RA'ANANA, Israel and POWDER
SPRINGS, Ga., May 6, 2021
/PRNewswire/ -- Mer Telemanagement Solutions Ltd.
(MTS) (Nasdaq Capital Market: MTSL), a global
provider of telecommunications expense management (TEM), call
accounting and contact center software, today released its
financial results for the six and twelve months ended December 31, 2020.
On April 15, 2021, we entered into
a definitive agreement and Plan of Merger (the "Merger Agreement")
with SharpLink, Inc., a leading online technology company that
works with sports leagues, fantasy sports sites and media companies
to connect fans to relevant and timely betting content sourced from
its sportsbook partners.
Financial information
The Company recorded revenues of $1.9
million for the six months ended December 31, 2020, compared with $2.6 million for the six months ended
December 31, 2019. The Company
incurred losses of $(1.2) million for
the six months ended December 31,
2020, or $(0.17) per diluted
share compared with net income of $85,000, or $0.01
per diluted share, for the comparable period in 2019. On a non-GAAP
basis (as described and reconciled below), The Company posted a net
loss of
$(224,000) or $(0.03) per
diluted share, for the six months ended December 31, 2020 compared with net income
of $262,000, or $0.04 per diluted share, for the comparable
period in 2019.
The Company recorded revenues of $4
million for the year ended December
31, 2020 compared with $5.2
million for the comparable period in 2019. The Company
incurred a net loss of $(1.8) million
or $(0.30) per diluted share, for the
year ended December 31, 2020 compared
with a net loss of $(135,000) or
$(0.03) per diluted share for the
comparable period 2019. On a non-GAAP basis (as described and
reconciled below), the Company posted a net loss of $(376,000), or $(0.06) per diluted share for the year ended
December 31, 2020 compared with net
income of $79,000, or $0.02 per diluted share for the comparable period
in 2019.
During the period 2018-2020 an institutional investor invested,
$3 million in a newly-created class
of convertible preferred shares and $0.2
million in ordinary shares of the Company, at a price per
preferred share and ordinary share of $1.14. The preferred shares are convertible into
ordinary shares on a one to one basis. The stock purchase agreement
with the institutional investor included a green shoe option for
future investment of up to $1.5
million in the Company's preferred shares at a price per
preferred share of $1.14. During,
2019 and 2020, the institutional investor fully exercised its green
shoe option as part of its $3 million
investment.
As previously reported on April 15,
2021, we entered into a definitive agreement and Plan of
Merger (the "Merger Agreement") with SharpLink, Inc. ("SharpLink"),
a leading online technology company that works with sports leagues,
fantasy sports sites and media companies to connect fans to
relevant and timely betting content sourced from its sportsbook
partners, and New SL Acquisition Corp., a company incorporated
under the laws of the State of
Delaware and a wholly-owned subsidiary of the Company
("Merger Sub"). On the terms and subject to the satisfaction of the
conditions described in the Merger Agreement, including approval of
the transaction by the Company's shareholders, Merger Sub will be
merged with and into SharpLink (the "Merger") with SharpLink
surviving the Merger as a wholly-owned subsidiary of the
Company.
Mr. Roy Hess, Chief Executive
Officer of MTS, said, "We are excited to achieve this major
milestone by signing the definitive merger agreement with
SharpLink, a promising leading online technology company that works
with sports leagues, fantasy sports sites and media companies. We
are also excited about our future growth strategy as well as the
current industry's rapid expansion both in the U.S. and globally.
Our results in 2020 reflect the substantial reduction of our
ongoing operations which were impacted by the COVID-19 pandemic.
During 2020, the Company continued implementing its efficiency plan
and reduced its operational expenses which contributed to improved
operating margins. Excluding the impact of one-time non-cash
impairment charges, our net loss for the second half of 2020 was
$(224,000) on a non-GAAP
basis. In June 2019, we
introduced Omnis - Contact Center Software with
"Out-Of-The-Box" capabilities and open channel architecture. During
the end of 2019, we started to see initial revenues from this new
product, which we consider to be our main growth engine in the
coming years. While our marketing of this new product was delayed
by the onset of the pandemic we intend to accelerate its
introduction in 2021." Mr. Hess concluded, "we are looking
forward to completing the SharpLink transaction in the near future
and beginning a new chapter in the life of our company."
