26 June 2024
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
audited results for the 12 months ended 31 December
2023.
Financials Highlights
·
Revenues $4.01m (2022:
$4.04m), with greater contribution from the supply
chain solution products rather than vehicle tracking
solutions.
·
Adjusted EBITDA gain of $341,000 (2022: EBITDA
loss of $812,000).
·
Gross margin for the period was 53% (2022:
42%).
·
General expenses decreased to $1.3m (H1 2022:
$1.5m).
Post-period Highlights
·
4 major long term commercial agreements,
representing total potential orders of up to 100,000 units,
the majority of which are from customers in LATAM, which, subject
to full delivery and deployment within the contract timeframes,
would contribute c. $20m hardware and SaaS revenue over 3
years.
·
Continued implementation of the new strategy
focusing on the supply chain markets, based on SaaS
model
Avi Hartmann, CEO of t42,
commented:
"We offer a comprehensive, cutting
edge, technological solution for monitoring and securing
containers, effectively addressing a critical challenge in
maritime, land transportation and air cargo. Our solution
guarantees reliability, security, and economic feasibility while
significantly reducing implementation time and accelerating return
on investment for our customers. We are actively pursuing business
opportunities in key markets such as South and North America,
evident from recent agreements signed and the substantial business
potential they represent."
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
|
The Annual Report will
be made available to shareholders shortly and be available from the
Company's website at: www.t42.co.uk/. A notice of AGM will be despatched to shareholders in
due course.
The information contained within this announcement is deemed
by the Company to constitute inside information pursuant to Article
7 of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as
amended.
CHAIRMAN'S
STATEMENT
We are pleased to report the
audited financial statements for the year ended 31st December
2023.
Revenues were $4.01m (2022:
$4.04m). However, we are pleased to report a gross margin of 53%
for the year compared to 42% for the previous year, and a reduced
net loss $0.42m for the year (2022: $1.01m loss). All in all,
the financials indicators continue to show stability and improvement, with a
decrease in expenses and loss which have led to a positive adjusted
EBITDA of $0.34m for the reporting period. These improvements are encouraging
as they demonstrate stabilization in the business and progress in
the Company's strategy. The Company has focused on long-term
significant agreements and has concluded 4 of these since the end
of reporting period as summarised below.
· In
February 2024 a follow-up agreement was signed with a distributor,
originally contracted in 2023 to whom 2,000 Lokies units had been
delivered. Under the new agreement it was agreed to supply up to
30,000 units over 3 years, which we estimated would deliver up to
$7.5m in revenues, including SaaS revenues, if fully ordered and
deployed.
· In
April 2024 we announced a further significant agreement, with a
Mexican distributor, involving the application of the tracking
system for the control of a large number of petrol and diesel
transporters enabling significant controls to be
installed.
· In
May 2024 another long-term agreement was entered into with a
leading company in Brazil within the transportation and logistics
security tracking sector. The agreement is for tracking units over
a 3 year period and is expected by the Company to have a total
value of c. $4.5m over the agreement period on the basis of full
deployment. The agreement was achieved after a long systems
development process and is expected to produce an order for 10,000
tracking units during 2024.
· Later in May 2024 the Company concluded another agreement
under which an initial order of 3,500 units (combination of Lokies
and Tetis) has been received, as part of total expected orders of
10,000 units during 2024. The agreement has an estimated total
value of c. $7m over 3 years, for both hardware and SaaS
revenues.
After a significant period
of testing and comparing different solutions, DHL Israel have
recently chosen Lokies as their standard solution in the field.
After a testing period of over a month, DHL Israel has placed their
first commercial order for Lokies, which will be implemented
immediately in their fleet. This order marks a new and significant
opportunity for the Company, and we expect it will open up
additional commercial opportunities from DHL Israel.
During the reported period, t42
has significantly advanced its R&D efforts to enhance its
product offerings and meet the evolving needs of its clients. We
have successfully incorporated additional 4G modules from diverse
suppliers, improving both pricing and availability. Our commitment
to product reliability has been strengthened through the
implementation of new and improved testing methods in our
manufacturing processes.
In July 2023, we initiated a
notable collaboration with a leading global firm providing
sustainable solutions across the cold chain. Furthermore, we
migrated our location by cellular antennas feature to our
proprietary cloud infrastructure. This strategic move provides
greater flexibility in selecting cellular module providers and
reduces additional costs.
