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.

 

28 June 2023

t42 IoT Tracking Solutions plc

("t42" or the "Company")

Full year results

t42 IoT Tracking Solutions plc (AIM: TRAC) ("t42" or the "Company"), the provider of global shipping containers tracking solutions, is pleased to announce its results for the 12 months ended 31 December 2022.

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 Lucy Williams/Charles Goodfellow/Eran Zucker	020 7469 0930

 

Notes to Editors

 

t42 IoT Tracking Solutions plc (AIM: TRAC), formerly Starcom Systems plc, provides real-time tracking, analysis, monitoring, and security IoT solutions for the global container and freight market and covers 55 countries, over 100 distributors, and 50 logistics and support partners.

 

t42's multi-sensor IoT tracking devices use a wide range of detection capabilities with cloud-based analytics and alerts, with real-time data transmission, analysis, and actionable insights. Its devices are used by ports, cargo owners, shipping companies, freight forwarders, insurance companies, customs authorities, homeland security, and police for end-to-end global container tracking and digital transformation of shipments.

 

The Annual Report will be made available to shareholders shortly and be available from the CompanyÕs website at: www.t42.co.uk/. 

 

 

CHAIRMAN'S STATEMENT

 

We are pleased to report the audited results of t42 for the year ended 31 December 2022: revenues were $4.04m (2021: $ 4.21m), gross margin was 42% (2021: 40%), and net losses after tax were reduced to $1.01m (2021: $2.96m).

 

A major contributing factor to these results, as stated in our trading update in February 2023, is the continuation of post-Covid and supply chain issues that have impacted our performance despite several successful trials of our technology by potential customers. We also experienced delays in the anticipated substantial orders from our LATAM distributor caused by local political disturbances but are hopeful that we will begin to see progress in the level of demand in the latter part of this year.

 

Looking forward to the remainder of 2023, we are targeting a significant improvement in revenues and gross margins. This optimism is based on several business vectors and improvements, which we initially highlighted last year. First, we have expanded in the USA with initial orders for Tetis units based on monthly payments for both devices and our software solutions. We see significant business potential in offering this innovative method to our product solutions and, assuming the required funding is available,  we expect to deliver increased revenues by offering this payment solution in the USA and elsewhere.

 

Secondly, we have completed major software and hardware improvements to meet clientsÕ needs and provide more holistic solutions, particularly in times of a global chip shortage. We have been working hard to make our products even better, faster, and more reliable. We are confident these improvements will make a real difference and help us stay ahead of the competition.

 

We have upgraded our entire product range to incorporate support for LTE Cat-1 (which has much better world-wide 4G coverage than previous devices with Cat-M1), as older generations of cellular networks are being phased out worldwide. We have moved our cloud infrastructure to Amazon Web Services (AWS), which will improve the operational capability of our products. Furthermore, we have added new features to our products, for example, new types of reports, dashboards, and improvements to our control center, and enhanced the security feature across our product range. These improvements are expected to reduce manufacturing costs, thus improving our gross margins.

 

Thirdly, in 2022, we introduced four new products to the market: Tetis R Connect (Tetis R with BLE 4.2 support for scanning external standalone sensors for temperature, humidity, etc.), the Lokies 2.0 (featuring a new design, BLE 5.2 support, a new CPU, and improved energy efficiency), the new iteration of our Helios TT device, and two new versions of Helios M (for 2G and 4G networks).

 

Finally, we have significantly expanded our presence at specialized exhibitions related to our technology while implementing multiple pilot schemes with new and existing customers. This has provided the opportunity to engage in pilot tests for our latest Lokies and Tetis products and receive valuable customer feedback.

 

We are already beginning to see the positive result of these improvements in the pipeline of potential business for the remainder of 2023, which gives us confidence in a considerable improvement in revenues and gross margin this year, with a second half weighting. We continue to benefit from the recurring income from software-as-a-service (SaaS) and expect this to increase further this year. As recently announced, we have secured an initial order of 1,000 units for our Lokies solution, with further orders anticipated. In addition, we are expectant that orders from Latin America (LATAM) will begin to materialize during 2023.

