T42 IOT Tracking Sol - 2024 Final Results
27/06/2025 09:11
RNS Number : 7401O
T42 IOT Tracking Solutions PLC
27 June 2025
27 June 2025
t42 IoT Tracking Solutions plc
("t42" or the "Company")
Full year results
t42 IoT Tracking Solutions plc (AIM: TRAC), a global provider of real-time tracking and monitoring solutions for containers, is pleased to announce its audited results for the year ended 31 December 2024.
Financial Highlights
· Revenue of $4.16m (2023: $4.01m), with an increased contribution from the supply chain solutions.
· Adjusted EBITDA loss of $206,000 (2023: EBITDA gain of $341,000).
· Gross margin decreased to 38%, due to cost increases in the hardware segment (2023: 53%).
· Total operating expenses increased to $2.48m (2023: $2.25m).
Operational and Post-period Highlights
Of the four major contracts signed in 2024, one is already outperforming expectations. Year-on-year growth in Lokies orders is nearly 100%, and this is expected to have a positive impact on 2025 results. The other contracts are progressing as planned. As previously reported, these contracts represent cumulative potential orders of up to 100,000 units, primarily from customers in Latin America. Subject to full execution and delivery timelines, the contracts are expected to generate approximately $20m in hardware and SaaS revenues over the next three years.
Since the beginning of 2025, we have seen a significant increase of nearly 100% in purchase orders for both Lokies and Tetis, which will contribute to revenues in the current year.
Avi Hartmann, CEO of t42, commented:
"We offer a comprehensive, cutting edge, technological solution for monitoring and securing containers, effectively addressing a critical challenge in maritime, land transportation and air cargo. Our solution guarantees reliability, security, and economic feasibility while significantly reducing implementation time and accelerating return on investment for our customers. We are actively pursuing business opportunities in key markets such as South and North America, evident from recent agreements signed and the substantial business potential they represent.
I would like to express, on behalf of the Board and myself, our sincere gratitude to Igor Vatenmacher, who stepped down as CFO in April this year. Igor's drive and determination has greatly helped to guide T42 through challenging times in the past and set it on a road to a brighter future. Although Igor has stepped down from his executive role, he has not left the Company - he now continues to serve as a non-executive director, contributing his vast experience and unique insights in his new role."
Contacts:
| t42 IoT Tracking Solutions PLC Michael Rosenberg, Chairman Avi Hartmann, CEO | 07785 727595 +972 5477 35663 |
| Strand Hanson Limited (Nominated Adviser and Financial Adviser) James Harris/ Richard Johnson/ Imogen Ellis | 020 7409 3494 |
| Peterhouse Capital Limited Lucy Williams/Charles Goodfellow/Eran Zucker | 020 7469 0930 |
| Executive Director | Salary | Pension and Related Expenses | Fees | Total | |
| A Hartmann | 167 | 24 | - | 191 | |
| I Vatenmacher | 108 | 33 | - | 141 | |
| Non-Executive Directors | |||||
| M Rosenberg | - | - | 51 | 51 | |
| M Blair | - | - | 57 | 57 | |
| Total 2024 | 275 | 57 | 108 | 440 | |
| Executive Director | Total vested at01/01/24 | Exercised | Vested/ (Expired) during the year | Total Vested at31/12/24 | Total Un-vested at 31/12/24 | Grant Total | |||||||
| A Hartmann | 1,123 | - | 42 | 1,165 | - | 1,165 | |||||||
| I Vatenmacher | 333 | - | 42 | 375 | - | 375 | |||||||
| Non-Executive Directors | |||||||||||||
| M Rosenberg | 814 | - | - | 814 | - | 814 | |||||||
| M Blair | 364 | - | - | 364 | - | 364 | |||||||
| December 31, | |||||
| Note | 2024 | 2023 | |||
| ASSETS | |||||
| NON-CURRENT ASSETS | |||||
| Property, plant and equipment | 6 | 341 | 422 | ||
| Right-of-use assets | 23 | 1,039 | 1,044 | ||
| Intangible assets | 7 | 759 | 952 | ||
| Trade receivables | 3 | 136 | - | ||
| Bank deposit | 5 | 9 | - | ||
| Total Non-Current Assets | 2,284 | 2,418 | |||
| CURRENT ASSETS | |||||
| Cash and cash equivalents | 147 | 186 | |||
| Deposits | 5 | - | 35 | ||
| Trade receivables | 3,24 | 740 | 892 | ||
| Other accounts receivables | 86 | 27 | |||
| Inventory | 4 | 1,117 | 1,439 | ||
| Total Current Assets | 2,090 | 2,579 | |||
| TOTAL ASSETS | 4,374 | 4,997 | |||
| DEFICIT AND LIABILITIES | |||||
| DEFICIT | 14 | (2,682) | (939) | ||
| NON-CURRENT LIABILITIES | |||||
| Long-term bank loans, net of current maturities | 10 | 13 | 88 | ||
| Leasehold liabilities | 23 | 770 | 814 | ||
| Financial liabilities infair value | 11A, B | - | 31 | ||
| Amortized cost of loans | 11 | - | 917 | ||
| Total Non-Current Liabilities | 783 | 1,850 | |||
| CURRENT LIABILITIES | |||||
| Short-term bank credit | 12 | 68 | 145 | ||
| Current maturities of long-term bank loans | 10 | 74 | 64 | ||
| Trade payables | 1,106 | 844 | |||
| Other accounts payable | 9 | 1,070 | 433 | ||
| Current maturities of leasehold liabilities | 23 | 202 | 168 | ||
| Financial liabilities in fair value | 11B, C | 238 | 12 | ||
| Amortized cost of loans | 11A, B,D | 2,745 | 1,681 | ||
| Related parties | 21 | 770 | 739 | ||
| Total Current Liabilities | 6,273 | 4,086 | |||
| TOTAL DEFICIT AND LIABILITIES | 4,374 | 4,997 | |||
| 27 June 2025 | ||||
| Date of Approval of the Financial Statements | Aviran Sabag CFO | Avi Hartmann CEO |
| Year ended December 31, | |||||
| Note | 2024 | 2023 | |||
| Revenues | 24,25 | 4,158 | 4,005 | ||
| Cost of revenues | 15 | (2,565) | (1,882) | ||
| Gross profit | 1,593 | 2,123 | |||
| Operating expenses: | |||||
| Research and development | (159) | (92) | |||
| Sales and marketing | 19 | (366) | (485) | ||
| General and administrative expenses | 16 | (1,888) | (1,665) | ||
| Other expenses, net | (64) | (3) | |||
| Total operating expenses | (2,477) | (2,245) | |||
| Operating loss | (884) | (122) | |||
| Finance income | 17 | 262 | 604 | ||
| Finance expenses | 18 | (1,126) | (902) | ||
| Net finance income (expenses) | (864) | (298) | |||
| Total comprehensive loss for the year | (1,748) | (420) | |||
| Loss per share: | |||||
| Basic and diluted loss per share | 14, 20 | (0.032) | (0.008) | ||
| Share Capital | Premium on Shares | Capital Reserve | Reserve from Share-Based Payments | Accumulated Loss | Total deficit | |||||||||||||||
| Balance as of January 1, 2023 | - | 13,531 | 89 | 1,246 | (15,404) | (538) | ||||||||||||||
| Issuance of share capital (net of expenses) | - | 12 | - | - | - | 12 | ||||||||||||||
| Share based payment (see Note 14d) | - | - | - | 7 | - | 7 | ||||||||||||||
| Comprehensive loss for the year | - | - | - | - | (420) | (420) | ||||||||||||||
| Balance as of December 31, 2023 | - | 13,543 | 89 | 1,253 | (15,824) | (939) | ||||||||||||||
| Share based payment (see Note 14d) | - | - | - | 5 | - | 5 | ||||||||||||||
| Comprehensive loss for the year | - | - | - | - | (1,748) | (1,748) | ||||||||||||||
| Balance as of December 31, 2024 | - | 13,543 | 89 | 1,258 | (17,572) | (2,682) | ||||||||||||||
| Year Ended December 31, | ||||
| 2024 | 2023 | |||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
| Loss for the year | (1,748) | (420) | ||
| Adjustments for: | ||||
| Depreciation and amortization | 523 | 469 | ||
| Financial expenses, Changes in fair value of financial liabilities and exchange rate differences, net | 700 | 43 | ||
| Share-based payment expenses | 5 | 7 | ||
| Gain from modification of debt terms | (190) | - | ||
| Capital gain | - | (10) | ||
| Intangible assets impairment | 122 | - | ||
| Changes in assets and liabilities: | ||||
| Decrease in inventory | 322 | 142 | ||
| Decrease (Increase) in trade receivables | 17 | (404) | ||
| Decrease (Increase) in other accounts receivable | (35) | 44 | ||
| Decrease in Income Tax Authorities | - | 57 | ||
| Increase (Decrease) in trade payables | 166 | (300) | ||
| Increase in other accounts payable | 720 | 173 | ||
| Net cash provided by (used in) operating activities | 602 | (198) | ||
| CASH FLOWS FOR INVESTING ACTIVITIES: | ||||
| Purchases of property, plant and equipment | (10) | (16) | ||
| Proceeds from sales of property, plant and equipment | - | 52 | ||
| Increase in deposits | - | 94 | ||
| Investment in intangible assets | (142) | (134) | ||
| Net cash used in investing activities | (152) | (4) | ||
| CASH FLOWS FOR FINANCING ACTIVITIES: | ||||
| Decrease in short-term bank credit, net | (77) | (366) | ||
| Proceeds from (payment to) related parties, net | 19 | (5) | ||
| Payment of leasehold liabilities | (191) | (183) | ||
| Repayment of loans | (240) | (546) | ||
| Receipt of convertible loans | - | 1,300 | ||
| Consideration of the issue of shares, net | - | 14 | ||
| Net cash provided by (used in) financing activities | (489) | 214 | ||
| Increase (Decrease) in cash and cash equivalents | (39) | 12 | ||
| Cash and cash equivalents at the beginning of the year | 186 | 174 | ||
| Cash and cash equivalents at the end of the year | 147 | 186 | ||
| Appendix A -Additional Information | ||||
| Interest paid during the year | 338 | 313 | ||
| NOTE 1 - | GENERAL | ||||
| a. | The Reporting Entity | ||||
| t42 IoT Tracking Solutions PLC ("the Company") was incorporated in Jersey on November 28, 2012. The Company and its subsidiaries ("the Group") is a global supplier in the field of advanced, automated real-time systems, specializing in the remote tracking and management of vehicles, containers, and assets. | |||||
