30 September 2024
t42 IoT Tracking Solutions
Plc
("t42",
the "Company" or, together with its subsidiaries, the
"Group")
Interim
Results
t42 IoT Tracking Solutions plc
(AIM: TRAC) ("t42" or the "Company"), which provides real-time
tracking, security, and monitoring solutions for the global supply
chain, logistics, container, and freight market, announces its
unaudited results for the six months ended 30 June 2024.
Business Overview Highlights
•
We are on track to achieve 100% year-over-year
growth in Lokies revenues, reflecting strong demand and market
confidence in our products.
•
Sales agreements announced since the beginning of
the year are progressing as expected, contributing to our solid
commercial performance.
•
The maturity date of the Company's two
outstanding convertible loan notes ("CLNs") have been extended for
an additional four months to May 2025 on unchanged terms, enhancing
financial flexibility.
H1 Financials Highlights
•
Revenues increased to $2.0m (H1 2023:
$1.7m).
•
Adjusted EBITDA loss improved to $25,000 (H1
2023: loss of $248,000).
•
Gross margin for the period was stable at 45% (H1
2023: 48%).
•
Operating expenses decreased to $1.2m (H1 2023:
$1.3m).
Avi Hartmann, CEO of t42, commented:
"2024 has already marked a significant turning point for t42,
with new supply agreements surpassing those of the entire previous
year by mid-year, demonstrating strong market demand for our Lokies
smart locks and other innovative solutions. The recent extension of
both CLN facilities for an additional four months, under unchanged
terms, enhances our financial flexibility to support ongoing
growth. Our focus on improving product performance, particularly in
energy efficiency, continues to resonate with clients and adds
substantial value to their operations. With this momentum, we are
confident in our ability to drive innovation, expand our market
presence, and lead the container tracking industry in the coming
years."
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 / Robert Collins
|
020 7409
3494
|
|
Peterhouse Capital Limited (Joint Broker)
Lucy Williams / Charles Goodfellow
/ Eran Zucker
|
020 7469
0930
|
The information contained within this announcement is deemed
by the Company to constitute inside information pursuant to Article
7 of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as
amended.
CHAIRMAN'S STATEMENT
We are pleased to report T42's
unaudited results for the half year ended 30 June 2024 ("H1 2024").
Total revenues reached $2.0 million, up from $1.7 million in H1
2023. We expect to fulfill orders under the agreements announced
earlier this year during the remainder of the second half. The
gross margin for the period remained stable at 45%, compared to 48%
last year. We continue to deliver on these agreements, along with
additional long-term and ad-hoc orders, with a strong focus on the
shipping container market.
A few years ago, we made a
significant strategic shift within the Company, transitioning our
focus from vehicle tracking systems to container tracking and
monitoring solutions. This transformation not only led to the
rebranding of the Company to t42 but also marked a fundamental
change in our core business. We successfully retained our excellent
team, while at the same time, we developed new products, identified
new customers, and built innovative revenue models.
In a short period, we have
demonstrated that we are on the right track, and the upward trend
is clearly reflected in our results. In the container market
segment we experienced significant growth in H1 2024, with new
supply agreements, for orders in 2024 and the following two years,
surpassing the total sales achieved in 2023. This remarkable
momentum is a clear reflection of the exceptional quality of our
Lokies smart locks, and the enthusiastic reception received in the
market. Demand continues to grow, positioning us for even greater
success by year-end.
We have invested considerable
effort in the development and performance improvement of our
products, and we have successfully reduced the energy consumption
of the locks by a significant amount. This enhancement means
customers need to charge the locks less frequently, providing
significant logistical benefits and added value to our
clients.
This positive trend continues to
strengthen. More and more customers are being introduced to our
monitoring solutions, additional pilots are underway, and the
existing market potential is converting into tangible business
deals. Moreover, we remain committed to investing in our
complementary product, Tetis, where we have also focused on
improving energy efficiency.
A significant part of this growth can be seen in the new supply
agreement that have been signed during H1 2024. We anticipate that
actual orders will exceed the initial estimates set out by the
clients in the contracts. With one of our clients, we are already
in advanced discussions to finalise next year's order forecast,
which we hope will significantly exceed the initial contract
amounts and we will provide updates on this in due
course.
There is no doubt that t42's
investments are shaping the future of container monitoring
technology. The increase in anticipated orders for 2024 is a
significant step towards achieving the Company's potential and its
ambition to lead the market in the coming years, in line with our
renewed strategy.