About MTS
Mer Telemanagement Solutions Ltd. (MTS) is focused on innovative
products and services for enterprises in the area of telecom
expense management (TEM), call accounting and contact center
software. Headquartered in Israel,
MTS markets its solutions through wholly-owned subsidiaries in
Israel, the U.S and Hong Kong, as well as through distribution
channels. For more information please visit the MTS web site:
www.mtsint.com.
Certain matters discussed in this news release are
forward-looking statements that involve a number of risks and
uncertainties including, but not limited to, the Company's ability
to achieve profitable operations, its ability to
continue to operate as a going concern, its ability to continue to
meet NASDAQ continued listing requirements, the impact of COVID-19
on the Company and its customers, customer acceptance of new
products, the impact of competitive products and pricing, market
acceptance, the lengthy sales cycle, proprietary rights of the
Company and its competitors, risk of operations in Israel, general economic conditions and
other risk factors detailed in the Company's annual report and
other filings with the United States Securities and Exchange
Commission.
Contacts:
Ofira Bar
CFO
Tel: +972-9-7777-540
Email: ofira.bar@mtsint.com
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
ASSETS
|
|
December
31,
|
|
|
|
2020
|
|
2019
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,504
|
|
$
1,732
|
|
|
Restricted
cash
|
|
1,003
|
|
1,464
|
|
|
Trade receivables (net
of allowance for credit losses of $69 and $75, at
December 31, 2019 and 2020,
respectively
|
|
407
|
|
499
|
|
|
Other accounts
receivable and prepaid expenses (Note 3)
|
|
399
|
|
236
|
|
|
Assets of discontinued
operations(Note 1b)
|
|
178
|
|
172
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
3,491
|
|
4,103
|
|
|
|
|
|
|
|
|
NON-
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance pay
fund
|
|
252
|
|
653
|
|
|
Property and equipment,
net (Note 4)
|
|
35
|
|
62
|
|
|
Deferred taxes (Note
7)
|
|
171
|
|
-
|
|
|
Goodwill
|
|
1,502
|
|
3,225
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
1,960
|
|
3,940
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
5,451
|
|
$
8,043
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Trade
payables
|
|
$
114
|
|
$
149
|
|
Deferred
revenues
|
|
745
|
|
962
|
|
Accrued expenses and
other liabilities (Note 5)
|
|
1,769
|
|
2,317
|
|
Liabilities of
discontinued operations (Note 1b)
|
|
496
|
|
516
|
|
|
|
|
|
|
Total current
liabilities
|
|
3,124
|
|
3,944
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
Accrued severance
pay
|
|
306
|
|
831
|
|
Deferred tax liability
(Note 7)
|
|
-
|
|
163
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
306
|
|
994
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES (Note 6)
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
(Note 9):
|
|
|
|
|
|
Share capital
-
|
|
|
|
|
|
Ordinary shares of
NIS 0.03 par value: Authorized: 17,000,000 shares at
December 31, 2020 and 2019; Issued: 4,426,791 and 3,614,208 shares
at
December 31, 2020 and 2019, respectively; Outstanding 4,424,991
and
3,612,408 shares at December 31, 2020 and 2019,
respectively
|
|
37
|
|
30
|
|
Preferred Shares of
NIS 0.03 par value: Authorized: 3,000,000 shares at
December 31, 2020 and 2019; Issued and Outstanding: 1,831,579
and
2,008,772 shares at December 31, 2020 and 2019,
respectively
|
|
15
|
|
16
|
|
Additional paid-in
capital
|
|
31,360
|
|
30,635
|
|
Treasury shares at
cost (1,800 Ordinary shares at December 31, 2020 and
2019)
|
|
(29)
|
|
(29)
|
|
Accumulated
deficit
|
|
(29,362)
|
|
(27,547)
|
|
|
|
|
|
|
Total shareholders' equity
|
|
2,021
|
|
3,105
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
