the COVID-19 pandemic and the invasion of Ukraine by Russia and
its material negative impact on the Group's activities.
Barzily & Co.
Certified Public Accountants.
A Member of MSI Worldwide
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM PLC)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION
U.S. Dollars in thousands
June 30 December
31
Note 2022 2021 2021
--------- --------------- --------
Unaudited Unaudited Audited
--------- --------------- --------
ASSETS
NON-CURRENT ASSETS :
Property, plant and equipment, net 591 325 299
Rights of use assets, net 1,0 64 260 690
Intangible assets, net 3 1,028 1,811 1,034
Income Tax Authorities 58 56 57
Total Non-Current Assets 2,7 41 2,452 2,080
--------- --------------- --------
CURRENT ASSETS :
Inventories 2,234 2,030 1,790
Trade receivables (net of allowance
for doubtful accounts of $462, $583
and $497 thousand as of June 30,
2022 and 2021 and December 31,2021) 645 734 679
Other receivables 98 74 160
Short-term deposit 131 148 154
Cash and cash equivalents 311 328 1,534
Total Current Assets 3,419 3,314 4,317
--------- --------------- --------
6,124
TOTAL ASSETS 6,1 60 5,766 6,397
========= =============== ========
LIABILITIES AND EQUITY
EQUITY
93 1,641 193
--------- --------------- --------
NON- CURRENT LIABILITIES:
Long-term loans from banks, net of
current maturities 178 265 239
Amortized cost of a convertible loan 5 824 287 857
Conversion component of a convertible
loan at fair value 5 215 16 279
Leasehold liabilities 8 88 170 558
Warrants at fair value 5 87 - 115
--------- --------------- --------
Total Non-Current Liabilities 2,1 92 738 2,048
CURRENT LIABILITIES:
Short-term bank credit 61 1 24
Short-term loans and current maturities
of long-term loans 927 958 998
Warrants at fair value 5 - 6 3
Trade payables 1,606 1,373 1,553
Shareholders and related parties 6 708 665 692
Other payables 442 254 738
Leasehold liabilities 1 31 130 148
Total Current Liabilities 3,8 75 3,387 4,156
--------- --------------- --------
TOTAL LIABILITIES AND EQUITY 6,1 60 5,766 6,397
========= =============== ========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
Igor Vatenmacher,
13/09/2022 CFO
--------------------------------- -----------------
Date of Approval of the Financial
Statements Director
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM PLC)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
U.S. Dollars in thousands
Year Ended
Six Months Ended December
June 30 31
Note 2022 2021 2021
--------- --------- ----------
Unaudited Unaudited Audited
--------- --------- ----------
Revenues 2,177 2,271 4,214
Cost of sales 7 (1,181) (1,356) (2,545)
Inventory write-down - - (381)
---------
Gross profit 996 915 1,288
Operating expenses:
Research and development (60) (137) (223)
Selling and marketing (323) (294) (609)
General and administrative (1,098) (978) (2,388)
Other income (expenses) (40) 21 (756)
--------- --------- ----------
(1,521) (1,388) (3,976)
--------- --------- ----------
Operating loss (525) (473) (2,688)
Net finance Income (expenses) 8 303 (58) (271)
--------- --------- ----------
Total comprehensive loss for
the year (222) (531) (2,959)
========= ========= ==========
Loss per share:
Basic and diluted loss per
share (in dollars) 4 (0.004) (0.012) (0.064)
========= ========= ==========
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM 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) - 13,351 89 1,151 (14,398) 193
Balance- January 1,
2022
Exercise of options,
see Note 4 - 74 - - - 74
Share based payment
- Note 4 - - - 48 - 48
Comprehensive loss
for the period - - - - (222) (222)
-----------------
Balance - June 30,
2022 - 13,425 89 1,199 (14,620) 93
============= =========== ======== ================= =========== ========
(Unaudited)
Balance- January 1,
2021 - 12,328 89 1,123 (11,439) 2,101
Issuance of share
capital,
net of expenses - 109 - - - 109
Share based payment - - - (38) - (38)
Comprehensive loss
for the period - - - - (531) (531)
-----------------
Balance- June 30,
2021 - 12,437 89 1, 085 (11,970) 1 ,641
============= =========== ======== ================= =========== ========
(Audited)
Balance- January 1,
2021 - 12,328 89 1,123 (11,439) 2,101
Issuance of shares
to a related party
in payment of a payable - 107 - - - 107
Conversion of a convertible
loan 295 - - - 295
Proceeds from issued
share capital, net
of expenses - 621 - - - 621
Share based payment - - - 28 - 28
Comprehensive loss
for the year - - - - (2,959) (2,959)