| The Company fully owns t42 Ltd., an Israeli company, and Starcom Systems Limited, a company incorporated in Jersey. The Company's shares are admitted for trading on the AIM market of the London Stock Exchange ("AIM"). The address of the official Company office is in Israel at t42 IoT Tracking Solutions offices, which are located at 96 Dereh Ramatayim Street, Hod Hasharon, Israel. The address of the Company's registered office is at Starcom Systems Limited offices, which is: Forum 4, Grenville Street, St. Helier, Jersey, Channel Islands, JE4 8TQ. | |||||
| b. | Definitions in these financial statements: | ||||
| 1. | International Financial Reporting Standards ("IFRS")- Standards and interpretations adopted by the International Accounting Standards Board ("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. | The Group- t42 IoT Tracking Solutions PLC. and the Subsidiaries. | ||||
| 6. | Related Party- As determined in International Accounting Standard No. 24. | ||||
| c. | Operating Turnover Period | |
| The ordinary operating period turnover for the Group is a year. As a result, the current assets and current liabilities include items that are expected and intended to be realized at the end of the ordinary operating turnover period for the Group. | ||
| d. | Functional and Presentation Currency | |
| The consolidated financial statements are presented in U.S. dollars (hereinafter: "dollars") that is the functional currency of the Group and is rounded to the nearest thousands, except when otherwise indicated. | ||
| The dollar is the currency that represents the economic environment in which the Group operates. | ||
| The Group's transactions and balances denominated in dollars are presented at their original amounts. Transactions in foreign currencies are translated to the respective functional currency of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are recognized in profit or loss. | ||
| e. | As of December 31, 2024, the Group has accumulated losses of $17.6 million from operations since inception and has a deficit in working capital of $4.2 million, including loans in the amount of $3.2 million to be repaid or converted during the next 12 months. In addition, the year ended on December 31,2024 resulted in an operating loss of $2.5 million. These factors indicate that there may be an uncertainty as the Company's ability to continue as a going concern. The management continues to focus its efforts to raise additional funds required to continue the Group's operations and negotiating with lenders to find an overall solution in which loans repayments will be postponed over a longer period of time and/or will be converted to equity. The management believes that due to the growth in the Group's activity and other efficient measures taken, the Company will have sufficient cashflow to continue in its activities and meet its liabilities. |
| NOTE 2A - | BASIS OF PREPARATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Statement of compliance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The consolidated financial statements were authorized for issue by the Company's Board of Directors on 27June 2025. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| b. | Basis of Measurement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The consolidated financial statements have been prepared on the historical cost basis, except for financial liabilities at fair value through profit or loss that are stated at fair value. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 2B - | USE OF ESTIMATES AND JUDGMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The preparation of financial statements in conformity with IFRS requires management 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Upon formulation of accounting estimates used in preparation of the Group financial statements, management is required to make assumptions in regard to circumstances and events that are significantly uncertain. Management arrives at these decisions based on prior experiences, various facts, external items and reasonable assumptions in accordance with the circumstances related to each assumption. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about assumptions made by the Group with respect to the future and other reasons for uncertainty with respect to estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in the following notes: Note 7 on Recoverability of development costs. Note 11 on fair value measurement of financial liabilities and derivatives. Note 8 on Recognition of deferred tax assets in respect of tax losses. Determination of fair value Preparation of the financial statements requires the Group to determine the fair value of certain assets and liabilities. Further information about the assumptions that were used to determine fair value is included in the following note 11. When determining the fair value of an asset or liability, the Group uses observable market data as much as possible. There are three levels of fair value measurements in the fair value hierarchy that are based on the data used in the measurement, as follows: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly • Level 3: inputs that are not based on observable market data (unobservable inputs). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 2C - | SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. Basis of consolidation Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control is lost. The accounting policies of subsidiaries are like the policies adopted by the Group. All intra-group transactions, balances, income, and expenses of the companies are eliminated on consolidation. b. Foreign currency and linkage basis Assets and liabilities stated in foreign currency are translated to USD at exchange rates at the reporting date. The income and expenses of operations stated in the foreign currency are translated to USD at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income. Exchange rates and changes in exchange rates during the reported periods are as follows:
c. Financial instruments (i) Financial assets The Group initially recognizes trade receivables and debt instruments issued on the date that they are created. All other financial assets are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. A financial asset is initially measured at fair value plus transaction costs that are directly attributable to the acquisition or issuance of the financial asset. A trade receivable without a significant financing component is initially measured at the transaction price. Financial assets are derecognized when the contractual rights of the Group to the cash flows from the asset expire, or the Group transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset were transferred. When the Group retains substantially all of the risks and rewards of ownership of the financial asset. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. The Group has balances of trade and other receivables and deposits that are held within a business model whose objective is collecting contractual cash flows. The contractual cash flows of these financial assets represent solely payments of principal and interest that reflect consideration for the time value of money and the credit risk. Accordingly, the group's financial assets are measured at amortized cost. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| c. | Financial instruments (cont.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (ii) Non-derivative financial liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-derivative financial liabilities include bank credit and borrowings from banks and others, finance lease liabilities, and trade and other payables. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Group initially recognizes debt securities issued on the date that they originated. All other financial liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities (other than financial liabilities at fair value through profit or loss) are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities are derecognized when the obligation of the Group, as specified in the agreement, expires or when it is discharged or cancelled. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| An exchange of debt instruments having substantially different terms, is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Furthermore, a substantial modification of the terms of an existing financial liability, or an exchange of debt instruments having substantially different terms between an existing borrower and lender, are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability at fair value. In such cases the entire difference between the amortized cost of the original financial liability and the fair value of the new financial liability is recognized in profit or loss as financing income or expense. The terms are substantially different if the discounted present value of the cash flows according to the new terms, including any commissions paid, less any commissions received and discounted using the original effective interest rate, is different by at least ten percent from the discounted present value of the remaining cash flows of the original financial liability In a non-substantial modification in terms of debt instruments, the new cash flows are discounted using the original effective interest rate, and the difference between the present value of the new financial liability and the present value of the original financial liability is recognized in profit or loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (iii) Hybrid financial instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities that are convertible into shares denominated in foreign currency or are linked foreign currency are a hybrid instrument (combined) that is presented fully as a financial liability. The instrument is split into two components for measurement purposes: A liability component without a conversion feature that is measured at amortized cost according to the effective interest method, and a conversion option that is an embedded derivative and is measured at fair value at each reporting date. Interest related to the financial liabilities is recognized in profit or loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Any directly attributable transaction costs are allocated to the liabilities and equity components in proportion to their initial carrying amounts. