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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SuperCom Ltd | NASDAQ:SPCB | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.2208 | 0.215 | 0.219 | 0 | 01:00:00 |
|
Per Unit(1)
|
Total
|
||||||
Public Offering Price
|
$
|
0.85
|
$
|
2,750,000
|
||||
Placement Agent fees(2)(3)
|
$
|
0.0595
|
$
|
192,500
|
||||
Proceeds, before expenses, to us
|
$
|
0.7905
|
$
|
2,557,500
|
(1)
|
Units consist of one ordinary share or Pre-Funded Warrant and one Warrant.
|
(2)
|
The Placement Agent fee shall equal 7% of the public offering price of the securities sold by us in this offering. Does not include certain out-of-pocket expenses of the Placement Agent that
are reimbursable by us.
|
(3)
|
We shall also reimburse the Placement Agent for certain offering related expenses in addition to the placement agent fees described above. See “Plan of
Distribution” for a description of compensation payable to the Placement Agent.
|
Description
|
Page
|
1
|
|
2
|
|
5
|
|
7
|
|
9
|
|
10
|
|
10
|
|
11
|
|
12
|
|
15
|
|
17
|
|
24
|
|
28
|
|
28
|
|
29
|
|
29
|
|
29
|
|
30
|
|
30
|
• |
if we are unable to manage our revenue growth, our business, financial results and stock price could suffer;
|
• |
our dependence on orders from large customers for a substantial portion of our revenues;
|
• |
the impact of other companies and technologies that compete with us within our industry;
|
• |
any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations;
|
• |
our ability to generate sufficient cash from operations and potential need to obtain additional financing or reduce our level of expenditure;
|
• |
changing technology, requirements, standards and products in the market of our products;
|
• |
our ability to enter into contracts with governments, as well as state and local governmental agencies and municipalities;
|
• |
our dependence on third-party representatives, resellers and distributors could result in marketing and distribution delays;
|
• |
if our technology and solutions cease to be adopted and used by government and public and private organizations;
|
• |
our ability to develop and sustain our position as a provider of e-Gov, IoT and Connectivity, and Cyber Security, solutions and services and earn high margins from our technology;
|
• |
our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment;
|
• |
our efforts to expand our international operations and maintain or increase our future international sales;
|
• |
our exposure to risks in operating in foreign markets;
|
• |
fluctuation in our financial and operating results;
|
• |
our reliance on third party technologies and components for the development of some of our products;
|
• |
delays in deliveries from our suppliers, defects in goods or components supplied by our vendors, or delays in projects that are performed by our subcontractors;
|
• |
significant differences between forecasted demands and actual orders received;
|
• |
breaches of network or information technology security, natural disasters or terrorist attacks;
|
• |
ability by third parties to obtain access to our proprietary information or could independently develop similar technologies;
|
• |
assertion by third parties that we are infringing their intellectual property rights, and IP litigation;
|
• |
our reliance on the services of certain of our executive officers and key personnel;
|
• |
our ability to attract, hire and retain qualified technical personnel;
|
• |
our products being subject to government regulation of radio frequency technology;
|
• |
war, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic;
|
• |
the impact of the political and security situation in Israel and in the U.S. on our business;
|
• |
impact of inflation and currency fluctuations;
|
• |
impact of the obligation of our management or key personnel to perform military service in Israel;
|
• |
our ability to enforce covenants not-to-compete under current Israeli law; and
|
• |
our company being subject to claims for remuneration or royalties for assigned service invention rights by our employees.