Our Lokies and Helios Pro products
have been extended to support a variety of external BLE sensors,
acting as gateways to supply users with comprehensive information
from the device surroundings. Additionally, we released a new
version of our flexible shackle for Lokies, specifically designed
for a global retail company, enhancing security solutions across a
broader range of trucks.
On the cloud and portal side, we
have expanded our services to allow clients to use our systems as
Data as a Service (DaaS), integrating seamlessly with their
existing infrastructure. This initiative has attracted over 20
clients, opening new market segments. We also introduced a
custom-made reporting system, integrated third-party devices for
Latin American customs authorities, and added new security layers,
including two-factor authentication for both web and mobile
platforms. Our dashboards and reports now offer more business
insights for our clients.
Special projects during 2023
included a tailored high-accuracy impact detection solution for an
American company using Kylos and an extended portal for a client's
special project requirements in Tanzania. We have also continued
our close integration with Zero Motorcycles, enhancing the
information they provide to their clients.
These R&D advancements
emphasize our commitment to innovation and excellence, ensuring we
remain at the forefront of the IoT tracking and security
industry.
FINANCIAL REVIEW
Group revenues for the year were
$4.01m, compared with $4.04m for the year ended 31 December 2022, a
decrease of 1%.
The gross margin for the year
increased to 53% (2022: 42%).
Total operating expenditure for
the year reduced to $2.24m (2022: $3.01m),
Net loss after taxation for the
year decreased to $0.42m compared with the 2022 net loss of
$1.01m.
The reduced operating loss in the
period was $0.1m compared to an operating loss of $1.37m in
2022.
The Group recorded an exchange
rate gain of $27k resulting from the weakness of the Israeli Shekel
compared with the US dollar (2022: exchange rate loss of
$450k).
The Group balance sheet showed an
increase in trade receivables to $0.89m, compared with $0.49m as of
31 December 2022.
Group inventories at the period
end were $1.44m, compared to $1.58m as of the end of
2022.
Trade payables at the year-end
decreased at $0.84m, compared with $1.14m as of 31 December
2022.
Net cash used in operating
activities in the period was approximately $0.22m, compared with
$0.95m for the year ended 31 December 2022.
Post-period, in March 2024, the
Company reached an agreement over the extension of its £925k
unsecured convertible loans until January 2025 under new
terms.
The auditors report draws
attention to the deficit in current liabilities as of 31 December
2023. However, given the significant additional sales referred to
in this report, the Board are confident that additional funding, if
required, will be available. In addition, the Company has
non-binding indications from the holders of the convertible loan
notes maturing in January 2025 that they would convert or extend
the loans, subject to agreeing terms.
OUTLOOK
We are expecting further growth in
revenues during 2024 based on our current pipeline of potential new
orders. The focus on long-term agreements demonstrates the market
demand for our products and solutions, stemming from the strength
of our R&D and technological advantages.
It is pleasing to have concluded
four long-term agreements this year to date concluded as we
continue to collaborate with market leaders to promote t42's
strategy in accessing mass markets. We are confident that our
cutting-edge technology will be translated into further contracts
in in the short- to mid-term.
As our strategic decision to focus
on the shipping container market evolves, we believe that the
technological advantages of our Helios solution will allow us to
secure further development projects and opportunities.
Michael Rosenberg OBE
Non-Executive Chairman
_______________
CORPORATE GOVERNANCE
STATEMENT
General
The Board has adopted the QCA
Corporate Governance Code ("the QCA Code"), further detail of which
is set out on the Company's 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.
However, given the current troubles in Israel it
was decided to hold all meetings in 2023 by conference call.
During 2023, a total of 11 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 one 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. However, given the
current troubles in Israel it was decided to hold all meetings in
2023 by conference call
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 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 Company's 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 Company's 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 2023, with the assistance of the Company's
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 Company's brokers, and via the website.
Shareholders are encouraged to attend the Company's 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 Company's tracking products
are sold via distributors; therefore, the Company has little
influence over individual product sales. Thus, 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
Company's 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 2023, management has actively been seeking to widen the
manufacturing bases for the Company's 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 11-12 of this
document.
Ensure that the directors
have the necessary up-to-date experience and
skills
The Board currently comprises 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 Non-Executive Chairman,
Michael Rosenberg, brings further strategic, commercial,
transaction and leadership experience which will be invaluable as
the Board pursues the Company's 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 about
20 members based in the office in Israel and their needs and
aspirations are regularly reviewed.
