false2024-06-3020240001291855Q2--12-31

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
 

 
FORM 6-K
 

 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of September 2024
 
Commission file number: 001-33668
 

 
SUPERCOM LTD.
(Translation of Registrant’s name into English)
 

 
3, Rothschild Street,
Tel Aviv,
Israel
 
(Address of principal executive office)
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
 
Form 20-F Form 40-F ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
 

SUPERCOM LTD.
 

Effective August 22, 2024, SuperCom Ltd. (the “Company”) effected a 1-for-20 reverse stock split (the “Reverse Split”) of its issued and outstanding ordinary shares, NIS 2.5 par value per share (the “ordinary shares”). As a result of the Reverse Split, every 20 shares of the pre-split issued and outstanding ordinary shares automatically converted into one post-split ordinary share, with a corresponding reduction of the number of ordinary shares that the Company is authorized to issue. All fractional shares will be rounded up. As a result of the Reverse Split, all options, warrants and convertible securities of the Company outstanding immediately prior to the Reverse Split were adjusted by dividing the number of ordinary shares into which the options and warrants are exercisable and the convertible securities are convertible by 20 and multiplying the exercise price or the conversion price thereof by twenty, all in accordance with the terms of the plans, agreements or arrangements governing such securities.

 

Accordingly, all ordinary share and per share data, par value and exercise price data for applicable ordinary share equivalents included in the Condensed Interim Consolidated Financial Statements of the Company and its subsidiaries as of June 30, 2024 and in the Company’s Management's Discussion and Analysis of Results Operations included in this Report on Form 6-K have been retroactively adjusted to give effect to the Reverse Split, unless otherwise indicated.

 
6-K Items
 
1.
 
2.
 
101.1NS
XBRL Instance Document
 
101.SCH
XBRL Taxonomy Extension Schema Document
 
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
 
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
 
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
 
101.DEF
XBRL Taxonomy Extension Definitions Linkbase Document
 

Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
SuperCom Ltd.
   
  By: /s/ Ordan Trabelsi
  Name: Ordan Trabelsi
 
Title: Chief Executive Officer
 
Date: September 3, 2024
 

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Exhibit 1
 
image2.jpg
 
SUPERCOM LTD
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
as of June 30, 2024
(Unaudited)
 

SUPERCOM LTD
 
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
as of June 30, 2024
 
(Unaudited)
 
IN U.S. DOLLARS
 
INDEX
 
 
2

 
SUPERCOM LTD
 
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
 
   
June 30,
2024
   
December 31,
2023
 
   
Unaudited
   
Audited
 
CURRENT ASSETS
           
Cash and cash equivalents
   
5,747
     
5,206
 
Restricted bank deposits
   
347
     
371
 
Trade receivable, net
   
16,524
     
13,357
 
Other accounts receivable and prepaid expenses
   
1,780
     
1,742
 
Inventories, net (Note 3)
   
2,782
     
2,503
 
Patents
   
5,283
     
5,283
 
Total current assets
   
32,463
     
28,462
 
                 
LONG-TERM ASSETS
               
Severance pay funds
   
-
     
-
 
Deferred tax long term
   
919
     
501
 
Property and equipment, net
   
2,889
     
2,701
 
Other Intangible assets, net (Note 4)
   
5,251
     
5,576
 
Goodwill
   
7,026
     
7,026
 
Operating lease right-of-use asset
   
1,025
     
487
 
Total non-current assets
   
17,110
     
16,291
 
                 
TOTAL ASSETS
   
49,573
     
44,753
 
                 
CURRENT LIABILITIES
               
Trade payables
   
2,345
     
1,883
 
Employees and payroll accruals
   
1,121
     
1,015
 
Related parties
   
-
     
100
 
Accrued expenses and other liabilities
   
517
     
485
 
Deferred revenue
   
695
     
726
 
Short-term loan and other
   
1,690
     
1,194
 
Total current liabilities
   
6,368
     
5,403
 
                 
LONG-TERM LIABILITIES
               
Long-term loan
   
29,181
     
33,952
 
Deferred revenue
   
49
     
305
 
Deferred tax liability LT
   
170
     
170
 
Accrued severance pay
   
-
     
-
 
Operating lease liabilities
   
-
     
108
 
Total non-current liabilities
   
29,400
     
34,535
 
                 
SHAREHOLDERS' EQUITY:
               
Ordinary shares
   
21,970
     
9,094
 
Additional paid-in capital
   
95,822
     
102,670
 
Accumulated deficit
   
(103,985
)
   
(106,948
)
Total shareholders' equity
   
13,807
     
4,816
 
                 
Total Liabilities and Shareholders' Equity
   
49,575
     
44,754
 
 
The accompanying notes are an integral part of these interim consolidated financial statements.
 
3

SUPERCOM LTD
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share data)
 
   
Six months ended June 30
 
   
2024
   
2023
 
 
Unaudited
   
Unaudited
 
REVENUES
   
14,397
     
14,124
 
                 
COST OF REVENUES
   
6,867
     
10,276
 
                 
GROSS PROFIT
   
7,530
     
3,848
 
                 
OPERATING EXPENSES
               
Research and development, net
   
1,900
     
1,662
 
Sales and marketing
   
1,210
     
1,128
 
General and administration
   
2,748
     
2,374
 
 
   
570
     
405
 
Total operating expenses
   
6,428
     
5,569
 
                 
OPERATING (LOSS) INCOME
   
1,102
     
(1,721
)
                 
FINANCIAL EXPENSES (INCOME), NET
   
1,443
     
(869
)
                 
LOSS BEFORE INCOME TAX
   
2,545
     
(2,590
)
                 
INCOME TAX BENEFIT
   
418
     
-
 
                 
NET LOSS FOR THE PERIOD
   
2,963
     
(2,590
)
                 
NET LOSS PER SHARE
               
                 
Basic
   
2.26
     
(10.66
)
                 
Diluted
   
1.19
     
(10.66
)
                 
Weighted average number of ordinary shares used in computing basic net loss per share
   
1,311,924
     
242,946
 
                 
Weighted average number of ordinary shares used in computing diluted net loss per share
   
2,483,714
     
242,946
 
 
The accompanying notes are an integral part of these interim consolidated financial statements.
 