R&D
Over the past six months, t42 IoT
Solutions has achieved significant advancements in its technology
and product offerings, reinforcing our commitment to innovation and
excellence in the IoT sector. Our efforts have been focused on
enhancing road safety solutions, improving client experiences, and
expanding our global reach into new markets.
In a first-of-its-kind project in
Mexico, we have developed an interface within our Helios product
line to connect to an external display monitor and provide
significant safety improvements to our Mexican client's
transportation fleet. This addition facilitates safer driver
identification and introduces smart alerts in both visual display
and human voice regarding speed, adjusted according to location and
direction of travel. The project began as a pilot with several
hundred units and will be progressing during H2 2024 to hardware
orders under the agreement. After a 12-month trial period the
client reported a significant outcome with zero accidents and a
100% success rate in preventing incidents that would have
previously led to significant losses and insurance claims.
Additionally, customers in other countries have already expressed
interest in this solution, and we anticipate that during 2024-2025
it will enable us to reach even more clients.
On our t42 online web application,
we have added an interface for creating thousands of zones based on
speed and direction of travel, and for communicating with end
equipment to monitor these zones. This enhancement allows for more
precise and efficient fleet management, providing our clients with
greater control and oversight of their operations.
In our continuous effort to
improve customer experience, we have upgraded our onboarding tools.
Clients can now initialize our units more quickly and with greater
accuracy, enabling seamless scaling of installations and shipments.
This enhancement not only streamlines deployment but also reduces
operational downtime for our clients.
Our Lokies product line has been
expanded with the introduction of a smaller shackle, offering
greater flexibility and security options without compromising on
durability or reliability. This development provides our clients
with more versatile solutions to meet their specific
needs.
FINANCIAL REVIEW
Group revenues for H1 2024 were
$2.0m, compared with $1.7m for the six-month ended 30 June
2023.
Gross margin for the 6 months to
30 June 2024 was stable at 45%, compared with 48% for the
corresponding period in 2023.
Total operating expenses for the 6
months to 30 June 2024 were $1.2m (H1 2023: $1.3m).
For the six months ended 30 June
2024 the Group recorded an exchange rate income of $0.36 million
(H1 2023: $0.03 million), driven by the strengthening of the US
dollar against the Israeli Shekel. However, this was offset by a
significant loss of $0.98 million due to changes in fair value of
the CLNs and warrants associated with the loans.
The Group balance sheet showed an
increase in trade receivables to $1.0m (including long term trade
receivables), compared with $0.9m as of 31 December
2023.
Group inventories at the period
end were $1.3m compared to $1.4m as of 31
December 2023.
Trade payables at the period end
were stable at $0.9m, compared with $1.3m and $0.8m as of 30 June
2023 and 31 December 2023, respectively.
Net cash from operating activities
for the 6 months to 30 June 2024 was $0.3m, compared with net cash
used by operating activities for the 6 months to 30 June 2023 of
$0.1m.
CLN Update
Following the reporting period, on
30 September 2024 t42 extended the Group's two CLNs (total
principal of $2.5m) for an additional four months to May 2025,
under unchanged terms and conditions.
OUTLOOK
After years of overcoming challenges
in penetrating the container market and proving the strength of our
technology, we made the strategic decision to rebrand the Company
implementing a strategic shift from vehicle tracking systems
to container tracking and monitoring solutions. This move sends a
clear and powerful message to the industry-we are here to establish
ourselves as a dominant force. This year, we have achieved over
100% growth in sales for the container market compared to the
previous year. We are already engaged in discussions with clients
to enhance existing supply contracts. It's now clear that we are
not just participating in this market-we are a key
player.
However, we are not content with
simply being significant. Our ambition is to lead the next
revolution in this sector. This will require pioneering
technological solutions, a forward-thinking business strategy, and
partnerships with major players who share our vision. We are taking
the first steps on this journey-a long, challenging, and
occasionally turbulent path, but one filled with excitement and
potential. The opportunities ahead for T42 are vast and look
forward to sharing our progress as we reach each major
milestone.