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (iv) Derivatives that are not serve hedging purposes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The changes in fair value of these derivatives are recognized in profit or loss, as financing income or expense. Inter alia, the Group implements the said accounting treatment to changes in the fair value of the conversion component of convertible loans and warrants granted to lenders. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| d. | Cash and cash equivalents | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value and are used by the Group in the management of its short-term commitments. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| e. | Share capital | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The consideration received from the issuance of a parcel of securities is attributed initially to financial liabilities that are measured each period at fair value through profit or loss, and then to financial liabilities that are measured only upon initial recognition at fair value. The remaining amount is the value of the equity component. Direct issuance costs are attributed to the specific securities in respect of which they were incurred, whereas joint issuance costs are attributed to the securities on a proportionate basis according to the allocation of the consideration from the issuance of the parcel | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| f. | Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, plant and equipment are measured at cost less accumulated depreciation. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, at the following annual rates: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Computers and software | 33 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Office furniture and equipment | 7 - 15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Laboratory equipment | 15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leasehold improvements are depreciated by the straight-line method over the term of the lease, ten-year period, (including option terms) or the estimated useful lives of the improvements, unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| At each balance sheet date, the Group examines the residual value, the useful life and the depreciation method it uses. If the Group identifies material changes in the expected residual value, the useful life or the future pattern of consumption of future economic benefits in the asset that may indicate that a change in the depreciation is required, such changes are treated as changes in accounting estimates. In 2024, no material changes have taken place with any material effect on the financial statements of the Group. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| g. | Intangible assets: Research and development | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognized in profit or loss as incurred. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalized only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends and has sufficient resources to complete development and to use or sell the asset. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The expenditure capitalized includes the cost of material and direct labor that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognized in profit or loss as incurred. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| g. | Intangible assets: Research and development (cont.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capitalized development expenditure is measured at cost less accumulated amortization and accumulated impairment losses. Amortization is calculated using the straight-line method over the estimated useful lives of the assets: between five to ten years. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| At each balance sheet date, the Group reviews whether any events have occurred or changes in circumstances have taken place, which might indicate that there has been an impairment of the intangible assets. When such indicators of impairment are present, the Group evaluates whether the carrying value of the intangible asset in the Group's accounts can be recovered from the cash flows anticipated from that asset, and, if necessary, records an impairment provision up to the amount needed to adjust the carrying amount to the recoverable amount. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| h. | Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On the inception date of the lease, the Group determines whether the arrangement is a lease or contains a lease, while examining whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In its assessment of whether an arrangement conveys the right to control the use of an identified asset, the Group assesses whether it has the following two rights throughout the lease term: (a) The right to obtain substantially all the economic benefits from use of the identified asset; (b) The right to direct the identified asset's use. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1. Lease assets and lease liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contracts that award the Group control over the use of a leased asset for a period of time in exchange for consideration, are accounted for as leases. Upon initial recognition, the Group recognizes a liability at the present value of the balance of future lease payments (these payments do not include certain variable lease payments) and concurrently recognizes a right-of-use asset at the same amount of the lease liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in respect of the lease. Since the interest rate implicit in the Group's leases is not readily determinable, the incremental borrowing rate of the Lessee is used. Subsequent to initial recognition, the right-of-use asset is accounted for using the cost model and depreciated over the shorter of the lease term or useful life of the asset. The Group has elected to apply the practical expedient by which short-term leases of up to one year and/or leases in which the underlying asset has a low value, are accounted for such that lease payments are recognized in profit or loss on a straight-line basis, over the lease term, without recognizing an asset and/or liability in the statement of financial position. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. Lease term | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option if it is reasonably certain that the lessee will or will not exercise the option, respectively | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. Variable lease payments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Variable lease payments that depend on an index or a rate are initially measured using the index or rate existing at the commencement of the lease and are included in the measurement of the lease liability. When the cash flows of future lease payments change as the result of a change in an index or a rate, the balance of the liability is adjusted against the right-of-use asset. Other variable lease payments that are not included in the measurement of the lease liability are recognized in profit or loss in the period in which the event or condition that triggers payment occurs. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| h. | Leases (cont.