4

SUPERCOM LTD
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(U.S. dollars in thousands, except share data)
 
   
Ordinary shares
                   
   
Number of
Shares
   
Share
capital
   
Additional paid-in
capital
   
Accumulated
deficit
   
Total shareholders'
equity
 
Balance as of December 31, 2022
   
210,316
     
3,057
     
103,000
     
(102,926
)
   
3,131
 
Changes during the six months ended June 30, 2023 (unaudited):
                                       
Net loss
   
-
     
-
     
-
     
(2,590
)
   
(2,590
)
Exercise of options and debt conversion
   
22,027
     
301
     
424
     
-
     
725
 
Share Issuance
   
46,410
     
1,552
     
649
     
-
     
2,201
 
                                         
Balance as of June 30, 2023 (unaudited)
   
278,753
     
4,910
     
104,073
     
(105,516
)
   
3,467
 
                                         
Balance as of December 31, 2023
   
664,552
     
9,094
     
102,670
     
(106,948
)
   
4,816
 
Changes during the six months ended June 30, 2023 (unaudited):
                                       
Net loss
   
-
     
-
     
-
     
2,963
     
2,963
 
Exercise of options and debt conversion
   
901,086
     
7,415
     
(4,140
)
   
-
     
3,275
 
Share Issuance
   
405,808
     
5,460
     
(2,707
)
   
-
     
2,753
 
                                         
Balance as of June 30, 2024 (unaudited):
   
1,971,446
     
21,970
     
95,822
     
(103,985
)
   
13,807
 
 
The accompanying notes are an integral part of these interim consolidated financial statements.
 
5

SUPERCOM LTD
 
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars in thousands)
 
    Six months ended June 30  
    2024     2023  
    Unaudited     Unaudited  
Cash flows from operating activities:
           
             
Net loss      2,963       (2,590 )
                 
Adjustments to reconcile net income to net cash used in operating activities:                
Depreciation and amortization
   
1,477
     
1,306
 
Increase in trade receivables, net
   
(3,167
)
   
(1,579
)
Increase in other accounts receivable and prepaid expenses
   
(38
)
   
(114
)
Increase (decrease) in inventories, net
   
(279
)
   
352
 
Increase(decrease) in trade payables
   
462
     
(793
)

Decrease (increase) in deferred tax

    (418

)

    -  
Increase (Decrease) in employees and payroll accruals
   
106
     
(264
)
Increase (decrease) in accrued severance pay
   
-
     
23
 
Increase(decrease) in long-term loan and other debt
   
(1,643
)
   
809
 
Increase (decrease) in accrued expenses and other liabilities
   
(413
)
   
(559
)
Net cash used in operating activities
   
(949
)
   
(3,409
)
                 
Cash flows from investing activities:
               
Purchase of property and equipment
   
(611
)
   
(1,041
)
Decrease (Increase) in severance pay fund
   
-
     
(25
)
Capitalization of software development costs
   
(574
)
   
(684
)
Net cash provided by (used in) investing activities
   
(1,185
)
   
(1,750
)
                 
Cash flows from financing activities:
               
Issuance of share capital, net of issuance costs
   
2,753
     
2,201
 
Long-term debt, net
   
-
     
-
 
Related parties
   
(100
)
   
(26
)
Net cash provided by (used in) financing activities
   
2,653
     
2,175
 
                 
Increase (decrease) in cash, cash equivalents and restricted cash
   
519
     
(2,984
)
Cash, cash equivalents and restricted cash at the beginning of the year
   
5,577
     
4,505
 
                 
Cash, cash equivalents and restricted cash at the end of the period
   
6,096
     
1,521
 
 
The accompanying notes are an integral part of these interim consolidated financial statements.
 
6

SUPERCOM LTD

 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1:  GENERAL
 
a.
SuperCom Ltd. (the “Company”) is an Israeli resident company organized in 1988 in Israel. On January 24, 2013, the Company changed its name back to SuperCom Ltd, its original name, from Vuance Ltd. On September 12, 2013, the Company’s ordinary shares were approved for listing on the NASDAQ Capital Market and began trading under the ticker symbol “SPCB” on September 17, 2013. Previously, the Company’s ordinary shares traded on the OTCQB® electronic quotation service.
 
The Company is a global provider of e-GOV, IoT, Communication and Cyber Security solutions to governments and organizations, both private and public, throughout the world; (i) IoT products and solutions reliably identify, track and monitor people or objects in real-time, enabling customers to detect unauthorized movement of people, vehicles and other monitored objects. The Company provides an all-in-one field-proven PureSecurity suite, accompanied by services specifically tailored to meet the requirements of an IoT customer; (ii) Proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, the Company have helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors, and Lands; (iii) Solutions for carrier wi-fi, enterprise connectivity as well as its legacy backhaul services and products; (iv) Cutting edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption methodologies, and comprehensive device and port control, The Company maps sensitive information and controls data flow through email, web, external devices, and additional channels.
 
b.
Liquidity Analysis
 
The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past 3 years. As of six months ended June 30, 2024, the Company had an accumulated deficit of $103,985 and net cash used in operating activities of $949, compared to $3,409 for six months ended June 30, 2023.
 
Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and noted that as of June 30, 2024, the Company had cash, cash equivalent, and restricted cash of $6,096 and positive working capital of $26,095
 
Additionally, the Company secured financing of $20,000 during 2018, of which $6,000 remains available to the Company to draw during the 12 months following the balance sheet date, under certain conditions. Throughout 2021, the Company also secured through the issuance of multiple notes aggregate gross proceeds of $12,000 of subordinated debt.
 
On March 1, 2022, the Company raised $4.65 million in a registered direct offering with a single accredited institutional investor of an aggregate of 156,500 of its ordinary shares, and 220,079 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00020 per share, and concurrent private placement to the Purchaser of the Company’s private warrants to purchase an aggregate of 282,434 or ordinary shares at an exercise price of $14.00 per share.
 
On July 27, 2022, the Company raised $1.74 million in a cash exercise of Company’s private warrants, as amended, of 282,434 of its ordinary shares at exercise price of $6.16, and concurrent private placement to the accredited institutional investor of the Company’s private warrants to purchase an aggregate of 282,434 or ordinary shares at an exercise price of $6.4 per share.
 
On March 31, 2023, the Company raised $2.4 million in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 24,250 of its ordinary shares, and 51,631 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 75,881 of its ordinary shares at an exercise price of $33.2 per share.
 