Michael Rosenberg OBE
T42 IOT TRACKING SOLUTIONS
PLC
UNAUDITED
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,
2024
T42 IOT TRACKING SOLUTIONS
PLC
UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL
STATEMENTS
JUNE 30,
2024
INDEX
|
|
|
|
|
|
UNAUDITED INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
|
PAGE
|
|
|
|
|
|
|
Independent Auditors' report on review of interim
financial information
|
5
|
|
|
|
|
|
|
|
|
|
|
Interim Condensed Consolidated
Statements of Financial Position
|
6
|
|
|
|
|
|
|
|
|
|
|
Interim Condensed Consolidated
Statements of Comprehensive Loss
|
7
|
|
|
|
|
|
|
|
|
|
|
Interim Condensed Consolidated
Statements of Changes in Deficit
|
8
|
|
|
|
|
|
|
|
|
|
|
Interim Condensed Consolidated
Statements of Cash Flows
|
9
|
|
|
|
|
|
|
|
|
|
|
Notes to the Interim Condensed
Consolidated Financial Statements
|
10-18
|
|
|
|
|
Review Report of Independent
Auditors
|
Introduction
|
|
We have reviewed the accompanying
condensed consolidated interim statements of financial position of
t42 IoT Tracking Solutions PLC and its consolidated companies
(hereinafter - "the Group") as of June 30, 2024 and the related
condensed consolidated interim statements of comprehensive loss,
changes in shareholders' equity and cash flows for the six months
then ended. Preparation and presentation of these condensed
consolidated financial statements in conformity with International
Accounting Standard No. 34 "Interim Financial Reporting" are the
responsibility of the Group's board of directors and management.
Our responsibility is to express a conclusion on these interim
consolidated financial statements based on our review.
The Company's annual consolidated
financial statements as of December 31, 2023 and the year then
ended and the consolidated interim financial statements as of June
30, 2023 and for six months then ended were audited and reviewed,
respectively, by other accountants that their reports included
drawing attention to the group's financial position and doubts
regarding the Company's ability to continue as a going
concern.
|
|
Scope of Review
|
|
We conducted our review in
accordance with Review Standard (Israel) No. 2410 of the Israel
Accounting Standards Board, "Review of Interim Financial
Information for Interim Periods Performed by the Auditor of an
Entity". A review consists principally of inquiries of Company
personnel, analytical procedures applied to the financial data and
other review procedures. A review is substantially less in scope
than an audit conducted in accordance with International Standards
on Auditing and consequently does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
|
|
Conclusion
|
|
Based on our review, we are not
aware of any material modifications that should be made to these
interim consolidated financial statements in order for them to be
in conformity with International Accounting Standard No.
34.
|
|
Without qualifying our conclusion,
we draw attention to Note 1 (b) in the financial statements
regarding the Company's accumulated losses of 17.2 million USD from
operations since inception, deficit in working capital of 3.8
million USD and loans in amount of 3.1 million USD to be repaid
during the next 12 months. These factors, among others, indicate
that there may be an uncertainty as the Company's ability to
continue as a going concern. The management is making efforts to
raise additional funds required to continue and develop the group's
operation and believes that due to the growth in the group's
activity and other activities taken, the Company will have a
sufficient cash flow to continue in its activity and meets its
liabilities.
|
|
Shtainmetz Aminoach &
Co.
Certified public accountants
(Israel)
A member of UHY worldwide
Tel
Aviv, September 27, 2024
|
T42
IOT TRACKING SOLUTIONS PLC
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
U.S. Dollars in thousands
|
|
|
June
30
|
|
December
31
|
|
|
Note
|
2024
|
|
2023
|
|
2023
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
ASSETS
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS :
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
384
|
|
503
|
|
422
|
|
Rights of
use assets, net
|
|
1,080
|
|
1,004
|
|
1,044
|
|
Intangible assets, net
|
3
|
931
|
|
998
|
|
952
|
|
Long Term Receivables
|
|
202
|
|
-
|
|
-
|
|
Tax assets
|
|
-
|
|
57
|
|
-
|
|
Total Non-Current Assets
|
|
2,597
|
|
2,562
|
|
2,418
|
|
CURRENT ASSETS :
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
135
|
|
215
|
|
186
|
|
Inventories
|
|
1,273
|
|
1,499
|
|
1,439
|
|
Trade receivables, net
|
|
792
|
|
587
|
|
892
|
|
Other accounts
receivable
|
|
108
|
|
25
|
|
27
|
|
Short-term deposit
|
|
8
|
|
132
|
|
35
|
|
Total Current Assets
|
|
2,316
|
|
2,458
|
|
2,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,124
|
|
|
|
TOTAL ASSETS
|
|
4,913
|
|
5,020
|
|
4,997
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
EQUITY (DEFICIT)
|
|
(2,314)
|
|
(1,289)
|
|
(939)
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Long-term loans from banks, net of
current maturities
|
|
50
|
|
103
|
|
88
|
|
Amortized cost of a convertible
loan
|
5
|
-
|
|
306
|
|
917
|
|
Conversion component of a
convertible loan at fair value
|
5
|
-
|
|
14
|
|
31
|
|
Long term leasehold
liabilities
|
|
791
|
|
778
|
|
814
|
|
Total Non-Current Liabilities
|
|
841
|
|
1,201
|
|
1,850
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Short-term bank credit
|
|
46
|
|
40
|
|
42
|
|
Short-term loans and current
maturities of long-term loans
|
|
69
|
|
620
|
|
167
|
|
Warrants at fair value
|
5
|
100
|
|
52
|
|
12
|
|
Trade payables
|
|
906
|
|
1,302
|
|
844
|
|
Related parties
|
6
|
734
|
|
772
|
|
739
|
|
Other accounts payable
|
|
701
|
|
645
|
|
433
|
|
Leasehold liabilities
Conversion component of
convertible loans at fair
value
Amortized cost of a loan and a
convertible
loan
|
5
|
173
926
2,731
|
|
119
-
1,558
|
|
168
-
1,681
|
|
Total Current Liabilities
|
|
6,386
|
|
5,108
|
|
4,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY
|
4,913
|
|
5,020
|
|
4,997
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the interim
condensed consolidated financial
statements.
