Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended |
Jun. 30, 2014 | |
Document and Entity Information [Abstract] | ' |
Document Type | '6-K |
Document Period End Date | 30-Jun-14 |
Amendment Flag | 'false |
Entity Registrant Name | 'SuperCom Ltd |
Entity Central Index Key | '0001291855 |
Trading Symbol | 'SPCB |
Current Fiscal Year End Date | '--12-31 |
Document Fiscal Period Focus | 'Q2 |
Document Fiscal Year Focus | '2014 |
CONDENSED_INTERIM_CONSOLIDATED
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $2,059 | $2,673 |
Restricted bank deposits | 563 | 85 |
Trade receivable, net | 10,430 | 3,096 |
Deferred tax short term | 1,480 | 2,183 |
Other accounts receivable and prepaid expenses | 1,999 | 3,365 |
Inventories, net | 1,049 | 707 |
Total current assets | 17,580 | 12,109 |
LONG-TERM ASSETS | ' | ' |
Severance pay funds | 349 | 294 |
Deferred tax long term | 4,633 | 3,930 |
Customer Contracts | 7,620 | 8,100 |
Software and other IP | 5,900 | 6,210 |
Goodwill | 889 | 889 |
Property and equipment, net | 317 | 176 |
Total assets | 37,288 | 31,708 |
CURRENT LIABILITIES | ' | ' |
Short-term bank credit | 26 | 1 |
Trade payables | 2,470 | 1,689 |
Employees and payroll accruals | 961 | 419 |
Related parties | 404 | 434 |
Accrued expenses and other liabilities | 1,999 | 3,636 |
Short-term liability for future earn-out | 1,748 | 1,978 |
Total current liabilities | 7,608 | 8,157 |
LONG-TERM LIABILITIES | ' | ' |
Long-term liability for future earn-out | 3,760 | 3,760 |
Accrued severance pay | 567 | 399 |
Total long-term liabilities | 4,327 | 4,159 |
SHAREHOLDERS' EQUITY: | ' | ' |
Ordinary shares | 934 | 904 |
Additional paid-in capital | 58,011 | 55,530 |
Accumulated deficit | -33,592 | -37,042 |
Total shareholders' equity | 25,353 | 19,392 |
Total Liabilities and Shareholders' Equity | $37,288 | $31,708 |
CONDENSED_INTERIM_CONSOLIDATED1
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 6 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ' | ' |
REVENUES | $12,364 | $3,903 |
COST OF REVENUES | -2,696 | -541 |
GROSS PROFIT | 9,668 | 3,362 |
OPERATING EXPENSES | ' | ' |
Research and development, net | 1,802 | 349 |
Sales and marketing | 3,222 | 1,410 |
General and administration | 1,094 | 435 |
Total operating expenses | 6,118 | 2,194 |
OPERATING INCOME | 3,550 | 1,168 |
FINANCIAL EXPENSES, NET | 100 | 42 |
INCOME BEFORE INCOME TAX | 3,450 | 1,126 |
INCOME TAX BENEFIT | ' | 3,001 |
NET INCOME | $3,450 | $4,127 |
NET INCOME PER SHARE | ' | ' |
Basic | $0.26 | $0.47 |
Diluted | $0.26 | $0.43 |
Weighted average number of ordinary shares used in computing basic income per share | 13,391,037 | 8,740,001 |
Weighted average number of ordinary shares used in computing diluted income per share | 13,471,288 | 9,553,082 |
CONDENSED_INTERIM_CONSOLIDATED2
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Total | Ordinary shares [Member] | Additional paid-in capital [Member] | Amount of liability extinguished on account of shares [Member] | Accumulated deficit [Member] |
In Thousands, except Share data | |||||
Balance at Dec. 31, 2012 | $711 | $574 | $43,518 | $127 | ($43,508) |
Balance (in shares) at Dec. 31, 2012 | ' | 8,651,703 | ' | ' | ' |
Shares issued in connection with extinguishments of liabilities | ' | 29 | 98 | -127 | ' |
Shares issued in connection with extinguishments of liabilities (in shares) | ' | 429,600 | ' | ' | ' |
Net income | 4,127 | ' | ' | ' | 4,127 |
Balance at Jun. 30, 2013 | 4,838 | 603 | 43,616 | ' | -39,381 |
Balance (in shares) at Jun. 30, 2013 | ' | 9,081,303 | ' | ' | ' |
Balance at Dec. 31, 2013 | 19,392 | 904 | 55,530 | ' | -37,042 |
Balance (in shares) at Dec. 31, 2013 | ' | 13,284,144 | ' | ' | ' |
Exercise of options and issuance of restricted share capital, net of issuance costs | 2,494 | 30 | 2,464 | ' | ' |
Exercise of options and issuance of restricted share capital, net of issuance costs (in shares) | ' | 414,911 | ' | ' | ' |
Stock- based compensation | 17 | ' | 17 | ' | ' |
Net income | 3,450 | ' | ' | ' | 3,450 |
Balance at Jun. 30, 2014 | $25,353 | $934 | $58,011 | ' | ($33,592) |
Balance (in shares) at Jun. 30, 2014 | ' | 13,699,055 | ' | ' | ' |
CONDENSED_INTERIM_CONSOLIDATED3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $3,450 | $4,127 |
