26 June 2024

t42 IoT Tracking Solutions plc

("t42" or the "Company")

Full year results

t42 IoT Tracking Solutions plc (AIM: TRAC) ("t42" or the "Company"), the provider of global shipping containers tracking solutions, is pleased to announce its audited results for the 12 months ended 31 December 2023.

Financials Highlights

·    Revenues $4.01m (2022: $4.04m), with greater contribution from the supply chain solution products rather than vehicle tracking solutions.

 

·    Adjusted EBITDA gain of $341,000 (2022: EBITDA loss of $812,000).

·    Gross margin for the period was 53% (2022: 42%).

·    General expenses decreased to $1.3m (H1 2022: $1.5m).

Post-period Highlights

·    4 major long term commercial agreements, representing total potential orders of up to 100,000 units,  the majority of which are from customers in LATAM, which, subject to full delivery and deployment within the contract timeframes, would contribute c. $20m hardware and SaaS revenue over 3 years. 

·    Continued implementation of the new strategy focusing on the supply chain markets, based on SaaS model

 

Avi Hartmann, CEO of t42, commented:

"We offer a comprehensive, cutting edge, technological solution for monitoring and securing containers, effectively addressing a critical challenge in maritime, land transportation and air cargo. Our solution guarantees reliability, security, and economic feasibility while significantly reducing implementation time and accelerating return on investment for our customers. We are actively pursuing business opportunities in key markets such as South and North America, evident from recent agreements signed and the substantial business potential they represent."

Contacts:

 

t42 IoT Tracking Solutions PLC Michael Rosenberg, Chairman Avi Hartmann, CEO	07785 727595 +972 5477 35663
Strand Hanson Limited (Nominated Adviser and Financial Adviser) James Harris/ Richard Johnson/ Robert Collins	020 7409 3494
Peterhouse Capital Limited Lucy Williams/Charles Goodfellow/Eran Zucker	020 7469 0930

 The Annual Report will be made available to shareholders shortly and be available from the Company's website at: www.t42.co.uk/. A notice of AGM will be despatched to shareholders in due course.

 

 

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

 

 

 

 

 

CHAIRMAN'S STATEMENT

 

We are pleased to report the audited financial statements for the year ended 31st December 2023.

 

Revenues were $4.01m (2022: $4.04m). However, we are pleased to report a gross margin of 53% for the year compared to 42% for the previous year, and a reduced net loss $0.42m for the year (2022: $1.01m loss).  All in all, the financials indicators continue to show stability and improvement, with a decrease in expenses and loss which have led to a positive adjusted EBITDA of $0.34m for the reporting period. These improvements are encouraging as they demonstrate stabilization in the business and progress in the Company's strategy. The Company has focused on long-term significant agreements and has concluded 4 of these since the end of reporting period as summarised below.

 

·      In February 2024 a follow-up agreement was signed with a distributor, originally contracted in 2023 to whom 2,000 Lokies units had been delivered. Under the new agreement it was agreed to supply up to 30,000 units over 3 years, which we estimated would deliver up to $7.5m in revenues, including SaaS revenues, if fully ordered and deployed.

 

·      In April 2024 we announced a further significant agreement, with a Mexican distributor, involving the application of the tracking system for the control of a large number of petrol and diesel transporters enabling significant controls to be installed. 

 

·      In May 2024 another long-term agreement was entered into with a leading company in Brazil within the transportation and logistics security tracking sector. The agreement is for tracking units over a 3 year period and is expected by the Company to have a total value of c. $4.5m over the agreement period on the basis of full deployment. The agreement was achieved after a long systems development process and is expected to produce an order for 10,000 tracking units during 2024.

 

·      Later in May 2024 the Company concluded another agreement under which an initial order of 3,500 units (combination of Lokies and Tetis) has been received, as part of total expected orders of 10,000 units during 2024. The agreement has an estimated total value of c. $7m over 3 years, for both hardware and SaaS revenues.

 

 After a significant period of testing and comparing different solutions, DHL Israel have recently chosen Lokies as their standard solution in the field. After a testing period of over a month, DHL Israel has placed their first commercial order for Lokies, which will be implemented immediately in their fleet. This order marks a new and significant opportunity for the Company, and we expect it will open up additional commercial opportunities from DHL Israel.

 

During the reported period, t42 has significantly advanced its R&D efforts to enhance its product offerings and meet the evolving needs of its clients. We have successfully incorporated additional 4G modules from diverse suppliers, improving both pricing and availability. Our commitment to product reliability has been strengthened through the implementation of new and improved testing methods in our manufacturing processes.