|
September 27,
2024
|
|
|
|
Date of Approval of the Financial
Statements
|
|
Avi
Hartmann, CEO
|
T42 IOT TRACKING SOLUTIONS
PLC
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS
U.S. Dollars in thousands
|
|
|
|
Six Months Ended June
30
|
|
Year Ended December
31
|
|
|
Note
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
2,039
|
|
1,707
|
|
4,005
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
7
|
|
(1,124)
|
|
(895)
|
|
(1,882)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
915
|
|
812
|
|
2,123
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
(54)
|
|
(52)
|
|
(92)
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
(186)
|
|
(263)
|
|
(485)
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
(947)
|
|
(974)
|
|
(1,665)
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses) , net
|
|
|
(8)
|
|
16
|
|
(3)
|
|
|
|
|
(1,195)
|
|
(1,273)
|
|
(2,245)
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(280)
|
|
(461)
|
|
(122)
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
368
|
|
25
|
|
604
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
(1,467)
|
|
(318)
|
|
(902)
|
|
|
|
|
|
|
|
|
|
|
Net finance Income
(expenses)
|
8
|
|
(1,099)
|
|
(293)
|
|
(298)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss for the year
|
|
|
(1,379)
|
|
(754)
|
|
(420)
|
|
Loss per share:
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share (in dollars)
|
4
|
|
(0.025)
|
|
(0.014)
|
|
(0.008)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the interim
condensed consolidated financial
statements.
T42 IOT TRACKING SOLUTIONS PLC
INTERIM CONDENSED
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
U.S. Dollars in
thousands
|
|
Share
Capital *
|
|
Premium on
Shares
|
|
|
Capital
Reserve
|
|
Capital Reserve for
Share-based payment
|
|
Accumulated
Loss
|
|
|
Total
|
|
|
|
|
|
|
(Unaudited)
|
-
|
|
13,543
|
|
|
89
|
|
1,253
|
|
(15,824)
|
|
|
(939)
|
|
Balance- January 1, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based
payment
|
-
|
|
-
|
|
|
-
|
|
4
|
|
-
|
|
|
4
|
|
Comprehensive loss for the
period
|
-
|
|
-
|
|
|
-
|
|
-
|
|
(1,379)
|
|
|
(1,379)
|
|
Balance - June 30, 2024
|
-
|
|
13,543
|
|
|
89
|
|
1,257
|
|
(17,203)
|
|
|
(2,314)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance- January 1, 2023
|
-
|
|
13,531
|
|
|
89
|
|
1,246
|
|
(15,404)
|
|
|
(538)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based
payment
|
-
|
|
|
|
|
|
|
4
|
|
-
|
|
|
4
|
|
Comprehensive loss for the
period
|
-
|
|
-
|
|
|
-
|
|
-
|
|
(754)
|
|
|
(754)
|
|
Balance- June 30, 2022
|
-
|
|
13,531
|
|
|
89
|
|
1,250
|
|
(16,158)
|
|
|
(1,288)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Audited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance- January 1, 2023
|
-
|
|
13,531
|
|
|
89
|
|
1,246
|
|
(15,404)
|
|
|
)538(
|
|
Issuance of share capital (net of
expenses)
|
-
|
|
12
|
|
|
-
|
|
-
|
|
-
|
|
|
12
|
|
Share based
payment
|
-
|
|
-
|
|
|
-
|
|
7
|
|
-
|
|
|
7
|
|
Comprehensive loss for the
year
|
-
|
|
-
|
|
|
-
|
|
-
|
|
(420)
|
|
|
(420)
|
|
Balance- December 31, 2023
|
-
|
|
13,543
|
|
|
89
|
|
1,253
|
|
(15,824)
|
|
|
(939)
|
* An amount less than one thousand.
