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SuperCom Ltd

SuperCom LtdSPCB決算レポート

Nasdaq · 情報技術 · 半導体及び関連デバイス

Super.com is a technology company headquartered in San Francisco and co-founded by Hussein Fazal and Henry Shi. The company provides financial services, including reward programs and travel bookings.

What changed in SuperCom Ltd's 20-F — 2023 vs 2024

Top changes in SuperCom Ltd's 2024 20-F

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Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. Reserve 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D. Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY 16 A. History and Development of the Company 16 B. Business Overview 18 C. Organizational Structure 27 D.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. Reserve 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D. Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY 15 A. History and Development of the Company 15 B. Business Overview 17 C. Organizational Structure 26 D.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Securities and Exchange Act of 1934, as amended, (the “Exchange Act”), we are exempt from certain rules and regulations provisions applicable to U.S. public companies and public companies listed on Nasdaq including: • the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission of quarterly reports on Form 10-Q and current reports on Form 8-K; • the sections of the Exchange Act regulating the solicitation of proxies in connection with shareholder meetings; 15 • the provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; and • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction (i.e., a purchase and sale, or sale and purchase, of the issuer’s equity securities within less than six months).
Securities and Exchange Act of 1934, as amended, (the “Exchange Act”), we are exempt from certain rules and regulations provisions applicable to U.S. public companies and public companies listed on Nasdaq including: • the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission of quarterly reports on Form 10-Q and current reports on Form 8-K; • the sections of the Exchange Act regulating the solicitation of proxies in connection with shareholder meetings; 14 • the provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; and • the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and establishing insider liability for profits realized from any “short swing” trading transaction (i.e., a purchase and sale, or sale and purchase, of the issuer’s equity securities within less than six months).
Restrictive laws, policies or practices directed towards Israel or Israeli businesses may have an adverse impact on our operations, our financial results or the expansion of our business. 13 Our financial results may be adversely affected by inflation and currency fluctuations. We report our financial results in dollars, while a portion of our expenses, primarily salaries, are paid in NIS.
Restrictive laws, policies or practices directed towards Israel or Israeli businesses may have an adverse impact on our operations, our financial results or the expansion of our business. Our financial results may be adversely affected by inflation and currency fluctuations. We report our financial results in dollars, while a portion of our expenses, primarily salaries, are paid in NIS.
Challenging economic conditions worldwide have from time to time contributed, and may continue to contribute, to slowdowns in the communications and networking industries at large, as well as in specific segments and markets in which we operate, resulting in: • Increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products • Risk of excess and obsolete inventories • Risk of supply onstraints • Risk of excess facilities and manufacturing capacity • Higher overhead costs as a percentage of revenue and higher interest expense During the fiscal year ended December 31, 2023, we continued to see a more broad-based weakening in the global macroeconomic environment which impacted our commercial and enterprise markets.
Challenging economic conditions worldwide have from time to time contributed, and may continue to contribute, to slowdowns in the communications and networking industries at large, as well as in specific segments and markets in which we operate, resulting in: • Increased price competition for our products, not only from our competitors but also as a consequence of customers disposing of unutilized products • Risk of excess and obsolete inventories • Risk of supply constraints • Risk of excess facilities and manufacturing capacity, and • Higher overhead costs as a percentage of revenue and higher interest expense During the fiscal year ended December 31, 2023, we continued to see a more broad-based weakening in the global macroeconomic environment which impacted our commercial and enterprise markets.
As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former employees, or be forced to litigate such claims, which could negatively affect our business. 14 Your rights and responsibilities as a shareholder will be governed by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.
As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former employees, or be forced to litigate such claims, which could negatively affect our business. 13 Your rights and responsibilities as a shareholder will be governed by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.
In the last three fiscal years ended December 31, 2023, we depended on orders from large customers for a substantial portion of our revenues. The loss of all or any of these customers or a decrease in their orders could adversely impact our business, operating results and financial condition.
In the last three fiscal years ended December 31, 2024, we depended on orders from large customers for a substantial portion of our revenues. The loss of all or any of these customers or a decrease in their orders could adversely impact our business, operating results and financial condition.
Since its establishment in 1948, Israel has been involved in a number of armed conflicts with its Arab neighbors and a state of hostility, varying from time to time in intensity and degree, has continued into 2022.
Since its establishment in 1948, Israel has been involved in a number of armed conflicts with its Arab neighbors and a state of hostility, varying from time to time in intensity and degree, has continued into 2024.
Our status as a foreign private issuer is subject to an annual review and test, and will be tested again as of June 30, 2023 1 (the last business day of our second fiscal quarter of 2023). If we lose our status as a foreign private issuer, we will no longer be exempt from such rules.
Our status as a foreign private issuer is subject to an annual review and test, and will be tested again as of June 30, 2025 (the last business day of our second fiscal quarter of 2025). If we lose our status as a foreign private issuer, we will no longer be exempt from such rules.
Among other things, beginning on January 1, 2024, we would be required to file periodic reports and financial statements on a periodic basis (including both an annual report in respect of 2023 and quarterly reports in respect of each of the quarters of 2024) as if we were a company incorporated in the U.S., which, among other things, could result in increased compliance and reporting costs to us.
Among other things, beginning on January 1, 2026, we would be required to file periodic reports and financial statements on a periodic basis (including both an annual report in respect of 2025 and quarterly reports in respect of each of the quarters of 2026) as if we were a company incorporated in the U.S., which, among other things, could result in increased compliance and reporting costs to us.
Most of our revenues to date are attributable to sales in jurisdictions other than the United States. For the years ended December 31, 2023 and 2022, approximately 75% and 61%, respectively, of our revenues were derived from sales to markets outside of the United States.
Most of our revenues to date are attributable to sales in jurisdictions other than the United States. For the years ended December 31, 2024 and 2023, approximately 75% and 75%, respectively, of our revenues were derived from sales to markets outside of the United States.
The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are its economic implications on our Company’s business and operations and on Israel’s economy in general. We have approximately 53 employees in Israel.
The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are its economic implications on our Company’s business and operations and on Israel’s economy in general. We have approximately 51 employees in Israel as of December 31, 2024.
In the year ended December 31, 2021, 10% of our consolidated net revenue is attributable to sales to two large customers. Because competition in our industry is intense, our business, operating results and financial condition may be adversely affected. The global markets for our IoT and connectivity, e-Gov, and Cyber Security solutions are highly fragmented and intensely competitive.
In the year ended December 31, 2022, 36% of our consolidated net revenue is attributable to sales to one large customer. . Because competition in our industry is intense, our business, operating results and financial condition may be adversely affected. The global markets for our IoT and connectivity, e-Gov, and Cyber Security solutions are highly fragmented and intensely competitive.
If global economic and market conditions, or economic conditions in key markets, remain uncertain or deteriorate further, we may experience material impacts on our business, operating results, and financial condition.
If global economic and market conditions, or economic conditions in key markets, remain uncertain or deteriorate further, we may experience material impacts on our business, operating results, and financial condition. Unfavorable national and global economic conditions could adversely affect our business, operating results and financial condition.
The application of purchase price allocation requires that the total purchase price we paid for the SmartID division of OTI, Safend, Alvarion and Prevision be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date.
Future changes to these estimates could impact our future operating results. The application of purchase price allocation requires that the total purchase price we paid for the SmartID division of OTI, Safend, Alvarion and Prevision be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date.
In the year ended December 31, 2023, 59% of our consolidated net revenue is attributable to sales to two large customer. In the year ended December 31, 2022, 36% of our consolidated net revenue is attributable to sales to one large customer.
In the year ended December 31, 2024, 59% of our consolidated net revenue is attributable to sales to two large customers. In the year ended December 31, 2023, 59% of our consolidated net revenue is attributable to sales to two large customers.
If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our ordinary shares, and our existing shareholders may experience dilution.
To support our growing business, we must have sufficient capital to continue to make significant investments in our platform and product offerings. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our ordinary shares, and our existing shareholders may experience dilution.
If integration - related expenses and capital expenditure requirements are greater than anticipated or if we are unable to manage our growth profitably after the acquisition, our financial results and the market price of our ordinary shares may decline.
If integration - related expenses and capital expenditure requirements are greater than anticipated or if we are unable to manage our growth profitably after the acquisition, our financial results and the market price of our ordinary shares may decline. 1 Purchase price allocation in connection with our acquisition of OTI’s SmartID division, Safend, Alvarion and Prevision requires estimates, which may be subject to change in the future.
Failure to maintain effective internal control over financial reporting could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our operating results, investor confidence in our reported financial information and the market price of our ordinary shares.
Failure to maintain effective internal control over financial reporting could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our operating results, investor confidence in our reported financial information and the market price of our ordinary shares. 12 Risks Related to Our Location and Incorporation in Israel Political, economic and military instability, war and/or acts of terror in Israel may disrupt our operations and negatively affect our business condition, harm our results of operations and adversely affect our share price.
Historically, we had loss from operations during the last seven years ended December 31, 2023 and have funded our business operations and capital expenditures primarily through equity and/or debt issuances (including convertible securities). To support our growing business, we must have sufficient capital to continue to make significant investments in our platform and product offerings.
Historically, we had loss from operations during the last seven years ended December 31, 2024, expect to continue to incur substantial and increased expenses as we continue to execute our business approach and have funded our business operations and capital expenditures primarily through equity and/or debt financings (including convertible securities).
Because the interests of Sigma may differ from the interests of our other shareholders, actions taken by Sigma with respect to us may not be favorable to our other shareholders. We do not expect to pay cash dividends. We have never paid cash dividends on our ordinary shares and do not anticipate paying cash dividends in the near future.
We have never paid cash dividends on our ordinary shares and do not anticipate paying cash dividends in the near future.
Removed
Purchase price allocation in connection with our acquisition of OTI’s SmartID division, Safend, Alvarion and Prevision requires estimates, which may be subject to change in the future. Future changes to these estimates could impact our future operating results.
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The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a growing company, the difficulties that may be encountered with integrating acquired companies and the highly competitive environment in which we operate.
Removed
We have been notified by The Nasdaq Stock Market LLC of our failure to comply with certain continued listing requirements and, if we are unable to regain compliance with all applicable continued listing requirements and standards of Nasdaq, our Common Stock could be delisted from Nasdaq. Our ordinary shares are currently listed on Nasdaq.
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We cannot assure you that our business will be profitable or that we will ever generate sufficient revenue to fully meet our expenses and support our anticipated activities.
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In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements.
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During periods of slowing economic activity, our customers may reduce their demand for our products, technology and professional services, which would reduce our sales, and our business, operating results and financial condition may be adversely affected.
Removed
On September 13, 2023, we received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the closing bid price of our ordinary shares for the previous 30 consecutive business days, we no longer met the requirement to maintain a minimum bid price of $1 per share (the “Minimum Bid Price Requirement”) and were required to regain compliance with the Minimum Bid Price Requirement by March 11, 2024. 12 On March 13, 2024, we received a letter from Nasdaq notifying us that, while we have not regained compliance with the with the minimum $1 bid price per share requirement (the “Minimum Bid Price Requirement”), Nasdaq has determined that we are eligible for and granted us an additional 180 calendar day period, or until September 9, 2024 (the “Second Compliance Period”), to regain compliance.
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The global and domestic economies continue to face a number of economic challenges, including threatened sovereign defaults, credit downgrades, restricted credit for businesses and consumers and potentially falling demand for a variety of products and services.
Removed
Nasdaq's determination was based on (i) our Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and (ii) our written notice to Nasdaq of its intention to cure the deficiency during the Second Compliance Period by effecting a reverse stock split, if necessary.