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4. Depreciation of right-of-use assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| After lease commencement, a right-of-use asset is measured on a cost basis less accumulated depreciation and accumulated impairment losses and is adjusted for re-measurements of the lease liability. Depreciation is calculated on a straight-line basis over the useful life or contractual lease period, whichever earlier, as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Offices - 10years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vehicles - 3 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| i. | Inventories | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the moving average/first-in first-out (FIFO) principle, and includes expenditure incurred in acquiring the inventories and the costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| j. | Impairment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Group recognizes a provision for expected credit losses (provision for doubtful accounts) in respect of financial assets at amortized cost which are mainly trade receivables. The Group has elected to measure the provision for expected credit losses in respect of trade receivables at an amount equal to the full lifetime credit losses of the instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition, and when estimating expected credit losses, the Group considers reasonable and supportable information that is relevant and available with no undue cost or effort. Such information includes quantitative and qualitative information, and an analysis, based on the Group's past experience and informed credit assessment, and it includes forward-looking info. The Group assumes that the credit risk of a financial asset has increased significantly since initial recognition when contractual payments are past due for more than 60 days. The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in full or when the payments of the financial assets are past due for more than 120 days. Credit losses are measured as the present value of the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive. At each reporting date, the Group assesses whether financial assets carried at amortized cost is credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following events: Significant financial difficulty of the borrower, payments being past due, it is probable that the borrower will enter bankruptcy or other financial reorganization. Provisions for expected credit losses of financial assets measured at amortized cost are deducted from the gross carrying amount of the financial assets. The gross carrying amount of a financial asset is written off when the Group does not have reasonable expectations of recovering a financial asset at its entirety or a portion thereof. This is usually the case when the Group determines that the debtor does not have assets or sources of income that may generate sufficient cash flows for paying the amounts being written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group's procedures for recovery of amountsdue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-financial assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The carrying amounts of the Group's non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the assessments of market participants regarding the time value of money and the risks specific to the asset for which the estimated future cash flows from the asset were not adjusted. An impairment loss is recognized if the carrying amount of an asset exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| k. | Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Group recognizes revenue when the customer obtains control over the promised goods or services. The revenue is measured according to the amount of the consideration to which the Group expects to be entitled in exchange for the goods or services promised to the customer, other than amounts collected for third parties. When determining the transaction price the Group takes into account the effects of all relevant elements like: discounts, refunds, credits and an existence of a significant financing component. In order to measure the transaction price, the Group adjusts the amount of the promised consideration in respect of the effects of the time value of money if the timing of the payments agreed between the parties provides the customer a significant financing benefit. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| k. | Revenues (cont.) | ||
| When assessing whether a contract contains a significant financing component, the Group examines, inter alia, the expected length of time between the date the Group transfers the promised goods or services to the customer and the date the customer pays for these goods or services, as well as the difference, if any, between the amount of the consideration promised and the cash selling price of the promised goods or services. When the contract contains a significant financing component, the Group recognizes the amount of the consideration using the discount rate that would be reflected in a separate financing transaction between it and the customer on the contract's inception date. The financing component is recognized as interest income over the period, which are calculated according to the effective interest method. In cases where the difference between the time of receiving payment and the time of transferring the goods or services to the customer is one year or less, the Group applies the practical expedient included in the standard and does not separate a significant financing component. During the year of 2024 the group recognized such interest income in the amount of 70K$. In sales of hardware products (devices) customers obtain control over the products when they are dispatched from the Group's warehouse and or when they are provided to the client's warehouse (depending on the specific agreement between client and the group), therefore the Group recognizes revenue at that time. For Saas services, which mainly include providing access to Group's platform that allows control and monitoring of the use of the Group's products - revenue is recognized over time in the reporting period in which the services are provided, since the customer simultaneously receives and consumes the benefits provided by the Group's performance when the Group provides such services. In certain contracts with customers the Group provides warranty services to the customers according to the contract or as customary in the industry. The warranty services are provided only in order to ensure the quality of the work and compliance with the specifications agreed between the parties, and do not constitute an additional service to the customer. Therefore, the Group does not identify the warranty as a distinct performance obligation but rather accounts for it in accordance with the guidance in IAS 37 and recognizes a provision for warranty at the estimated cost of such services. | |||
| l. | Provisions | ||
| Provisions are recognized when the Group has a current obligation (legal or derived) as a result of a past occurrence that can be reliably measured, that will in all probability result in the Group being required to provide additional benefits in order to settle this obligation. Provisions are determined by capitalization of projected cash flows at a rate prior to taxes that reflects the current market preparation for the money duration and the specific risks for the liability. | |||
| m. | Finance income and expenses | ||||||||||||||||||||||||||||
| Financing income comprises interest income on funds invested, gains on changes in the fair value of financial derivatives at fair value through profit or loss and foreign currency gains. | |||||||||||||||||||||||||||||
| Financing expenses comprise interest expense on borrowings, charges and changes in the fair value of financial derivatives at fair value through profit or loss. Borrowing costs, which are not capitalized to qualifying assets, are recognized in profit or loss using the effective interest method. Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either financing income or financing expenses depending on whether foreign currency movements are in a net gain or net loss position. Interest income or expense is recognized using the effective interest method. Generally, in calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the financial asset or to the amortized cost of the financial liability, as applicable. | |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
| - | ||
| o. | Taxes | |
| Income tax comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss. | ||
| Current taxes Current tax is the expected tax payable (or receivable) on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date. Current taxes also include taxes in respect of prior years and any tax arising from dividends. Deferred taxes Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for temporary differences related to the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognized for unused tax losses and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax assets that were not recognized are reevaluated at each reporting date and recognized if it has become probable that future taxable profits will be available against which they can be utilized. Offset of deferred tax assets and liabilities Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their current tax assets and liabilities will be realized simultaneously | ||
| p. | Earnings per Share | |
| The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, after adjustment for the effects of all dilutive potential ordinary shares, which comprise convertible loans, warrants and share options granted to employees. | ||
| NOTE 2D - | CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES | ||||||
| There were no new standards or amendments that are relevant for the Group which are effective for annual periods beginning on or after 1 January 2024. New significant relevant standards not yet adopted: IFRS 18, Presentation and Disclosure in Financial Statements This standard replaces IAS 1, Presentation of Financial Statements. The purpose of the standard is to provide improved structure and content to the financial statements, particularly the income statement. The standard includes new disclosure and presentation requirements that were taken from IAS 1, Presentation of Financial Statements, with small changes. As part of the new disclosure requirements, companies will be required to present two subtotals in the income statement: operating profit and profit before financing and taxes. Furthermore, for most companies, the results in the income statements will be classified into three categories: operating profit, profit from investments and profit from financing. In addition to the changes in the structure of the income statements, the standard also includes a requirement to provide separate disclosure in the financial statements regarding the use of management-defined performance measures (non-GAAP measures). Furthermore, the standard adds specific guidance for aggregation and disaggregation of items in the financial statements and in the notes. The standard will encourage companies to avoid classifying items as 'other' (for example, other expenses), and using this classification will lead to additional disclosure requirements. The standard is effective from annual reporting periods beginning on or after 1 January 2027 with earlier application being permitted. The Group is examining the effects of the standard on its financial statements with no plans for early adoption. | |||||||