The
accompanying notes are an integral part of the interim
condensed consolidated financial
statements.
T42 IOT TRACKING SOLUTIONS PLC
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
U.S. Dollars in thousands
|
|
|
Six Months
Ended
June 30
|
|
Year Ended December
31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
CASH FLOWS FROM ( OPERATING ACTIVITIES:
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
Comprehensive loss
|
|
(1,379)
|
|
(754)
|
|
(420)
|
|
Adjustments for:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
243
|
|
225
|
|
469
|
|
Interest expense, changes in fair
value of financial instruments and exchange rate
differences, net
|
|
1,145
|
|
55
|
|
43
|
|
Share-based payment
expense
|
|
4
|
|
4
|
|
7
|
|
Capital gain
|
|
-
|
|
-
|
|
(10)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
Decrease (Increase)
in inventories
|
|
166
|
|
82
|
|
142
|
|
Decrease in trade receivables,
net
|
|
(101)
|
|
(99)
|
|
(404)
|
|
Decrease (Increase) in other
receivables
|
|
(58)
|
|
46
|
|
44
|
|
Increase in Income Tax
Authorities
|
|
-
|
|
-
|
|
57
|
|
Increase (Decrease) in trade
payables
|
|
38
|
|
158
|
|
(300)
|
|
Increase in other
payables
|
|
242
|
|
385
|
|
173
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities
|
|
300
|
|
102
|
|
(199)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FOR INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property and
equipment
|
|
(12)
|
|
(8)
|
|
(16)
|
|
Proceeds from sales of property,
plant and equipment
|
|
-
|
|
-
|
|
52
|
|
Decrease (Increase) in short-term
deposits
|
|
(3)
|
|
(2)
|
|
94
|
|
Purchase of intangible
assets
|
|
(73)
|
|
(72)
|
|
(134)
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
|
(88)
|
|
(82)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FOR FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Repayment of short-term bank
credit, net
|
|
4
|
|
)2(
|
|
(616)
|
|
Receipt (Repayment) of short-term
loans from banks, net
|
|
(103)
|
|
)135(
|
|
-
|
|
Receipt of loans ,net
|
|
-
|
|
250
|
|
1,550
|
|
Proceeds from (Repayment to)
shareholders and related parties, net
|
|
26
|
|
28
|
|
(5)
|
|
Repayment of Leasehold
liability
|
|
(87)
|
|
(86(
|
|
(183)
|
|
Receipt (Repayment) of long-term
loans
|
|
(103)
|
|
(34)
|
|
(544)
|
|
Proceeds from issue of
shares, net
|
|
-
|
|
-
|
|
12
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
financing activities
|
|
(263)
|
|
21
|
|
214
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in cash and
cash equivalents
|
|
(51)
|
|
41
|
|
11
|
|
Cash and cash equivalents at the
beginning of the period
|
|
186
|
|
174
|
|
174
|
|
Cash and cash equivalents at the
end of the period
|
|
135
|
|
215
|
|
186
|
|
|
|
|
|
|
|
|
|
Appendix A - Additional
Information
|
|
|
|
|
|
|
|
Interest paid during the
period
|
|
113
|
|
189
|
|
313
|
|
Appendix B - Non-cash
financing activities
|
|
|
|
|
|
|
|
Issuance of shares to a related
party in payment of debt
|
|
-
|
|
103
|
|
-
|
The
accompanying notes are an integral part of the interim
condensed consolidated financial
statements.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 1 -
|
GENERAL
INFORMATION
|
|
|
a. The Reporting Entity
|
|
|
|
|
|
|
t42 IoT Tracking Solutions PLC
("the Company") was incorporated in Jersey on November 28, 2012.
The Group provides real-time tracking, security, and monitoring
solutions for the global supply chain, logistics, container, and
freight market.
See Note 1 (c) regarding the
Company's financial position.