 

Although heavily focused on developing our presence in the container protection sector, we continue to progress in our traditional activity areas. Thus, during the year, we obtained additional orders for Helios Hybrid, one of t42Õs superior technology hardware products, combining GSM cellular and satellite communication. Our target market for this product is homeland security customers. We have secured additional orders within Africa with other superior Helios units.

 

We are now in the final stages of formalizing additional funding through a new $1.3m convertible loan stock with a third party. These funds, if secured, would meet our cash requirements in the medium term and enable the Company to fulfil existing orders in hand. The agreement has been approved by all parties and formal documents are in the process of being signed and the lender has committed to provide the funds, subject to completion. The Company expects significant further growth in orders over the next 12 months and should these be achieved, it may be necessary to review cash requirements to enable them to be fulfilled and to ensure the new leasing structure can be applied for future sales now being adopted for some clients.

 

FINANCIAL REVIEW

 

Group revenues for the year were $4.04m, compared with $4.21m for the year ended 31 December 2021, a decrease of 4%.

 

The gross margin for the year was approximately 42% compared with 40% for 2021.

 

Total operating expenditure for the year was $3.01m (2021: $3.98m),

 

Net loss after taxation for the year decreased to $1.01m compared with the 2021 net loss of $2.96m. The operating loss in the period was $1.37m, compared to an operating loss of $2.69m in 2021.

 

The Group recorded an exchange rate gain of $0.45m resulting from the weakness of the Israeli Shekel compared with the US dollar (2021: exchange rate loss of $0.1m).

 

The Group balance sheet showed a decrease in trade receivables to $0.49m, compared with $0.68m as at 31 December 2021.

 

Group inventories at the period end were $1.58m, compared to $1.79m as of the end of 2021.

 

Trade payables at the year-end were stable at $1.14m, compared with $1.55m as of 31 December 2021.

 

Net cash used in operating activities in the period was approximately $0.95m, compared with $0.38m for the year ended 31 December 2021.

As detailed in notes 10, 12, and 13 of this financial report, the Company has loans with a leading Israeli Bank. The financial covenants, as detailed in note 12, were breached at the quarter ending 31 December 2021. The Company and the bank monitor the position carefully, remain in close correspondence and work toward a solution. 

OUTLOOK

 

We  commenced the first quarter of 2023 with some new orders for our Tetis products using the new leasing structure and anticipate further take-up of this new financing methodology over the rest of 2023. Meanwhile, we expect that several of the pilot projects undertaken during 2022 will lead to orders being received during the remainder of year. Despite the slow progress of orders from LATAM, as set out above, we are expecting increased business in this area during the second half of 2023.

 

Overall, assuming additional funding is secured on a timely basis, we expect significant revenue and gross margin improvements during 2023. With increased funding available to us we also believe that previous constraints on growth due to supply chain issues will be less of a feature in our future business opportunities.

 

Michael Rosenberg OBE

Non-Executive Chairman

 

CORPORATE GOVERNANCE STATEMENT

General

The Board has adopted the QCA Corporate Governance Code (Òthe QCA CodeÓ), further detail of which is set out on the CompanyÕs website. The following comments are intended to provide an update on the application of these guidelines where appropriate. The Company seeks to comply with the principles of the QCA Code that the Board considers appropriate, given the size and nature of the business. However, there may be certain cases where non-compliance is appropriate due to the nature of the business and its non-UK status, as explained further below.

Division of responsibilities     

The T42 IoT Tracking Solutions PLC Board consists of four directors, two of whom are non-executive, including the Chairman. Although the Company is a relatively small company with a small board, the roles of Chairman and Chief executive are separate, clearly established roles, with a clear division of responsibilities between them.