| NOTE 3 - | TRADE RECEIVABLES | ||||||
| December 31 | |||||||
| 2024 | 2023 | ||||||
| Open accounts | 439 | 560 | |||||
| Income to receive | 460 | 353 | |||||
| 899 | 913 | ||||||
| Provision for doubtful accounts (credit loss) | (23) | (21) | |||||
| 876 | 892 | ||||||
| Income to receive - long term | (136) | - | |||||
| 740 | 892 | ||||||
| The movement in the provision for doubtful accounts respect of trade receivables during the year was as follows: | ||||
| 2024 | 2023 | |||
| Balance as at January 1 | 21 | 9 | ||
| Change from write-off of financial assets | (42) | (9) | ||
| Allowance for doubtful accounts | 44 | 21 | ||
| Balance as of December 31 | 23 | 21 | ||
| December 31, 2024 | |||
| Not past due | 570 | ||
| Past due 1-30 days | 94 | ||
| Past due 31-60 days | 43 | ||
| Past due 61-90 days | 62 | ||
| Past due more than 90 days (*) | 130 | ||
| Total | 899 |
| NOTE 4 - | INVENTORY | |||||
| December 31 | ||||||
| 2024 | 2023 | |||||
| Raw materials | 959 | 1,076 | ||||
| Finished goods | 158 | 363 | ||||
| 1,117 | 1,439 | |||||
| NOTE 5 - | BANK DEPOSIT |
| A bank deposit sums of $9 and $8 as of December 31, 2024 and 2023, respectively, serves as a security deposit for repayment of a long-term bank loan (see note 10). The deposit bears negligible interest. |
| NOTE 6 - | PROPERTY, PLANT AND EQUIPMENT | ||||||||||||||||
| Computers and Software | Furniture and Equipment | Laboratory Equipment | Leasehold Improvements | Total | |||||||||||||
| Cost: | |||||||||||||||||
| c | Balance as of January 1, 2024 | 240 | 159 | 306 | 345 | 1,050 | |||||||||||
| Additions during the year | 4 | - | 4 | 2 | 10 | ||||||||||||
| Balance as of December 31, 2024 | 244 | 159 | 310 | 347 | 1,060 | ||||||||||||
| Accumulated Depreciation: | |||||||||||||||||
| Balance as of January 1, 2024 | 221 | 117 | 220 | 70 | 628 | ||||||||||||
| Depreciation during the year | 14 | 14 | 35 | 28 | 91 | ||||||||||||
| Balance as of December 31, 2024 | 235 | 131 | 255 | 98 | 719 | ||||||||||||
| Net book value December 31, 2024 | 9 | 28 | 55 | 249 | 341 | ||||||||||||
| Computers and Software | Furniture and Equipment | Laboratory Equipment | Leasehold Improvements | Vehicles | Total | ||||||||||||
| Cost: | |||||||||||||||||
| c | Balance as of January 1, 2023 | 240 | 156 | 299 | 340 | 156 | 1,191 | ||||||||||
| Additions during the year | - | 3 | 7 | 5 | - | 15 | |||||||||||
| Disposal during the year | - | - | - | - | (156) | (156) | |||||||||||
| Balance as of December 31, 2023 | 240 | 159 | 306 | 345 | - | 1,050 | |||||||||||
| Accumulated Depreciation: | |||||||||||||||||
| Balance as of January 1, 2023 | 203 | 109 | 181 | 31 | 121 | 645 | |||||||||||
| Depreciation during the year | 18 | 8 | 39 | 39 | - | 104 | |||||||||||
| Disposal during the year | - | - | - | - | (121) | (121) | |||||||||||
| Balance as of December 31, 2023 | 221 | 117 | 220 | 70 | - | 628 | |||||||||||
| Net book value December 31, 2023 | 19 | 42 | 86 | 275 | - | 422 | |||||||||||
| Net book value as of January 1, 2023 | 37 | 47 | 118 | 309 | 35 | 546 | |||||||||||
| NOTE 7 - | INTANGIBLE ASSETS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | 2,018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additions - capitalized development costs | 142 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 2,160 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Amortization and impairment loss: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1 ,2024 | (1,066) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization during the year | (213) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairmentduring the year | (122) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | (1,401) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net book value as of December 31, 2024 | 759 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2023 | 1,884 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Additions - capitalized development costs | 134 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 2,018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Amortization: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2023 | (863) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization during the year | (203) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | (1,066) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net book value as of December 31, 2023 | 952 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization is calculated using the straight-line method over the estimated useful lives of the assets, 5-10 years. Recoverability of development costs The carrying amount of certain intangible assets representing development costs for a few products is $ 291,000. An impairment test was triggered during the year because of changes in demand for certain versions of those products. The recoverable amount of those products was estimated by the company based on their value in use, determined by discounting the future cash flows generated from the continuing use of those products using a discount rate of 16% and a growth rate of 5%-15% in the years 2025-2026. The carrying amount of those products was determined to be higher than their recoverable amount of $122,000, and an impairment loss of $122,000 was recognized. The impairment loss is included in other expenses. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 8 - | TAXES ON INCOME | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Israeli taxation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1. | The Israeli corporate tax rate for 2024and 2023is 23%. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | Tax Benefits from the Encouragement of Capital Investments Law, 1959 ("The Encouragement Law") | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| t42 Israel was determined in the past as a company which is entitled to a reduced tax rate. However, the Group does notexpect to pay taxes in Israel by t42 Israel in the next coming years due to carryforward tax losses. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. | t42 Israel has carryforward operating tax losses of approximately NIS 49 million as of December 31, 2024(NIS 43.8 million as of December 31, 2023). Since there is a significant uncertainty regarding the existence of taxable revenues in the near future, deferred tax assets were not recognized.The company recognized deferred tax assets for carryforward tax losses up to the amount of deferred tax liabilities. t42 Israel has been assessed by the Income Tax Authorities up to and including the year 2019. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| b. | Jersey taxation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable income of the Company and Starcom Jersey is subject to tax at the rate of zero percent for the years 2024and 2023. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| c. | Reconciliation between the theoretical profit before taxes and the tax expense | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The difference between the statutory tax rate (23%) and the effective tax rate (0%) is primarily due tonon-recognitionof deferred tax assets and liabilities on losses and other temporary differences. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 10 - | LONG-TERM BANK LOAN, NET OF CURRENT MATURITIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1. | Composition: | December 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term liability | 87 | 152 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: current maturities | (74) | (64) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 13 | 88 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | Aggregate maturities of long-term loans for years subsequent to December 31, 2024are as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year | 74 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Second year | 13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 87 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. | Additional information regarding long-term loans: | ||||||||
| Date Received | Original amount Received NIS (U. S. dollars) In thousands | Annual Interest Rate | Loan Terms and Maturity Dates | Interest Payment Terms | |||||
| Dec 9, 2020 | 1,000 ($310) | Prime + 1.5 | 48 equal monthly installments of principal and interest (once year grace for principal) * | Monthly basis | |||||
| The loan is a state-guaranteed loan, received by t42 Israel as assistance due to the spread of the Covid -19 virus. Per the loan's conditions, interest for the first year was paid by the State of Israel. As of December 31, 2024 the interest prime rate was6%. | |||||||||