The Company fully owns t42 Ltd.,
an Israeli company that engages in the same field, and Starcom
Systems Limited, a company in Jersey.
The Company's shares
are admitted for trading on the London Stock Exchange's AIM
market.
Address of the official Company
office in Israel of t42 Ltd. is:
96 Derech Ramatayim, Hod-Hasharon,
Israel.
Address of the Company's
registered office in Jersey of Starcom Systems Limited
is:
IFC5, St
Helier, Jersey, JE1 1ST
|
|
|
|
|
|
b.
|
Company's financial position:
|
|
|
|
|
|
|
|
|
As of June 30, 2024 the Group has
accumulated losses of $17.2 million from operations since inception
and has a deficit in working capital of $3.8 million including
loans in amount of $3.1 million to be repaid or converted during
the next 12 months. 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 in order to find an
overall solution for the Group's debt structure in which loans will
be converted to equity. The management believes that due to the
growth in the Group's activity and other efficiency measures taken,
the Company will have a sufficient cashflow to continue in its
activities and meets its liabilities. See also note 10.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in
thousands
|
NOTE 2 -
|
BASIS OF
PREPARATION AND CHANGE IN
THE GROUP'S ACCOUNTING POLICIES
|
|
a.
|
Basis of preparation
|
|
b.
c.
|
The interim consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for the preparation of financial statements
for interim periods, as prescribed in International Accounting
Standard No. 34 ("Interim Financial Reporting").
The interim consolidated financial
information should be read in conjunction with the annual financial
statements as of December 31, 2023 and for the year ended on that
date and with the notes thereto.
The significant accounting
policies applied in the annual financial statements of the Company
as of December 31, 2023 are applied consistently in these interim
consolidated financial statements.
new standard 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.
Use of estimates and judgments
|
|
|
The preparation of financial
statements in conformity with IFRS requires management of the
Company to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
|
|
|
|
The judgment of management, when
implementing the Group accounting policies and the basic
assumptions utilized in the estimates that are bound up in
uncertainties are consistent with those that were utilized to
prepare the annual financial statements.
Information about critical
judgment in applying accounting policies that have a significant
effect on the amounts recognized in the consolidated financial
statements is included in note 5- fair value of financial
instruments.
|
|
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in
thousands
|
d.
|
Exchange rates:
|
|
|
|
As of June
30
|
|
As of December
31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
Exchange rate of NIS in U.S.
$
|
0.266
|
|
0.27
|
|
0.276
|
|
|
Exchange rate of U.S. $ in
GBP
|
0.79
|
|
0.79
|
|
0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months Ended June 30
|
|
Year Ended December
31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
Change of NIS in U.S. $
|
(3.6%)
|
|
(4.9%)
|
|
2.9%
|
|
|
Change of U.S. $ in GBP
|
1.28%
|
|
(4.6%)
|
|
(5.8%)
|
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 3 -
|
INTANGIBLE ASSETES, NET
|
|
|
|
|
|
|
Cost:
|
|
|
Unaudited
|
|
Balance as of January 1,
2024
|
|
|
2,018
|
|
Additions during the period
(*)
|
|
|
72
|
|
Balance as of June 30,
2024
|
|
|
2,090
|
|
|
|
|
|
|
Accumulated Depreciation:
|
|
|
|
|
Balance as of January 1,
2024
|
|
|
(1,066)
|
|
Amortization during the
period
|
|
|
(93)
|
|
Balance as of June 30,
2024
|
|
|
(1,159)
|
|
|
|
|
|
|
Impairment of assets
|
|
|
-
|
|
|
|
|
|
|
Net book value as of June 30,
2024
|
|
|
931
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
Unaudited
|
|
|
Balance as of January 1,
2023
|
|
|
1,884
|
|
|
Additions during the period
(*)
|
|
|
72
|
|
|
Balance as of June 30,
2023
|
|
|
1,956
|
|
|
|
|
|
|
|
|
Accumulated Depreciation:
|
|
|
|
|
|
Balance as of January 1,
2023
|
|
|
(863)
|
|
|
Amortization during the
period
|
|
|
(95)
|
|
|
Balance as of June 30,
2023
|
|
|
(958)
|
|
|
|
|
|
|
|
|
Impairment of assets
|
|
|
-
|
|
|
|
|
|
|
|
|
Net book value as of June 30,
2023
|
|
|
998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost:
|
|
|
audited
|
|
Balance as of January 1,
2023
|
|
|
1,884
|
|
Additions during the year
(*)
|
|
|
134
|
|
Balance as of December 31,
2023
|
|
|
2,018
|
|
|
|
|
|
|
Accumulated Amortization:
|
|
|
|
|
Balance as of January 1,
2023
|
|
|
(863)
|
|
Depreciation during the
year
|
|
|
(203)
|
|
Balance as of December 31,
2023
|
|
|
(1,066)
|
|
|
|
|
|
|
Net book value as of December 31,
2023
|
|
|
952
|
|
|
|
|
|
|
|
(*) Capitalization of development
costs
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 4 -
|
SHARE
CAPITAL
|
|
|
|
|
|
a.