The Chairman

The Chairman is responsible for the leadership of the Board. The Chairman sets the agenda for Board meetings and encourages an open and constructive debate. Since the Company is based in Tel Aviv, some Board meetings take place by conference call but normally at least two meetings a year take place physically in Israel with all Board members attending. The in-person Board meetings were suspended during the recent pandemic and restrictions on travel but now these have passed at least two physical Board meetings will be held in 2023. During 2022, a total of 9 Board meetings were held and all directors attended all meetings either in person or by conference call. There were 2 audit committee meetings held during the year under review, and all members of the committee attended. There was 1 remuneration committee meeting held during the year under review, which all members attended.

The Non-Executive directors

The Chairman is responsible for the leadership of the Board. The Chairman sets the agenda for Board meetings and encourages an open and constructive debate. Since the Company is based in Tel Aviv, some Board meetings take place by conference call but normally at least two meetings a year take place physically in Tel Aviv with all Board members attending.

Time Commitment

Each non-executive director is required to be able to devote sufficient time to his role as a director in the light of other commitments external to the Board. In practice, despite their limited contractual time obligations to the Board which in general are one or two days a month, the non-executive directors devote considerable time over and above their commitments to the Company in support of the other executive members of the Board. On average, they provide at least one day a week and sometimes more to assist the management.  The executive directors are fully committed to the Company and spend as much time as is needed, both in normal working hours and very often much more.

The business model and strategy

The strategic objectives of the Company are becoming clear in the shipping container market.  The CompanyÕs target is to reach each and every container and convert it into a transmitting data point. The Company is targeting to use the opportunity of the present global environment of supply chain challenges and logistics costs in order to penetrate the mass market. The CompanyÕs legacy products and experience will support the business to challenge this market and provide a comprehensive solution.

To understand and meet shareholder needs and expectations

The Board keeps in regular contact with investors with a view to understanding their needs and expectations. During 2022, with the assistance of the CompanyÕs brokers, presentations were made to a number of investors and further presentations are planned together with the release of these financial statements. In addition, the Board welcomes contact from investors via the CompanyÕs brokers, PR firm and via the website. In normal times shareholders are encouraged to attend the CompanyÕs Annual General Meetings where they can meet and directly communicate with the Board.

Taking into account wider stakeholder and social responsibilities and their implications for long-term success

The CompanyÕs tracking products are sold via distributors; therefore, the Company has little influence over individual product sales. Therefore, although the Company continues to monitor performance of its distribution network, it is not generally in touch with end users and has limited influence over the processes followed by distributors. However, the Board constantly reviews the distribution network by measuring the performance of individual distributors. Where products are manufactured by external firms, the Company regularly inspects the production facilities and processes used.

The Board is committed to reviewing and assessing stakeholder expectations and guides the CompanyÕs senior management to act in accordance with feedback received.

Embed effective risk management

The Board is fully aware of, and monitors closely, the risks that may apply to the business. These include counterparty credit risk, foreign exchange risk and, from time to time, political risks in countries where the Company is actively marketing its products. It is also influenced by the covenants imposed by its bankers on credit risk for certain countries. Operational risks are identified and assessed by management and are reported to the Board when necessary. The Audit Committee also addresses these risks at its regular meetings. During 2022, management has actively been seeking to widen the manufacturing bases for the CompanyÕs products so as to lessen reliance on any single manufacturer, thus minimizing risk to the business. In order to monitor risk, regular visits are made to the manufacturing facility and the Board is informed of any issues that need addressing. The key risks facing the Company together with any mitigation taken are considered further on pages 10-11 of this document.

Ensure that the directors have the necessary up-to-date experience and skills

The Board currently comprises of two executive and two non-executive directors with an appropriate balance of sector, financial and public market skills, and experience. The experience and knowledge of each of the directors gives them the ability to constructively challenge strategy and to scrutinise performance. In addition, the Chairman, Michael Rosenberg, brings further strategic, commercial, transaction and leadership experience which will be invaluable as the Board pursues the CompanyÕs growth strategy and continues to transform the Company.

Ethical matters

As a small company, the directors are constantly in touch with members of the staff. There are 20 members based in the office in Israel and their needs and aspirations are regularly reviewed.