On August 3, 2023, the Company raised $2.75 million in a registered offering with a single accredited institutional investor through the sale of an aggregate of 33,050 of its ordinary shares, and 128,715 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent issuance to such Purchaser of the Company’s warrants to purchase an aggregate of 161,765 of its ordinary shares at an exercise price of $17 per share.
 
On November 15, 2023, the Company raised approximately $2.0 million in gross proceeds in a warrant exercise and reload with a single accredited institutional investor through warrant exercise of 54,050 warrant to ordinary shares, and warrant exercise of 183,596 warrant to pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent warrant reload to such Purchaser of the Company’s private warrants to purchase an aggregate of 475,291 of its ordinary shares at an exercise price of $10 per share.
 
On April 19, 2024, the Company raised approximately $2.9 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 143,694 of its ordinary shares, and 262,114 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 450,808 of its ordinary shares at an exercise price of $7.6 per share
 
To date, the Company has used the proceeds from the secured financing, subordinated debt, and private placement (i) to satisfy certain indebtedness; and (ii) for general corporate purposes, and (iii) for working capital needs for multiple new government customer contracts with significant positive cash flow.
 
Furthermore, the available $6 million secured credit facility from Fortress Investment Group may provide the Company with additional access to capital if needed.
 
The Company believes that based on the above-mentioned secured financings, management’s plans, significant cost savings, and expected cash streams from the Company’s current contracts with customers worldwide, it will be able to fund its operations for at least the next 12 months.
 
7

NOTE 1:  GENERAL (Cont.)
 
c.
Senior Secured Credit Facility
 
On September 6, 2018 and October 26, 2018, through a two-stage closing process, the Company entered into a Senior Secured Credit Facility with affiliates of Fortress Investment Group LLC("Fortress") with an aggregate principal amount of up to $20,000 (the "Credit Facility"). The Initial Term Loan which finalized on October 26, 2018 has an aggregate principal of $10,000, and the Incremental Term Loan provides for up to an additional $10,000 in principal through Incremental Draws of at least $1,000 each. In 2019, a total of $4,000 gross was drawn on the Incremental Term Loan, and some of the terms of the Credit Facility were amended to support the needs of the company. The Credit Facility bears interest on the borrowed balance at a rate per annum equal to LIBOR plus an applicable margin (the "Interest Margin") dependent on the EBITDA Leverage Ratio which is calculated and reset on a quarterly basis (8.0% for an EBITDA Leverage Ratio greater than or equal to 2.50x; 7.0% for an EBITDA Leverage Ratio less than 2.50x). At the Company's election, interest is paid in cash or in-kind in the amount of 4% per annum of the Interest Margin. The balance of interest is payable in cash monthly in arrears. For amounts which remain un-borrowed, the Company incurs interest at a rate of 0.50% per annum ("Unused Fee"). From closing and until today, the Company only paid monthly interest payments. The majority of the principal to be paid via a bullet payment at the maturity date, which the company expects to be amended to December 2028.
 
The Credit Facility is subject to an original issue discount equal to 2.5% of any drawn amounts, and amounts repaid cannot be re-borrowed. At maturity, an end-of-term fee of 2.25% to 4.5% is owed by the Company for any amounts drawn. In connection with securing the Credit Facility, the Company incurred legal and due diligence fees, which are recorded together with the original issue discount and end-of-term fee, and amortized into interest expense over the life of the Credit Facility.
 
In connection with the Credit Facility, the Investor received 1,250 warrants initially and an additional 3,750 warrants for amendments (the “Credit Facility Warrants”) and purchased 5,335 unregistered common shares at a share price of $37.4 from the Company at a total of $200. The Credit Facility Warrants mature 7 years from the date of issuance, were set to be issued at a strike price at a premium to the then current market price.
 
In 2021, the Company secured through the issuance of subordinated notes, gross proceeds of $12,000. For the consideration of $12,000 in gross proceeds, SuperCom issued to a certain institutional investor in February 2021 and June 2021, two-year unsecured, subordinated promissory notes in the amounts of $7,000 and $5,000, respectively, both with similar structures and terms. Given the subordination agreement between the senior secured loan investor, the subordinated debt investor and the Company, the subordinated investor may request that the balance of the subordinated debt be paid only after the senior secured Fortress debt is paid in full. The notes have a 5% annual coupon and a built-in increase to the balance of the notes by 5% every 6 months for the first 24 months, for any portion of the notes which has not been paid down prior to maturity. All principal and interest accrued is required to be paid in only one-bullet payment at maturity, and the company has the right to pre-pay any portion of either note at any time without a pre-payment penalty. The company has an option at its discretion only, at any time after 12 months to pay down all or a portion of either note using its ordinary shares, subject to certain conditions being met.
 
During 2024, 2023, 2022 and 2021 the Company converted $ 5,535, $500, $211 and $7,601, respectively, of the remaining principal and accrued interest of subordinated notes into the Company’s ordinary shares.
 
As of June 30, 2024, the outstanding principal, including accrued interest, of the Credit Facility and the aggregate balance for these Subordinated Debt was $29,181.
 
The Company purchases certain services and products used by it to generate revenues in its projects and sales from several sole suppliers. Although there are only a limited number of manufacturers of those particular services and products, management believe that other suppliers could provide similar services and products on comparable terms without affecting operating results.

 

8

NOTE 2:  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
Financial Statement preparation
 
These unaudited interim consolidated financial statements of the Company and its subsidiaries (collectively referred to in its report as "Company"), as of June 30, 2024 and for the six months then ended have been prepared, in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). They do not include all information and notes required by U.S. GAAP in the preparation of annual consolidated financial statements.
 
The accounting policies used in the preparation of the unaudited interim consolidated financial statements is the same as those described in the Company's audited consolidated financial statements prepared in accordance with U.S. GAAP for the year ended December 31, 2023.
 
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
 
The Company believes all adjustments necessary for a fair statement of the results for the period presented have been made, and all such adjustments were of a normal recurring nature unless otherwise disclosed. The financial results for the period are not necessarily indicative of financial results for the full year.
 
These financial statements should be read in conjunction with the Company's consolidated financial statements for the year ended December 31, 2023, and the accompanying notes. There have been no changes in the significant accounting policies from those disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 Form 20-F/A.

 

NOTE 3:  INVENTORIES, NET
 
   
June 30,
2024
   
December 31,
2023
 
   
$
   
$
 
Raw materials, parts and supplies
   
1,672
     
1,380
 
Finished products
   
1,110
     
1,123
 
                 
     
2,782
     
2,503
 
 
As of June 30, 2024 and December 31, 2023, inventory is presented net of write-offs for slow inventory in the amount of approximately $2,227 and $2,215, respectively.