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These developments, or the perception that any of them could occur, could result in longer sales cycles, slower adoption of new technologies and increased price competition for our products and services. We could also be exposed to credit risk and payment delinquencies on our accounts receivable, which are not covered by collateral.
Removed
If at any time before September 9, 2024, the closing bid price of our ordinary shares is at least $1 per share for a minimum of 10 consecutive business days, we should be able to regain compliance with the Minimum Bid Price Requirement.
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Significant portions of our business are conducted outside the markets in which our products and solutions are manufactured or generally sold, and accordingly, we often export a substantial number of products into such markets.
Removed
If we do not regain compliance within the allotted compliance period, Nasdaq staff will provide notice that our ordinary shares will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel.
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We may be denied access to potential customers or suppliers or denied the ability to ship products from any of our subsidiaries into the countries in which we currently operate or wish to operate, as a result of economic, legislative, political and military conditions, including hostilities and acts of terrorism, in such countries.
Removed
There can be no assurances that we will be able to regain compliance with the Minimum Bid Price Requirement or, if we do regain compliance with the Minimum Bid Price Requirement, that we will be able to continue to comply with all applicable Nasdaq listing requirements in the future.
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In particular, there is currently significant uncertainty about the future relationship between the U.S. and various other countries, with respect to trade policies, treaties, government regulations, and tariffs.
Removed
If we are unable to maintain compliance with these Nasdaq requirements, our ordinary shares will be delisted from Nasdaq.
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For example, the recent imposition of tariffs and/or changes in tariffs on various products by the U.S. and other countries, including China and Canada, have introduced greater uncertainty with respect to trade policies and government regulations affecting trade between the U.S. and other countries, and new and/or increased tariffs have subjected, and may in the future subject, us to additional costs and expenditure of resources.
Removed
In the event that our ordinary shares are delisted from Nasdaq, as a result of our failure to comply with the Minimum Bid Price Requirement, or due to our failure to continue to comply with any other requirement for continued listing on Nasdaq, and is not eligible for listing on another exchange, trading in our ordinary shares could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board.
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Major developments in trade relations, including the imposition of new or increased tariffs by the U.S. and/or other countries, and any emerging nationalist trends in specific countries could alter the trade environment and consumer purchasing behavior which, in turn, could have a material effect on our business financial condition and results of operations.
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In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our ordinary shares, and it would likely be more difficult to obtain coverage by securities analysts and the news media, which could cause the price of our ordinary shares to decline further.
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We cannot predict future trade policy and regulations in the United States and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business. An escalated trade war could have a significant adverse effect on world trade and the world economy.
Removed
Also, it may be difficult for us to raise additional capital if we are not listed on a national exchange. We have a shareholder that is able to exercise substantial influence over us and all matters submitted to our shareholders. Sigma Wave Ltd. (“Sigma”), which is controlled by the family members of Mrs. Tsviya Trabelsi, and by her husband Mr.
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To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost, or gross margin of our products may be adversely affected and the demand from our customers for products and services may be diminished.
Removed
Arie Trabelsi, a member of our board of directors, is the beneficial owner of approximately 4.5% of our outstanding ordinary shares as of December 31, 2023. Mrs. Trabelsi and Mr. Trabelsi are also the parents of Ordan Trabelsi, our CEO and President, and Barak Trabelsi, our COO and CTO.
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Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending. If we deem it necessary to alter all or a portion of our activities or operations in response to such policies, agreements, or tariffs, our capital and operating costs may increase.
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Such ownership interest gives Sigma the ability to influence our corporate affairs and to control our Company, including our management, subject to approvals that may be required for related-party transactions pursuant to Israeli law.
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The Russian invasion of Ukraine, which began in February 2022 resulted in the imposition of certain sanctions by the U.S., EU, UK and other jurisdictions.
Removed
Sigma may have influence over the outcome of most matters submitted to our shareholders, including the election of our directors, and such influence could make us a less attractive acquisition or investment target.
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Any heightened military conflict, economic impact or persistent geopolitical instability, including heightened operating risks in Russia and Europe, additional sanctions or counter-sanctions, heightened and prolonged inflation, cyber disruptions or attacks, and higher supply chain costs, could lead to further disruption, instability and volatility in global markets and industries that could have a material adverse effect on our operation.
Removed
Risks Related to Our Location and Incorporation in Israel Political, economic and military instability, war and/or acts of terror in Israel may disrupt our operations and negatively affect our business condition, harm our results of operations and adversely affect our share price.
Added
We have operations or activities in countries and regions outside Israel and the United States, including Europe, and any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations. To date, we have experienced longer shipping times but which did not have any material adverse effect on our business.
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If global economic and market conditions or economic conditions in key markets remain uncertain or weaken further, our financial condition and operating results may be materially adversely affected.
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Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our ordinary shares and penny stock trading. There can be no assurance that we will be able to continue to meet all of the criteria necessary for Nasdaq to allow us to remain listed.
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If we fail to satisfy the applicable continued listing requirement and continue to be in non-compliance after notice and the applicable grace period ends, Nasdaq may commence delisting procedures against our Company (during which we may have additional time of up to six months to appeal and correct our non-compliance).
Added
If our ordinary shares are ultimately delisted from Nasdaq, our ordinary shares would likely then trade only in the over-the-counter market and the market liquidity of our ordinary shares could be adversely affected and their market price could decrease.
Added
If our ordinary shares were to trade on the over-the-counter market, selling our ordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; a reduced amount of news and analyst coverage for our Company; and a decreased ability to issue additional securities or obtain additional financing in the future.
Added
These factors could result in lower prices and larger spreads in the bid and ask prices for our ordinary shares and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.
Added
In addition to the foregoing, if our ordinary shares are ultimately delisted from Nasdaq and they trade on the over-the-counter market, the application of the “penny stock” rules could adversely affect the market price of our ordinary shares and increase the transaction costs to sell those shares.
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The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions.
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If our ordinary shares are ultimately delisted from Nasdaq and then trade on the over-the-counter market at a price of less than $5.00 per share, our ordinary shares would be considered a penny stock.
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The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.
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The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.
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In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction.
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If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our ordinary shares and may affect the ability of investors to sell their shares, until our ordinary shares is no longer considered a penny stock. We do not expect to pay cash dividends.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Our sales personnel will customize and adapt solutions that can then be installed and supported by these business partners. 19 • Expand our IoT and Cyber Security activities globally, particularly in the Americas, Europe, and the Far East. • Leverage our customer base, superior PureSecurity hybrid suite of IoT solutions, and Cyber Security capabilities to secure additional long-term contracts with governments and communities in the public safety markets. • Leverage our reputation, talented personnel, and project management capabilities in the e-Gov market to secure additional projects and solutions in the growing e-Government market. • Leverage our customer base, Connectivity solutions, and Cyber Security capabilities to secure additional long-term contracts with governments and communities in the Communication Infrastructure market. • Develop strong strategic relationships with business partners that will introduce our solutions into the healthcare, homecare, Safe City and Smart Campus markets. • Develop strong strategic relationships with business partners in the financial services industry, and un-banked and mobile payments markets. • Identify and acquire synergistic contracts or businesses in order to reduce time to market, obtain complementary technologies and secure required references for international bids. • Grow our business in emerging markets with perceived significant growth opportunities.
Our sales personnel will customize and adapt solutions that can then be installed and supported by these business partners. 18 • Expand our IoT and Cyber Security activities globally, particularly in the Americas, Europe, and the Far East. • Leverage our customer base, superior PureSecurity hybrid suite of IoT solutions, and Cyber Security capabilities to secure additional long-term contracts with governments and communities in the public safety markets. • Leverage our reputation, talented personnel, and project management capabilities in the e-Gov market to secure additional projects and solutions in the growing e-Government market. • Leverage our customer base, Connectivity solutions, and Cyber Security capabilities to secure additional long-term contracts with governments and communities in the Communication Infrastructure market. • Develop strong strategic relationships with business partners that will introduce our solutions into the healthcare, homecare, Safe City and Smart Campus markets. • Develop strong strategic relationships with business partners in the financial services industry, and un-banked and mobile payments markets. • Identify and acquire synergistic contracts or businesses in order to reduce time to market, obtain complementary technologies and secure required references for international bids. • Grow our business in emerging markets with perceived significant growth opportunities.
SuperCom Ltd. was incorporated in the State of Israel on July 4, 1988 pursuant to the provisions of the then-current Israeli Companies Ordinance. The legislative framework within which we now operate is the Israeli Companies Law, which became effective on February 1, 2000, and the Israeli Companies Ordinance (New Version) 1983, as amended (the “Companies Ordinance”).
SuperCom was incorporated in the State of Israel on July 4, 1988 pursuant to the provisions of the then-current Israeli Companies Ordinance. The legislative framework within which we now operate is the Israeli Companies Law, which became effective on February 1, 2000, and the Israeli Companies Ordinance (New Version) 1983, as amended (the “Companies Ordinance”).
We believe that Guidance (G4S), G4S, STOP, Omnilink, Sentinel, BI (GeoGroup), and Buddi are our potential competitors with respect to our IoT products and solutions. We believe that Face Technologies, Zetes Industries, Mühlbauer Group, Oberthur Technologies, Thales, Bundesdruckerei GmbH and Nadra are our potential competitors in the e-Gov products and solutions market.
We believe that G4S, STOP, Omnilink, Sentinel, BI (GeoGroup), and Buddi are our potential competitors with respect to our IoT products and solutions. We believe that Face Technologies, Zetes Industries, Mühlbauer Group, Oberthur Technologies, Thales, Bundesdruckerei GmbH and Nadra are our potential competitors in the e-Gov products and solutions market.
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. 18 Market Opportunity We believe that our wide range of solutions offers us several opportunities across global markets and industries.
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. 17 Market Opportunity We believe that our wide range of solutions offers us several opportunities across global markets and industries.
On December 31, 2006, we sold the majority of the e-Gov Division activities and related intellectual property to OTI for 2,827,200 restricted ordinary shares of OTI, as of December 31, 2008, we sold all of the OTI shares that we received in the transaction. 16 On August 28, 2007, we purchased, through our wholly owned subsidiary, Vuance, Inc., all of the issued and outstanding stock capital of Security Holding Corp., or SHC, from Homeland Security Capital Corporation and other minority shareholders for approximately $4.34 million of our ordinary shares and direct expenses of approximately $600,000 in our ordinary shares.
On December 31, 2006, we sold the majority of the e-Gov Division activities and related intellectual property to OTI for 2,827,200 restricted ordinary shares of OTI, as of December 31, 2008, we sold all of the OTI shares that we received in the transaction. 15 On August 28, 2007, we purchased, through our wholly owned subsidiary, Vuance, Inc., all of the issued and outstanding stock capital of Security Holding Corp., or SHC, from Homeland Security Capital Corporation and other minority shareholders for approximately $4.34 million of our ordinary shares and direct expenses of approximately $600,000 in our ordinary shares.
Our IoT Suite can provide solutions for the healthcare sector for asset, staff, patient and medical record location and identification. We believe that as hospitals continue to upgrade their security measures, IoT and connectivity technology will be utilized in real-time location systems that are designed to immediately locate persons, equipment and objects within the hospital. 20 Municipals and Educations .
Our IoT Suite can provide solutions for the healthcare sector for asset, staff, patient and medical record location and identification. We believe that as hospitals continue to upgrade their security measures, IoT and connectivity technology will be utilized in real-time location systems that are designed to immediately locate persons, equipment and objects within the hospital. 19 Municipals and Educations .