Main governance structures and processes

The Chairman, Michael Rosenberg, has responsibility for ensuring proper corporate governance and can also rely on the support of the CFO, Mr Vatenmacher, who is also very familiar with corporate governance requirements.

Further information on the Board and its Committees:

Michael Rosenberg OBE (Non-Executive Chairman)

Michael has many years of experience both as a corporate financier and as an entrepreneur, involved in a number of new businesses in the healthcare, media and financial sectors. He has considerable global experience, having been chairman of the UK DTI committee on trade with Hong Kong and as member of the China Britain Business Council. He was, for many years, also chairman of the British Export Healthcare Association, now known as ABHI, and led a number of UK trade missions overseas. He was a founder of the investment bank now known as Numis Securities where he served as chairman for a number of years until his retirement in 1999.

Over many years he has also served on the boards of other Israeli companies listed on AIM, including Pilat Media Global PLC, as well as several other non-listed companies.  

Avi Hartmann (Chief Executive Officer)

Avi has spent his life as an entrepreneur focused on the technology of tracking systems. He was a founder of Mobiltel Communications Services, which was purchased by Pelephone in Israel in 1999. Together with his son, Uri Hartmann, and his then partner, Doron Kedem, he founded t42 IoT Tracking Solutions PLC in 2004.

Martin Blair (Non-Executive Director)

Martin qualified as a chartered accountant with Ernst & Young in 1982 and between 1983 and 1986 also worked for PwC.  He then spent 15 years in a variety of senior financial roles, primarily for media and technology companies, both in UK and the US.  Martin became the CFO for Pilat Media Global PLC, a company which previously traded on both AIM and the Tel Aviv Stock Exchange.  Pilat Media Global developed, marketed and supported new generation business management software solutions for content and service providers in the media industry.  Martin is also currently a non-executive director and Chairman of the audit committees at Kape Technologies PLC (AIM: KAPE) and Cake Box Holdings PLC (AIM: CAKE).

Igor Vatenmacher (Chief Financial Officer)

Igor is a certified public accountant in Israel and has a BachelorÕs degree in Economics from Ben Gurion University of the Negev, and an executive MBA degree with honours, specializing in financing, banking, capital markets and financial engineering, from the Hebrew University in Jerusalem. He began his career with Ernst and Young. Igor joined t42 IoT Tracking Solutions PLC in December 2017 and brings highly qualified accounting experience to the Company, and, since his appointment, has assisted with the development of more sophisticated internal systems and controls essential to the growth of the business. He joined the Board of the Company in January 2019.

Audit Committee

The Audit Committee consists of the non-executive directors, Martin Blair and Michael Rosenberg, and is chaired by Martin Blair. The Audit Committee, inter alia, determines and examines matters relating to the financial affairs of the Company including the terms of engagement of the CompanyÕs auditors and, in consultation with the auditors, the scope of the annual audit. The Audit Committee met twice during 2022. In March 2022 the Audit Committee reviewed the financial statements for the year ended 31 December 2021, paying particular attention to the valuation of stock and the level of debtors with a view to making provisions where necessary. The Audit Committee met in September 2022 to consider the interim financial statements for the six months ended 30 June 2022. Again, the Committee focused on stock valuation and debtor levels, as well as the reported gross margin.  The Board considers that, given the size and nature of the business, it is not beneficial to include a full audit committee report in the annual report and accounts for 2022. This will be kept under annual review by the Board.

The Remuneration Committee reviews the performance of the directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The committee meets as and when necessary to assess the suitability of candidates proposed for appointment by the Board, but not less than once per annum. Members of the remuneration committee comprise Michael Rosenberg, who acts as chairman of the committee, with Martin Blair as a member.

 

The Board considers that, given the size and nature of the business, it is not beneficial to include a remuneration committee report in the annual report and accounts for 2022. This will be kept under annual review by the Board.