 

NOTE 4:  OTHER INTANGIBLE ASSETS, NET
 
   
June 30,
2024
   
December 31,
2023
 
    $     $  
Customer relationship & Other
   
155
     
532
 
IP & Technology
   
1,591
     
1,878
 
Capitalized software development costs
   
3,505
     
3,094
 
                 
     
5,251
     
5,504
 

 

NOTE 5:  COMMITMENTS AND CONTINGENT LIABILITIES – LITIGIATION
 
We are party to legal proceedings in the normal course of our business. There are no material pending legal proceedings to which we are a party or of which our property is subject. Although the outcome of claims and lawsuits against us cannot be accurately predicted, we do not believe that any of the claims and lawsuits, will have a material adverse effect on our business, financial condition, results of operations or cash flows for any quarterly or annual period.
 
9


Exhibit 2
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OPERATIONS
 
The following discussion and analysis should be read together with our unaudited consolidated financial statements and the related notes as of June 30, 2024, which appear elsewhere in this report.
 
Cautionary Note Regarding Forward-Looking Statements
 
The discussion and analysis in this section contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, with respect to our business, financial condition and results of operations. Such forward-looking statements reflect our current views with respect to future events and financial results. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. These include statements regarding our earnings, projected growth and forecasts, and similar matters which are not historical facts. We remind readers that forward-looking statements are merely predictions and therefore are inherently subject to uncertainties and other factors which could cause the actual future events or results to differ materially from those described in the forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) inability to realize benefits from acquisitions, (ii) our inability to manage our growth profitably, (iii) intense competition in our industry, (iv) acquisition of businesses disrupting our business and harming our financial condition and operations, (v) the need to obtain additional financing , (vi) our ability to respond promptly and effectively to market changes, (vii) our ability to obtain and maintain contracts with governments, (viii) our dependence on third-party representatives to generate revenues and supply components, (ix) unfavorable global economic conditions, (x) developments affecting international operations and foreign markets, (xi) breaches of network or information technology security, (xii) intellectual property litigation, and (xiii) such other factors discussed throughout Item 3. D. Risk Factors of our Annual Report on Form 20-F for the year ended December 31, 2022. Any forward-looking statement made by us in this section is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
 

Overview
 
Founded in 1988, we are a global provider of traditional and digital identity solutions, advanced IoT, and cyber security products and solutions to governments and private and public organizations worldwide.
 
We are comprised of three main Strategic Business Units(SBU): e-Gov, IoT and Connectivity (or “IoT”), and Cyber Security:
 
e-Gov
 
Through our proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, we have helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors, and Lands.
 
We have focused on expanding our activities in the traditional identification, or ID, and electronic identification, or e-Gov, market, including the design, development, and marketing of identification technologies and solutions to governments in Europe, Asia, America, and Africa using our e-Government platforms. Our activities include: (i) utilizing paper secured by different levels of security patterns (UV, holograms, etc.); and (ii) electronic identification secured by biometric data, principally in connection with the issuance of national Multi-ID documents (IDs, passports, driver’s licenses, vehicle permits, and visas, Secure Land Certificated) border control applications and Land Information System (LIS).

On December 26, 2013, we acquired the SmartID division of On Track Innovations Ltd., or OTI, including all contracts, software, other related technologies, and intellectual property, or IP, assets. The SmartID division has a strong international presence, with a broad range of competitive and well-known e-Gov solutions and technology. The acquisition significantly expanded the breadth of our e-Gov capabilities globally, while providing us with outstanding market and technological experts, together with leading ID software platforms and technologies.

IoT and Connectivity
 
IoT

Our IoT products and solutions reliably identify, track and monitor people or objects in real-time, enabling our customers to detect unauthorized movement of people, vehicles, and other monitored objects. We provide an all-in-one field-proven IoT suite, accompanied by services specifically tailored to meet the requirements of IoT solutions. Our proprietary IoT suite of hybrid hardware, connectivity and software components is the foundation of these solutions and services. Our IoT division has primarily focused on growing the following markets: (i) public safety, (ii) healthcare and homecare, (iii) Smart Cities, (iv) Smart Campus, and (iv) transportation.
 
During 2006, we identified the growing electronic tracking and monitoring vertical markets for public safety, real time healthcare and homecare, and transportation management. We have developed the PureRF Hybrid suit of wrist devices, connectivity, and controlling software, from 2012 we have developed the next generation IoT suite of devices, connectivity and Monitoring software; the PureSecurity Hybrid Suite of wrist band, tags, beacons, PureCom, Pure Monitors, PureTrack and other components.

On January 1, 2016, we acquired Leaders in Community Alternatives, Inc., or LCA. LCA is a California-based, private criminal justice organization providing community-based services and electronic monitoring programs to government agencies in the U.S. for more than 25 years. LCA offers a broad range of competitive solutions for governmental institutions across the
U.S. in addressing realignment strategies and plans.
 
Connectivity
 
In 2016, as part of our strategy to enhance and broaden our IoT connectivity products and solutions offerings for public safety, enterprises, hospitality, and smart cities markets, on May 18, 2016, we acquired Alvarion Technologies Ltd. or Alvarion. Alvarion designs solutions for carrier wi-fi, enterprise connectivity, smart city, smart hospitality, connected campuses, and connected events that are both complete and heterogeneous to ensure ease of use and optimize operational efficiency. Carriers, local governments and hospitality sectors worldwide deploy Alvarion’s intelligent wi-fi networks to enhance productivity and performance, as well as its legacy backhaul services and products.

2

Cyber Security
 
During 2015, we identified the cyber security market as a very fast-growing market where we believe that SuperCom has major advantages due to synergic technologies and shared customer base to our e-Gov, IoT, and connectivity SBUs. In 2015, we acquired Prevision Ltd., or Prevision, a company with a strong presence in the market and a broad range of competitive and well- known cyber security services. During the first quarter of 2016, we acquired Safend Ltd, or Safend, an international provider of cutting-edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption methodologies, and comprehensive device and port control. Safend maps sensitive information and controls data flow through email, web, external devices, and additional channels.

