Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Entity Registrant Name | SuperCom Ltd |
Entity Central Index Key | 1,291,855 |
Trading Symbol | SPCB |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2,015 |
CONDENSED INTERIM CONSOLIDATED
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 32,393 | $ 4,789 |
Restricted bank deposits | 3,043 | 5,195 |
Trade receivable, net | 15,901 | 11,628 |
Deferred tax short term | 3,495 | 3,958 |
Other accounts receivable and prepaid expenses | 1,242 | 1,190 |
Inventories, net | 1,818 | 1,614 |
Total current assets | 57,892 | 28,374 |
LONG-TERM ASSETS | ||
Severance pay funds | 102 | 325 |
Deferred tax long term | 134 | 301 |
Customer Contracts | 4,128 | 4,587 |
Software and other IP | 4,772 | 4,949 |
Goodwill | 3,722 | 3,722 |
Property and equipment, net | 855 | 616 |
Total assets | 71,605 | 42,874 |
CURRENT LIABILITIES | ||
Trade payables | 2,783 | 2,892 |
Employees and payroll accruals | 1,668 | 944 |
Related parties | 401 | 341 |
Accrued expenses and other liabilities | 2,981 | 2,755 |
Advances from customers | 2,864 | |
Short-term liability for future earn-out | 2,482 | 2,870 |
Total current liabilities | 10,315 | 12,666 |
LONG-TERM LIABILITIES | ||
Long-term liability for future earn-out | 1,477 | 1,477 |
Accrued severance pay | 147 | 425 |
Total long-term liabilities | 1,624 | 1,902 |
SHAREHOLDERS EQUITY | ||
Ordinary shares | 1,100 | 937 |
Additional paid-in capital | 86,259 | 58,210 |
Accumulated deficit | (27,693) | (30,841) |
Total shareholders' equity | 59,666 | 28,306 |
Total Liabilities and Shareholders Equity | $ 71,605 | $ 42,874 |
CONDENSED INTERIM CONSOLIDATED3
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract] | ||
REVENUES | $ 15,444 | $ 12,364 |
COST OF REVENUES | (5,116) | (2,696) |
GROSS PROFIT | 10,328 | 9,668 |
OPERATING EXPENSES | ||
Research and development, net | 1,510 | 1,802 |
Sales and marketing | 2,869 | 3,222 |
General and administration | 2,060 | 1,094 |
Total operating expenses | 6,439 | 6,118 |
OPERATING INCOME | 3,889 | 3,550 |
FINANCIAL EXPENSES, NET | 111 | 100 |
INCOME BEFORE INCOME TAXES | 3,778 | 3,450 |
INCOME TAX EXPENSES | 630 | |
NET INCOME | $ 3,148 | $ 3,450 |
NET INCOME PER SHARE | ||
Basic | $ 0.23 | $ 0.26 |
Diluted | $ 0.22 | $ 0.26 |
Weighted average number of ordinary shares used in computing basic income per share | 13,862,731 | 13,391,037 |
Weighted average number of ordinary shares used in computing diluted income per share | 14,048,570 | 13,471,288 |
CONDENSED INTERIM CONSOLIDATED4
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary Shares [Member] | Additional Paid-in Capital [Member] | Accumulated deficit [Member] |
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 share capital, net of issuance costs | 2,494 | $ 30 | 2,464 | |
Exercise of options and issuance of 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 | |||
Balance at Dec. 31, 2014 | 28,306 | $ 937 | 58,210 | $ (30,841) |
Balance (in shares) at Dec. 31, 2014 | 13,742,586 | |||
Exercise of options, warrants and issuance of share capital, net of issuance costs | 27,334 | $ 163 | 27,171 | |
Exercise of options, warrants and issuance of share capital, net of issuance costs (in shares) | 2,523,466 | |||
Stock-based compensation | 878 | $ 878 | ||
Net income | 3,148 | $ 3,148 | ||
Balance at Jun. 30, 2015 | $ 59,666 | $ 1,100 | $ 86,259 | $ (27,693) |
Balance (in shares) at Jun. 30, 2015 | 16,266,052 |
CONDENSED INTERIM CONSOLIDATED5
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 3,148 | $ 3,450 |
Adjustments to reconcile net income to net cash from operations: | ||
Depreciation and amortization | 743 | 817 |
Increase (decrease ) in accrued severance pay | (278) | 168 |
Stock-based compensation | 878 | $ 17 |
Decrease in deferred tax | 630 | |
Increase in trade receivables, net | (4,273) | $ (7,334) |
Decrease (increase) in other accounts receivable and prepaid expenses | (52) | 1,366 |
Increase in inventories, net | (204) | (342) |
Increase (decrease) in trade payables | (109) | 781 |
Increase in employees and payroll accruals | 724 | $ 542 |
Decrease in advance payment | (2,864) | |
Increase (decrease) in accrued expenses and other liabilities | 286 | $ (1,667) |
Net cash used in operating activities | (1,371) | (2,202) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (346) | (168) |
Decrease (Increase) in severance pay fund | 223 | (55) |
Liability for future earn-out | (388) | (230) |
Restricted bank deposits, net | 2,152 | (478) |
Net cash provided (used in) by investing activities | $ 1,641 | (931) |
Cash flows from financing activities: | ||
Short-term bank credit, net | 25 | |
Proceeds from issuance of share capital, net of issuance costs | $ 27,153 | 2,449 |
Proceeds from exercise of options and warrants, net | 181 | 45 |
Net cash provided by financing activities | 27,334 | 2,519 |
Increase (decrease) in cash and cash equivalents | 27,604 | (614) |
Cash and cash equivalents at the beginning of the year | 4,789 | |