|
Composition : As of June 30, 2024:
55,126,357 Ordinary shares of no-par value, issued and outstanding.
As of June 30, 2023 and December 31, 2023: 54,026,822 and
54,917,055 shares , respectively.
|
|
|
|
|
|
b.
|
A Company share grants to its
holder voting rights, rights to receive dividends and rights to net
assets upon dissolution.
|
|
|
|
|
|
|
c.
|
Weighted average number of shares
used for calculation of basic and diluted loss per
share:
|
|
|
|
|
June
30
June 30
|
|
December 31
|
|
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
55,106,807
|
|
54,026,822
|
|
54,064,060
|
|
The following table lists the
number of share options and warrants with the exercise prices of
share options during the reported period:
|
|
|
Six months ended
June 30,
2024
|
|
Year Ended
December 31,
2023
|
|
|
|
|
Unaudited
|
|
Audited
|
|
|
|
|
Number
of options and warrants
|
|
Weighted average
exercise price
|
|
Number
of options
|
|
Weighted average
exercise price
|
|
|
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share options & warrants
outstanding beginning of period
|
|
10,876,650
|
|
0.166
|
|
12,545,222
|
|
0.177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options & Warrants exercised
during the period
|
|
(209,302)
|
|
-
|
|
(530,233)
|
|
-
|
|
|
Options & Warrants expired
during the period (*)
|
|
(3,083,334)
|
|
0.18
|
|
(1,138,339)
|
|
0.37
|
|
Share options & warrants
outstanding at end of period
|
|
7,584,014
|
|
0.156
|
|
10,876,650
|
|
0.166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share options & warrants
exercisable at end of period (**)
|
|
7,584,014
|
|
0.156
|
|
10,713,651
|
|
0.159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Expired and cancelled as part of
the CLN extension agreement signed during the reported period. See
notes 11 (b) and 1 (e) in the annual financial
statements.
(**) In addition, the Group also has
convertible loans, which can be converted as of June 30, 2024, to a
total amount of 47.1 M shares.
For the six months ended June 30,
2024 and 2023 the Company recognized share based payment expenses,
in the amount of $4,000 and $4,000 respectively.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 5 -
|
FAIR VALUE OF THE
FINANCIAL INSTRUMENTS
|
|
|
|
|
|
|
|
|
a. The table
hereunder presents a reconciliation from the opening balance to the
closing balance of financial instruments carried at fair value
level 3 of the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
Conversion components of
loans
|
|
Warrants
|
|
|
Balance as of January 1,
2024
|
|
31
|
|
12
|
|
|
Additions during the
period
|
|
-
|
|
-
|
|
|
Finance (income)
expenses
|
|
895
|
|
88
|
|
|
Payments
|
|
-
|
|
-
|
|
|
Balance as of June 30,
2024
|
|
926
|
|
100
|
|
|
|
b.
As of
June 30, 2024, the estimated fair
values of the Warrants and the Convertible component were measured
by an independent appraiser under main assumptions as follows:
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
2024
|
|
Expected term
|
|
|
0.5-3.5
Years
|
|
Expected average
volatility
|
|
|
22%-64%
|
|
Expected dividend yield
|
|
|
-
|
|
Risk-free interest rate
|
|
|
3.65%-4.91%
|
|
Stock market price
|
|
|
0.06 £
|
Fair value of one unit at the end of the
period
£0-0.0266
The level of the
fair value hierarchy is level 3.