Both acquisitions significantly expanded the breadth of our cyber security capabilities globally while providing us with outstanding market and technological experts and over 3,000 customers in the United States, Europe, and Asia, and more than three million software license seats deployed by multinational enterprises, government agencies and small to mid-size companies around the globe, together with leading data and cyber security platforms and technologies.
 
General
 
Our consolidated financial statements appearing in this report are prepared in U.S. dollars and in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Transactions and balances originally denominated in dollars are presented at their original amounts. Transactions and balances in other currencies are re-measured into dollars in accordance with the principles set forth in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 830, “Foreign Currency Translation.” The majority of our sales are made outside Israel in U.S. dollars. In addition, substantial portions of our costs are incurred in U.S. dollars. Since the U.S. dollar is the primary currency of the economic environment in which we and certain of our subsidiaries operate, the U.S. dollar is our functional and reporting currency and, accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured using the foreign exchange rate at the balance sheet date. Operational accounts and non-monetary balance sheet accounts are measured and recorded at the exchange rate in effect at the date of the transaction. The financial statements of certain subsidiaries, whose functional currency is not the U.S. dollar, have been translated into U.S. dollars. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for the period. The resulting translation adjustments are reported as a component of shareholders’ equity in accumulated other comprehensive income (loss).

3

Results of Operations
 
Revenues
 
Our revenues for the six months ended June 30, 2024, increased by $0.3 million, or 2%, to $14.4 million compared to $14.1 million for the six months ended June 30, 2023.

Cost of Sales

Our cost of sales increased in the first six months of 2024 to $7.5 million from $10.2 million in the first six months of 2023, a decrease of 27%. This decrease in cost of sales was primary due to the change in revenue’s mix toward recurring revenue with higher Gross margin.

Gross Margin
 
Our gross margin decreased in the first six months of 2024 to 52.3% compared to 27.2% in the first half of 2023.
 
The increase in gross margin was primary due to the change in revenue mix, mainly due to the end of the implementation stage of new IoT contract in Europe representing lower gross margin’ and the increase of recurring revenue representing higher gross margin.
 
Expenses
 
Our operating expenses decreased in the first six months of 2024 to $6.4 million, or by 16%, from $5.5 million in the first six months of 2023. This increase in operating expenses in the first half of 2024 was primarily due to (i) increase of $0.2 million in research and development expenses, (ii) increase of $0.1 million in sales and marketing expenses, (iii) increase of $0.4 million in general and administration expenses, (iv) an increase of $0.2 million in other expenses.
 
Financial Expenses, net
 
We had financial income of $1,433 thousands in the first half of 2024 compared to a financial expenses of $869 thousands in the first half of 2023. The increase in financial income was due to (i) changes in the exchange rate of the NIS against the U.S. dollar in 2024 compared to 2023, (ii) an interest fee on loans and credit lines of $764 thousands, and (iii) a debt conversion with premium rate over the fair market value of $2.4m.
 
Income Tax Benefit

We recorded an income tax expense in the amount of $0 during the first half of the year 2024, compared to an income tax expense in the amount of $0 thousand during the first half of the year 2023.
 
Net Loss

As a result of the changes in our operational expenses, financial expense that we recorded in the first half of 2024, as described above, our net profit in the first half of 2024 was $2,963 thousand compared to a net loss of $2,590 thousands in the first half of 2023.

4

v3.24.2.u1
Document And Entity Information
6 Months Ended
Jun. 30, 2024
Cover [Abstract]  
Document Type 6-K
Amendment Flag false
Document Period End Date Jun. 30, 2024
Document Fiscal Year Focus 2024
Document Fiscal Period Focus Q2
Entity Registrant Name SUPERCOM LTD.
Entity Central Index Key 0001291855
Current Fiscal Year End Date --12-31
v3.24.2.u1
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
CURRENT ASSETS    
Cash and cash equivalents $ 5,747 $ 5,206
Restricted bank deposits 347 371
Trade receivable, net 16,524 13,357
Other accounts receivable and prepaid expenses 1,780 1,742
Inventories, net 2,782 2,503
Patents 5,283 5,283
Total current assets 32,463 28,462
LONG-TERM ASSETS    
Severance pay funds 0 0
Deferred tax long term 919 501
Property and equipment, net 2,889 2,701
Other Intangible assets, net 5,251 5,576
Goodwill 7,026 7,026
Operating lease right-of-use asset 1,025 487
Total non-current assets 17,110 16,291
TOTAL ASSETS 49,573 44,753
CURRENT LIABILITIES    
Trade payables 2,345 1,883
Employees and payroll accruals 1,121 1,015
Related parties 0 100
Accrued expenses and other liabilities 517 485
Deferred revenue 695 726
Short-term loan and other 1,690 1,194
Total current liabilities 6,368 5,403
LONG-TERM LIABILITIES    
Long-term loan 29,181 33,952
Deferred revenue 49 305
Deferred tax liability LT 170 170
Accrued severance pay 0 0
Operating lease liabilities 0 108
Total non-current liabilities 29,400 34,535
SHAREHOLDERS' EQUITY:    
Ordinary shares 21,970 9,094
Additional paid-in capital 95,822 102,670
Accumulated deficit (103,985) (106,948)
Total shareholders' equity 13,807 4,816
Total Liabilities and Shareholders' Equity $ 49,575 $ 44,754
v3.24.2.u1
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]    
REVENUES $ 14,397 $ 14,124
COST OF REVENUES 6,867 10,276
GROSS PROFIT 7,530 3,848
OPERATING EXPENSES    
Research and development, net 1,900 1,662
Sales and marketing 1,210 1,128
General and administration 2,748 2,374
Other operating expenses 570 405
Total operating expenses 6,428 5,569
OPERATING (LOSS) INCOME 1,102 (1,721)
FINANCIAL EXPENSES (INCOME), NET 1,443 (869)
LOSS BEFORE INCOME TAX 2,545 (2,590)
INCOME TAX BENEFIT 418 0
NET LOSS FOR THE PERIOD $ 2,963 $ (2,590)
NET LOSS PER SHARE    
Basic $ 2.26 $ (10.66)
Diluted $ 1.19 $ (10.66)
Weighted average number of ordinary shares used in computing basic net loss per share 1,311,924 242,946
Weighted average number of ordinary shares used in computing diluted net loss per share 2,483,714 242,946
v3.24.2.u1
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Ordinary shares [Member]
Additional paid-in capital [Member]
Accumulated deficit [Member]
Total
Balance at Dec. 31, 2022 $ 3,057 $ 103,000 $ (102,926) $ 3,131
Balance (in shares) at Dec. 31, 2022 210,316      
Net loss $ 0 0 (2,590) (2,590)
Exercise of options and debt conversion $ 301 424 0 725
Exercise of options and debt conversion (in shares) 22,027      
Share Issuance $ 1,552 649 0 2,201
Share Issuance (in shares) 46,410      
Balance at Jun. 30, 2023 $ 4,910 104,073 (105,516) 3,467
Balance (in shares) at Jun. 30, 2023 278,753      
Balance at Dec. 31, 2023 $ 9,094 102,670 (106,948) 4,816
Balance (in shares) at Dec. 31, 2023 664,552      
Net loss $ 0 0 2,963 2,963
Exercise of options and debt conversion $ 7,415 (4,140) 0 3,275
Exercise of options and debt conversion (in shares) 901,086      
Share Issuance $ 5,460 (2,707) 0 2,753
Share Issuance (in shares) 405,808      
Balance at Jun. 30, 2024 $ 21,970 $ 95,822 $ (103,985) $ 13,807
Balance (in shares) at Jun. 30, 2024 1,971,446      
v3.24.2.u1
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities:    
Net loss $ 2,963 $ (2,590)
Adjustments to reconcile net income to net cash used in operating activities:    
Depreciation and amortization 1,477 1,306
Increase in trade receivables, net (3,167) (1,579)
Increase in other accounts receivable and prepaid expenses (38) (114)
Increase (decrease) in inventories, net (279) 352
Increase(decrease) in trade payables 462 (793)
Decrease (increase) in deferred tax (418) 0
Increase (Decrease) in employees and payroll accruals 106 (264)
Increase (decrease) in accrued severance pay 0 23
Increase(decrease) in long-term loan and other debt (1,643) 809
Increase (decrease) in accrued expenses and other liabilities (413) (559)
Net cash used in operating activities (949) (3,409)
Cash flows from investing activities:    
Purchase of property and equipment (611) (1,041)
Decrease (Increase) in severance pay fund 0 (25)
Capitalization of software development costs (574) (684)
Net cash provided by (used in) investing activities (1,185) (1,750)
Cash flows from financing activities:    
Issuance of share capital, net of issuance costs 2,753 2,201
Long-term debt, net 0 0
Related parties (100) (26)
Net cash provided by (used in) financing activities 2,653 2,175
Increase (decrease) in cash, cash equivalents and restricted cash 519 (2,984)
Cash, cash equivalents and restricted cash at the beginning of the year 5,577 4,505
Cash, cash equivalents and restricted cash at the end of the period $ 6,096 $ 1,521
v3.24.2.u1
GENERAL
6 Months Ended
Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GENERAL
NOTE 1:  GENERAL
 