Cash and cash equivalents at the end of the year | 32,393 | $ 2,059 |
Supplemental disclosure of cash flows information: | ||
Cash paid during the period for: Income taxes, net | $ 16 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2015 | |
GENERAL [Abstract] | |
GENERAL | NOTE 1: GENERAL a. SuperCom Ltd. (the Company") is an Israeli resident company organized in 1988 in Israel. On January 24, 2013 the Company changed its name back to SuperCom Ltd, its original name, from Vuance Ltd. On September 12, 2013, the Company's ordinary shares were approved for listing on the NASDAQ Capital Market and began trading under the ticker symbol SPCB on September 17, 2013. Previously, the Company's ordinary shares traded on the OTCQB® electronic quotation service. We are a global provider of traditional and digital identity solutions, providing advanced safety, identification, tracking and security products to governments and public organizations throughout the world. We offer three lines of solutions, our e-ID platform and solutions, from which we derive the majority of our revenue, our M2M/IoT suite and services and our Secure Mobile Payments (SMP) suite and solutions. e-ID Platform and Solutions M2M/IoT Suite and Services SMP Suite and Solutions TM TM 2 3 TM TM As of June 30, 2015, the Company's principal activities were conducted mainly through SuperCom Ltd. and Supercom Inc. and through SuperCom Tanzania and SuperCom Panama, that were acquired in December 2013 as part of the acquisition of the SmartID division. The subsidiaries in Tanzania and Panama provide support and maintenance services to the Company's customers in these countries. b. On June 23, 2015, the Company closed a public offering whereby 2,415,000 315,000 27.1 c. Concentration of risk that may have a significant impact on the Company: In the first half of year 2015, the Company derived most of its revenues from 3 four one The Company purchases certain services and products used by it to generate revenues in its projects and sales from several sole suppliers. Although there are only a limited number of manufacturers of those particular services and products, management believe that other suppliers could provide similar services and products on comparable terms without affecting operating results. |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 6 Months Ended |
Jun. 30, 2015 | |
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] | |
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | NOTE 2: UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Financial Statement preparation These unaudited interim consolidated financial statements of the Company and its subsidiaries (collectively referred to in its report as "Company"), as of June 30, 2015 and for the six and three 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, 2014. 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, 2014 and the accompanying notes. There have been no changes in the significant accounting policies from those that were disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2014 included in the 2014 Form 20-F. |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES, NET [Abstract] | |
INVENTORIES, NET | NOTE 3: INVENTORIES, NET June 30, December 31, 2015 2014 $ $ Raw materials, parts and supplies 1,600 759 Finished products 218 855 1,818 1,614 As of June 30, 2015 and December 31, 2014, inventory is presented net of write offs for slow inventory in the amount of approximately $ 121 121 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION | 6 Months Ended |
Jun. 30, 2015 | |
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION | NOTE 4: COMMITMENTS AND CONTINGENT LIABILITIES LITIGIATION As part of the acquisition of the SmartID division of OTI, 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. |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
INVENTORIES, NET [Abstract] | |
Schedule of Inventory, Net | June 30, December 31, 2015 2014 $ $ Raw materials, parts and supplies 1,600 759 Finished products 218 855 1,818 1,614 |
GENERAL (Details)
GENERAL (Details) $ in Millions | 6 Months Ended | 12 Months Ended | 24 Months Ended |
Jun. 30, 2015USD ($)shares | Dec. 31, 2014 | Dec. 31, 2013 | |
GENERAL [Abstract] | |||
Issuance of shares from a public offering, inclusive of 315,000 shares of common stock pursuant to the full exercise of an overallotment option granted to the underwriters | $ | $ 27.1 | ||
Issuance of shares from a public offering, inclusive of 315,000 shares of common stock pursuant to the full exercise of an overallotment option granted to the underwriters (in shares) | 2,415,000 | ||
Shares of common stock pursuant to the full exercise of an overallotment option granted to the underwriters | 315,000 | ||
Number of major customers | 3 | 4 | 1 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
INVENTORIES, NET [Abstract] | ||
Raw materials, parts and supplies | $ 1,600 | $ 759 |
Finished products | 218 | 855 |
Inventories, net | 1,818 | 1,614 |
Valuation adjustment for slow inventory | $ 121 | $ 121 |