An integrated anti-collision algorithm allows multiple tags to be simultaneously identified by a single reader, allowing employees to be matched to individual laptops or assets, shipping pallets to merchandise, assets to “authorized” locations and drivers to specific vehicles. 21 Hands-Free Long-Range RFID Asset Tags. These tags provide real-time asset loss prevention, inventory management, and personnel/asset tracking.
An integrated anti-collision algorithm allows multiple tags to be simultaneously identified by a single reader, allowing employees to be matched to individual laptops or assets, shipping pallets to merchandise, assets to “authorized” locations and drivers to specific vehicles. 20 Hands-Free Long-Range RFID Asset Tags. These tags provide real-time asset loss prevention, inventory management, and personnel/asset tracking.
In addition to preserving the PureTrack battery life, other features include (i) four years of battery life, (ii) encrypted RF protocol, (iii) Bluetooth support, (iv) proximity and case tamper detection, (v) an expansive range via a mesh network and (vi) a waterproof, dustproof and lightweight design. 22 PureMonitor Offender Electronic Monitoring Software.
In addition to preserving the PureTrack battery life, other features include (i) four years of battery life, (ii) encrypted RF protocol, (iii) Bluetooth support, (iv) proximity and case tamper detection, (v) an expansive range via a mesh network and (vi) a waterproof, dustproof and lightweight design. 21 PureMonitor Offender Electronic Monitoring Software.
Due to the developing nature of the markets for our e-Gov, IoT, and Cyber Security products and solutions and the ongoing changes in this market, the above-mentioned list may not constitute a full list of all of our competitors and additional companies may be considered our competitors. 26 Our management expects competition to intensify as the markets in which our products and solutions compete continue to develop.
Due to the developing nature of the markets for our e-Gov, IoT, and Cyber Security products and solutions and the ongoing changes in this market, the above-mentioned list may not constitute a full list of all of our competitors and additional companies may be considered our competitors. 25 Our management expects competition to intensify as the markets in which our products and solutions compete continue to develop.
During the years ended December 31, 2023 and 2022, we have invested, $3.2 million and $3.4 million, respectively, in research and development. We anticipate that we will continue to invest up to 15% of our revenue in broadening our Cyber Security, e-Gov, IoT and Connectivity solutions and platforms.
During the years ended December 31, 2024 and 2023, we have invested, $3.4 million and $3.2 million, respectively, in research and development. We anticipate that we will continue to invest up to 15% of our revenue in broadening our Cyber Security, e-Gov, IoT and Connectivity solutions and platforms.
We believe that McAfee (Intel Security), Symantec, Sophos, and Trend Micro are the primary competitors for our Cyber Security division.
We believe that Intel Security, Symantec, Sophos, and Trend Micro are the primary competitors for our Cyber Security division.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company SuperCom Ltd.(the “Company”) is a company organized under the laws of the State of Israel. Our registered office is located at 3 Rothschild Street, Tel-Aviv, Israel, and our telephone number is +972-9-889-0880.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company SuperCom is a company organized under the laws of the State of Israel. Our registered office is located at 3 Rothschild Street, Tel-Aviv, Israel, and our telephone number is +972-9-889-0880.
Please see the section titled “Risk Factors” for more information on the effects of governmental regulation on our business. C. Organizational Structure The following reflects our active subsidiaries and affiliates as of April 22, 2024: SuperCom Inc. - wholly owned.
Please see the section titled “Risk Factors” for more information on the effects of governmental regulation on our business. C. Organizational Structure The following reflects our active subsidiaries and affiliates as of April 22, 2025: SuperCom Inc. - wholly owned.
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. 17 B.
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. 16 B.
Carrier-grade IP-68 is designed to provide a high standard of reliability, quality of service, security and manageability. • Gigabit outdoor Wi-Fi support up to 450 Mbps, (per band) 900 Mbps for both bands, and maximum aggregated capacity of up to one Gigabit per unit • Built in Access Controller, for flexible service planning • Self-configuring, plug-and-play deployment 23 BreezeULTRA™ P6000 .
Carrier-grade IP-68 is designed to provide a high standard of reliability, quality of service, security and manageability. • Gigabit outdoor Wi-Fi support up to 450 Mbps, (per band) 900 Mbps for both bands, and maximum aggregated capacity of up to one Gigabit per unit • Built in Access Controller, for flexible service planning • Self-configuring, plug-and-play deployment 22 BreezeNET® B .
Principal Markets The following table provides a breakdown of total revenue by geographic market for the two years ended December 31, 2023 and 2022 (all amounts in thousands of dollars): 2023 2022 Africa $ 1,455 $ 374 Europe 17,673 9,559 South and center America 12 - United States 6,766 6,877 Israel 585 693 Asia Pacific 79 146 Total $ 26,570 $ 17,649 As part of the Company’s decision to switch from one technology segment, e-government, into three technology segments or Strategic Business Units; e-Gov, IoT, and Cyber Security, the Company made four acquisitions in 2016 of companies with various technologies and customer bases which enhanced and strengthened the capabilities and value offerings of each of the three segments.
Principal Markets The following table provides a breakdown of total revenue by geographic market for the three years ended December 31, 2024, 2023 and 2022 (all amounts in thousands of dollars): 2024 2023 2022 Africa $ 774 $ 1,455 $ 374 Europe 18,166 17,673 9,559 South and center America 8 12 - United States 7,092 6,766 6,877 Israel 1,533 585 693 Asia Pacific 62 79 146 Total $ 27,635 $ 26,570 $ 17,649 As part of the Company’s decision to switch from one technology segment, e-government, into three technology segments or Strategic Business Units; e-Gov, IoT, and Cyber Security, the Company made four acquisitions in 2016 of companies with various technologies and customer bases which enhanced and strengthened the capabilities and value offerings of each of the three segments.
Currently we own 52 issued patents in the United States and 74 issued patents in the rest of the world. Trademarks We rely on trade names, trademarks and service marks to protect our name brands. We hold registered trademarks in several countries including Israel, the United States and the United Kingdom.
Currently we own 50 issued patents in the United States and 72 issued patents in the rest of the world. Trademarks We rely on trade names, trademarks and service marks to protect our name brands. We hold registered trademarks in several countries including Israel, the United States and the United Kingdom.
The following table provides a breakdown of total revenue by segment for the two years ended December 31, 2023 and 2022 (all amounts in thousands of dollars): Year ended December 31, 2023 2022 e-Gov $ 1,544 $ 637 IoT 23,766 15,628 Cyber Security 1,260 1,384 Total $ 26,570 $ 17,649 25 The following table provides a breakdown of total revenue by products and services for the two years ended December 31, 2023 and 2022 (all amounts in thousands of dollars): Year ended December 31, 2023 2022 Revenues Products $ 19,767 $ 10,099 Services 6,803 7,550 Total revenues $ 26,570 $ 17,649 Customer Service and Support Customer service includes mainly maintenance and support services and plays a significant role in our sales and marketing efforts.
The following table provides a breakdown of total revenue by segment for the three years ended December 31, 2024, 2023 and 2022 (all amounts in thousands of dollars): Year ended December 31, 2024 2023 2022 e-Gov $ 1,154 $ 1,544 $ 637 IoT 25,283 23,766 15,628 Cyber Security 1,198 1,260 1,384 Total $ 27,635 $ 26,570 $ 17,649 24 The following table provides a breakdown of total revenue by products and services for the three years ended December 312024, , 2023 and 2022 (all amounts in thousands of dollars): Year ended December 31, 2024 2023 2022 Revenues Products $ 20,109 $ 19,767 $ 10,099 Services 7,526 6,803 7,550 Total revenues $ 27,635 $ 26,570 $ 17,649 Customer Service and Support Customer service includes mainly maintenance, and support services and plays a significant role in our sales and marketing efforts.
We lease approximately 1,701 square meters of office premises in Miami, Kentucky and California for our U.S. subsidiaries, which under the current lease contracts expire between 2024 and 2025, with a monthly fee of approximately $26,749. We do not lease any facilities for any other subsidiary or branch.
We lease approximately 1,701 square meters of office premises in Miami, Kentucky and California for our U.S. subsidiaries, which under the current lease contracts expire by 2026, with a monthly fee of approximately $27,000 for 2024. We do not lease any facilities for any other subsidiary or branch.
Safend Ltd., incorporated in Israel, was acquired on March 13, 2016, and is a global data security company with a broad range of competitive and well-known encryption and data protection solutions. Prevision Ltd.(“Prevision”) - wholly owned. Prevision Ltd., incorporated in Israel, was acquired on November 12, 2015, and is an international provider of Cyber Security services and solutions.
(“Safend”) - wholly owned. Safend Ltd., incorporated in Israel, was acquired on March 13, 2016, and is a global data security company with a broad range of competitive and well-known encryption and data protection solutions. Prevision Ltd. (“Prevision”) - wholly owned.
We lease approximately 1,139 square meters of office and warehousing premise in Tel Aviv and Herzliya, Israel, under a new lease which started on April 1, 2021 and expires on March 30, 2026. According to the lease agreements, the monthly fee (including management fees) is approximately $35,430.
Property, Plants and Equipment We do not own any real estate. We lease approximately 1,139 square meters of office and warehousing premise in Tel Aviv and Herzliya, Israel, under a new lease which started on April 1, 2021, and expires on March 30, 2026. According to the lease agreements, the monthly fee (including management fees) is approximately $39,000.
We have enhanced and developed a series of new products and solutions including the Pure Security Suite, Puretag, PureCom, Pure Monitor and PureTrack, Between 2013 and through 2016, our product depth and global presence was expanded significantly with our acquisitions of the SmartID division of OTI in 2013, Prevision in 2015, and LCA, Safend, the PowaPOS business, and Alvarion in 2016, together with our extensive research and development of new product lines for the e-Gov, IoT, cyber security, and connectivity businesses.
Between 2013 and through 2016, our product depth and global presence was expanded significantly with our acquisitions of the SmartID division of OTI in 2013, Prevision in 2015, and LCA, Safend, the PowaPOS business, and Alvarion in 2016, together with our extensive research and development of new product lines for the e-Gov, IoT, cyber security, and connectivity businesses.
During 2012, we altered our strategy with respect to the IoT division to focus on solutions for three growing electronic monitoring vertical markets: (i) public safety, (ii) healthcare and homecare and (iii) transportation management.
During 2012, we altered our strategy with respect to the IoT division to focus on solutions for three growing electronic monitoring vertical markets: (i) public safety, (ii) healthcare and homecare and (iii) transportation management. We have enhanced and developed a series of new products and solutions including the Pure Security Suite, Puretag, PureCom, Pure Monitor and PureTrack.
Our total annual rental fees, for 2023 and 2022 were $930,000 and $817,160, respectively. 28 ITEM 4A. UNRESOLVED STAFF COMMENTS None.
Our total annual rental fees, for 2024 and 2023 were $759,000 and $701,000, respectively. 27 ITEM 4A. UNRESOLVED STAFF COMMENTS None.
Alvarion Technologies Ltd.(“Alvarion”) - wholly owned. Alvarion Ltd., incorporated in Israel, was acquired on May 18, 2016, and is a global provider of wireless broadband products and Wi-Fi networks. D. Property, Plants and Equipment We do not own any real estate.
Prevision Ltd., incorporated in Israel, was acquired on November 12, 2015, and is an international provider of Cyber Security services and solutions. Alvarion Technologies Ltd. (“Alvarion”) - wholly owned. Alvarion Ltd., incorporated in Israel, was acquired on May 18, 2016, and is a global provider of wireless broadband products and Wi-Fi networks. D.
LCA, incorporated in California, was acquired by us on January 1, 2016, and provides electronic monitoring and community-based services under contracts with various government agencies. 27 Safend Ltd.(“Safend”) - wholly owned.