a.
SuperCom Ltd. (the “Company”) is an Israeli resident company organized in 1988 in Israel. On January 24, 2013, the Company changed its name back to SuperCom Ltd, its original name, from Vuance Ltd. On September 12, 2013, the Company’s ordinary shares were approved for listing on the NASDAQ Capital Market and began trading under the ticker symbol “SPCB” on September 17, 2013. Previously, the Company’s ordinary shares traded on the OTCQB® electronic quotation service.
 
The Company is a global provider of e-GOV, IoT, Communication and Cyber Security solutions to governments and organizations, both private and public, throughout the world; (i) IoT products and solutions reliably identify, track and monitor people or objects in real-time, enabling customers to detect unauthorized movement of people, vehicles and other monitored objects. The Company provides an all-in-one field-proven PureSecurity suite, accompanied by services specifically tailored to meet the requirements of an IoT customer; (ii) Proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, the Company have helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors, and Lands; (iii) Solutions for carrier wi-fi, enterprise connectivity as well as its legacy backhaul services and products; (iv) Cutting edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption methodologies, and comprehensive device and port control, The Company maps sensitive information and controls data flow through email, web, external devices, and additional channels.
 
b.
Liquidity Analysis
 
The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past 3 years. As of six months ended June 30, 2024, the Company had an accumulated deficit of $103,985 and net cash used in operating activities of $949, compared to $3,409 for six months ended June 30, 2023.
 
Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and noted that as of June 30, 2024, the Company had cash, cash equivalent, and restricted cash of $6,096 and positive working capital of $26,095
 
Additionally, the Company secured financing of $20,000 during 2018, of which $6,000 remains available to the Company to draw during the 12 months following the balance sheet date, under certain conditions. Throughout 2021, the Company also secured through the issuance of multiple notes aggregate gross proceeds of $12,000 of subordinated debt.
 
On March 1, 2022, the Company raised $4.65 million in a registered direct offering with a single accredited institutional investor of an aggregate of 156,500 of its ordinary shares, and 220,079 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00020 per share, and concurrent private placement to the Purchaser of the Company’s private warrants to purchase an aggregate of 282,434 or ordinary shares at an exercise price of $14.00 per share.
 
On July 27, 2022, the Company raised $1.74 million in a cash exercise of Company’s private warrants, as amended, of 282,434 of its ordinary shares at exercise price of $6.16, and concurrent private placement to the accredited institutional investor of the Company’s private warrants to purchase an aggregate of 282,434 or ordinary shares at an exercise price of $6.4 per share.
 
On March 31, 2023, the Company raised $2.4 million in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 24,250 of its ordinary shares, and 51,631 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 75,881 of its ordinary shares at an exercise price of $33.2 per share.
 
On August 3, 2023, the Company raised $2.75 million in a registered offering with a single accredited institutional investor through the sale of an aggregate of 33,050 of its ordinary shares, and 128,715 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent issuance to such Purchaser of the Company’s warrants to purchase an aggregate of 161,765 of its ordinary shares at an exercise price of $17 per share.
 
On November 15, 2023, the Company raised approximately $2.0 million in gross proceeds in a warrant exercise and reload with a single accredited institutional investor through warrant exercise of 54,050 warrant to ordinary shares, and warrant exercise of 183,596 warrant to pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent warrant reload to such Purchaser of the Company’s private warrants to purchase an aggregate of 475,291 of its ordinary shares at an exercise price of $10 per share.
 
On April 19, 2024, the Company raised approximately $2.9 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 143,694 of its ordinary shares, and 262,114 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 450,808 of its ordinary shares at an exercise price of $7.6 per share
 
To date, the Company has used the proceeds from the secured financing, subordinated debt, and private placement (i) to satisfy certain indebtedness; and (ii) for general corporate purposes, and (iii) for working capital needs for multiple new government customer contracts with significant positive cash flow.
 