On behalf of the board,

M. Rosenberg, Chairman

_______________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          t42 IoT Tracking Solutions PLC

 

         Directors' Report

 

         for the Year Ended December 31, 2022

 

The directors present the annual report together with the financial statements and auditors' report for the year ended December 31, 2022.

The Company was incorporated in Jersey and two wholly-owned trading subsidiaries: Starcom Systems Limited and t42 Limited, were incorporated in Jersey and in Israel, respectively.

Principal activities and review of business

The Group's principal activity is in the development of wireless solutions for the remote tracking, monitoring and protection of various types of assets and people. Further information on the results of the Group for the period under review can be found in the Chairman's Statement.

Accounts production

The financial statements for the year ended December 31, 2022, have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS").

Dividends

The directors do not propose a final dividend.

Directors

Michael Rosenberg      Appointed February 2013

Avi Hartmann              Appointed February 2013

Igor Vatenmacher        Appointed January 2019

Martin Blair                 Appointed May 2019

 

 

Remuneration of Directors 

Remuneration of directors for the year ending 31 December 2022: (All amounts presented in thousands of USD)

 

Executive Director	Salary	Pension and Related Expenses		Fees	Total
A Hartmann	186		14	-	200
I Vatenmacher	127		26	-	153
Non-Executive Directors
M Rosenberg	-		-	50	50
M Blair	-		-	45	45
Total 2022	313		40	95	448

 

 

Directors' remuneration in share options: (In thousands)

Executive Director	Total vested at 01/01/22	Exercised	Vested/ (Expired) during the year		Total Vested at 31/12/22		Total un-vested at 31/12/22		Grant Total
A Hartmann	1,199	(200)		83		1,082		83		1,165
I Vatenmacher	258	(50)		84		292		83		375
Non-Executive Directors
M Rosenberg	1,200	(200)		182		1,182		-		1,182
M Blair	458	-		157		615		-		615

 

Further details regarding the grants are detailed in note 14 within the financial reports. Some of the directors were also issued warrants as a part of the loan they provided to the Company, as detailed in notes 11 and 14 within the financial report.

Charitable and Political Donations

The Group did not make any charitable or political contributions during the year.

Corporate governance

The Company adopts the Quoted Company AllianceÕs (QCA) Corporate Governance Code (ÒQCA CodeÓ) and the Board believes this is the appropriate code for the Company to adhere to.  The Board assesses its compliance with the QCA Code on an annual basis.

In common with other organizations of a similar size, the executive directors are heavily involved in the day to day running of the business and meet regularly on an informal basis as well as at Board Meetings.

The Board of directors meets regularly and is responsible for formulating strategy, monitoring financial performance and approving major items of capital expenditure.

 

Statement of Directors' Responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.

Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law, the directors are required to prepare the Group and parent Company financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.

The financial statements are required by law to give a true and fair view of the state of affairs of the Group and parent Company and of the profit and loss of the Group for that period.

In preparing each of the Group and parent Company financial statements, the directors are required to:

i)          Select suitable accounting policies and then apply them consistently;

ii)         Make judgments and accounting estimates that are reasonable and prudent; and

iii)        State whether they have been prepared in accordance with IFRS as adopted by the EU, subject to any material departures disclosed and explained in the parent Company financial statements; and prepare the financial statements on the "going concern" basis unless it is inappropriate to presume that the Group and the parent Company will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy, at any time, the financial position of the Group and parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulations. They have general responsibility for taking such steps as are reasonably open to safeguard the assets of the Group and parent Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a Directors' Report to comply with that law and those regulations.

In determining how amounts are presented within terms in the income statement and balance sheet, the directors have regarded the substance of the reported transaction or arrangement in accordance with generally accepted accounting principles or practice.

So far as each of the directors is aware at the time the report is approved:

There is no relevant audit information of which the Company's auditors are unaware; and

The directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Going concern

The directors have prepared and reviewed sales forecasts and budgets for the next twelve months and, having considered these cash flows and the availability of other financing sources if required, have concluded that the Group will remain a "going concern."  After this process and having made further relevant enquiries, the directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the "going concern" basis in preparing the accounts.