-----------------
Balance- December
31, 2021 - 13,351 89 1,151 (14,398) 193
============= =========== ======== ================= =========== ========
* 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 (FORMERLY: STARCOM PLC)
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. Dollars in thousands
Six Months Ended Year Ended
June 30 December
31
2022 2021 2021
--------- --------- ----------------
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES: Unaudited Unaudited Audited
--------- --------- ----------------
Comprehensive loss (222) (531) (2,959)
Adjustments to reconcile net loss to
net cash provided by
(used in) operating activities:
Depreciation and amortization 211 366 549
Interest expense and exchange rate differences (221) 33 (24)
Share-based payment expense 48 (38) 28
Inventory write down - - 381
Intangible assets impairment - - 801
Changes in assets and liabilities:
Decrease (Increase) in inventories (444) 97 (44)
Decrease (Increase) in trade receivables 34 395 450
Decrease (Increase) in other receivables 62 7 (79)
Increase in Income Tax Authorities (1) - (1)
Increase (Decrease) in trade payables 72 (97) 81
Increase (Decrease) in other payables (297) (49) 435
Net cash provided by (used in) operating
activities (758) 183 (382)
--------- --------- ----------------
CASH FLOWS FOR INVESTING ACTIVITIES:
Purchases of property and equipment (333) (41) (49)
Proceeds from sales of property, plant
and equipment - - -
Decrease (Increase) in short-term deposits 23 2 (4)
Purchase of intangible assets (83) (173) (283)
Net cash used in investing activities (393) (212) (336)
--------- --------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank credit,
net 37 (24) (1)
Receipt (Repayment) of Short-term loans
from banks, net (65) 176 183
Receipt of l ong-term loans - - -
Receipt of convertible loans , net - - 1,251
Proceeds from (Repayment to) shareholders
and related parties, net (4) 50 77
Repayment of Leasehold liability (80) (67) (137)
Repayment of long-term loans (34) (42) (6)
Proceeds from issue of shares , net 74 - 621
--------- --------- ----------------
Net cash provided by (used in) financing
activities (72) 93 1,988
--------- --------- ----------------
Increase (Decrease) in cash and cash
equivalents (1,223) 64 1,270
Cash and cash equivalents at the beginning
of the period 1,534 264 264
--------- --------- ----------------
Cash and cash equivalents at the end
of the period 311 328 1,534
========= ========= ================
Appendix A - Additional Information
Interest paid during the period (73) (30) (49)
========= ========= ================
Appendix B - Non-cash financing activities
Issuance of shares to a related party
in payment of debt - 109 402
Non-cash additions to right-of-use assets
and lease liabilities 418 629 -
=== === ======
The accompanying notes are an integral part of the interim
condensed consolidated financial statements.
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM PLC)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 1 GENERAL INFORMATION
-
The Reporting Entity
a.
1. t42 IoT Tracking Solutions PLC (formerly: Starcom 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.
The Company fully owns Starcom G.P.S. Systems 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 Starcom
G.P.S. Systems Ltd. is:
96 Derech Ramataim, Israel.
Address of the Company's registered office in Jersey of Starcom
Systems Limited is:
Forum 4, Grenville Street, St. Helier, Jersey, Channel Islands,
JE4 8TQ
Definitions in these financial statements:
b.
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
(formerly:
Starcom PLC)
The Subsidiaries - Starcom G.P.S. Systems
3. Ltd. and Starcom
Systems Limited.
4. Starcom Jersey - Starcom Systems Limited.
5. Starcom Israel - Starcom G.P.S. Systems Ltd.
6. The Group - t42 IoT Tracking Solutions PLC
(formerly:
Starcom PLC) and the Subsidiaries.
7. Related party - As determined by
International Accounting
Standard No. 24 in regard to related
parties.
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM 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, 202 1 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,
202 1 are applied consistently in these interim consolidated
b. financial statements.
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:
c.
Year Ended
Six Months Ended December 31
June 30
2022 2021 2021
-------------- ------------ -------------
Exchange rate of NIS
in U.S. $ 0.286 0.306 0.322
Exchange rate of U.S.