SuperCom Inc., incorporated in Delaware, is responsible for our sales, marketing and support in the United States, and wholly owns its subsidiary, LCA. Leaders in Community Alternatives, Inc. (“LCA”) - wholly owned. LCA, incorporated in California, was acquired by us on January 1, 2016, and provides electronic monitoring and community-based services under contracts with various government agencies. 26 Safend Ltd.
The solution in development enables rapid deployment of any application on a smart device leaving the security challenges to the framework. Research and Development Our research and development efforts have enabled us to offer our customers a broader line of products and solutions, primarily in the areas of our e-Gov, IoT and Connectivity, and Cyber Security.
It helps identify gaps in data protection and compliance initiatives, and provides insight into which security policies should be implemented, using other components of the Safend Data Protection Suite. 23 Research and Development Our research and development efforts have enabled us to offer our customers a broader line of products and solutions, primarily in the areas of our e-Gov, IoT and Connectivity, and Cyber Security.
Removed
The BreezeULTRA family intends to provide high-capacity product in wireless broadband Point to Point communication license-exempt market.
Added
On January 24, 2013 we changed our name back to SuperCom Ltd., our original name, from Vuance Ltd.
Removed
BreezeULTRA offers a bold combination of capacity, performance, organic growth and ease of use capabilities. • Optimized for high-capacity applications • Available in the Licensed Exempt frequencies: 5.1-5.9 GHz • High Performance - supporting up to 500 Mbps net throughput and distances of up to 50km/32 miles (w/high-gain antenna) • Dynamic up-link /down-link bandwidth allocation • Optimized performance of voice, video and data using four priorities of service • Optimized interference mitigation and NLOS performance • Ease of ordering, installation and configuration Arena controller .
Removed
Arena controller is an essential element for constructing large scale carrier wi-fi networks for hotspot/hotzones and cellular offloading services. • Cost effective and scalable network architecture with centralized control plane and distributed data plane • Supporting up to 5,000 AP’s and 50,000 users per controller • Control and manage AP and backhaul radio, including statistic and reporting • Automatic AP units detection, configuration and firmware distribution • Secured control layer management • Hotspots/Hotzones and cellular offloading services • Providing a single peer to the AAA BreezeNET® B .
Removed
It helps identify gaps in data protection and compliance initiatives, and provides insight into which security policies should be implemented, using other components of the Safend Data Protection Suite. 24 SafeMobile , which provides high-end security framework designed to meet cyber threats on both the mobile client and on an organization’s main server.
Removed
SuperCom Inc., incorporated in Delaware, is responsible for our sales, marketing and support in the United States, and wholly owns its subsidiary, LCA. Leaders in Community Alternatives, Inc. (“LCA”) - wholly owned.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

36 edited+34 added−6 removed94 unchanged
We are headquartered in Israel and operate internationally with subsidiaries in the New York, California, and other geographical regions where we attain and deploy new projects. General Our consolidated financial statements appearing in this Annual Report are prepared in U.S. dollars and in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
We are headquartered in Israel and operate internationally with subsidiaries in the New York, Miami, California, and other geographical regions where we attain and deploy new projects. General Our consolidated financial statements appearing in this Annual Report are prepared in U.S. dollars and in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
Depreciation of the NIS in relation to the dollar has the effect of reducing the dollar amount of any of our expenses or liabilities and also has the effect of decreasing the dollar value of any asset which consists of NIS or receivables payable in NIS, unless the receivables are linked to the dollar. 32 The following table presents information about the rate of inflation in Israel, the rate of devaluation or appreciation of the NIS against the dollar, and the rate of inflation in Israel adjusted for the devaluation: Year ended December 31, Israeli inflation rate % NIS devaluation (appreciation) rate % Israeli inflation adjusted for devaluation (appreciation) % 2023 3.0 3.1 (0.1) 2022 5.3 13.2 (7.9) Because exchange rates between the NIS and the dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on our profitability and period-to-period comparisons of our results.
Depreciation of the NIS in relation to the dollar has the effect of reducing the dollar amount of any of our expenses or liabilities and also has the effect of decreasing the dollar value of any asset which consists of NIS or receivables payable in NIS, unless the receivables are linked to the dollar. 32 The following table presents information about the rate of inflation in Israel, the rate of devaluation or appreciation of the NIS against the dollar, and the rate of inflation in Israel adjusted for the devaluation: Year ended December 31, Israeli inflation rate % NIS devaluation (appreciation) rate % Israeli inflation adjusted for devaluation (appreciation) % 2024 3.2 4.9 (1.7 ) 2023 3.0 3.1 (0.1 ) 2022 5.3 13.2 (7.9 ) Because exchange rates between the NIS and the U.S. dollar fluctuate continuously, exchange rate fluctuations, particularly larger periodic devaluations, may have an impact on our profitability and period-to-period comparisons of our results.
Expectation about realization of deferred tax assets related to losses carried forward are subjective and require estimates of future income in the territories in which such losses have been generated. Changes in those estimations could lead to changes in the expected realization of the deferred tax assets and to an increase or decrease in valuation allowances. C.
Expectation about realization of deferred tax assets related to losses carried forward are subjective and require estimates of future income in the territories in which such losses have been generated. Changes in those estimations could lead to changes in the expected realization of the deferred tax assets and to an increase or decrease in valuation allowances. Inventory valuation.
Research and Development Our research and development efforts have enabled us to offer our customers with a broader line of products and solutions for the e-Gov, IoT and Cyber Security segments. As of December 31, 2023, the number of employees in our research and development activities was 43.
Research and Development Our research and development efforts have enabled us to offer our customers with a broader line of products and solutions for the e-Gov, IoT and Cyber Security segments. As of December 31, 2024, the number of employees in our research and development activities was 43.
In recent years, Israel has established commercial and trade relations with a number of other nations, including China, India, Russia, Turkey and other nations in Eastern Europe and Asia. Effective Corporate Tax Rate The Israeli corporate tax rate was 23% in 2022 and in 2023.
In recent years, Israel has established commercial and trade relations with a number of other nations, including China, India, Russia, Turkey and other nations in Eastern Europe and Asia. Effective Corporate Tax Rate The Israeli corporate tax rate was 23% in each of 2022, 2023 and 2024.
Our research and development expenses decreased to $3,110,000 during the fiscal year ended December 31, 2023 from $3,412,000 in 2022, an decrease of 9%. The decrease in our research and development expenses was primarily due to the completion of some of the IoT products development.
Our research and development expenses decreased to $3,110,000 during the fiscal year ended December 31, 2023 from $3,412,000 in 2022, a decrease of 9%. The decrease in our research and development expenses was primarily due to the completion of some of the IoT products development.
The allowance for doubtful accounts was $14,124,000 and $12,667,000 as of December 31, 2023 and 2022, respectively. Deferred Taxes We account for income taxes, in accordance with the provisions of FASB ASC 740, “Income Taxes” under the liability method of accounting.
The allowance for doubtful accounts was $15,524,000, $14,124,000 and $12,667,000 as of December 31, 2024, 2023 and 2022, respectively. Deferred Taxes We account for income taxes, in accordance with the provisions of FASB ASC 740, “Income Taxes” under the liability method of accounting.
The Company expects approximately 68% of remaining performance obligations to be recognized into revenue within the next 12 months, with the remaining 32% recognized thereafter. We apply the practical expedient in paragraph ASC 606-10-50-14 and do not disclose information about remaining performance obligations that have original expected durations of one-year or less.
The Company expects approximately 63% of remaining performance obligations to be recognized into revenue within the next 12 months, with the remaining 37% recognized thereafter. We apply the practical expedient in paragraph ASC 606-10-50-14 and do not disclose information about remaining performance obligations that have original expected durations of one-year or less.
The nature of certain of our expenses is mainly fixed or partially fixed and any fluctuation in revenues will generate a significant variation in gross profit and net income. 30 Operating Results The following table sets forth selected our consolidated income statement data for each of the two years ended December 31, 2023 and 2022, expressed as a percentage of total revenues. 2023 2022 Revenues 100 % 100 % Cost of revenues 61.5 63.8 Gross profit 38.5 36.2 Operating expenses: Research and development 11.7 19.3 Selling and marketing 8.3 15.1 General and administrative 20.5 29.4 Other expenses 10.6 6.4 Total operating expenses 51.1 70.2 Operating loss (12.6 ) (34.0 ) Financial expenses, net (2.5 ) (9.9 ) Loss before income tax (15.1 ) (43.9 ) Income tax expense - 1.7 Net Loss (15.1 ) (42.3 ) Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Revenues Our total revenues in 2023 were $26,570,000 compared to $17,649,000 in 2022, an increase of 51%.
The nature of certain of our expenses is mainly fixed or partially fixed and any fluctuation in revenues will generate a significant variation in gross profit and net income. 29 Operating Results The following table sets forth selected our consolidated income statement data for each of the three years ended December 31, 2024, 2023 and 2022, expressed as a percentage of total revenues. 2024 2023 2022 Revenues 100 % 100 % 100 % Cost of revenues 51.6 61.5 63.8 Gross profit 48.4 38.5 36.2 Operating expenses: Research and development 12.4 11.7 19.3 Selling and marketing 8.7 8.3 15.1 General and administrative 23.0 20.5 29.4 Other expenses 7.2 10.6 6.4 Total operating expenses 51.2 51.1 70.2 Operating Income(loss) (2.8 ) (12.6 ) (34.0 ) Financial expenses, net 3.7 (2.5 ) (9.9 ) Income(loss) before income tax 0.9 (15.1 ) (43.9 ) Income tax expense 1.5 - 1.7 Net Income(loss) 2.4 (15.1 ) (42.3 ) Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Revenues Our total revenues in 2024 were $27,635,000 compared to $26,570,000 in 2023, an increase of 4%.
As these services are completed during a single onsite visit, revenue is recognized at the point in time of such onsite visit. Disaggregation of revenue In the following table, revenue is disaggregated by major geographic region and timing of revenue recognition.
As these services are completed during a single onsite visit, revenue is recognized at the point in time of such onsite visit. Disaggregation of revenue In the following table, revenue is disaggregated by major geographic region.
Critical Accounting Estimates Disclosure See discussion in Part B of “Item 5. Operating and Financial Review and Prospects” for a description of the Critical Accounting Estimates Disclosure relevant to us. 39
Trend Information See discussion in Parts A and B of “Item 5. Operating and Financial Review and Prospects” for a description of the Trend Information relevant to us. E. Critical Accounting Estimates Disclosure See discussion in Part B of “Item 5. Operating and Financial Review and Prospects” for a description of the Critical Accounting Estimates Disclosure relevant to us. 39
See Item 3D “Key Information – Risk Factors – Risks Relating to Operations in Israel” for a description of governmental, economic, fiscal, monetary or political polices or factors that have materially affected or could materially affect our operations.
See Item 3D “Key Information – Risk Factors – Risks Related to Our Location and Incorporation in Israel” for a description of governmental, economic, fiscal, monetary or political polices or factors that have materially affected or could materially affect our operations.
Remaining performance obligations represent the transaction price of system deployment, service and maintenance contracts for which work has not been performed as of the period end date. As of December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations totals $19.557 million.
Remaining performance obligations represent the transaction price of system deployment, service and maintenance contracts for which work has not been performed as of the period end date. As of December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations totals $16.523 million.
The decrease in operating expenses was primarily due to (i) a decrease of 9% in research and development expenses, (ii) an increase of 5% in general and administrative expenses; and (iii) a decrease of 17% in sales and marketing expenses.