| See also Note 13 regarding charges. | |||||||||
| NOTE 11 - | CONVERTIBLE LOANS AND FINANCIAL LIABILITIES IN FAIR VALUE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - - NOTE 11 - | a. During July 2023 the Company received a convertible loan, total amount of $1.3m provided by Ewave Mobile Ltd. The loan bears interest of 10% per annum to be paid on a monthly basis. 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, into such number of 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. On 30 September 2024 an addendum with the lender was signed, to extend the original due date from 20 January 2025 to May 20, 2025. The Company examined the discounted present value of the future cash flows of the loan according to the new maturity date discounted at the original effective interest rate (before the change in terms) and found that it was different by more than 10% from the discounted present value of the remaining cash flows of the loan before the change in terms. Therefore, the Company treated the change in terms as a substantial modification in terms of debt and accordingly derecognized the original loan components on the date of the change and recognized the loan components under the new terms at their fair values as of that date. The difference between the original loan components that were derecognized and the fair value of the components on the date of the change in terms amounted toapproximately $ 191,000. It was recordedas finance income in the profit and loss statement. On the day of recognition, the loan amount ($1.3M) was divided into components: a conversion component and anti-dilution component which are measured at fair value, and a residual component of liability of the loan in amortized cost. As of December 31, 2024 the values of components are as follows: · Conversion component of the convertible loan and anti-dilution liability component at fair value - $107k. · Amortized cost of a convertible loan$1,083K. An effective interest rate was calculated for the liability component of the loan, based on its amortization table. After deducting the conversion and anti-dilution component it is 79.47% per annum. b. During December 2021, The Company received third parties loans in the total amount of $1,251 thousand (£925K) in the form of convertible loans enabling the lenders to convert the loans at an exercise price of £0.15 per share at any time, subject to compliance with the AIM Rules, Takeover Code and MAR regulations, up to December 31, 2023. The convertible loans bore interest at the rate of 8% per annum calculated by reference to the principal amount of the convertible loans. If not converted, the loans were supposed to be repayable on December 31, 2023. In addition, the lenders received total amount of 3,083,334 warrants to subscribe further shares at an exercise price of £0.19-0.17 per share. Any unexercised warrant expires at the end of three-years from grant. As of 31 December 2023, the loan was not repaid and in February 2024 the company successfully negotiated the extension of the maturity date of the loan (original principal of £925K and accrued interest of £71K) until 20 January 2025. The following terms have been agreed with the lenders as part of the extension: · The interest payable on the loan shall be 10% per annum to be paid in a monthly basis, commencing from 1 January 2024. · Conversion: the lenders will have the right to convert, at their discretion, the amount of the loan into the number of company shares ("Conversion Shares") corresponding to 28.82% of the company issued ordinary share capital immediately following the date of conversion, if the aggregate loan amount is converted, and into a pro-rata number of Conversion Shares in case of a partial conversion. The lenders shall not issue a conversion notice if this would result in a breach of Rule 9 of the UK Takeover Code. · Anti-dilution: the agreement includes anti-dilution provisions to protect the equity interest percentage of the lenders, so that in the event of the exercise or conversion of existing warrants, options, or other instruments convertible into the company's ordinary shares (subject to certain exceptions), the lenders will be issued for no additional consideration such number of shares such that, together with the shares already held, each lenders percentage shareholding shall remain the same. · Security: security provided by way of parent guarantee, fixed, and floating charges over the assets of t42. The floating charge ranks pari passu with the floating charge provided to Ewave under the Ewave loan and the fixed charge security over the intellectual property rights of t42 is second ranking, subordinated only to the fixed charge in favor of Ewave under the Ewave loan. · Conversion/Repayment Event: In the event of a certain major transaction or financing investment, the lender may elect for conversion or repayment of the loan. · Cancellation of warrant: 1,541,667 outstanding 3-year warrant granted to the lenders in December 2021 have been cancelled. In conjunction with the agreement, the company also entered into an addendum with Ewave, pursuant to which Ewave consented to the loan extension and will also have the same conversion rights in the event of a major transaction. On 30 September 2024 an addendum with the lenders was signed, to extend the due date from 20 January 2025 to May 20, 2025, with no other changes in the loan's terms. The Company examined the discounted present value of the future cash flows of the loan based on the new maturity date discounted at the original effective interest rate (before the change in terms) and found that it does not differ by more than 10% from the discounted present value of the remaining cash flows of the loan before the change in terms. Accordingly, the original loan components were not derecognized and no new liability components were recognized at fair value. A loss of $1,000 from the adjustment to the present value was recognized as finance expenses in the profit and loss statement. On the day of recognition, the loan amount (£996K) was divided into components: a conversion component and anti-dilution component which are measured at fair value, and a residual component of liability of the loan measured in amortized cost. As of December 31, 2024, the values of components are as follows: · Conversion component of the convertible loan and anti-dilution liability component at fair value - $97k. · Amortized cost of a convertible loan - $1,313K. An effective interest rate was calculated for the liability component of the loan, based on its amortization table. After deducting the conversion and anti-dilution component it is 10.7% per annum. c. 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 provides, inter alia, for interest at 2% 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 % of the loan, and a deposit with CSS of 3,000,000 shares. In addition, warrants for a total of 2,976,185 company's shares have been issued to CSS, exercisable at 7p per share over 5 years. During the year 2024 the loan and accrued interest were fully paid. As of December 31, 2024 the fair value of the warrants is $34k. d. In December 2022, the Company issued a £265,000 convertible loan note to a supplier, to be applied in lieu of settlement of a supplier debt, assisting with the Company's cashflow management. The loan bears interest at 3% per annum, payable quarterly, and is repayable by 31 December 2024. The loan is convertible at 9p per share at the discretion of the holder (In the event that the company does not comply with the loan terms, the conversion price will be updated according to the mechanism stipulated in the loan agreement). In addition, the Company had the right to enforce conversion of £100,000 of the loan in the event share price exceeds 12p and full loan balance if the share price exceeds 15p. As of December 31, 2024 the loan was not paid and its balance (including accrued interest) is $349k. After the balance sheet date, a binding oral agreement was reached between the Company and the supplier's representative, according to which the supplier will waive all remedies to which it is entitled in the case of the Company's failure to repay the loan, as well as waiving the option to convert the loan into shares, so that starting January 1, 2025, the loan will become a debt bearing annual interest (3%) only and will be repaid in cash from time to time in an agreement to be reached by the parties. e. As of December 31, 2024, the fair values of the Warrants and the components relative to the two convertible loans were measured by an independent appraiser under the main assumptions as follows: Stock Market Value £0.0325 Expected term 3.3 years Expected average volatility 79.2% Expected dividend yield 0% Risk-free interest rate 4.19% The Company also assumed the probability that the lenders will convert the loans into shares on May 20, 2025 is approximately 60% and that in case that the loans are not converted on this date, the Company will not agree to an extension of the loan period (including granting the lenders the conversion option) beyond December 31, 2025. The level of the fair value hierarchy is level three. The table hereunder presents a reconciliation from the opening balance to the closing balance of financial liabilities carried at fair value level 3 of the fair value hierarchy:
