REG - T42 IOT Tracking Sol - Interim Results
27/09/2023 13:45
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230927:nRSa8739Na&default-theme=true
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 / 020 7409 3494
Richard Johnson / Robert Collins
Peterhouse Capital Limited (Joint Broker) 020 7469 0930
Lucy Williams / Charles Goodfellow / Eran Zucker
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 $0.65m as of 30 June 2022.
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 £0.15 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 1,064 981
Intangible assets, net 3 998 1,028 1,021
Income Tax Authorities 57 58 57
Total Non-Current Assets 2,562 2,741 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 587 645 488
$450 thousand as of June 30, 2023 and 2022 and December 31, 2022)
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 6,160 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 778 888 790
Warrants at fair value 5 - 87 -
Total Non-Current Liabilities 1,201 2,192 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 6 772 708 744
Other accounts payable 645 442 260
Leasehold liabilities 119 131 112
-
Conversion component of a convertible loan at fair 5
1,558 - 7
value
5 - 1,161
Amortized cost of a loan and a convertible
loan
Total Current Liabilities 5,108 3,875 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
Six Months Ended June 30 Year Ended December 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) 16 (40) (29)
(1,273) (1,521) (3,056)
Operating loss (461) (525) (1,373)
Finance income 25 413 814
Finance expenses (318) (110) (447)
Net finance Income (expenses) 8 (293) 303 367
(754) (222) (1,006)
Total comprehensive loss for the year
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
Premium on Shares Capital Reserve Capital Reserve for Share-based payment Accumulated Loss
Share Total
Capital *
(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 December 31
June 30
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 long-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.
c. Significant event during and 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
a. Basis of preparation
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 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 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
b. recorded accordingly.
Use of estimates and judgments
c.
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.
d. Exchange rates:
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 December 31
Six Months Ended 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 1,028
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 -
54,026,822 shares and 54,026,822 shares as of June 30, 2023, 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 December 31
June 30
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
Number of options and warrants Weighted average Number of options Weighted average
exercise price exercise price
£ £
Share options outstanding at beginning of period 12,545,222 0.177 10,122,112 0.206
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 (£925,000) in the form of unsecured convertible
loans enabling the lenders to convert the loans at an exercise price of £0.15
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 £0.17 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 £0.19 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 £265,000 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 £100,000 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 component Warrant
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 274 (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
£0-0.0176
The level of the fair value hierarchy is level two.
Common Stock Market Value measured in calculation
$0.055
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 (21) (15)
(554)
(508)
Avi Hartmann (20)
Uri Hartmann (545)
Total Credit balance (575) (523) (565)
Loans 49 53
(246)
(238)
Avi Hartmann 69
Uri Hartmann (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 December 31
June 30
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 December 31
June 30
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) 303 367
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).
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR BDGDCCXDDGXRRecent news on t42 IoT Tracking Solutions
See all newsREG - T42 IOT Tracking Sol - Business Update & Board Change
AnnouncementREG - AIM - AIM Notice - 12/02/2025
AnnouncementREG - T42 IOT Tracking Sol - Placing to raise £262,500
AnnouncementREG - T42 IOT Tracking Sol - Result of AGM
AnnouncementREG - T42 IOT Tracking Sol - Project Agreement Secured Evaluated at over US$5m
Announcement