The increase in operating expenses was primarily due to (i) an increase of 10% in research and development expenses, (ii) an increase of 16% in general and administrative expenses; and (iii) an increase of 9% in sales and marketing expenses.
The Company raised a gross amount of approximately $3,200 in a private placement in July 2020. 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) working capital needs for multiple new government customer contracts with significant positive cash flow.
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) working capital needs for multiple new government customer contracts with significant positive cash flow.
With respect to our e-Gov business, in some contracts we provide our customers with a license to issue IDs, passports and driver licenses and we are entitled to receive royalties upon the issuance of each form of document by our customers.
With respect to our e-Gov business, in some contracts we provide our customers with a license to issue IDs, passports and driver licenses and we are entitled to receive royalties upon the issuance of each form of document by our customers. Such royalties are recognized when the issuances are reported to us, usually on a monthly basis.
Net cash used in investing activities during the year ended December 31, 2023, was $3,366,000 compared to $2,189,000 during the year ended December 31, 2022, a decrease of 53.8%.
Net cash used in investing activities during the year ended December 31, 2023, was $3,366,000 compared to $2,189,000 during the year ended December 31, 2022, an increase of 54%.
On August 3, 2023, the Company raised approximately $2.75 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 661,000 of its ordinary shares, and 2,574,295 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 3,235,295 of its ordinary shares at an exercise price of $0.85 per share.
On August 3, 2023, the Company raised approximately $2.75 million in gross proceeds in a registered direct 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 private placement to such purchaser of the Company’s private warrants to purchase an aggregate of 161,765 of its ordinary shares at an exercise price of $17.00 per share.
Liquidity and Capital Resources As of and for the year ended December 31, 2023, the Company had an accumulated deficit of $106,948, and net cash used in operating activities of $2,367 compared to $4,654 for the year ended December 31, 2022, which demonstrates a 49% reduction in negative operation cash flow. 33 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 December 31, 2023, the Company had cash, cash equivalent and restricted cash of $5,577 and positive working capital of $23,059.
Liquidity and Capital Resources As of and for the year ended December 31, 2024, the Company had an accumulated deficit of $106,287,000 and net cash used in operating activities of $1,294,000 compared to $2,367,000 for the year ended December 31, 2023, which demonstrates a 61% reduction in negative operation cash flow. 33 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 December 31, 2024, and the Company had cash, cash equivalent and restricted cash of $3,538,000 and positive working capital of $22,515,000.
Our effective USA tax rate as for the year ended December 31, 2023 was 27.03%. Our taxes outside Israel are dependent on our operations in each jurisdiction as well as relevant laws and treaties. Under Israeli tax law, the results of our foreign consolidated subsidiaries cannot be consolidated for tax. B.
Our taxes outside Israel are dependent on our operations in each jurisdiction as well as relevant laws and treaties. Under Israeli tax law, the results of our foreign consolidated subsidiaries cannot be consolidated for tax. B.
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 1,081,000 warrant to ordinary shares, and warrant exercise of 3,671,910 warrant to pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent warrant reload to such Purchaser of the Company’s private warrants to purchase an aggregate of 9,505,820 of its ordinary shares at an exercise price of $0.5 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 March 30, 2023, the Company raised approximately $2.4 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 485,000 of its ordinary shares, and 1,032,615 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 1,517,615 of its ordinary shares at an exercise price of $1.66 per share.
On March 1, 2022, the Company raised approximately $4.65 million in gross proceeds 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 $0.0002 per share, and concurrent private placement to such purchaser of the Company’s private warrants to purchase an aggregate of 282,434 of ordinary shares at an exercise price of $14 per share On March 30, 2023, the Company raised approximately $2.4 million in gross proceeds 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.
Our operating results are significantly affected by, among other things, the timing of contract awards and the performance of agreements. As a result, our revenues and income may fluctuate substantially from year to year, and we believe that comparisons over longer periods of time may be more meaningful.
As a result, our revenues and income may fluctuate substantially from year to year, and we believe that comparisons over longer periods of time may be more meaningful.
Such royalties are recognized when the issuances are reported to us, usually on a monthly basis, for the year 2023 and 2022 we had no such contract. Allowance for Doubtful Accounts The allowance for doubtful accounts is determined with respect to specific amounts we have determined to be doubtful of collection.
For the years 2024, 2023 and 2022 we had no such contract. Allowance for Doubtful Accounts The allowance for doubtful accounts is determined with respect to specific amounts we have determined to be doubtful of collection.
Expenses Our operating expenses, excluding other (income) expenses, net, during the fiscal year ended December 31, 2023 was $10,770,000 compared to $11,255,000 in 2022, a decrease of 4%.
Expenses Our operating expenses, excluding other (income) expenses, net, during the fiscal year ended December 31, 2024 were $12,162,000 compared to $10,770,000 in 2023, an increase of 13%.
For the years ended December 31, 2023 and 2022 we had losses, and therefore the effective tax rate was mostly affected by changes in deferred tax. In 2023, the USA federal tax rate was 21%, the state tax rate was 8.84% in CA and 6.5% in NY, the New York City tax rate was 6.5%.
For the years ended December 31, 2024, we had income and for 2023 and 2022 we had net losses; therefore the effective tax rate was mostly affected by changes in deferred tax.
Cash Flows The following table summarizes our cash flows for the periods presented: Year ended December 31, 2023 2022 (in thousands) Net cash used in operating activities $ (2,367 ) $ (4,654 ) Net cash used in investing activities (3,366 ) (2,189 ) Net cash provided by (used in) financing activities 6,805 6,744 Net increase(decrease) in cash and cash equivalents 1,072 (99 ) Cash, cash equivalents and restricted cash at beginning of period 4,505 4,604 Cash, cash equivalents and restricted cash at end of period $ 5,577 $ 4,505 Net cash used in operating activities for the year ended December 31, 2023, was $2,367, compared to net cash used by operating activities of $4,654,000 during the year ended December 31, 2022, a decrease of 49%.
The Company believes that based on the above-mentioned secured financings, management’s current plans, management’s expectation to maintain the cost savings and expected cash streams from the Company’s current contracts with customers worldwide, the Company will be able to fund its operations for at least the next 12 months. 34 Cash Flows The following table summarizes our cash flows for the periods presented: Year ended December 31, 2024 2023 2022 (in thousands) Net cash used in operating activities $ (1,294 ) $ (2,367 ) (4,654 ) Net cash used in investing activities (3,349 ) (3,366 ) (2,189 ) Net cash provided by (used in) financing activities 2,604 6,805 6,744 Net increase(decrease) in cash and cash equivalents (2,039 ) 1,072 (99 ) Cash, cash equivalents and restricted cash at beginning of period 5,577 4,505 4,604 Cash, cash equivalents and restricted cash at end of period $ 3,538 $ 5,577 4,505 Net cash used in operating activities for the year ended December 31, 2024, was $1,294,000, compared to net cash used by operating activities of $2,367,000 during the year ended December 31, 2023, a decrease of 45%.
We spent $4,762,000 (out of which $1,652,000 was capitalized as cost of software to be sold), and $5,025,000 (out of which $1,613,000 was capitalized as cost of software to be sold), in 2023 and 2022, respectively. These amounts were spent on the development or improvement of our technologies and products, primarily in the areas of IoT and Cyber Security.
We spent $5,168,000 (out of which $1,751,000 was capitalized as cost of software to be sold), $4,762,000 (out of which $1,652,000 was capitalized as cost of software to be sold), $5,025,000 (out of which $1,613,000 was capitalized as cost of software to be sold) in 2024, 2023 and 2022, respectively.
Net cash provided by financing activities during the year ended December 31, 2023, was $6,805,000 compared to $6,744,000 during the year ended December 31, 2022, which consisted mainly of two registered direct offering with $5,180,000 in gross proceeds and warrant exercise for cash with $1,819,000 in gross proceeds. 34 Discussion of Critical Accounting Policies The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
Net cash provided by financing activities during the year ended December 31, 2023, was $6,805,000 compared to $6,744,000 during the year ended December 31, 2022, an increase of 1% which consisted mainly of two registered direct offerings resulting in $5,180,000 of aggregate gross proceeds and warrant exercise for cash resulting in $1,819,000 of gross proceeds.
On March 1, 2022, the Company raised approximately $4.65 million in gross proceeds in a registered direct offering with a single accredited institutional investor of an aggregate of 3,130,000 of its ordinary shares, and 4,401,585 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such purchaser of the Company’s private warrants to purchase an aggregate of 5,648,689 of ordinary shares at an exercise price of $0.70 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 143,695 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 405,808 of its ordinary shares at an exercise price of $7.60 per share On January 31, 2025, the Company raised approximately $6.0 million in gross proceeds in a registered direct offering with two accredited institutional investors through the sale of an aggregate of 545,454 of its ordinary shares.
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 (“Subordinated Debt”).
Additionally, the Company secured financing of $20,000,000 during 2018. Throughout 2021, the Company also secured through the issuance of multiple notes, aggregate gross proceeds of $12,000,000 of subordinated debt (“Subordinated Debt”). The Company raised a gross amount of approximately $3,200,000 in a private placement in July 2020.
In 2023, our sales and marketing returned to normal and was optimized, our selling and marketing expenses decreased by 17% compared to the same period in 2022 Our general and administrative expenses consist primarily of salaries and related costs, allocated overhead costs, office supplies and administrative costs, fees and expenses of our directors, information technology, depreciation, and professional service fees, including legal, insurance and audit fees.
Our general and administrative expenses consist primarily of salaries and related costs, allocated overhead costs, office supplies and administrative costs, fees and expenses of our directors, information technology, depreciation, and professional service fees, including legal, insurance and audit fees. Our operating results are significantly affected by, among other things, the timing of contract awards and the performance of agreements.
Our research and development expenses consist of salaries, subcontractor expenses, related depreciation costs and overhead allocated to research and development activities. In 2023, our research and development expenses were decreased by 12% compared to the same period in 2022.
In 2024, our research and development expenses increased by 10% compared to the same period in 2023. In 2023, our research and development expenses decreased by 9% compared to the same period in 2022.
We intend to continue to research and develop new technologies and products. There can be no assurance that we can achieve any or all of our research and development goals. D. Trend Information See discussion in Parts A and B of “Item 5. Operating and Financial Review and Prospects” for a description of the Trend Information relevant to us. E.
These amounts were spent on the development or improvement of our technologies and products, primarily in the areas of IoT and Cyber Security. We intend to continue to research and develop new technologies and products. There can be no assurance that we can achieve any or all of our research and development goals. D.
For further discussion of the factors affecting our results of operations, see Item 3D “Risk Factors.” 29 Explanation of Key Income Statement Items, Significant Revenues and Expenses General 2023 was a year of returning to normal as the Covid-19 global pandemic’s impact had no impact on our operations in Israel, USA and worldwide.
For further discussion of the factors affecting our results of operations, see Item 3D “Risk Factors.” 28 Explanation of Key Income Statement Items, Significant Revenues and Expenses General During 2024, our Company’s business was affected by the Seven Fronts War of Israel with Hamas in Gaza, Lebanon and Iran.
The table also includes a reconciliation of the disaggregated revenue with the reportable segments: Year ended December 31, 2023 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1455 $ 1455 European countries 328 17,256 89 17673 South America 12 - - 12 United States 279 6,487 - 6,766 Israel 562 23 - 585 APAC 79 - - 79 Total revenue $ 1,260 $ 23,766 $ 1,544 $ 26,570 Timing of revenue recognition Products and services transferred over time $ 343 $ 8,262 $ 1455 $ 10,060 Products transferred at a point in time 917 15,504 89 16,510 Total revenue $ 1,260 $ 23,766 $ 1,544 $ 26,570 38 Transaction price allocated to the remaining performance obligations.