$ in GBP 0.83 0.72 0.74
Change of NIS in U.S.
$ (11.27%) (3.53%) 3.4%
Change of U.S. $ in GBP 11.68% (1.64%) 1.37%
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM PLC)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 3 INTANGIBLE ASSETS, NET
-
Total
----------
Unaudited
----------
Cost:
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
----------
Unaudited
----------
Cost:
Balance as of January
1, 2021 5,036
Additions during the period 173
Balance as of June 30,
2021 5,209
----------
Accumulated Depreciation
:
Balance as of January
1, 2021 (2,934)
Amortization during the
period (262)
Balance as of June 30,
2021 (3,196)
----------
Impairment of assets (202)
----------
Net book value as of June
30, 2021 1,811
==========
Total
--------
Audited
--------
Cost:
Balance as of January
1, 2021 5,036
Additions during the year 283
Impairment (3,601)
Balance as of December
31, 2021 1,718
--------
Accumulated Amortization
:
Balance as of January
1, 2021 (2,934)
Amortization during the
year (348)
Impairment 2,598
Balance as of December
31, 2021 (684)
--------
Net book value as of December
31, 2021 1,034
========
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM 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 - 53,026,822 shares and 52,526,822 shares
as of June 30, 2022, and December 31, 2021, 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
2022 2021 2021
----------------- ----------------- -------------------
Unaudited Unaudited Audited
----------------- ----------------- -------------------
Number 52,833,452 44,030,728 46,294,205
================= ================= ===================
* The number of shares adjusted according to the shares
consolidation as detailed in Note 4d below .
The following table lists the number of share options and
warrants with the exercise prices of share options during the
reported period:
June 30, 2022 December 31, 2021
------------------------ -------------------------------
Unaudited Audited
------------------------ -------------------------------
Weighted
Number of average Number of
options exercise options Weighted average
and warrants price and warrants exercise price
------------- --------- ------------- ----------------
GBP GBP
------------------------ -------------------------------
Share options and warrants outstanding
at beginning of period 10,122,112 0.206 6,244,243 0.22
Share options or warrants granted
during the period - - 4,322,869 0.17
Warrants exercised during the ( 500,000
period ) 0.12 (445,000) -
Share options or warrants expired (53,075
during the period ( 0.12 - -
Share options and warrants outstanding 0.21
at end of period 9,569,037 1 10,122,112 0.206
============= ========= ============= ================
Share options and warrants exercisable
at end of period 9,239,370 0.204 9,127,829 0.207
============= ========= ============= ================
d. During November 2021 the Company held a general meeting
which resulted with a decision to consolidated shares
by a ratio of 1:8 ("shares consolidation").
e. During March 2022 the Company's CEO, CFO, chairman and
another employee exercised 500,000 warrants granted to
them under a convertible loan they provided in March
2020. The warrants were exercised at a price of 12p per
share as set out in the loan agreement, generating proceeds
of GBP60,000.
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM 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 loans from third
parties totaling $1,251 thousand (GBP925 thousand) in the
form of convertible loans enabling the lenders to convert
the loans at an exercise price of GBP0.15 per share at
any time, under the limitations of the AIM Rules, Takeover
Code and MAR regulations, up to December 31, 2023.
The convertible loans bear 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.
In addition, the lenders received 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.
For the period ended June 30, 2022, the estimated fair
values of the Warrants and the Convertible component were
measured by an independent appraiser as follows,
The level of the fair value hierarchy is level two.
Common Stock Market Value measured in calculation $0.15 Period ended
June 30,
2022
-----------------
Expected term 1.5-2.5 years
Expected average volatility 40%
Expected dividend yield -
Risk-free interest rate 0.245%
The loan was evaluated and divided into different components
by an independent appraiser, the amounts as at June 30,
2022 are as follows:
Conversion component at fair value - $215 thousand
Warrants at fair value - $87 thousand
Amortized cost of a loan - $824 thousand
Transaction costs were allocated according to the component's
fair value ratio.
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. The effective
interest rate is 33% per annum.