Main governance structures
and processes
The Non-Executive 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 non-executive Chairman of the Board and Audit Chair
at Cake Box Holdings PLC (AIM: CAKE).
Igor Vatenmacher (Chief Financial Officer)
Igor is a certified public
accountant in Israel and has a bachelor's 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. Since his appointment, he 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 Company's auditors and, in
consultation with the auditors, the scope of the annual audit. The
Audit Committee met twice during 2023. In June 2023, the Audit Committee
reviewed the financial statements for the year ended 31 December
2022, paying particular attention to the level of debtors. The
Audit Committee met in September 2023 to consider the interim financial
statements for the six months ended 30 June 2023. Again, the Committee focused on
stock valuation and debtor levels.
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
2023. 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 plan 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 2023. This will be kept under annual review by the
Board.
On behalf of the Board,
M. Rosenberg, Non-Executive
Chairman
_______________
t42 IoT Tracking Solutions PLC
Directors' Report
for the Year Ended December 31, 2023
The directors present the annual
report together with the financial statements and auditors' report
for the year ended December 31, 2023.
The Company was incorporated in
Jersey and two wholly-owned trading subsidiaries:
Starcom Systems Limited
and t42 Ltd, were incorporated in Jersey
and in Israel, respectively.
Principal activities and review of
business
t42 pioneering Advanced Real-Time
Tracking and Management Solutions
t42 is a global leader in the
field of advanced, automated real-time systems, specializing in the
remote tracking and management of vehicles, containers, and assets.
Our commitment to innovation is underpinned using cutting-edge
Artificial Intelligence (AI) and Machine Learning (ML)
technologies. We offer a unique and revolutionary real-time cargo
tracking solution that caters to a diverse clientele.
At the forefront of our product
line are the revolutionary Tetis, Lokies, and Kylos products. These
products provide a comprehensive 360 degree view of containers and
goods throughout the entire supply chain. Our commitment to
excellence is evident in the strength, stability, and continuous
performance of all our systems.
Accounts production
The financial statements for the
year ended December 31, 2023, 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 2023: (All amounts presented in thousands
of USD)
|
Executive Director
|
Salary
|
Pension and Related Expenses
|
Fees
|
Total
|
|
A Hartmann
|
165
|
13
|
-
|
178
|
|
I Vatenmacher
|
105
|
25
|
-
|
130
|
|
Non-Executive Directors
|
|
|
|
|
|
M Rosenberg
|
-
|
-
|
50
|
50
|
|
M Blair
|
-
|
-
|
45
|
45
|
|
Total 2023
|
270
|
38
|
95
|
403
|
|
|
|
|
|
| |
Directors' remuneration in share
options: (In thousands)
|
Executive Director
|
Total
vested
at 01/01/23
|
Exercised
|
Vested/
(Expired) during the year
|
Total
Vested at 31/12/23
|
Total
Un-vested at 31/12/23
|
Grant
Total
|
|
|
A Hartmann
|
1,082
|
-
|
41
|
1,123
|
42
|
1,165
|
|
|
|
I Vatenmacher
|
292
|
-
|
41
|
333
|
42
|
375
|
|
|
|
Non-Executive Directors
|
|
|
|
|
|
|
|
|
|
M Rosenberg
|
1,182
|
(279)
|
(89)
|
814
|
-
|
814
|
|
|
|
M Blair
|
615
|
(251)
|
-
|
364
|
-
|
364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
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 Alliance's (QCA) Corporate Governance Code ("QCA Code") 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 a 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 Group's 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.
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
directors' 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.
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, Non-Executive
Chairman
________________
Jerusalem, 25 June 2024
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 - "the Group") as
of December 31, 2023 and 2022 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 Auditors' Regulations
(Auditor's 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, 2023 and 2022 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 1e in the financial statements regarding
the Company's accumulated losses of 16M USD from operations since
inception, the current convertible loans to be repaid by January
2025 and the management efforts to raise additional funds
required. These factors
indicate that there may be an uncertainty as to the Company's
ability to continue as a going concern. The management is on
the opinion that due to the growth in activity and other actions
taken the Company will have the sufficient cash flow it requires to
fund its ongoing operations as well as solve the requirement to
repay the convertible loans.