Furthermore, the available $6 million secured credit facility from Fortress Investment Group may provide the Company with additional access to capital if needed.
 
The Company believes that based on the above-mentioned secured financings, management’s plans, significant cost savings, and expected cash streams from the Company’s current contracts with customers worldwide, it will be able to fund its operations for at least the next 12 months.
 
c.
Senior Secured Credit Facility
 
On September 6, 2018 and October 26, 2018, through a two-stage closing process, the Company entered into a Senior Secured Credit Facility with affiliates of Fortress Investment Group LLC("Fortress") with an aggregate principal amount of up to $20,000 (the "Credit Facility"). The Initial Term Loan which finalized on October 26, 2018 has an aggregate principal of $10,000, and the Incremental Term Loan provides for up to an additional $10,000 in principal through Incremental Draws of at least $1,000 each. In 2019, a total of $4,000 gross was drawn on the Incremental Term Loan, and some of the terms of the Credit Facility were amended to support the needs of the company. The Credit Facility bears interest on the borrowed balance at a rate per annum equal to LIBOR plus an applicable margin (the "Interest Margin") dependent on the EBITDA Leverage Ratio which is calculated and reset on a quarterly basis (8.0% for an EBITDA Leverage Ratio greater than or equal to 2.50x; 7.0% for an EBITDA Leverage Ratio less than 2.50x). At the Company's election, interest is paid in cash or in-kind in the amount of 4% per annum of the Interest Margin. The balance of interest is payable in cash monthly in arrears. For amounts which remain un-borrowed, the Company incurs interest at a rate of 0.50% per annum ("Unused Fee"). From closing and until today, the Company only paid monthly interest payments. The majority of the principal to be paid via a bullet payment at the maturity date, which the company expects to be amended to December 2028.
 
The Credit Facility is subject to an original issue discount equal to 2.5% of any drawn amounts, and amounts repaid cannot be re-borrowed. At maturity, an end-of-term fee of 2.25% to 4.5% is owed by the Company for any amounts drawn. In connection with securing the Credit Facility, the Company incurred legal and due diligence fees, which are recorded together with the original issue discount and end-of-term fee, and amortized into interest expense over the life of the Credit Facility.
 
In connection with the Credit Facility, the Investor received 1,250 warrants initially and an additional 3,750 warrants for amendments (the “Credit Facility Warrants”) and purchased 5,335 unregistered common shares at a share price of $37.4 from the Company at a total of $200. The Credit Facility Warrants mature 7 years from the date of issuance, were set to be issued at a strike price at a premium to the then current market price.
 
In 2021, the Company secured through the issuance of subordinated notes, gross proceeds of $12,000. For the consideration of $12,000 in gross proceeds, SuperCom issued to a certain institutional investor in February 2021 and June 2021, two-year unsecured, subordinated promissory notes in the amounts of $7,000 and $5,000, respectively, both with similar structures and terms. Given the subordination agreement between the senior secured loan investor, the subordinated debt investor and the Company, the subordinated investor may request that the balance of the subordinated debt be paid only after the senior secured Fortress debt is paid in full. The notes have a 5% annual coupon and a built-in increase to the balance of the notes by 5% every 6 months for the first 24 months, for any portion of the notes which has not been paid down prior to maturity. All principal and interest accrued is required to be paid in only one-bullet payment at maturity, and the company has the right to pre-pay any portion of either note at any time without a pre-payment penalty. The company has an option at its discretion only, at any time after 12 months to pay down all or a portion of either note using its ordinary shares, subject to certain conditions being met.
 
During 2024, 2023, 2022 and 2021 the Company converted $ 5,535, $500, $211 and $7,601, respectively, of the remaining principal and accrued interest of subordinated notes into the Company’s ordinary shares.
 
As of June 30, 2024, the outstanding principal, including accrued interest, of the Credit Facility and the aggregate balance for these Subordinated Debt was $29,181.
 
The Company purchases certain services and products used by it to generate revenues in its projects and sales from several sole suppliers. Although there are only a limited number of manufacturers of those particular services and products, management believe that other suppliers could provide similar services and products on comparable terms without affecting operating results.
v3.24.2.u1
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6 Months Ended
Jun. 30, 2024
Condensed Financial Statements [Abstract]  
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2:  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
Financial Statement preparation
 
These unaudited interim consolidated financial statements of the Company and its subsidiaries (collectively referred to in its report as "Company"), as of June 30, 2024 and for the six months then ended have been prepared, in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). They do not include all information and notes required by U.S. GAAP in the preparation of annual consolidated financial statements.
 
The accounting policies used in the preparation of the unaudited interim consolidated financial statements is the same as those described in the Company's audited consolidated financial statements prepared in accordance with U.S. GAAP for the year ended December 31, 2023.
 
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
 
The Company believes all adjustments necessary for a fair statement of the results for the period presented have been made, and all such adjustments were of a normal recurring nature unless otherwise disclosed. The financial results for the period are not necessarily indicative of financial results for the full year.
 
These financial statements should be read in conjunction with the Company's consolidated financial statements for the year ended December 31, 2023, and the accompanying notes. There have been no changes in the significant accounting policies from those disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 Form 20-F/A.
v3.24.2.u1
INVENTORIES, NET
6 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
INVENTORIES, NET
NOTE 3:  INVENTORIES, NET
 
   
June 30,
2024
   
December 31,
2023
 
   
$
   
$
 
Raw materials, parts and supplies
   
1,672
     
1,380
 
Finished products
   
1,110
     
1,123
 
                 
     
2,782
     
2,503
 
 
As of June 30, 2024 and December 31, 2023, inventory is presented net of write-offs for slow inventory in the amount of approximately $2,227 and $2,215, respectively.
v3.24.2.u1
OTHER INTANGIBLE ASSETS, NET
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
OTHER INTANGIBLE ASSETS, NET
NOTE 4:  OTHER INTANGIBLE ASSETS, NET
 
   
June 30,
2024
   
December 31,
2023
 
    $     $  
Customer relationship & Other
   
155
     
532
 
IP & Technology
   
1,591
     
1,878
 
Capitalized software development costs
   
3,505
     
3,094
 
                 
     