Total revaluation expenses regarding these components in
the statement of comprehensive loss for the reported period
are set out below:
Loan component Conversion component Warrant
--------------- --------------------- --------
Balance as of January
1, 2021 254 42 10
Additions during the
year 857 279 115
Finance (income) expenses 56 (42) (7)
Payments (17) - -
Conversion (293) - -
--------------- --------------------- --------
Balance as of December
31, 2021 857 279 118
Finance (income) expenses (33) (64) (28)
Payments - - -
Conversion - - (3)
Balance as of June 30,
2022 824 215 87
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM 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
2022 2021 2021
---------- -------------------- -------------------
Unaudited Unaudited Audited
---------- -------------------- -------------------
Credit balance
Avi Hartmann (15) (47) (38)
Uri Hartmann (508) (446) (482)
Doron Kedem* - (173) (173)
Total Credit balance (523) (666) (693)
---------- -------------------- -------------------
Loans
Avi Hartmann 53 31 38
Uri Hartmann (238) (237) (236)
Doron Kedem* - 207 199
---------- -------------------- -------------------
Total Loans (185) 1 1
---------- -------------------- -------------------
Total Short-term
balances (708) (665) (692)
========== ==================== ===================
* As of June 30, 2022, Mr. Doron Kedem is not considered
a related party, and his balances are not included for
this date.
c. Transactions: Six Months Ended Year Ended
June 30 December
31
2022 2021 2021
---------- ---------- -------------
Unaudited Unaudited Audited
---------- ---------- -------------
Total salaries, services
rendered and related
expenses for shareholders 195 192 543
========== ========== =============
Total share-based
payment expenses 2 2 22
========== ========== =============
Interest to related
parties 5 5 10
========== ========== =============
NOTE 7 - COST OF SALES
Six Months Ended Year Ended
June 30 December
31
2022 2021 2021
---------- ---------- -----------
Unaudited Unaudited Audited
---------- ---------- -----------
Purchases and other 1,536 997 2,241
Amortization 89 262 348
Increase in Inventory (444) 97 (44)
1,181 1,356 2,545
========== ========== ===========
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM 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
2022 2021 2021
---------------- --------------- -----------
Unaudited Unaudited Audited
---------------- --------------- -----------
Exchange rate differences 292 63 (98)
Evaluation of Warrants
and Convertible component
of loan 96 (38) -
Bank charges (40) (31) (62)
Interest to banks and
others (40) (43) (55)
Interest to suppliers - (4) (46)
Interest to related parties (5) (5) (10)
Interest income from - - -
deposits
Net finance income (expenses) 30 3 (58) (271)
================ =============== ===========
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 30.06.2022:
(Unaudited)
Segment revenues 1,086 1,091 2,177
Cost of sales (1,056) (125) (1,181)
--------- ------ --------
Gross profit 30 966 996
Period Ended 30.06.2021:
(Unaudited)
Segment revenues 1,197 1,074 2,271
Cost of sales (1,220) (136) (1,356)
--------- ------ --------
Gross profit (23) 938 915
Year Ended 31.12.2021:
(Audited)
Segment revenues 2,069 2,145 4,214
Cost of sales (2,291) (254) (2,545)
--------- ------ --------
Gross profit (loss) (222) 1,891 1,669
T42 IOT TRACKING SOLUTIONS PLC (FORMERLY: STARCOM PLC)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
U.S. Dollars in thousands
NOTE 10- SIGNIFICANT EVENTS DURING AND AFTER THE REPORTED PERIOD
(GLOBAL UNCERTAINTIES - COVID-19 AND UKRAINE WAR)
The impacts of the COVID-19 pandemic are still being felt.
There was a global component's shortage, increased purchasing
costs and difficult shipping conditions which created additional
costs and delays impacting the Group's ability to fully
respond to the increased business demand. To meet this demand
the Group has sourced additional components which will enable
it to deliver additional products in H2 2022.
In addition, the Group also managed to take advantage of
the opportunity of COVID-19's impact on freight movement
and was able to conclude 3 significant distribution contracts
which are expected to contribute significantly to revenues
in the coming years.
During February 2022, the geo-political situation between
Russia and Ukraine escalated, causing the shutdown of one
of the Group's sub-contractor's production site. The Company
managed to shift quickly to other manufacturers, but it
did cause some short delays in the production process which
resulted in a slowdown in onward deliveries of finished
goods to our customers. The Company's general production
abilities were unaffected.
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END
IR DGGDCSGBDGDX
(END) Dow Jones Newswires
September 14, 2022 02:01 ET (06:01 GMT)
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