|
|
For the Six-Month Period
Ended June 30, |
|||||||
|
2023
|
2022
|
||||||
|
(U.S. dollars in thousands, except for per share data)
(unaudited)
|
|||||||
Consolidated income statements data:
|
||||||||
Revenues
|
14,124
|
6,264
|
||||||
Cost of revenues
|
(10,276
|
)
|
(3,648
|
)
|
||||
Gross profit
|
3,848
|
2,616
|
||||||
Operating expenses:
|
||||||||
Research and development
|
1,662
|
1,792
|
||||||
Selling and marketing
|
1,128
|
1,463
|
||||||
General and administrative
|
2,374
|
2,488
|
||||||
Other expense (Income)
|
405
|
-
|
||||||
Total operating expenses
|
5,569
|
5,743
|
||||||
Operating loss
|
(1,721
|
)
|
(3,127
|
)
|
||||
Financial expenses, net
|
869
|
2,032
|
||||||
Loss before income tax
|
(2,590
|
)
|
(5,159
|
)
|
||||
Income tax expense
|
-
|
-
|
||||||
Net loss for the period
|
(2,590
|
)
|
(5,159
|
)
|
|
As of June 30, 2023
|
|||||||
|
Actual
|
As Adjusted(1)
|
||||||
|
(U.S. dollars in thousands)(unaudited)
|
|||||||
Consolidated balance sheet data:
|
||||||||
Cash, cash equivalents and restricted cash
|
1,521
|
3,919
|
||||||
Working capital(2)
|
21,196
|
23,676
|
||||||
Total assets
|
40,494
|
42,974
|
||||||
Total shareholders’ equity
|
3,467
|
5,947
|
(1) |
As adjusted amounts give effect to the issuance and sale 3,235,295 Units, after deducting estimated underwriting discounts and commissions and offering expenses payable by us, as set forth under “Use of Proceeds.” See “Use of
Proceeds” and “Capitalization.”
|
(2) |
Working capital is defined as current assets less current liabilities.
|
• |
if we are unable to manage our revenue growth, our business, financial results and stock price could suffer;
|
• |
our dependence on orders from large customers for a substantial portion of our revenues;
|
• |
the impact of other companies and technologies that compete with us within our industry;
|
• |
any acquisitions that we have completed, or may complete in the future, may not perform as planned and could disrupt our business and harm our financial condition and operations;
|
• |
our ability to generate sufficient cash from operations and potential need to obtain additional financing or reduce our level of expenditure;
|
• |
changing technology, requirements, standards and products in the market of our products;
|
• |
our ability to enter into contracts with governments, as well as state and local governmental agencies and municipalities;
|
• |
our dependence on third-party representatives, resellers and distributors could result in marketing and distribution delays;
|
• |
if our technology and solutions cease to be adopted and used by government and public and private organizations;
|
• |
our ability to develop and sustain our position as a provider of e-Gov, IoT and Connectivity, and Cyber Security, solutions and services and earn high margins from our technology;
|
• |
our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment;
|
• |
our efforts to expand our international operations and maintain or increase our future international sales;
|
• |
our exposure to risks in operating in foreign markets;
|
• |
fluctuation in our financial and operating results;
|
• |
our reliance on third party technologies and components for the development of some of our products;
|
• |
delays in deliveries from our suppliers, defects in goods or components supplied by our vendors, or delays in projects that are performed by our subcontractors;
|
• |
significant differences between forecasted demands and actual orders received;
|
• |
breaches of network or information technology security, natural disasters or terrorist attacks;
|
• |
ability by third parties to obtain access to our proprietary information or could independently develop similar technologies;
|
• |
assertion by third parties that we are infringing their intellectual property rights, and IP litigation;
|
• |
our reliance on the services of certain of our executive officers and key personnel;
|
• |
our ability to attract, hire and retain qualified technical personnel;
|
• |
our products being subject to government regulation of radio frequency technology;
|
• |
war, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic;
|
• |
the impact of the political and security situation in Israel and in the U.S. on our business;
|
• |
impact of inflation and currency fluctuations;
|
• |
impact of the obligation of our management or key personnel to perform military service in Israel;
|
• |
our ability to enforce covenants not-to-compete under current Israeli law; and
|
• |
our company being subject to claims for remuneration or royalties for assigned service invention rights by our employees.
|
Securities offered by us hereunder
|
3,235,295 Units on a reasonable best efforts basis, each consisting of one ordinary share and one Warrant to purchase one ordinary share, at a public offering price of $0.85 per Unit.