5,251
     
5,504
 
v3.24.2.u1
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION
6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION
NOTE 5:  COMMITMENTS AND CONTINGENT LIABILITIES – LITIGIATION
 
We are party to legal proceedings in the normal course of our business. There are no material pending legal proceedings to which we are a party or of which our property is subject. Although the outcome of claims and lawsuits against us cannot be accurately predicted, we do not believe that any of the claims and lawsuits, will have a material adverse effect on our business, financial condition, results of operations or cash flows for any quarterly or annual period.
v3.24.2.u1
INVENTORIES, NET (Tables)
6 Months Ended
Jun. 30, 2024
Inventory Disclosure [Abstract]  
Schedule of inventory, net
   
June 30,
2024
   
December 31,
2023
 
   
$
   
$
 
Raw materials, parts and supplies
   
1,672
     
1,380
 
Finished products
   
1,110
     
1,123
 
                 
     
2,782
     
2,503
 
v3.24.2.u1
OTHER INTANGIBLE ASSETS, NET (Tables)
6 Months Ended
Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of other intangible assets, net
   
June 30,
2024
   
December 31,
2023
 
    $     $  
Customer relationship & Other
   
155
     
532
 
IP & Technology
   
1,591
     
1,878
 
Capitalized software development costs
   
3,505
     
3,094
 
                 
     
5,251
     
5,504
 
v3.24.2.u1
GENERAL (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Thousands
1 Months Ended 6 Months Ended 12 Months Ended
Aug. 03, 2023
Mar. 01, 2022
Apr. 19, 2024
Nov. 15, 2023
Mar. 31, 2023
Jul. 27, 2022
Feb. 28, 2021
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2021
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2020
Dec. 31, 2018
Accumulated deficit               $ 103,985     $ 106,948      
Net cash used in operating activities               949 $ 3,409          
Cash, cash equivalents and restricted cash               6,096 $ 1,521   $ 5,577 $ 4,505    
Net working capital               26,095            
Amount of secured financing                           $ 20,000
Remaining available secured financing                         $ 6,000  
Gross proceeds of subordinated debt             $ 12,000     $ 12,000        
Amount of direct offering cost $ 2,750 $ 4,650 $ 2,900 $ 2,000 $ 2,400 $ 1,740                
Pre-funded warrant issued purchase of ordinary shares 128,715 220,079 262,114 183,596 51,631                  
Number of warrants to purchase ordinary shares 33,050 156,500 143,694 54,050 24,250 282,434                
Concurrent private placement of warrant to purchase ordinary shares 161,765 282,434 450,808 475,291 75,881 282,434                
Concurrent private placement of exercise price $ 17 $ 14 $ 7.6 $ 10 $ 33.2 $ 6.4                
Exercise price of warrants $ 0.0002 $ 0.0002 $ 0.0002 $ 0.0002 $ 0.0002 $ 6.16                
Secured Credit Facility [Member] | Fortress Investment Group [Member]                            
Remaining available secured financing               $ 6,000            
v3.24.2.u1
GENERAL - Senior Secured Credit Facility (Narrative) (Details)
$ / shares in Units, $ in Thousands
1 Months Ended 6 Months Ended 12 Months Ended
Feb. 28, 2021
USD ($)
Jun. 30, 2024
USD ($)
$ / shares
shares
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2019
USD ($)
Jun. 30, 2021
USD ($)
Oct. 26, 2018
USD ($)
Line of Credit Facility [Line Items]                
Gross proceeds of subordinated debt $ 12,000       $ 12,000      
Subordinated promissory note term         2 years      
Consideration unsecured subordinated promissory note   $ 5,535 $ 500 $ 211 $ 7,601      
Subordinated Debt   $ 29,181            
Certain Institutional Investor [Member]                
Line of Credit Facility [Line Items]                
Aggregate principal amount $ 7,000           $ 5,000  
Consideration unsecured subordinated promissory note         $ 12,000      
Fortress [Member]                
Line of Credit Facility [Line Items]                
Initial warrants received by investor | shares   1,250            
Additional warrants | shares   3,750            
Unregistered common shares issued | shares   5,335            
Value of unregistered common shares issued   $ 200            
Share price | $ / shares   $ 37.4            
Credit facility warrants, maturity term   7 years            
Outstanding principal of credit Facility   $ 6,000            
Credit Facility [Member]                
Line of Credit Facility [Line Items]                
Unused fee (as a percent)   0.50%            
Original issue discount (as a percent)   2.50%            
Credit Facility [Member] | Minimum [Member]                
Line of Credit Facility [Line Items]                
Term fee (as a percent)   2.25%            
Credit Facility [Member] | Maximum [Member]                
Line of Credit Facility [Line Items]                
Term fee (as a percent)   4.50%            
Credit Facility [Member] | EBITDA Leverage Ratio Greater Than or Equal to 2.50 Times [Member]                
Line of Credit Facility [Line Items]                
EBITDA leverage ratio   2.5            
Credit Facility [Member] | EBITDA Leverage Ratio Less Tan 2.50x [Member]                
Line of Credit Facility [Line Items]                
Interest margin   7.00%            
EBITDA leverage ratio   2.5            
Credit Facility [Member] | Fortress [Member]                
Line of Credit Facility [Line Items]                
Aggregate principal amount               $ 20,000
Current borrowing capacity               1,000
Gross draw down amount           $ 4,000    
Initial Term Loan [Member] | Fortress [Member]                
Line of Credit Facility [Line Items]                
Current borrowing capacity               10,000
Incremental Term Loan [Member] | Fortress [Member]                
Line of Credit Facility [Line Items]                
Current borrowing capacity               $ 10,000
v3.24.2.u1
INVENTORIES, NET (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Inventory Disclosure [Abstract]    
Raw materials, parts and supplies $ 1,672 $ 1,380
Finished products 1,110 1,123
Inventories, net 2,782 2,503
Valuation adjustment for slow inventory $ 2,227 $ 2,215
v3.24.2.u1
OTHER INTANGIBLE ASSETS, NET (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Other intangible assets, including operating lease right-of-use asset $ 5,251 $ 5,504
Customer relationship & Other [Member]    
Other intangible assets, including operating lease right-of-use asset 155 532
IP & Technology [Member]    
Other intangible assets, including operating lease right-of-use asset 1,591 1,878
Capitalized software development costs [Member]    
Other intangible assets, including operating lease right-of-use asset $ 3,505 $ 3,094

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