The table also includes a reconciliation of the disaggregated revenue with the reportable segments: Year ended December 31, 2024 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 744 $ 744 European countries 234 17,772 160 18,166 Latin America 8 - - 8 United States 244 6,848 - 7,092 Israel 658 655 220 1,533 APAC 54 8 - 62 Total revenue $ 1,198 $ 25,283 $ 1,154 $ 27,635 38 Transaction price allocated to the remaining performance obligations.
Removed
Our sales, project operations and R&D processes have return to normal per our current business plan.
Added
Some of our Company employees have been serving the army, all airlines except for the Israeli ELAL previously stopped flying to and from Israel, and many customers and potential customers have refrained from visiting Israel, increasing shipping costs due to the Hutim blockage on the Suez Canal for cargo ships shipping to Israel.
Removed
While returning fully to our business plan, we have optimized the operations of our Company, and our operating costs except for our investment in R&D which continued to enhance our product offerings and competitive standing among our target markets, our optimized company generated numerous new opportunities and large project wins in our target markets, but required us to use resources in many cases that have yet to yield income to our Company as part of multi-year government sale and project deployment life cycles.
Added
Furthermore, as a result of the War, public sentiments towards Israel often spill over into antisemitism, affecting Jewish communities and, by extension, Israeli businesses including our Company.
Removed
We believe that comparing between our 2023 fiscal year, on one hand and 2022 and 2021 fiscal years, on the other hand, cannot be done effectively without taking into account the material impact of Covid-19 on our business in the years 2022 and 2021.
Added
Antisemitism and hatred in Europe and Asia had presented significant challenges for our Company, these phenomena had affected our market access, brand reputation, and operational security, hence we needed to remain resilient and adaptable in the face of these challenges to ensure continued operation and success in these regions .
Removed
Costs and Operating Expenses For the fiscal year ended December 31, 2023, our costs were materially impacted by the fact that the Covid-19 pandemic ended and attention of management was required to quickly adapt and optimize operational structures of the businesses as was described in the General section above.
Added
Our sales, project operations and management experienced difficulties visiting or even communicating with some European and Asian countries customers or potential customers.
Removed
Furthermore, the available $6 million secured credit facility from Fortress Investment Group may provide the Company additional access to capital if needed.
Added
Our R&D processes have returned to normal per our current business plan, although as described above, we have experienced difficulties implementing fully our business plan mainly in regards for the expansion in Europe and Asia, hence we had temporarily moved our business focus to the U.S. market by expanding our Sales and Marketing team in the U.S. and had developed products tailored for the US market.
Removed
The Company believes that based on the above-mentioned secured financings, management’s current plans, maintaining the cost savings and expected cash streams from the Company’s current contracts with customers worldwide, the Company will be able to fund its operations for at least the next 12 months.
Added
Costs and Operating Expenses For the fiscal year ended December 31, 2024, our costs were per our multi-year business plan, our gross profit is aiming at 50%, and we have optimized our production lines and supply chains processes. Our research and development expenses consist of salaries, subcontractor expenses, related depreciation costs and overhead allocated to research and development activities.
Added
In 2024, our sales and marketing team expanded mainly in the U.S., our selling and marketing expenses increased by 9% compared to the same period in 2023. In 2023, our selling and marketing expenses decreased by 17% compared to the same period in 2022.
Added
The composition of revenues has changed during the fiscal year ended December 31, 2024 as follows: (i) the e-Gov segment revenue was $1,154,000 in comparison to $1,544,000 in 2023, a decrease of 25% which reflects decreased recurring revenue from some of our multiyear governments contracts due to manufacturing failure; (ii) the IoT segment revenue was $25,283,000 in comparison to $23,766,000 in 2023, an increase of 6% which is attributed to an increase of revenue in the European market; and (iii) the Cyber Security segment revenue was $1,198,000 in comparison to $1,260,000 in 2023, a decrease of 5% which is mainly attributed to the decrease in our revenue from product license renewals.
Added
Gross Profit Our gross profit during the fiscal year ended December 31, 2024 was $13,384,000 compared to $10,223,000 in 2023, an increase of 31%. The gross profit margin for 2024 was 48.4% compared to 38.5% in 2023.
Added
The increase in our gross profit margin is mainly attributed to (i) the completion of the implementation and recurring revenue stages of our new $33 million contract which contributed to a higher than average gross margin; (ii) a change in the mix of revenues; (iii) an increase of 6% in IoT revenue, which contributes to a higher than average gross margin; and (iv) offset by a decrease of revenue from e-Gov contracts which contributed to a lower than average gross margin.
Added
Our sales and marketing expenses increased to $2,401,000 during the fiscal year ended December 31, 2024 from $2,200,000 in 2023, an increase of 9%. The increase in our sales and marketing expenses was primarily due to an increase in our sales and marketing direct expenses and the increased costs related to commissions paid or incurred during 2024.
Added
Our research and development expenses increased to $3,417,000 during the fiscal year ended December 31, 2024 from $3,110,000 in 2023, an increase of 10%. The increase in our research and development expenses was primarily due to new IoT product developed for the U.S. market.
Added
Our general and administrative expenses increased to $6,344,000 during the fiscal year ended December 31, 2024 from $5,460,000 in 2023, an increase of 16%. 30 Other expenses were $1,999,000 during the fiscal year ended December 31, 2024, compared to other expenses of $2,812,000 in 2023.
Added
The decrease in other expenses in 2024 from 2023 represents mainly (i) a provision of bad debt, related mainly to African and Latin American government customers, amounting to $1,200,000 and $1,457,000 for 2024 and 2023, respectively, and a one-time expense due to settlement with e-GOV account in the amount of $1,053,000 in 2023.
Added
Financial Expenses, net We had financial income, net, of $1,020,000 during the fiscal year ended December 31, 2024 compared to financial expenses of $663,000 in 2023, an increase of $1,683,000 mainly due to $2,312,000 financial income from debt conversion to equity at higher than market share price.
Added
Income Tax We recorded a tax income of $418,000 for the fiscal year ended December 31, 2024 compared to a tax income of $0 in 2023, mainly due to a tax asset recognized for Safend after four years of material profit and toward Safend tax allowance for the year 2024.
Added
Net Income As a result of the factors described above, our net income for the fiscal year ended December 31, 2024, was $661,000 compared to a net loss of $4,022,000 in 2023 an increase of $4,683,000.
Added
The increase in our net income was mainly due to (i) a decrease of $813,000 in other expenses; (ii) a decrease of $1,683,000 in financial expenses, (iii) offset by a $3,161,000 increase in gross profit and (iv) a $418,000 increase in tax income.
Added
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Revenues Our total revenues in 2023 were $26,570,000 compared to $17,649,000 in 2022, an increase of 51%.
Added
Expenses Our operating expenses, excluding other (income) expenses, net, during the fiscal year ended December 31, 2024 were $12,162,000 compared to $10,770,000 in 2023, an increase of 13%.
Added
The increase in operating expenses was primarily due to (i) an increase of 10% in research and development expenses, (ii) an increase of 16% in general and administrative expenses; and (iii) an increase of 9% in sales and marketing expenses.
Added
In 2024, 2023 and 2022, the U.S. federal tax rate was 21%, the state tax rate was 8.84% in CA and 6.5% in NY, the New York City tax rate was 6.5%. Our effective U.S. tax rate as for the year ended December 31, 2024 was 27.03%.
Added
On February 19, 2025, the Company raised approximately $8.2 million in gross proceeds as a result of the exercise of previously issued Company warrants by a single accredited institutional investor warrant holder through the exercise of warrants to purchase an aggregate of 931,099 of the Company’s ordinary shares, and as a result of such exercise, the issuance to such accredited institutional investor of the Company’s new warrants to purchase an aggregate of 698,324 of its ordinary shares at an exercise price of $13.5 per share.
Added
During the month of January 2025, the Company converted $4.4 million of senior debt held by Fortress, the Company’s senior Lender, to ordinary shares and signed an amendment to the credit agreement with Fortress that, among other things, reduced the outstanding debt to $14 million and extended the maturity date of the loans made by Fortress to the Company under such credit agreement to December 31, 2028.
Added
During 2024 and 2023, the Company converted $3,747,000 and $500,000, respectively, out of the remaining principal and accrued interest of subordinated notes into the Company’s ordinary shares.
Added
Net cash used in investing activities during the year ended December 31, 2024, was $3,349,000 compared to $3,366,000 during the year ended December 31, 2023, a decrease of 1%.
Added
Net cash provided by financing activities during the year ended December 31, 2024, was $2,604,000 compared to $6,805,000 during the year ended December 31, 2023, which consisted mainly of one registered direct offering.
Added
Net cash used in operating activities for the year ended December 31, 2023, was $2,367, compared to net cash used by operating activities of $4,654,000 during the year ended December 31, 2022, a decrease of 49%.
Added
Discussion of Critical Accounting Policies The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
Added
Inventories are valued at the lower of cost or market. The Company assess the valuation of its inventory on a yearly basis and write down the value for different finished goods and raw material items based on their potential utilization. Inventory write-offs are provided to cover risks arising from slow-moving items, discontinued products, and excess inventories.
Added
The process for evaluating these write-offs often requires management to make subjective judgments and estimates concerning the future utilization of the inventory items. Goodwill impairment assessment. Management conducts an impairment test as of December 31 of each year, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may be impaired.
Added
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit or intangible asset to its respective carrying value. Fair value is estimated by management using the income method, which is based on the present value of estimated future cash flows attributable to the respective unit.
Added
Management applies significant judgment which is affected by expectations about future market and economic conditions in estimating and making assumptions related to the appropriate discount rates, revenue growth and operating margins. Changes in the assumptions could have a significant impact on the amount of potential impairment charge. Assessment of the capitalized internal costs to develop software.
Added
The Company capitalizes costs incurred to develop software during the application development stage. Judgment is required to assess the stage of software development for upgrades and enhancements for existing software, which determines when costs should be capitalized. C.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

26 edited+2 added−4 removed131 unchanged
Trabelsi holds a BSc. degree in Software and Electrical Engineering from the Technion - Israel Institute of Technology, and an M.B.A. degree from the Columbia University Business School, New York, both with distinction. Barak Trabelsi . Mr.
Mr. Trabelsi holds a BSc. degree in Software and Electrical Engineering from the Technion - Israel Institute of Technology, and an M.B.A. degree from the Columbia University Business School, New York, both with distinction. Barak Trabelsi . Mr.
The following table lists our directors, the positions they hold with us and the dates they were first elected or appointed: Name Position Date Service Began Date of Expiration of Current Term Arie Trabelsi Director February 24, 2019 Annual general meeting Tal Naftali Shmuel Independent Director March 17, 2022 Annual general meeting Oren Raoul De Lange Independent Director March 28, 2021 March 28, 2026 Shoshana Cohen Shapira Independent Director February 24, 2019 February 23, 2025 Our Board of Directors is presently comprised of four (4) members, two of whom were elected as external directors under the provisions of the Israeli Companies Law .
The following table lists our directors, the positions they hold with us and the dates they were first elected or appointed: Name Position Date Service Began Date of Expiration of Current Term Arie Trabelsi Director February 24, 2019 Annual general meeting Tal Naftali Shmuel Independent Director March 17, 2022 Annual general meeting Oren Raoul De Lange Independent Director March 28, 2021 March 28, 2026 Shoshana Cohen Shapira Independent Director February 24, 2019 February 23, 2028 Our Board of Directors is presently comprised of four (4) members, two of whom were elected as external directors under the provisions of the Israeli Companies Law .