We are also offering to each purchaser, with respect to the purchase of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of our outstanding
ordinary shares immediately following the consummation of this offering, the opportunity to acquire one Pre-Funded Warrant in lieu of one ordinary share. A holder of Pre-Funded Warrants will not have the right to exercise any portion of
its Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of ordinary shares outstanding
immediately after giving effect to such exercise. Each Pre-Funded Warrant will be exercisable for one ordinary share. The pre-funded exercise price payable per Pre-Funded Warrant will be equal to the price per ordinary share, minus
$0.00001, and the non pre-funded exercise price of each Pre-Funded Warrant will equal $0.00001 per share. The Pre-Funded Warrants will be immediately exercisable (subject to the beneficial ownership cap) and may be exercised at any time
in perpetuity until all of the Pre-Funded Warrants are exercised in full.
The Units will not be certificated or issued in stand-alone form. The ordinary shares and/or Pre-Funded Warrants and the Warrants comprising the Units are immediately separable upon
issuance and will be issued separately in this offering.
|
Warrants
|
Each Warrant will have an exercise price of $0.85 per share (which shall be equal to 100% of the public offering price of each Unit sold in this offering, and in any event, not less
than the nominal value of such share, being $0.00001 per share as at the date hereof), will be exercisable upon issuance and will expire five years from issuance. Each Warrant is exercisable for one ordinary share, subject to adjustment
in the event of stock dividends, stock splits, adjustments, stock combinations, reclassifications, reorganizations or similar events affecting our ordinary shares as described herein. This prospectus also relates to the offering of the
ordinary shares issuable upon exercise of the Warrants. For more information regarding the Warrants, you should carefully read the section titled “Description of Securities” in this prospectus.
|
Public offering price
|
$0.85 per Unit.
|
Ordinary shares outstanding prior to this offering
|
6,010,054
|
Ordinary shares to be outstanding after this offering(1)
|
9,245,349 shares at a public offering price of $0.85 per Unit.
|
Use of proceeds
|
We estimate the net proceeds from the offering will be approximately $2.5 million, after deducting placement agent fees and estimated offering expenses payable by us, assuming no exercise of the Warrants.
We intend to use the net proceeds of this offering for general corporate purposes. Ultimately, our management will have discretion and flexibility in applying the net proceeds of this
offering. We may use the proceeds of this offering for purposes with which you do not agree. See “Risk Factors ⸺ Risks Relating to This Offering ⸺ Since we have broad discretion in how we use the proceeds from this offering, we may use
the proceeds in ways with which you disagree.” See the section titled “Use of Proceeds” appearing elsewhere in this prospectus for more information.
|
Listing
|
Our ordinary shares are listed on Nasdaq under the symbol SPCB.
We do not intend to list the Warrants or Pre-Funded Warrants offered hereunder on any stock exchange. There are no established public trading markets for the Warrants or the Pre-Funded
Warrants, and we do not expect such markets to develop. Without an active trading market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited.
|
Risk factors
|
See the section titled “Risk Factors” and other information included in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our
securities.
|
(1) |
The number of ordinary shares to be outstanding after the offering is based on 6,010,054 ordinary shares outstanding as of July 28, 2023, and excludes, as of that date, the following:
|
• |
811,050 ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of $3.58 per share;
|
• |
1,921,625 ordinary shares issuable upon the exercise of outstanding warrants to purchase ordinary shares at an average exercise price of $3.47 per share; and
|
• |
188,950 ordinary shares reserved for future issuance under our equity incentive plans.
|
• |
no exercise of outstanding options or warrants;
|
• |
no sale of any Pre-Funded Warrants in lieu of ordinary shares in this offering; and
|
• |
no exercise of any Warrants sold in this offering or any Placement Agent Warrants.