 

Risks

Foreign exchange risks

Most of the GroupÕs sales and income are in US Dollars and the US Dollar is the currency in which the Company reports. The expenses, however, are divided between the US Dollar and the Israeli Shekel. The cost of goods (components) are paid in US Dollars and part of the operational costs, such as rent and other service providers, quote their fees in Israeli Shekel. Labor costs are paid in Israeli Shekels. The Company has, therefore, a partial currency risk in the event that the Israeli Shekel strengthens against the US Dollar, which could have an effect on the bottom line of the Group's financial results.

The Group consults with foreign currency experts from main Israeli banks regarding the main financial institutions' expectations for foreign currency changes. Management reviews them carefully and will consider with the board whether it should purchase financial instruments sold by local banks to protect itself from this foreign exchange risk. There are no financial instruments in use at the date of this report.

Interest Rate Risks

The Company is exposed to interest risks as it uses credit lines and loans from its banks. Changes in the effective Prime interest rate published monthly by the Bank of Israel can influence the Company's financing costs.

Credit Risk

The Group is exposed to credit risks if its customers fail to pay for goods supplied by the Group. In order to minimize this risk, the Group has a policy of:

(a) Selling only to respectable integrators and distributors and not to the end customer.

(b) Orders from customers in certain regions are shipped only after an approved letter of credit is received by the Group's bank.

(c) New customers in common pays at least 30% before initial shipping.

Capital Risk management

The Group manages its cash carefully. In order to reduce its risk, the Group may take measures to reduce its fixed costs (labor) if performance is below the directorsÕ expectations. The Group may conduct a placing for new shares of the Company in order to raise additional capital as required when monitoring its performance, and to continue its operations.

Supplier payment policy

It is the Group's policy to settle the terms of payment with suppliers when agreeing to the terms of the transaction, to ensure that suppliers are aware of these terms and to abide by them.

CREST

The Company's ordinary shares are eligible for settlement through CREST, the system for securities to be held and transferred in electronic form rather than on paper. Shareholders are not obliged to use CREST and can continue to hold and transfer shares on paper without loss of rights.

Auditors

A resolution reappointing Barzily as the GroupÕs auditors will be proposed at the AGM in accordance with S485 of the Companies Act 2006.

 

 

 

 

 

 

Electronic Communications

The Company may deliver shareholder information, including Annual and Interim Reports, Forms of Proxy and Notices of General Meetings, in an electronic format to shareholders.

If you would like to receive shareholder information in electronic format, please register your request on the Company's Registrar's electronic database at www.linkassetservices.com. You will initially need your unique investor code which you will find at the top of your share certificate. There is no charge for this service. If you wish to subsequently change your mind, you may do so by contacting the Company's Registrars by post or through their website.

If you elect to receive shareholder information electronically, please note that it is the shareholder's responsibility to notify the Company of any change in his name, address, email address or other contact details. Shareholders should also note that, with electronic communication, the Company's obligations will be satisfied when it transmits the notification of availability of information, or such other document as may be involved, to the electronic address it has on file. The Company cannot be held responsible for any failure in transmission beyond its control any more than it can be held responsible for postal failure.

 In the event of the Company becoming aware that an electronic notification is not successfully transmitted, a further two attempts will be made. In the event that the transmission is still unsuccessful, a hard copy of the notification will be mailed to the shareholder. In the event that specific software is required to access information placed on the Company's website, it will be available via the website without charge.

Before electing for electronic communications, shareholders should ensure that they have the appropriate equipment and computer capabilities sufficient for this purpose. The Company takes all reasonable precautions to ensure no viruses are present in any communication it sends out but cannot accept responsibility for loss or damage arising from the opening or use of any email or attachments from the Company and recommends that shareholders subject all messages to virus checking procedures prior to use. Any electronic communication received by the Company that is found to contain any virus will not be accepted.

Shareholders wishing to receive shareholder information in the conventional printed form will continue to do so and need take no further action.