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 6
-
|
CONTROLLING SHAREHOLDERS AND RELATED
PARTIES
|
|
|
|
a.
|
Related parties that own the
controlling shares in the Group are:
|
|
|
|
Mr. Avraham Hartman
(10.53%)
and Mr. Uri Hartman (5.56%).
|
|
|
b.
|
Short-term balances of controlling
shareholders:
|
June 30
|
|
December
31
|
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
Debit
(Credit) balance
Avi Hartmann
Uri Hartmann
|
65
(550)
|
|
(21)
(554)
|
|
52
(570)
|
|
|
|
Total Credit balance
|
(485)
|
|
(575)
|
|
(518)
|
|
|
|
|
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|
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|
Loans
Avi Hartmann
Uri Hartmann
|
-
(249)
|
|
49
(246)
|
|
6
(227)
|
|
|
|
Total Loans
|
(249)
|
|
(197)
|
|
(221)
|
|
|
|
Total Short-term balances
|
(734)
|
|
(772)
|
|
(739)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c.
|
Transactions:
|
|
Six Months
Ended
June 30
|
|
Year Ended
December
31
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
Total salaries, services rendered
and related expenses for shareholders
|
195
|
|
178
|
|
339
|
|
|
Total share-based payment
expenses
|
2
|
|
2
|
|
2
|
|
|
Non-executive directors'
fees
|
48
|
|
38
|
|
96
|
|
|
Interest to related
parties
|
5
|
|
5
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 7 -
|
COST OF
REVENUES
|
|
|
|
|
|
Six Months
Ended
June 30
|
|
Year Ended December
31
|
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
Purchases and other
|
864
|
|
882
|
|
1,552
|
|
|
Amortization
|
94
|
|
95
|
|
187
|
|
|
Increase (Decrease) in
Inventory
|
166
|
|
(82)
|
|
143
|
|
|
|
1,124
|
|
895
|
|
1,882
|
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 8 -
|
NET FINANCE
INCOME (EXPENSES)
|
|
|
|
|
|
Six Months
Ended
June 30
|
|
Year Ended December
31
|
|
|
|
|
2024
|
|
2023
|
|
2023
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
Exchange rate
differences
|
368
|
|
25
|
|
27
|
|
|
Changes in fair value of Warrants
and Conversion component of loans
|
(980)
|
|
(117)
|
|
577
|
|
|
Bank charges
|
(16)
|
|
(31)
|
|
(73)
|
|
|
Loans interest
|
(396)
|
|
(163)
|
|
(818)
|
|
|
Interest to suppliers
|
(70)
|
|
-
|
|
(1)
|
|
|
Interest to related
parties
|
(5)
|
|
(5)
|
|
(10)
|
|
|
Interest income from
deposits
|
-
|
|
-
|
|
-
|
|
|
Net finance expenses
|
(1,099)
|
|
(291)
|
|
(298)
|
|
NOTE 9 -
|
SEGMENTATION
REPORTING
|
|
|
|
Differentiation policy for the
segments:
The Company's management has
defined its segmentation policy based on the financial essence of
the different segments. This refers to services versus goods,
delivery method and allocated resources per sector.
On this basis, the following
segments were defined: Hardware and SaaS.
|
|
|
|
Segment information regarding the
reported segments:
|
|
|
|
|
Hardware
|
|
SaaS
|
|
|
Total
|
|
Six months ended 30.06.2024:
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Segment revenues
|
|
|
1,031
|
|
1,008
|
|
|
2,039
|
|
Cost of revenues
|
|
|
(912)
|
|
(212)
|
|
|
(1,124)
|
|
Gross profit
|
|
|
119
|
|
796
|
|
|
915
|
|
|
|
|
|
|
|
|
|
|
|
six months ended 30.06.2023:
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Segment revenues
|
|
|
728
|
|
979
|
|
|
1,707
|
|
Cost of revenues
|
|
|
(753)
|
|
(142)
|
|
|
(895)
|
|
Gross profit (loss)
|
|
|
(25)
|
|
837
|
|
|
812
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended 31.12.2023: (Audited)
|
|
|
|
|
|
|
|
|
|
Segment revenues
|
|
|
2,019
|
|
1,986
|
|
|
4,005
|
|
Cost of revenues
|
|
|
(1,611)
|
|
(271)
|
|
|
(1,882)
|
|
Gross profit
|
|
|
408
|
|
1,715
|
|
|
2,123
|
|
|
|
|
|
|
|
|
|
|
T42 IOT TRACKING SOLUTIONS PLC
NOTES TO THE INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
U.S. Dollars in thousands
|
NOTE 10
-
|
SIGNIFICANT EVENTS
AFTER THE REPORTED PERIOD
|
|
|
Further to notes 11 (a), 11 (b) and
1 (e) to the annual financial statements, the Company, on 30
September 2024, signed addendums to
the agreements with the lenders, to extend
the two convertible loans period until May 20, 2025. There was no
change in the other terms of the loans.
|