 

In July 2023, we initiated a notable collaboration with a leading global firm providing sustainable solutions across the cold chain. Furthermore, we migrated our location by cellular antennas feature to our proprietary cloud infrastructure. This strategic move provides greater flexibility in selecting cellular module providers and reduces additional costs.

 

Our Lokies and Helios Pro products have been extended to support a variety of external BLE sensors, acting as gateways to supply users with comprehensive information from the device surroundings. Additionally, we released a new version of our flexible shackle for Lokies, specifically designed for a global retail company, enhancing security solutions across a broader range of trucks.

 

On the cloud and portal side, we have expanded our services to allow clients to use our systems as Data as a Service (DaaS), integrating seamlessly with their existing infrastructure. This initiative has attracted over 20 clients, opening new market segments. We also introduced a custom-made reporting system, integrated third-party devices for Latin American customs authorities, and added new security layers, including two-factor authentication for both web and mobile platforms. Our dashboards and reports now offer more business insights for our clients.

 

Special projects during 2023 included a tailored high-accuracy impact detection solution for an American company using Kylos and an extended portal for a client's special project requirements in Tanzania. We have also continued our close integration with Zero Motorcycles, enhancing the information they provide to their clients.

 

These R&D advancements emphasize our commitment to innovation and excellence, ensuring we remain at the forefront of the IoT tracking and security industry.

 

FINANCIAL REVIEW

 

Group revenues for the year were $4.01m, compared with $4.04m for the year ended 31 December 2022, a decrease of 1%.

The gross margin for the year increased to 53% (2022: 42%).

 

Total operating expenditure for the year reduced to $2.24m (2022: $3.01m),

 

Net loss after taxation for the year decreased to $0.42m compared with the 2022 net loss of $1.01m.

The reduced operating loss in the period was $0.1m compared to an operating loss of $1.37m in 2022.

 

The Group recorded an exchange rate gain of $27k resulting from the weakness of the Israeli Shekel compared with the US dollar (2022: exchange rate loss of $450k).

 

The Group balance sheet showed an increase in trade receivables to $0.89m, compared with $0.49m as of 31 December 2022.

 

Group inventories at the period end were $1.44m, compared to $1.58m as of the end of 2022.

 

Trade payables at the year-end decreased at $0.84m, compared with $1.14m as of 31 December 2022.

 

Net cash used in operating activities in the period was approximately $0.22m, compared with $0.95m for the year ended 31 December 2022.

 

Post-period, in March 2024, the Company reached an agreement over the extension of its £925k unsecured convertible loans until January 2025 under new terms.

 

The auditors report draws attention to the deficit in current liabilities as of 31 December 2023. However, given the significant additional sales referred to in this report, the Board are confident that additional funding, if required, will be available. In addition, the Company has non-binding indications from the holders of the convertible loan notes maturing in January 2025 that they would convert or extend the loans, subject to agreeing terms.

 

OUTLOOK

 

We are expecting further growth in revenues during 2024 based on our current pipeline of potential new orders. The focus on long-term agreements demonstrates the market demand for our products and solutions, stemming from the strength of our R&D and technological advantages.

 

It is pleasing to have concluded four long-term agreements this year to date concluded as we continue to collaborate with market leaders to promote t42's strategy in accessing mass markets. We are confident that our cutting-edge technology will be translated into further contracts in in the short- to mid-term.

 

As our strategic decision to focus on the shipping container market evolves, we believe that the technological advantages of our Helios solution will allow us to secure further development projects and opportunities.

 

Michael Rosenberg OBE

Non-Executive Chairman

_______________

 

 

CORPORATE GOVERNANCE STATEMENT

 

General

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

Division of responsibilities     

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

The Chairman

The Chairman is responsible for the leadership of the Board. The Chairman sets the agenda for Board meetings and encourages an open and constructive debate. Since the Company is based in Tel Aviv, some Board meetings take place by conference call but normally at least two meetings a year take place physically in Israel with all Board members attending. However, given the current troubles in Israel it was decided to hold all meetings in 2023 by conference call.  During 2023, a total of 11 Board meetings were held and all directors attended all meetings either in person or by conference call. There were 2 audit committee meetings held during the year under review, and all members of the committee attended. There was one remuneration committee meeting held during the year under review, which all members attended.