Summary compensation table The below table presents the compensation, on an individual basis, of our five most highly compensated office holders and key employees during or with respect to the year ended December 31, 2023, as required by regulations promulgated under the Israeli Companies Law.
Summary compensation table The below table presents the compensation, on an individual basis, of our five most highly compensated office holders and key employees during or with respect to the year ended December 31, 2024, as required by regulations promulgated under the Israeli Companies Law.
Board Practices Corporate Governance Practices Our Board of Directors considers good corporate governance to be central to our effective and efficient operations.
C. Board Practices Corporate Governance Practices Our Board of Directors considers good corporate governance to be central to our effective and efficient operations.
Alfi brings over more than 18 years of experience in different technology companies as technology lead in different R&D teams. Mr. Alfi holds B.Sc. degree in Computer Science & Mathematics and MSc degree in Computer Science from Bar-Ilan University. Lester Villeneuve, Mr. Lester Villeneuve has recently joined the SuperCom Group as the Executive Director for Leaders in Community Alternatives (LCA).
Alfi brings over more than 18 years of experience in different technology companies as technology lead in different R&D teams. Mr. Alfi holds B.Sc. degree in Computer Science & Mathematics and MSc degree in Computer Science from Bar-Ilan University. Lester Villeneuve, Mr. Lester Villeneuve joined the SuperCom Group as the Executive Director for Leaders in Community Alternatives (LCA) in 2023.
D. Employees As of December 31, 2023 and 2022, we had 121 and 122 full-time employees, respectively (not including service providers). The following table describes our employees and the employees of our subsidiaries by department.
D. Employees As of December 31, 2024, 2023 and 2022, we had 124, 121 and 122 full-time employees, respectively (not including service providers). The following table describes our employees and the employees of our subsidiaries by department.
Share Ownership Beneficial Ownership by Executive Officers and Directors The following table sets forth certain information as of December 31, 2023, regarding the beneficial ownership of our ordinary shares by each of our directors and all of our executive officers and directors as a group.
Share Ownership Beneficial Ownership by Executive Officers and Directors The following table sets forth certain information as of December 31, 2024, regarding the beneficial ownership of our ordinary shares by each of our directors and all of our executive officers and directors as a group.
Trabelsi joined us in January 2013 as director of new products development, He served as our VP of IoT from 2016 until February 21, 2022 and serves as VP and Chief Operating Officer since February 21, 2022. Previously and commencing in June 2011, he served as Senior Product Manager in Equinox Ltd.
Trabelsi joined us in January 2013 as director of new products development, He served as our VP of IoT from 2016 until February 21, 2022 and has been serving as VP and Chief Operating Officer since February 21, 2022. Previously and commencing in June 2011, he served as Senior Product Manager in Equinox Ltd.
Compensation The following table sets forth all compensation we paid with respect to all of our directors and executive officers as a group for the year ended December 31, 2023.
B. Compensation The following table sets forth all compensation we paid with respect to all of our directors and executive officers as a group for the year ended December 31, 2024.
As of December 31, 2023, we had set aside approximately $53,964 to provide pension, retirement or similar benefits for certain of our executive officers. 41 The monthly fee for a director (other than with respect to our Chairman of the Board) is $1,500 and for external director a monthly fee of approximately $731 plus approximately $281 for every board or audit committee meeting attended.
As of December 31, 2024, we had set aside approximately $50,981 to provide pension, retirement or similar benefits for certain of our executive officers. 41 The monthly fee for a director (other than with respect to our Chairman of the Board) is $1,500 and for external director a monthly fee of approximately $731 plus approximately $281 for every board or audit committee meeting attended.
Directors and Senior Management Set forth below are the name, age, principal position, and a biographical description of each of our directors: Name Age Position Arie Trabelsi 66 Director Tal Naftali Shmuel 38 Independent Director (1) (2)(3) Oren Raoul De Lange 46 Independent Director (1)(2)(3) Shoshana Cohen Shapira 66 Independent Director (1)(2)(3) (1) “Independent Director” (2) Member of the Audit Committee (3) Member of the Compensation Committee Arie Trabelsi .
Directors and Senior Management Set forth below are the name, age, principal position, and a biographical description of each of our directors: Name Age Position Arie Trabelsi 67 Director Tal Naftali Shmuel 39 Independent Director (1) (2)(3) Oren Raoul De Lange 47 Independent Director (1)(2)(3) Shoshana Cohen Shapira 67 Independent Director (1)(2)(3) (1) “Independent Director” (2) Member of the Audit Committee (3) Member of the Compensation Committee Arie Trabelsi .
Dec. 31, 2023 Dec. 31, 2022 Research, Development & Operations 98 91 Marketing and Sales 8 9 Administration 15 22 Total 121 122 Over the past two years, the number of our employees by geographic area was as follows: Dec. 31, 2023 Dec. 31, 2022 Israel & Europe 53 58 United States 68 64 Total 121 122 From time to time, we have engaged temporary employees to fill open positions.
Dec. 31, 2024 Dec. 31, 2023 Dec. 31, 2022 Research, Development & Operations 96 98 91 Marketing and Sales 15 8 9 Administration 13 15 22 Total 124 121 122 Over the past three years, the number of our employees by geographic area was as follows: Dec. 31, 2024 Dec. 31, 2023 Dec. 31, 2022 Israel & Europe 51 53 58 United States 73 68 64 Total 124 121 122 From time to time, we have engaged temporary employees to fill open positions.
Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. (2) The percentages shown are based on 13,291,028 ordinary shares issued and outstanding as of December 31, 2023.
Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares shown as beneficially owned by them. (2) The percentages shown are based on 2,172,855 ordinary shares issued and outstanding as of December 31, 2024.
Villeneuve has also spent two years with LCA, beginning in 2015 as the Director of the Sacramento ADRC in collaboration with County Probation there. Mr. Villeneuve holds a BA in Psychology from the University of Rhode Island and an MS in Criminal Justice from the University of New Haven.
Villeneuve has also spent two years with LCA, beginning in 2015 as the Director of the Sacramento ADRC in collaboration with County Probation there. Mr. Villeneuve holds a BA in Psychology from the University of Rhode Island and an MS in Criminal Justice from the University of New Haven. Arie Trabelsi . Please see Mr. Arie Trabelsi’s biographical description above.
Salaries, fees, commissions and bonuses Pension, retirement and similar benefits All directors and executive officers as a group (6 persons) $ 580,878 $ 53,964 The aggregate amount of compensation paid by us to our board members and executive officers as a group for the year ended December 31, 2023 was approximately $580,878.
Salaries, fees, commissions and bonuses Pension, retirement and similar benefits All directors and executive officers as a group (6 persons) $ 647,075 $ 50,981 The aggregate amount of compensation paid by us to our board members and executive officers as a group for the year ended December 31, 2024 was approximately $647,075.
As of December 31, 2023, our directors and executive officers as a group, then consisting of 6 persons, held options to purchase an aggregate of 640,000 ordinary shares, of which 320,000 were exercisable as of December 31, 2023, at an average exercise price of $3.25 per share.
As of December 31, 2024, our directors and executive officers as a group, then consisting of 6 persons, held options to purchase an aggregate of 32,000 ordinary shares, of which 24,000 were exercisable as of December 31, 2024, at an average exercise price of $65 per share.
Name Number of Ordinary Shares Beneficially Owned (1) Percentage of Outstanding Ordinary Shares (2) Arie Trabelsi(3) 800,021 6.02 % Tal Naftali Shmuel — — Shoshana Cohen Shapira — — Oren Raoul De Lange — — All executive officers and directors as a group (6 persons) 800,021 6.02 % (1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
Name Number of Ordinary Shares Beneficially Owned (1) Percentage of Outstanding Ordinary Shares (2) Arie Trabelsi 40,001 1.84 % Ordan Trabelsi 91,500 4.21 % Barak Trabelsi 64,500 2.97 % Tal Naftali Shmuel — — Shoshana Cohen Shapira — — Oren Raoul De Lange — — All executive officers and directors as a group (7 persons) 196,001 9.02 % (1) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
He has also led numerous successful financings for the Company, including two public offerings. Trabelsi has experience in strategic merger and acquisition, financing and product strategies as well as technology expertise in security, cyber, mobile and internet networks technologies. Mr.
He has been with the Company since May 2013 as the second US employee and grew the business in the USA. He has also led numerous successful financings for the Company, including two public offerings. Trabelsi has experience in strategic merger and acquisition, financing and product strategies as well as technology expertise in security, cyber, mobile and internet networks technologies.
Trabelsi serves as our President and Chief Operating Officer since February 21, 2022. Previously he led our business and operations in the Americas through his roles as President of SuperCom Inc. and Leaders in Community Alternatives, Inc. He has been with the Company since May 2013 as the second US employee and grew the business in the USA.
Mr. Trabelsi has been serving as our President and Chief Operating Officer since February 21, 2022. Previously he led our business and operations in the Americas through his roles as President of SuperCom Inc. and Leaders in Community Alternatives, Inc.
Executive Officers and Key Employees Our executive officers and certain key employees as of April 22, 2024 are: Name Age Position Ordan Trabelsi* 38 President, Chief Executive Officer Barak Trabelsi* 37 Chief Operating Officer and CTO Gil Alfi 52 Vice President Sales, Safend Ltd Lester Villeneuve 55 Managing Director LCA , USA * Executive officer 40 Ordan Trabelsi. Mr.
Executive Officers and Key Employees Our executive officers and certain key employees as of April 22, 2025 are: Name Age Position Ordan Trabelsi* 40 President, Chief Executive Officer Barak Trabelsi* 39 Chief Operating Officer and CTO Gil Alfi 53 Vice President Sales, Safend Ltd Lester Villeneuve 56 Managing Director LCA , USA Arie Trabelsi 67 Acting Chief Financial Officer * Executive officer 40 Ordan Trabelsi.
Mr. Trabelsi joined us in November 2010 as President and Chief Executive Officer. He served as our Chief Executive Officer from November 1, 2010 until November 12, 2011 and from June 1, 2012 to February 21,2022, and served as Chairman of our board of directors from December 12, 2011 to December 27, 2012, and from February 24, 2019 to date.
He served as our Chief Executive Officer from November 1, 2010 until November 12, 2011 and from June 1, 2012 to February 21,2022, and served as Chairman of our board of directors from December 12, 2011 to December 27, 2012, has been serving as Chairman of our board of directors since February 24, 2019, and has been serving as our Acting Chief Financial Officer since and from February 24, 2019.
Name and Position Salary (1) Bonus and commissions Equity-Based Compensation (2) Total Yoad Hayash Director of sales 177,329 - - 177,329 Arkady Tachman R&D director, e-Gov 180,652 - - 180,652 Barak Trabelsi GM &Vice President, IoT 213,810 33,085 - 246,896 Ido Rozenfeld R&D 140,527 - - 140,527 Gil Alfi Vice President Sales, Cyber 160,876 123,684 - 284,560 (1) Amounts reported in this column include salary, social benefits, including those mandated by applicable law.
Name and Position Salary (1) Bonus and commissions Equity-Based Compensation Total Yoad Hayash Director of R&D 195,461 - - 195,461 Arkady Tachman R&D director, e-Gov 195,077 4,113 - 199,190 Barak Trabelsi COO & CTO 230,765 - - 230,765 Ido Rozenfeld R&D 160,161 - - 160,161 Gil Alfi Vice President Sales, Cyber 160,623 123,905 - 284,528 (1) Amounts reported in this column include salary, social benefits, including those mandated by applicable law.
On August 15, 2007, this option plan was approved by our shareholders at the general shareholders meeting.