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 12 - | SHORT-TERM BANK CREDIT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bank overdraft (bears an average annual interest rate of 10%) | 13 | 42 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term bank loan (bears an annual interest rate of 9.5%) | 55 | 103 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 68 | 145 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 13 - | CHARGES | ||
| In respect of bank credit and loans set out in Notes 12 and 10 above and convertible loans set out in Note 11 above, charges were placed as follows: | |||
| 1. | A charge on the t42 Israel's IPs andIntangibleassets, | ||
| 2. | A floating pledge on the assets of t42 Israel. | ||
| 3. | A guarantee of the company in accordance with certain t42 Israel's bank liabilities up to $10M . | ||
| 4. | A pledge on a bank deposit of t42 Israel. See note 5. | ||
| 5. | A pledge on a certain bank account of t42 Israel up to 180K NIS (approx. $49k) | ||
| 6. | A Secondary fixed and floating pledge on t42 assets. | ||
| NOTE 14 - | EQUITY | ||||||||
| a. | Common stock of no-par value, issued and outstanding: | ||||||||
| As of December 31, | |||||||||
| 2024 | 2023 | ||||||||
| 55,126,357 | 54,917,055 | ||||||||
| b. | Company share grants to its holder voting rights, rights to receive dividends and rights to net assets upon dissolution. | During December 2022, the Company raised £90 ($100) thousand before expensesthrough a placing of 1,000,000 Ordinary Shares. | |||||||
| c. | In October 2023, 530,233 ordinary shares of no-par value were issued following the exercise of options by a director. In January 2024, 209,302 ordinary shares of no-par value were issued following the exercise of options by a director at nil cost. | ||||||||
| d. | Share-based payment The following table lists the number of share options and warrants and the exercise prices of such during the current and prior years: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) The balances as of December 31 2024 and 2023 include 2,976,185 options granted to CSS (see Note 11C). (2) The remaining warrants, amounting to 4,607,829, are warrants granted to employees, managers and directors of the Company as share-based compensation in a number of grants in previous years, the most recent of which was in 2021. The warrants vested over three years from the date of their grant until May 2024 and are exerciseable for consideration of £0-£0.40 per warrant over 10 years from their date of maturity (July 2026-May 2034). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 15 - | COST OF REVENUES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases and manufacturing | 1,687 | 1,184 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Communication Suppliers and Others | 343 | 368 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization | 213 | 187 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in inventory | 322 | 143 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,565 | 1,882 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 16 - | GENERAL AND ADMINISTRATIVE EXPENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| a. | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salaries and related expenses (2) | 907 | 978 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Professional services (1) | 395 | 138 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Doubtful accounts and bad debts | 23 | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization and Depreciation | 310 | 267 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Office maintenance | 198 | 187 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Car maintenance (2) | 55 | 83 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,888 | 1,665 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) (1) Including share-based payment todirectors and senior managementin the amounts of $5k and $7k for the years ended December 31, 2024 and 2023, respectively. See also Note 14d. (2) (2) Including CEO's salaries and related expenses in the amount of $216K (2023: $195K). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| b. Average Number of Staff Members by Category: | ||||
| Year Ended December 31, | ||||
| 2024 | 2023 | |||
| Sales and marketing | 5 | 4 | ||
| Research and development | 3 | 3 | ||
| General and administrative | 11 | 11 | ||
| 19 | 18 | |||
| NOTE 17 - | FINANCE INCOME | |||||||||||||
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Exchange rate differences, net | 72 | 27 | ||||||||||||
| Gain from modification of debt terms (see note 11 A, B) | 190 | - | ||||||||||||
| Changes in fair value of financial liabilities | - | 577 | ||||||||||||
| 262 | 604 | |||||||||||||
| NOTE 18 - FINANCE EXPENSES | ||||||||||||||
| Loans interest | (768) | (749) | ||||||||||||
| Bank charges | (37) | (73) | ||||||||||||
| Interest to suppliers and institutions | (71) | (5) | ||||||||||||
| Interest to a related party | (10) | (10) | ||||||||||||
| Changes in the fair value of financial liabilities (See note 11E) | (193) | - | ||||||||||||
| Others | (47) | (65) | ||||||||||||
| (1,126) | (902) | |||||||||||||
| Net finance expenses | (864) | (298) | ||||||||||||
| NOTE 19 - | SALES AND MARKETING | |||||||||||||
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Salaries and related expenses | 232 | 390 | ||||||||||||
| Sales commissions | 49 | 53 | ||||||||||||
| Travel expenses | 34 | 14 | ||||||||||||
| Others | 51 | 28 | ||||||||||||
| 366 | 485 | |||||||||||||
| NOTE 20 - | LOSS PER SHARE | ||||
| Weighted average number of shares used in computing basic and diluted loss per share: | |||||
| Year Ended December 31, | |||||
| 2024 | 2023 | ||||
| 55,117,182 | 54,064,060 | ||||
| NOTE 21 - | RELATED PARTIES | ||||||||||
| a. | The related parties that own shares of the company are: | ||||||||||
| Mr. Avraham Hartmann who serves as a director and CEO (8.40%) , Mr. Uri Hartmann, a son of Mr. Avi Hartmann, who serves as CTO (5.57%) and Mr. Igor Vatenmacher, who served as a CFO during the reported periods and director (0.82%). | |||||||||||
| b. | Current debit (credit) balances: | December 31, | |||||||||
| 2024 | 2023 | ||||||||||
| Current account | |||||||||||
| Avi Hartmann | 36 | 52 | |||||||||
| Uri Hartmann | (585) | (570) | |||||||||
| Total Credit Balance | (549) | (518) | |||||||||
| Loans to (from) | |||||||||||
| Avi Hartmann | - | 6 | |||||||||
| Uri Hartmann | (221) | (227) | |||||||||
| Total Loans | (221) | (221) | |||||||||
| (770) | (739) | ||||||||||
| c. | Shareholders' current credit balances are mainly related to deferred salaries. Loans from shareholders accrue 4% annual interest. | ||||||||||
| d. | Transactions: | Year Ended December 31, | |||||||||
| 2024 | 2023 | ||||||||||
| Total salaries and related expenses for Mr. Avi Hartmann and Mr. Uri Hartmann, including car maintenance (1) | 426 | 339 | |||||||||
| Salaries and related expenses for Mr. Igor Vatenmacher, including car maintenance | 171 | 161 | |||||||||
| Non-executive directors' fees (2 persons), (2) | 108 | 96 | |||||||||
| Total share-based payment (5 persons) | 4 | 2 | |||||||||
| Interest to related parties | 10 | 10 | |||||||||
| (1) Mr. Uri Hartman's salaries and related expenses are included in R&D expenses (2024: 210K$), Regarding Mr. Avi Hartmann - see note 16(a)(2). (2) As of 31December 2024 the company owes them 204K$. | |||||||||||
| e. | Mr. Avi Hartmann and Mr. Uri Hartmann are each entitled to benefits, in addition to a monthly salary of 12K$, that include inter alia a vehicle, a cellular phone, a pension fund and a professional enrichment fund. In addition, each of them is entitled to reimbursement for expenses incurred in connection with their duties and 22 days of annual leave. Each of the Company and the aforementioned may notify the other party of the termination by giving 6 months' notice. The Company has a right to offset any debt of the aforementioned against any compensation due to them. | ||||||||||
| NOTE 22- | FINANCIAL INSTRUMENTS AND MANAGEMENT OF FINANCIAL RISKS | |||
| a. | Financial Risk Factors: | |||
| The Group's operations expose it to a variety of financial risks , mainly Currency, Credit and Liquidity risks. The comprehensive Group plan for risk management focuses on the fact that it is not possible to predict financial market behavior and an effort to minimize possible negative effects on Company financial performance. | ||||
| 1) | Exchange rate risk | |||
| The Group is exposed to currency risk on sales, purchases, receivables and borrowings that are denominated in a currency other than the respective functional currency of Group, the US dollar (USD). While most of the Group's revenues, purchases, and manufacturing costs are denominated in dollar, operating expenses (primarily salaries and overhead) are paid in NIS and some of the headquarters' expenses are paid in GBP. Changes in the exchange rates of the NIS and the GBP against the dollar can cause losses for the Company. | ||||
| 2) | Credit risk | |||
| The Group's credit risk arises principally from the Group's receivables from customers. The carrying amounts of financial assets and contract assets represent the Group's maximum credit risk exposure. The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group's customer base, including the default risk of the industry and region in which customers operate, as these factors may have an influence on credit risk. See also note 24. The Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, and usually an advanced payment of 25-50% is required before shipping. The Group holds cash and cash equivalents mainly with big banks in Israel and therefore believes its cash and cash equivalents have low credit risk. | ||||