Adjustments to reconcile net income to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 817 | 21 |
Accrued severance pay | 168 | 20 |
Stock-based compensation | 17 | ' |
Deferred tax | ' | -3,010 |
Increase in trade receivables, net | -7,334 | -860 |
Decrease (increase) in other accounts receivable and prepaid expenses | 1,366 | -361 |
Increase in inventories, net | -342 | -49 |
Increase (decrease) in trade payables | 781 | -4 |
Increase in employees and payroll accruals | 542 | 186 |
Increase (decrease) in accrued expenses and other liabilities | -1,667 | 176 |
Net cash provided by (used in) operating activities | -2,202 | 246 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -168 | -76 |
Decrease in severance pay fund | -55 | -7 |
Liability for future earn-out | -230 | ' |
Restricted bank deposits, net | -478 | ' |
Net cash used in investing activities | -931 | -83 |
Cash flows from financing activities: | ' | ' |
Short-term bank credit, net | 25 | -20 |
Proceeds from issuance of restricted share capital, net of issuance costs | 2,449 | ' |
Proceeds from exercise of options, net | 45 | ' |
Net cash (used in) provided by financing activities | 2,519 | -20 |
Increase (decrease) in cash and cash equivalents | -614 | 143 |
Cash and cash equivalents at the beginning of the year | 2,673 | 225 |
Cash and cash equivalents at the end of the year | $2,059 | $368 |
SUPPLEMENTAL_DISCLOSURE_OF_CAS
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION (USD $) | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | ||
Cash paid during the period for: | ' | ' | ||
Interest | ' | [1] | ' | [1] |
Income taxes, net | ' | $9 | ||
[1] | Less than $1. |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2014 | |
GENERAL [Abstract] | ' |
GENERAL | ' |
NOTE 1: GENERAL | |
SuperCom Ltd. (the “Company") is an Israeli resident company organized in 1988 in Israel. On January 24, 2013 the Company changed its name back to SuperCom Ltd, its original name, from Vuance Ltd. On September 12, 2013, the Company's ordinary shares were approved for listing on the NASDAQ Capital Market and began trading under the ticker symbol “SPCB” on September 17, 2013. Previously, the Company's ordinary shares traded on the OTCQB electronic quotation service. | |
The Company is a global provider of traditional and digital identity solutions, providing advanced safety, identification, tracking and security products to governments and private and public organizations. The Company provides cutting edge real-time positioning, tracking, monitoring and verification solutions enabled by its PureRF wireless hybrid suite of products and technologies, all connected to a web-based, secure, proprietary, interactive and user-friendly interface. The Company offers a wide range of solutions including, national ID registries, e-passports, biometric visas, automated fingerprint identification systems, digitized driver's licenses, and electronic voter registration and election management using the common platform ("MAGNA"). The Company sells its products through sales offices in the U.S, Tanzania, Panama, Ecuador and Israel. | |
On December 26, 2013 the Company acquired the SmartID Division of On Track Innovations Ltd. (NASDAQ: OTIV) (“OTI”), consisting of customer contracts, software, other related technologies and IP assets. The Company paid OTI $8.8 million ($10 million less certain price adjustments) at the closing and agreed to make contingent payments of up to $12.5 million pursuant to an earn-out mechanism based on certain performance and other milestones. The SmartID Division has a strong international presence, with a broad range of competitive and well-known e-ID solutions and technology. The acquisition significantly expanded the breadth of the Company's e-ID capabilities globally, while providing it with market and technological experts, together with its ID software platforms and technologies. |
UNAUDITED_CONDENSED_CONSOLIDAT
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2014 | |
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ' |
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ' |
NOTE 2: UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
Financial Statement preparation | |