On August 15, 2007, this option plan was approved by our shareholders at the general shareholders meeting. As of December 31, 2024, no options were exercisable and no options were outstanding under this plan.
A summary of the status of options granted to employees that had vested as of December 31, 2023 is presented below: Options Weighted– average grant-date fair value Non-vested at January 1, 2023 597,453 $ 3.51 Granted 22,000 $ 1.23 Vested (204,978 ) $ 3.46 Forfeited and canceled (9,275 ) $ 3.68 Non-vested at December 31, 2023 405,200 $ 3.20 As of December 31, 2023, and 2022, there was $741,177 and $1,125,448, respectively, of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the stock option plans. 52
A summary of the status of options granted to our employees that had vested as of December 31, 2024 is presented below: Options Weighted– average grant-date fair value Non-vested at January 1, 2024 20,257 $ 64.07 Granted - $ - Vested (9,819 ) $ 64.91 Forfeited and canceled (179 ) $ 37.75 Non-vested at December 31, 2025 10,259 $ 63.73 As of December 31, 2024, there was $214,000 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the stock option plans. 52
In April 2023, the Option plan was extended for another period of 10 years, until December 31, 2033. 51 A summary of our stock option activity and related information is as follows: Year ended December 31, 2023 2022 Number of options Weighted average exercise price Number of options Weighted average exercise price $ $ Outstanding at Beginning of year 811,050 3.58 21,388 12.3 Granted 22,000 1.23 800,937 3.25 Exercised (250 ) 1.84 (1,650 ) 1.00 Canceled and forfeited (10,625 ) 4.17 (9,625 ) 3.79 Outstanding at end of year 822,175 3.51 811,050 3.58 Exercisable at end of year 416,975 3.80 213,597 4.15 We recognized compensation expenses related to our share-based employee compensation awards of $243,000 and $138,000 for the years ended December 31, 2023 and December 31, 2022 The following table summarizes the allocation of the stock-based compensation expenses (all amounts in thousands of dollars): Year ended December 31, 2023 2022 $ $ Cost of revenues 13 17 Research and development expenses 95 67 Selling and marketing expenses 7 7 General and administrative expenses 128 47 243 138 The options outstanding and exercisable as of December 31, 2023, have the following ranges of exercise prices as follows: Options outstanding Options Exercisable Range of exercise price Number outstanding as of December 31, 2023 Weighted average remaining contractual life (years) Weighted average exercise price Aggregate intrinsic value Number outstanding as of December 31, 2023 Weighted average remaining contractual life (years) Weighted average exercise price Aggregate intrinsic value $ $ $ $ $ 0.00-20.00 822,175 5.54 3.51 - 416,975 5.55 3.80 - 20.00-50.00 - - - - - - - - 822,175 5.54 3.51 - 416,975 5.55 3.80 - The total intrinsic value of options exercised during the years ended December 31, 2023, and 2022 was $0 and $0, respectively, based on our company’s average stock price of $0.58 and $5.08 during the years ended on those dates respectively.
The following table summarizes the allocation of the stock-based compensation expenses (all amounts in thousands of dollars): Year ended December 31, 2024 2023 2022 Cost of revenues $ 4 $ 13 $ 17 Research and development expenses 133 95 67 Selling and marketing expenses 9 7 7 General and administrative expenses 175 128 47 Other expenses, net 81 - - $ 402 $ 243 $ 138 The options outstanding and exercisable as of December 31, 2024, have the ranges of exercise prices as follows: Options outstanding Options Exercisable Range of exercise price Number outstanding as of December 31, 2023 Weighted average remaining contractual life (years) Weighted average exercise price Aggregate intrinsic value Number outstanding as of December 31, 2023 Weighted average remaining contractual life (years) Weighted average exercise price Aggregate intrinsic value $ $ $ $ $ 20.00 373 4.20 20.0 - 373 4.20 20.0 - 24.60 662 6.05 24.60 - 340 5.80 24.60 - 65.00 38,150 4.68 65.00 - 28,214 4.67 65.00 - 150.00 1,190 4.18 150.00 - 1,190 4.18 150.00 - 400.00 463 4.07 400.00 - 463 4.07 400.00 - 40,838 5.54 - 30,579 - The total intrinsic value of options exercised during the years ended December 31, 2024, and 2023 was $0 and $0, respectively, based on our Company’s average stock price of $3.95 and $11.60 during the years ended on those dates respectively.
As of December 31, 2023, 416,975 options were exercisable, and 822,175 options were outstanding.
As of December 31, 2024, 30,579 options were exercisable, and 40,838 options were outstanding under this plan.
Removed
Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this Annual Report.
Added
Mr. Trabelsi joined us in November 2010 as President and Chief Executive Officer.
Removed
Board Diversity Matrix Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 4 Part I: Gender Identity Female Male Non-Binary Did Not Disclose Gender Directors 1 3 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 B.
Added
In April 2023, the Option Plan was extended for another period of 10 years, until December 31, 2033. 51 A summary of our stock option activity and related information is as follows: Year ended December 31 2024 2023 2022 Number of options Weighted average exercise price Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at Beginning of year 41,109 $ 70.20 40,553 $ 71.6 1,069 $ 246 Granted - $ - 1,100 $ 20.6 40,047 $ 65 Exercised - $ - (13 ) $ 20.0 (83 ) $ 20 Canceled and forfeited (271 ) $ 62.88 (531 ) $ 83.4 (481 ) $ 75.8 Outstanding at end of year 40,838 $ 70.21 41,109 $ 70.2 40,552 $ 71.6 Exercisable at end of year 30,579 $ 72.38 20,849 $ 76.0 10,680 $ 83 We recognized compensation expenses related to our share-based employee compensation awards of $401,841 , $243,000 and $138,000 for the years ended December 31, 2024, 2023 and, 2022, respectively.
Removed
(2) Amounts reported in this column represent the expense recorded in our audited consolidated financial statements for the year ended December 31, 2023 based on the grant date fair value in accordance with accounting guidance for stock-based compensation. See Note 12.c to our audited consolidated financial statements for the year ended December 31, 2023. C.
Removed
(3) Sigma Wave Ltd. is controlled by Mrs. Tsviya Trabelsi, and by her husband, Mr. Arie Trabelsi. As such, Mr. Trabelsi may be deemed to beneficially own the 800,021 ordinary shares beneficially held by Sigma Wave Ltd.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

8 edited+4 added−0 removed2 unchanged
Trabelsi of $10.6 per month plus social benefits and an annual bonus of the greater of 2% of the Company’s annual net profit or 0.5% of annual revenues, but in no event greater than Mr. Trabelsi annual salary. As of December 31, 2023 and 2022, we had accrued $18,000, and $85,000, respectively as expenses arising from services provided by Mr.
Trabelsi of $10.6 per month plus social benefits and an annual bonus of the greater of 2% of the Company’s annual net profit or 0.5% of annual revenues, but in no event greater than Mr. Trabelsi annual salary. As of December 31, 2024 and 2023, we had accrued $18,000, and $18,000, respectively as expenses arising from services provided by Mr.
These numbers are not representative of the number of beneficial holders of our shares nor are they representative of where such beneficial holders reside, since many of these ordinary shares were held of record by brokers or other nominees (including one U.S. nominee company, CEDE & Co., which held approximately 97.66% of our outstanding ordinary shares as of such date).
These numbers are not representative of the number of beneficial holders of our shares nor are they representative of where such beneficial holders reside, since many of these ordinary shares were held of record by brokers or other nominees (including one U.S. nominee company, CEDE & Co., which held approximately 99.60% of our outstanding ordinary shares as of such date).
Record Holders Based on a review of the information provided to us by our U.S. transfer agent, as of December 31, 2023, there were approximately 23 record holders, of which 14 record holders holding approximately 97.74% of our ordinary shares had registered addresses in the United States.
Record Holders Based on a review of the information provided to us by our U.S. transfer agent, as of December 31, 2024, there were approximately 23 record holders, of which 10 record holders holding approximately 99.72% of our ordinary shares had registered addresses in the United States.
Trabelsi. On April 29, 2012, the Board of Directors approved the recording of a floating charge on the Company’s assets in favor of Mr. and Mrs. Trabelsi, unlimited in amount, in order to secure loans that are given by them from time to time to the Company. The short terms loans provided by Mrs. and Mr.
Trabelsi. On April 29, 2012, our Board of Directors approved the recording of a floating charge on our assets in favor of Mr. Arie Trabelsi and his spouse, unlimited in amount, in order to secure loans that are given by them from time to time to us. The short terms loans provided by Mr.
Trabelsi during the years 2011 until 2023 ranged from $2,809 up to $2,662,470 and bore no interest As of December 31,2023, total loans were $100. These loans bear no interest and are not attached to any price index. C. Interests of Experts and Counsel Not applicable.
Arie Trabelsi and his spouse during the years from 2011 until 2023 ranged from $2,809 up to $2,662,470 and bore no interest. As of December 31,2024, total loans were $0. These loans bear no interest and are not attached to any price index.
Based on our experience in the business segments in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met our policy standards at the time they occurred. Mr. Trabelsi has served as the Chief Executive Officer of the Company since June 1, 2012 until February 21, 2022.
Based on our experience in the business segments in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met our policy standards at the time they occurred. Mr.
Mr. Trabelsi is the sole director of Sigma Wave, which is the controlling shareholder of the Company. On May 9, 2013, the general meeting of shareholders of the Company approved the payment of management fees to Mr.
Arie Trabelsi has served as the Chief Executive Officer of the Company since June 1, 2012 until February 21, 2022. Mr. Trabelsi is the sole director of Sigma Wave, which is the controlling shareholder of the Company. On May 9, 2013, the general meeting of shareholders of the Company approved the payment of management fees to Mr.
Major Shareholders The following table lists the beneficial ownership of our securities as of April 5, 2024 by each person known by us to be the beneficial owner of 5% or more of the outstanding shares of any class of our securities. 20,231,041 of our ordinary shares were issued and outstanding: None Significant Changes in the Ownership of Major Shareholders Sigma Wave Ltd is no longer a beneficial owner of greater than 5% or more of the outstanding shares of any class of our securities Voting Rights of Major Shareholders Our major shareholders do not have different voting rights from the other holders of our ordinary shares.
Significant Changes in the Ownership of Major Shareholders Mas Alpha became a beneficial owner of more than 5% of our issued and outstanding ordinary shares on March 27, 2025. Voting Rights of Major Shareholders Our major shareholders do not have different voting rights from the other holders of our ordinary shares.
Added
Major Shareholders The following table lists the beneficial ownership of our securities as of April 22, 2025 by each person known by us to be the beneficial owner of 5% or more of the outstanding shares of any class of our securities of which 4,101,907 of our ordinary shares were issued and outstanding: Mas Alpha Securities Fund LP Mas Alpha Securities Fund LP (“Mas Alpha”) holds 286,046 shares of our ordinary shares, which reflects approximately 7% of our issued and outstanding ordinary shares, as reported in Mas Alpha’s Schedule 13G filed with the SEC on April 2, 2025.
Added
The relationships and related party transactions described herein are in addition to any employment arrangements with our executive officers and directors, which are described in this Annual Report above under “ITEM 6. Directors, Senior Management and Employees”.
Added
Indemnification Agreements Our Articles of Association provide that we may indemnify our officers and directors for certain cases of liability and expenses incurred by him or her as a result of an act done by him or her by virtue of being such an office holder. In addition, we have granted indemnification letters to our office holders.
Added
For more information, please see section above captioned “ ITEM 6.C. Directors, Senior Management and Employees ⸺. Board Practices ⸺ Exculpation, Insurance and Indemnification of Directors and Officers”. C. Interests of Experts and Counsel Not applicable.

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