|
• |
the authorized number of directors can be changed only by resolution of our board of directors;
|
• |
our Articles of Association may be amended or repealed by our stockholders;
|
• |
our stockholders do not have cumulative voting rights, and therefore our stockholders holding a majority of our ordinary shares outstanding will be able to elect all of our directors;
|
• |
and our stockholders must comply with advance notice provisions applicable required under the laws of Israel to bring business before or nominate directors for election at a stockholder meeting.
|
• |
on an actual basis;
|
• |
on an as further adjusted basis, to give effect to (i) the issuance and sale of 3,235,295 Units consisting of one ordinary share (or one Pre-Funded Warrant in lieu of one ordinary share) and one Warrant to subscribe for one ordinary
share each at a public offering price of $0.85 per Unit, and (ii) estimated total expenses of the maximum offering amount, which include registration, filing and listing fees, printing fees and legal and accounting expenses amounting to
approximately $80,000 and the Placement Agent fee of 7% of the public offering price.
|
|
As of December 31, 2022
|
|||||||
(All figures in thousands of U.S. dollars, except for share amounts)
|
Actual (audited)
|
As Adjusted (unaudited)
|
||||||
Cash and cash equivalents
|
$
|
4,042
|
$
|
6,522
|
||||
Debt
|
||||||||
Debt
|
33,500
|
$
|
33,500
|
|||||
Non-current operating lease liabilities
|
108
|
108
|
||||||
Total debt
|
33,500
|
33,500
|
||||||
Equity
|
||||||||
Ordinary shares, par value NIS 2.5 per share, 10,000,000 authorized, 4,206,327 issued & outstanding as of December 31, 2022
|
3,057
|
5,237
|
||||||
Additional paid in capital
|
103,000
|
103,300
|
||||||
Accumulated deficit
|
102,926
|
102,926
|
||||||
Total shareholders’ equity
|
3,131
|
5,611
|
||||||
Total capitalization
|
$
|
36,631
|
39,111
|
• |
811,050 ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of $3.58 per share;
|
• |
901,869 ordinary shares issuable upon the exercise of outstanding warrants to purchase ordinary shares at an average exercise price of $6.92 per share; and
|
• |
188,950 ordinary shares reserved for future issuance under our equity incentive plans; and
|
• |
no exercise of any Warrants sold in this offering.
|
Public offering price per Unit
|
$
|
0.85
|
||||||
Historical net tangible book value per share as of December 31, 2022
|
$
|
3,131
|
||||||
Pro forma net tangible book value per share as of December 31, 2022
|
$
|
5,611
|
||||||
Increase in net tangible book value per share attributable to new investors in this offering
|
$
|
0.01
|
||||||
As-adjusted pro forma net tangible book value per share as of December 31, 2022, after giving effect to this offering
|
$
|
0.75
|
||||||
Dilution per share to new investors in this offering
|
$
|
0.10
|
• |
811,050 ordinary shares issuable upon exercise of outstanding stock options at a weighted average exercise price of $3.58 per share;
|
• |
1,921,625 ordinary shares issuable upon the exercise of outstanding warrants to purchase ordinary shares at an average exercise price of $3.47 per share;
|
• |
188,950 ordinary shares reserved for future issuance under our equity incentive plans; and
|
• |
no exercise of any Warrants sold in this offering.