Key Audit
Matters
Key audit matters are matters
arising from the current period audit of the financial statements
that were communicated or required to be communicated to the board
of directors and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgements. We
determined that there are no key audit matters.
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|
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Barzily & Co.
|
|
Certified Public
Accountants.
|
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A Member of MSI Worldwide
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T42 IOT TRACKING SOLUTIONS PLC
CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
U.S. Dollars in thousands
|
|
|
December
31,
|
|
|
Note
|
2023
|
|
2022
|
|
ASSETS
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
Property, plant and equipment,
net
|
6
|
422
|
|
546
|
|
Right-of-use assets,
net
|
22
|
1,044
|
|
981
|
|
Intangible assets, net
|
7
|
952
|
|
1,021
|
|
Income tax authorities
|
|
-
|
|
57
|
|
Total Non-Current Assets
|
|
2,418
|
|
2,605
|
|
CURRENT ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
186
|
|
174
|
|
Short-term bank deposit
|
5
|
35
|
|
130
|
|
Trade receivables,
net
|
3
|
892
|
|
488
|
|
Other accounts
receivable
|
|
27
|
|
71
|
|
Inventories
|
4
|
1,439
|
|
1,581
|
|
Total Current Assets
|
|
2,579
|
|
2,444
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
4,997
|
|
5,049
|
|
|
|
|
|
|
|
DEFICIT AND LIABILITIES
|
|
|
|
|
|
DEFICIT
|
14
|
(939)
|
|
(538)
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
Long-term loans from banks, net of
current maturities
|
10
|
88
|
|
142
|
|
Long-term leasehold
liabilities
|
22
|
814
|
|
790
|
|
Conversion component of a
convertible loan at fair value
|
11A,D
|
31
|
|
27
|
|
Amortized cost of a convertible
loan
|
11A,D
|
917
|
|
292
|
|
Total Non-Current Liabilities
|
|
1,850
|
|
1,251
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
Short-term bank credit
|
|
42
|
|
42
|
|
Short-term bank loan
|
12
|
103
|
|
719
|
|
Current maturities of long-term
loans from banks
|
10
|
64
|
|
70
|
|
Trade payables
|
|
844
|
|
1,144
|
|
Other accounts payable
|
9
|
433
|
|
260
|
|
Leasehold liabilities
|
22
|
168
|
|
112
|
|
Warrants at fair value
|
11B,C
|
12
|
|
84
|
|
Amortized cost of a convertible
loan
|
11B,C,D
|
1,681
|
|
1,161
|
|
Related parties
|
20
|
739
|
|
744
|
|
Total Current Liabilities
|
|
4,086
|
|
4,336
|
|
|
|
|
|
|
|
TOTAL DEFICIT AND LIABILITIES
|
4,997
|
|
5,049
|
|
|
|
|
|
|
|
| |
The
accompanying notes are an integral part of the consolidated
financial statements.
|
25 June
2024
|
|
|
|
|
|
|
Date of
Approval
of the
Financial Statements
|
|
Igor
Vatenmacher
CFO
|
|
Avi
Hartmann CEO
|
T42 IOT TRACKING SOLUTIONS PLC
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
U.S. Dollars in thousands (except shares
data)
+
Year ended December
31,
|
|
|
|
|
|
|
Note
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
4,005
|
|
4,041
|
|
|
|
|
|
|
|
|
Cost of sales
|
15
|
|
(1,882)
|
|
(2,358)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
2,123
|
|
1,683
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
(92)
|
|
(125)
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
(485)
|
|
(652)
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
16
|
|
(1,665)
|
|
(2,250)
|
|
|
|
|
|
|
|
|
Other expenses,
net
|
|
|
(3)
|
|
(29)
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
(2,245)
|
|
(3,056)
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(122)
|
|
(1,373)
|
|
|
|
|
|
|
|
|
Finance income
|
17
|
|
604
|
|
814
|
|
|
|
|
|
|
|
|
Finance expenses
|
18
|
|
(902)
|
|
(447)
|
|
|
|
|
|
|
|
|
Net finance income
(expenses)
|
|
|
(298)
|
|
367
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the
year
|
|
|
(420)
|
|
(1,006)
|
|
|
|
|
|
|
|
|
Loss per share:
|
|
|
|
|
|
|
Basic and diluted loss per
share
|
14,
19
|
|
(0.008)
|
|
(0.019)
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of the consolidated
financial statements.