The non-executive directors

The Chairman is responsible for the leadership of the Board. The Chairman sets the agenda for Board meetings and encourages an open and constructive debate. Since the Company is based in Tel Aviv, some Board meetings take place by conference call but normally at least two meetings a year take place physically in Tel Aviv with all Board members attending.  However, given the current troubles in Israel it was decided to hold all meetings in 2023 by conference call

Time Commitment

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

The business model and strategy

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

To understand and meet shareholder needs and expectations

The Board keeps in regular contact with investors with a view to understanding their needs and expectations. During 2023, with the assistance of the Company's brokers, presentations were made to a number of investors and further presentations are planned together with the release of these financial statements. In addition, the Board welcomes contact from investors via the Company's brokers, and via the website. Shareholders are encouraged to attend the Company's Annual General Meetings where they can meet and directly communicate with the Board.

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

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

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

Embed effective risk management

The Board is fully aware of, and monitors closely, the risks that may apply to the business. These include counterparty credit risk, foreign exchange risk and, from time to time, political risks in countries where the Company is actively marketing its products. It is also influenced by the covenants imposed by its bankers on credit risk for certain countries. Operational risks are identified and assessed by management and are reported to the Board when necessary. The Audit Committee also addresses these risks at its regular meetings. During 2023, management has actively been seeking to widen the manufacturing bases for the Company's products so as to lessen reliance on any single manufacturer, thus minimizing risk to the business. In order to monitor risk, regular visits are made to the manufacturing facility and the Board is informed of any issues that need addressing. The key risks facing the Company together with any mitigation taken are considered further on pages 11-12 of this document.

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

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

Ethical matters

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

Main governance structures and processes

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

Further information on the Board and its Committees:

Michael Rosenberg OBE (Non-Executive Chairman)

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

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

Avi Hartmann (Chief Executive Officer)

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

Martin Blair (Non-Executive Director)

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

Igor Vatenmacher (Chief Financial Officer)

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

Audit Committee

The Audit Committee consists of the non-executive directors, Martin Blair and Michael Rosenberg, and is chaired by Martin Blair. The Audit Committee, inter alia, determines and examines matters relating to the financial affairs of the Company including the terms of engagement of the Company's auditors and, in consultation with the auditors, the scope of the annual audit. The Audit Committee met twice during 2023. In June 2023, the Audit Committee reviewed the financial statements for the year ended 31 December 2022, paying particular attention to the level of debtors. The Audit Committee met in September 2023 to consider the interim financial statements for the six months ended 30 June 2023. Again, the Committee focused on stock valuation and debtor levels. The Board considers that, given the size and nature of the business, it is not beneficial to include a full audit committee report in the annual report and accounts for 2023. This will be kept under annual review by the Board.

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

The Board considers that, given the size and nature of the business, it is not beneficial to include a Remuneration Committee report in the annual report and accounts for 2023. This will be kept under annual review by the Board.

On behalf of the Board,

M. Rosenberg, Non-Executive Chairman

_______________

 

                 t42 IoT Tracking Solutions PLC

 

              Directors' Report

 

              for the Year Ended December 31, 2023

 

The directors present the annual report together with the financial statements and auditors' report for the year ended December 31, 2023.

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

Principal activities and review of business

t42 pioneering Advanced Real-Time Tracking and Management Solutions

t42 is a global leader in the field of advanced, automated real-time systems, specializing in the remote tracking and management of vehicles, containers, and assets. Our commitment to innovation is underpinned using cutting-edge Artificial Intelligence (AI) and Machine Learning (ML) technologies. We offer a unique and revolutionary real-time cargo tracking solution that caters to a diverse clientele.

At the forefront of our product line are the revolutionary Tetis, Lokies, and Kylos products. These products provide a comprehensive 360 degree view of containers and goods throughout the entire supply chain. Our commitment to excellence is evident in the strength, stability, and continuous performance of all our systems.

Accounts production

The financial statements for the year ended December 31, 2023, have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS").

Dividends

The directors do not propose a final dividend.

Directors

Michael Rosenberg             Appointed February 2013

Avi Hartmann                      Appointed February 2013

Igor Vatenmacher               Appointed January 2019

Martin Blair                          Appointed May 2019

 

 

Remuneration of Directors 

Remuneration of directors for the year ending 31 December 2023: (All amounts presented in thousands of USD)

 

Executive Director	Salary	Pension and Related Expenses		Fees	Total
A Hartmann	165		13	-	178
I Vatenmacher	105		25	-	130
Non-Executive Directors
M Rosenberg	-		-	50	50
M Blair	-		-	45	45
Total 2023	270		38	95	403

 

 

Directors' remuneration in share options: (In thousands)

Executive Director	Total vested at 01/01/23	Exercised	Vested/ (Expired) during the year		Total Vested at 31/12/23		Total Un-vested at 31/12/23		Grant Total
A Hartmann	1,082	-		41		1,123		42		1,165
I Vatenmacher	292	-		41		333		42		375
Non-Executive Directors
M Rosenberg	1,182	(279)		(89)		814		-		814
M Blair	615	(251)		-		364		-		364

 

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

Charitable and Political Donations

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

Corporate governance

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

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

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

Statement of Directors' Responsibilities

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

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

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

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

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

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

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

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

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

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

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

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

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

Going concern

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

Risks

Foreign exchange risks

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

The Group consults with foreign currency experts from main Israeli banks regarding the main financial institutions' expectations for foreign currency changes. Management reviews them carefully and will consider with the board whether it should purchase financial instruments sold by local banks to protect itself from this foreign exchange risk.