5,451
|
|
$
8,043
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
Twelve months
ended
December
31,
|
|
Six months
ended
December
31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
Audited
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Services
|
|
$
3,383
|
|
$
4,273
|
|
$
1,568
|
|
$
2,094
|
|
Product
sales
|
|
635
|
|
920
|
|
347
|
|
499
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
4,018
|
|
5,193
|
|
1,915
|
|
2,593
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Services
|
|
1,511
|
|
1,486
|
|
818
|
|
701
|
|
Product
sales
|
|
284
|
|
371
|
|
111
|
|
175
|
|
|
|
|
|
|
|
|
|
|
Total cost of
revenues
|
|
1,795
|
|
1,857
|
|
929
|
|
876
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
2,223
|
|
3,336
|
|
986
|
|
1,717
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
-
|
|
545
|
|
-
|
|
277
|
|
Selling and
marketing
|
|
752
|
|
817
|
|
293
|
|
264
|
|
General and
administrative
|
|
1,867
|
|
1,890
|
|
930
|
|
912
|
|
Goodwill
impairment
|
|
1,723
|
|
254
|
|
1,106
|
|
254
|
|
Total operating
expenses
|
|
4,342
|
|
3,506
|
|
2,329
|
|
1,707
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
(2,119)
|
|
(170)
|
|
(1,343)
|
|
10
|
|
Financial income
(expenses), net
|
|
16
|
|
(18)
|
|
8
|
|
7
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes on income
|
|
(2,103)
|
|
(188)
|
|
(1,335)
|
|
17
|
|
Taxes on income (tax
benefit), net
|
|
(325)
|
|
4
|
|
(217)
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) from
continuing operations
|
|
(1,778)
|
|
(192)
|
|
(1,118)
|
|
14
|
|
Income (loss) from
discontinued operations
|
|
(37)
|
|
57
|
|
(36)
|
|
71
|
|
Net Income
(loss)
|
|
$
(1,815)
|
|
$
(135)
|
|
$
(1,154)
|
|
$
85
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
Basic and diluted net
profit (loss) per share from continuing
operations
|
|
$
(0.29)
|
|
$
(0.04)
|
|
$
(0.16)
|
|
$
0.00
|
|
Basic and diluted net
profit (loss) per share from
discontinued operations
|
|
( 0.01)
|
|
0.01
|
|
( 0.01)
|
|
0.01
|
|
Basic and dilutednet
loss per share
|
|
$
(0.30)
|
|
$
(0.03)
|
|
$
( 0.17)
|
|
$
0.01
|
|
Weighted average number
of shares used in computing
basic net profit (loss) per
share
|
|
5,954,795
|
|
5,013,374
|
|
6,873,156
|
|
5,864,372
|
|
Weighted average number
of shares used in computing
diluted net profit (loss) per
share
|
|
5,954,795
|
|
5,081,865
|
|
6,873,156
|
|
6,031,193
|
|
RECONCILIATION OF
GAAP TO NON-GAAP RESULTS
|
|
|
U.S. dollars in
thousands (except share and per share data)
|
|
|
|
|
|
Twelve months
ended
December
31,
|
|
Six months
ended
December
31,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
from continuing operations
|
|
(1,778)
|
|
(192)
|
|
(1,118)
|
|
14
|
|
|
Stock-based
compensation expenses
|
|
21
|
|
47
|
|
7
|
|
34
|
|
|
Intangible assets
amortization, net of tax effects
|
|
-
|
|
21
|
|
-
|
|
11
|
|
|
Goodwill impairment,
net of tax effect
|
|
1,381
|
|
203
|
|
887
|
|
203
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net Income
(loss)
|
|
$
(376)
|
|
$
79
|
|
$
(224)
|
|
$
262
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and
diluted net profit (loss) per share
|
|
$
(0.29)
|
|
$
(0.04)
|
|
$
(0.16)
|
|
$
0.00
|
|
|
Non-GAAP basic and
diluted net profit (loss) per share
|
|
$
(0.06)
|
|
$
0.02
|
|
$
(0.03)
|
|
$
0.04
|
|
|
Weighted average
number of shares used in computing
non-GAAP basic net profit (loss) per share
|
|
5,954,795
|
|
5,013,374
|
|
6,873,156
|
|
5,864,372
|
|
|
Weighted average
number of shares used in computing
non-GAAP diluted net profit (loss) per share
|
|
5,954,795
|
|
5,081,865
|
|
6,873,156
|
|
6,031,193
|
|
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SOURCE Mer Telemanagement Solutions Ltd. (MTS)