| 3) | Liquidity risks | |||
| Cash flow forecasts are determined on both an individual company basis and a consolidated basis. The Company examines current forecasts of its liquidity requirements so as to make certain that there is sufficient cash for its operating needs, and it is careful at all times to have enough cash that the Company does not exceed its credit limits. These forecasts take into consideration matters such as the Company's plan to use a bank short term credit for financing its activity and the group's liabilities. The following are the contractual maturities of financial liabilities at undiscounted amounts and based on the future rates forecasted at the reporting date, including estimated interest payments. | ||||
| December 31, 2024 | ||||||||||||
| NIS | U.S. Dollar | GBP | Euro | Total | ||||||||
| Unlinked | Variable Interest | Unlinked | ||||||||||
| Financial Assets: | ||||||||||||
| Cash and cash equivalents | 35 | - | 108 | - | 4 | 147 | ||||||
| Short-term deposit | - | 9 | - | - | - | 9 | ||||||
| Trade receivables, net | 91 | - | 721 | - | 64 | 876 | ||||||
| Other accounts receivable | (175) | - | 205 | - | - | 30 | ||||||
| Financial Liabilities: | ||||||||||||
| Short-term bank credit | - | (68) | - | - | - | (68) | ||||||
| Long term bank Loan | - | (87) | - | - | - | (87) | ||||||
| Trade payables | (702) | - | (84) | (319) | (1) | (1,106) | ||||||
| Other accounts payable | (435) | - | - | - | - | (435) | ||||||
| Leasehold liabilities | (972) | - | - | - | - | (972) | ||||||
| Related parties | (983) | (245) | 458 | - | - | (770) | ||||||
| Amortized cost of other loans | - | - | (1,082) | (1,662) | - | (2,744) | ||||||
| Financial liabilities in fair value | - | - | (141) | (97) | - | (238) | ||||||
| (3,141) | (391) | 185 | (2,078) | 67 | (5,358) | |||||||
| December 31, 2023 | ||||||||||||
| NIS | U.S. Dollar | GBP | Euro | Total | ||||||||
| Unlinked | Variable Interest | Unlinked | ||||||||||
| Financial Assets: | ||||||||||||
| Cash and cash equivalents | 10 | - | 172 | - | 4 | 186 | ||||||
| Short-term deposit | - | 35 | - | - | - | 35 | ||||||
| Trade receivables, net | 45 | - | 812 | - | 35 | 892 | ||||||
| Other accounts receivable | 27 | - | - | - | - | 27 | ||||||
| Financial Liabilities: | ||||||||||||
| Short-term bank credit | - | (42) | - | - | - | (42) | ||||||
| Short-term bank loan Non-bank loans | - - | (103) - | - (1,395) | - - | - - | (103) (1,395) | ||||||
| Trade payables | - | (489) | (200) | (153) | (2) | (844) | ||||||
| Other accounts payable | (433) | - | - | - | - | (433) | ||||||
| Leasehold liabilities | - | (982) | - | - | - | (982) | ||||||
| Related parties | - | (739) | - | - | - | (739) | ||||||
| Long-term loans from banks | - | (152) | - | - | - | (152) | ||||||
| Financial liabilities of convertible loans | - | - | (1,202) | - | - | (1,202) | ||||||
| (351) | (2,472) | (1,813) | (153) | 37 | (4,752) | |||||||
| Analysis of Sensitivity to Changes in the Exchange Rate of the U.S. Dollar Against the NIS: | ||||||||||||||||||||
| 5% Increase in Exchange Rate | 5% Decrease in Exchange Rate | |||||||||||||||||||
| For the Year Ended December 31 | ||||||||||||||||||||
| 2024 | (141) | 141 | ||||||||||||||||||
| 2023 | (134) | 134 | ||||||||||||||||||
| Analysis of Sensitivity to Changes in the Exchange Rate of the U.S. Dollar Against the Euro: | ||||||||||||||||||||
| 5% Increase in Exchange Rate | 5% Decrease in Exchange Rate | |||||||||||||||||||
| For the Year Ended December 31 | ||||||||||||||||||||
| 2024 | 3 | (3) | ||||||||||||||||||
| 2023 | 2 | (2) | ||||||||||||||||||
| Analysis of Sensitivity to Changes in the Exchange Rate of the U.S. Dollar Against the GBP: | ||||||||||||||||||||
| 5% Increase in Exchange Rate | 5% Decrease in Exchange Rate | |||||||||||||||||||
| For the Year Ended December 31 | ||||||||||||||||||||
| 2024 | (104) | 104 | ||||||||||||||||||
| 2023 | (8) | 8 | ||||||||||||||||||
| As of 31 December 2024, | ||||||||||||
| Carrying amount | Up to six month | 6-12 months | 1-2 years | 3-4 years | Total contractual cash flows | |||||||
| Related parties | 770 | - | 780 | - | - | 780 | ||||||
| Trade and other payables | 1,541 | 540 | 1,001 | - | - | 1,541 | ||||||
| Long term bank loan (1) | 87 | 39 | 38 | 13 | 91 | |||||||
| Short term bank credit (1) | 68 | 70 | - | - | - | 70 | ||||||
| Other loans (2) | 2,744 | 3,061 | - | - | - | 3,061 | ||||||
| 5,210 | 3,710 | 1,819 | 13 | - | 5,543 | |||||||
| e. | Fair value | |
| As of December 31, 2024, there was no significant difference between the carrying amounts and fair values of the Company's financial instruments that are presented in the financial statements not at fair value. See also note 11E regarding financial instruments measured in fair value. |
| NOTE 23- | LEASES |
| Group as a lessee | |
| The Group has lease contracts for offices and 9 vehicles used in its operations. The lease of the offices is for5years with an extension option of another 5 years, while vehicles leases are for 3 years. | |
| Below are the carrying amounts of right-of-use assets recognized and the movements during the period: | |
| Offices | Vehicles | Total | ||||
| Balance at January 1, 2023 | 941 | 40 | 981 | |||
| Additions | - | 231 | 231 | |||
| Depreciation expenses | (104) | (64) | (168) | |||
| Balance at December 31, 2023 | 837 | 207 | 1,044 | |||
| Additions | - | 66 | 66 | |||
| Effect of Index linkage | 148 | - | 148 | |||
| Depreciation expenses | (122) | (97) | (219) | |||
| Balance at December 31, 2024 | 863 | 176 | 1,039 |
| Below are the carrying amounts of lease liabilities and the activities during the period: | |
| 2024 | 2023 | |||
| As at January 1 | (982) | (902) | ||
| Additions | (66) | )231( | ||
| Effect of Index linkage | (148) | - | ||
| Exchange rate differences | 4 | 24 | ||
| Payments | 191 | 127 | ||
| Others | 29 | - | ||
| Balance at December 31 | (972) | (982) | ||
| Current liabilities | (202) | (168) | ||
| Non-Current liabilities | (770) | (814) |
| Maturity analysis - Contractual discounted cash flows (*) | |||||||
| |||||||
| (*) including potential future payments related to the extension period. | |||||||
| The following are the amounts recognized in profit or loss: |
| 2024 | 2023 | |||
| Depreciation expenses of right-of-use assets | (219) | (168) | ||
| Interest expenses on lease liabilities | (54) | (55) | ||
| Total amount recognized in profit or loss | (273) | (223) |
| The Group had total cash outflows for leases of $242 in 2024 ($127 in 2023). The Group also had non-cash additions to right-of-use assets and lease liabilities of $66 in 2024 ($231 in 2023) | ||||||
| a. | Major customers' data as a percentage of total consolidated revenues to unaffiliated customers: | |||||
| NOTE 24 - | CUSTOMERS AND GEOGRAPHIC INFORMATION | |||||
| Year Ended December 31, | ||||
| 2024 | 2023 | |||
| Customer A | 34% | 8% | ||
| Customer B | 6% | 5% | ||
| Customer C | 6% | 4% | ||
| b. | Breakdown of consolidated revenues to unaffiliated customers according to geographic regions |
| Year Ended December 31, | ||||
| 2024 | 2023 | |||
| Latin America | 13% | 11% | ||
| Europe | 8% | 12% | ||
| Africa | 20% | 29% | ||
| Asia | 3% | 3% | ||
| Middle East | 42% | 27% | ||
| North America | 14% | 18% | ||
| Total | 100% | 100% | ||
| NOTE 25 - | SEGMENTATION REPORTING |
| The Group has two reportable segments: Hardware and SaaS, which form the Group's strategic business units. | ||
| The strategic business units offer different products and services and the allocation of resources and evaluation of performance are managed separately because they require different resources. For each of the strategic business units, the Group's CEO reviews internal management reports on a quarterly basis. The accounting policies of revenue recognition for each segment are described in Note 2C(k). There is no inter-segment transaction. | ||
| Performance is measured based on segment gross profit (loss) as included in reports that are regularly reviewed by the CEO. Segment gross profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Information regarding the results of each segment is included below: |
| Hardware | SaaS | ||||
| Year Ended 31.12.2024: | |||||
| Segment revenues | 2,036 | 2,122 | |||
| Cost of revenues | (2,182) | (383) | |||
| Gross profit (loss) | (146) | 1,739 | |||
| Year Ended 31.12.2023: | |||||
| Segment revenues | 2,019 | 1,986 | |||
| Cost of revenues | (1,611) | (271) | |||
| Gross profit | 408 | 1,715 |
| NOTE 26 - | SIGNIFICANT EVENTS AFTER THE REPORTED PERIOD a. Further to thedetails of Note 11 A and B in connection with the convertible loans provided to the Company, the Company defaulted on the loans on May 20, 2025. As of the date of approval of the financial statements, the Company is negotiating with the lenders , and has received non-binding proposals, regarding the extension of the loan period and the manner of their repayment/conversion into shares. b. In February 2025 the Company completed a capital raising in a total (gross) amount of £262,500, in which the Company issued to investors 10,500,000 shares of the Company and 10,500,000 warrants. The warrants are convertible into shares of the Company in a ratio of 1:1 in exchange for £0.05 per warrant for a period of 3 years from the date of their issuance. The proceeds of the offering, net of issuance expenses, amounted to approximately £253,375. |