These unaudited interim consolidated financial statements of the Company and its subsidiaries (collectively referred to in its report as "Company"), as of June 30, 2014 and for the six months then ended have been prepared, in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). They do not include all information and notes required by U.S. GAAP in the preparation of annual consolidated financial statements. The accounting policies used in the preparation of the unaudited interim consolidated financial statements is the same as those described in the Company's audited consolidated financial statements prepared in accordance with U.S. GAAP for the year ended December 31, 2013. | |
The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. | |
The Company believes all adjustments necessary for a fair statement of the results for the period presented have been made and all such adjustments were of a normal recurring nature unless otherwise disclosed. The financial results for the period are not necessarily indicative of financial results for the full year. | |
These financial statements should be read in conjunction with the Company's consolidated financial statements for the year ended December 31, 2013 and the accompanying notes. |
COMMITMENTS_AND_CONTINGENT_LIA
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION | 6 Months Ended | ||
Jun. 30, 2014 | |||
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION [Abstract] | ' | ||
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION | ' | ||
NOTE 3: COMMITMENTS AND CONTINGENT LIABILITIES – LITIGIATION | |||
1 | According to a success based consulting agreement from November 29, 2009, Periscope Finance Ltd. (“Periscope”), committed to assist the Company in finding an investor, With the following payments terms: (i) for any investment of up to $2 million, an amount equal to 6% of the investment amount and (ii) options for 3% of the Company's share capital. (iii) for any amount over $2 million, an additional $25 for any $1 million and an additional options for 1% of the Company's share capital. Periscope claims that they are responsible for an investment by Sigma Wave, the Company's current controlling shareholder. The Company believes that Periscope is not entitled to any payment, since the agreement with Periscope was never approved by the Company's authorized organs and since the acquisition of the Company's convertible bond from a bondholder by Sigma Wave was not "an investment in the company" (the Company was not part of the transaction). In addition, the Company position is that even if the agreement was enforceable, it terminated prior to November 28, 2010, and as such the Sigma transaction (not an investment), occurred after the term of the agreement with Periscope terminated. In April, 2013, Periscope proposed a settlement agreement, which was presented at the Company's general assembly for approval but this agreement was rejected by the general assembly in its annual meeting on May 9, 2013. Both parties agreed to go into a mediation process, which was ended with no agreement between the parties. In August 2014, Periscope proposed a new settlement agreement, which is currently under evaluation. | ||
2 | As part of the acquisition of the SmartID division of OTI in December 2013, the Company assumed a dispute with Merwell Inc. (“Merwell”). Merwell has alleged that it has not received the full payment it is entitled to for its services in respect of a drivers' license project. OTI alleged that Merwell breached its commitments under the service agreement and also acted in concert with third parties to damage OTI's business activities. This matter is now subject to an arbitration proceeding. | ||
GENERAL_Details
GENERAL (Details) (USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Dec. 26, 2013 |
GENERAL [Abstract] | ' |
Cash paid for acquisition | $10 |
Cash paid for acquisition, net | 8.8 |
Maximum contingent payments | $12.50 |
COMMITMENTS_AND_CONTINGENT_LIA1
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION (Details) (Periscope [Member], USD $) | Nov. 29, 2009 |
Periscope [Member] | ' |
Registration Payment Arrangement [Line Items] | ' |
Investment amount | $2,000,000 |
Incremental investment | 1,000,000 |
Additional fee | $25,000 |
Percentage of investment amount | 6.00% |
Percentage of share capital | 3.00% |
Additional percentage of share capital | 1.00% |