Should you have any further questions in this regard, please contact the Company's Registrars, Share Registrars Limited.

On behalf of the board,

M. Rosenberg, Chairman

________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jerusalem 27 June 2023

 

Report of Independent Auditors

              

                    to the Board of Directors and Stockholders of

 

 t42 IoT Tracking Solutions PLC

 

We have audited the accompanying consolidated statements of financial position of t42 IoT Tracking Solutions PLC and its subsidiaries (hereinafter - Òthe GroupÓ) as of December 31, 2022 and 2021 and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended. These financial statements are the responsibility of the Group board of directors and management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Israel, including those prescribed by the Israeli AuditorsÕ Regulations (AuditorÕs Mode of Performance - 1973). Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the board of directors and management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021 and the consolidated results of its operations, changes in equity and cash flows for the years then ended in conformity with international financial reporting standards (IFRS).

Without qualifying our conclusion, we draw attention to Note 25 in the financial statements regarding the Company's efforts to raise additional funds.

 

 

Barzily & Co.

Certified Public Accountants.

A Member of MSI Worldwide

 

 

 

 

 

 

 

T42 IOT TRACKING SOLUTIONS PLC

U.S. Dollars in thousands

 

		December 31,
	Note	2022		2021
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment, net	6	546		299
Rights-of-use assets, net	22	981		690
Intangible assets, net	7	1,021		1,034
Income tax authorities		57		57
Total Non-Current Assets		2,605		2,080
CURRENT ASSETS
Cash and cash equivalents		174		1,534
Short-term bank deposit	5	130		154
Trade receivables, net	3B	488		679
Other accounts receivable	3A	71		160
Inventories	4	1,581		1,790
Total Current Assets		2,444		4,317
TOTAL ASSETS		5,049		6,397

 

EQUITY /(DEFICIT) AND LIABILITIES
EQUITY /(DEFICIT)	14	(538)		193
NON-CURRENT LIABILITIES
Long-term loans from banks, net of current maturities	10	142		239
Long-term leasehold liabilities	22	790		558
Warrants at fair value	11	-		115
Conversion component of a convertible loan at fair value	11C	27		279
Amortized cost of a convertible loan	11C	292		857
Total Non-Current Liabilities		1,251		2,048
CURRENT LIABILITIES
Short-term bank credit		42		24
Short-term bank loan	12	719		922
Current maturities of long-term loans from banks	10	70		76
Trade payables		1,144		1,553
Other accounts payable	9	260		738
Leasehold liabilities	22	112		148
Conversion component of a convertible loan at fair value	11A	7		-
Amortized cost of a convertible loan	11A,B	1,161		-
Warrants at fair value	11A,B	77		3
Related parties	20	744		692
Total Current Liabilities		4,336		4,156
TOTAL EQUITY /(DEFICIT) AND LIABILITIES		5,049		6,397

The accompanying notes are an integral part of the consolidated financial statements.

 

, 2023
Date of Approval of the Financial Statements		Igor Vatenmacher CFO		Avi Hartmann CEO

 T42 IOT TRACKING SOLUTIONS PLC

U.S. Dollars in thousands (except shares data)

                                                                                                                                                                Year ended December 31,

	Note		2022		2021
Revenues			4,041		4,214
Cost of sales	15		(2,358)		(2,545)
Inventory write-down			-		(381)
Gross profit			1,683		1,288
Operating expenses:
Research and development			(125)		(223)
Selling and marketing			(652)		(609)
General and administrative expenses	16		(2,250)		(2,388)
Other expenses			(29)		(756)
Total operating expenses			(3,056)		(3,976)
Operating loss			(1,373)		(2,688)
Finance income	18A		814		49
Finance expenses	18B		(447)		(320)
Net finance income (expenses)			367		(271)
Total comprehensive loss for the year			(1,006)		(2,959)
Loss per share:
Basic and diluted loss per share	14, 19		(0.019)		(0.064)

 

 

The accompanying notes are an integral part of the consolidated financial statements.