Interest Rate Risks

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

Credit Risk

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

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

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

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

Capital Risk management

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

Supplier payment policy

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

CREST

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

Electronic Communications

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

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

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

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

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

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

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

On behalf of the Board,

M. Rosenberg, Non-Executive Chairman

________________

 

 

 

 

 

 

Jerusalem, 25 June 2024

 

Report of Independent Auditors

 

to the Board of Directors and Stockholders of

 

t42 IoT Tracking Solutions PLC

 

We have audited the accompanying consolidated statements of financial position of t42 IoT Tracking Solutions PLC and its subsidiaries (hereinafter - "the Group") as of December 31, 2023 and 2022 and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended. These financial statements are the responsibility of the Group board of directors and management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023 and 2022 and the consolidated results of its operations, changes in equity and cash flows for the years then ended in conformity with international financial reporting standards (IFRS).

Without qualifying our conclusion, we draw attention to Note 1e in the financial statements regarding the Company's accumulated losses of 16M USD from operations since inception, the current convertible loans to be repaid by January 2025 and the management efforts to raise additional funds required. These factors indicate that there may be an uncertainty as to the Company's ability to continue as a going concern.  The management is on the opinion that due to the growth in activity and other actions taken the Company will have the sufficient cash flow it requires to fund its ongoing operations as well as solve the requirement to repay the convertible loans.   Key Audit Matters Key audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the board of directors and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no key audit matters. Barzily & Co. Certified Public Accountants. A Member of MSI Worldwide

 

 

T42 IOT TRACKING SOLUTIONS PLC

U.S. Dollars in thousands

		December 31,
	Note	2023				2022
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment, net	6	422				546
Right-of-use assets, net	22	1,044				981
Intangible assets, net	7	952				1,021
Income tax authorities		-				57
Total Non-Current Assets		2,418				2,605
CURRENT ASSETS
Cash and cash equivalents		186				174
Short-term bank deposit	5	35				130
Trade receivables, net	3	892				488
Other accounts receivable		27				71
Inventories	4	1,439				1,581
Total Current Assets		2,579				2,444
TOTAL ASSETS		4,997				5,049
DEFICIT AND LIABILITIES
DEFICIT	14		(939)				(538)
NON-CURRENT LIABILITIES
Long-term loans from banks, net of current maturities	10		88				142
Long-term leasehold liabilities	22		814				790
Conversion component of a convertible loan at fair value	11A,D		31				27
Amortized cost of a convertible loan	11A,D		917				292
Total Non-Current Liabilities			1,850				1,251
CURRENT LIABILITIES
Short-term bank credit			42				42
Short-term bank loan	12		103				719
Current maturities of long-term loans from banks	10		64				70
Trade payables			844				1,144
Other accounts payable	9		433				260
Leasehold liabilities	22		168				112
Warrants at fair value	11B,C		12				84
Amortized cost of a convertible loan	11B,C,D		1,681				1,161
Related parties	20		739				744
Total Current Liabilities			4,086				4,336
TOTAL DEFICIT AND LIABILITIES			4,997				5,049

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

 

25 June 2024
Date of Approval of the Financial Statements		Igor Vatenmacher CFO		Avi Hartmann CEO

T42 IOT TRACKING SOLUTIONS PLC

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

                                                                                +                                                                              Year ended December 31,

	Note		2023		2022
Revenues			4,005		4,041
Cost of sales	15		(1,882)		(2,358)
Gross profit			2,123		1,683
Operating expenses:
Research and development			(92)		(125)
Selling and marketing			(485)		(652)
General and administrative expenses	16		(1,665)		(2,250)
Other expenses, net			(3)		(29)
Total operating expenses			(2,245)		(3,056)
Operating loss			(122)		(1,373)
Finance income	17		604		814
Finance expenses	18		(902)		(447)
Net finance income (expenses)			(298)		367
Total comprehensive loss for the year			(420)		(1,006)
Loss per share:
Basic and diluted loss per share	14, 19		(0.008)		(0.019)

 

 

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