|
• |
financial institutions or financial services entities;
|
• |
broker-dealers;
|
• |
taxpayers that are subject to the mark-to-market accounting rules;
|
• |
tax-exempt entities;
|
• |
governments or agencies or instrumentalities thereof;
|
• |
banks, insurance companies, and certain other financial institutions;
|
• |
regulated investment companies or real estate investment trusts;
|
• |
grantor trusts;
|
• |
dealers or traders in securities, commodities or currencies;
|
• |
persons subject to the alternative minimum tax;
|
• |
expatriates and former citizens or long-term residents of the United States;
|
• |
persons that actually or constructively own five percent or more of our voting shares;
|
• |
persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;
|
• |
persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction;
|
• |
persons subject to special tax accounting rules under Section 451(b) of the Code;
|
• |
passive foreign investment companies (“PFICs”) and corporations that accumulate earnings to avoid U.S. federal income tax;
|
• |
Controlled foreign corporations or U.S. shareholders of controlled foreign corporations, as those terms are defined in Sections 951(b) and 957(a) of the Code, respectively;
|
• |
S corporations, partnerships or other entities or arrangements treated as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein);
|
• |
tax-qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; or
|
• |
persons whose functional currency is not the U.S. dollar.
|
• |
an individual citizen or resident of the United States,
|
• |
a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the
District of Columbia,
|
• |
an estate whose income is subject to U.S. federal income tax regardless of its source, or
|
• |
a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect
under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.
|
• |
any gain recognized by the U.S. Holder on the sale or other disposition of its ordinary shares or Warrants; and
|
• |
any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in
respect of SuperCom securities during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for such securities).
|
• |
the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for its securities;
|
• |
the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year
in which we are a PFIC, will be taxed as ordinary income;
|
• |
the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
|
• |
the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder.
|
Per Unit |
Total |
|||||||
Offering Price
|
$
|
0.85
|
$
|
2,750,000
|
||||
Placement agent fees
|
$
|
0.0595
|
$
|
192,500
|
||||
Proceeds before expenses to us
|
$
|
0.7905
|
$
|
2,557,500
|
|
●
|
to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
|
|
●
|
to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual
net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
|
|
●
|
by the underwriter to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or
|
|
●
|
In any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of these securities shall result in a requirement for the publication by
the issuer or the underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.
|
|
a.
|
it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the
meaning of section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection with the issue or sale of any of the securities in circumstances in which section 21(1) of the FSMA does not apply to the
issuer; and
|
|
b.
|
it has complied with and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the securities in, from or otherwise involving the
United Kingdom.
|
|
●
|
to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
|
|
●
|
to any legal entity which has two or more of (1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in the last annual or consolidated accounts; or
|
|
●
|
in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.
|
SEC registration fee
|
$
|
2,204
|
||
FINRA filing fee
|
$
|
5,000
|
||
Transfer agent fees and expenses
|
$
|
2,000
|
||
Printing and mailing expenses
|
$
|
1,000
|
||
Legal fees and expenses
|
$
|
60,000
|
||
Accounting fees and expenses
|
$
|
6,000
|
||
Miscellaneous
|
$
|
4,000
|
||
Total
|
$
|
80,204
|
• |
our Registration Statement on Form F-3, filed with the SEC on December 1, 2021;
|
• |
our Annual Report on Form 20-F for the fiscal year ended on December 31, 2022, filed with the SEC on April 20, 2023;
|
• |
our Report on Form 6-K filed with the SEC on March 31, 2023; and
|
• |
our Report on Form 6-K filed with the SEC on April 3, 2023.
|
• |
the judgments are obtained after due process before a court of competent jurisdiction, according to the laws of the state in which the judgment is given and the rules of private international law currently prevailing in Israel;
|
• |
the prevailing law of the foreign state in which the judgments were rendered allows the enforcement of judgments of Israeli courts (however, the Israeli courts may waive this requirement following a request by the attorney general);
|
• |
adequate service of process has been effected and the defendant has had a reasonable opportunity to be heard and to present his or her evidence;
|
• |
the judgments are not contrary to public policy, and the enforcement of the civil liabilities set forth in the judgment does not impair the security or sovereignty of the State of Israel;
|
• |
the judgments were not obtained by fraud and do not conflict with any other valid judgment in the same matter between the same parties;
|
• |
an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court; and
|
• |
the obligations under the judgment are enforceable according to the laws of the State of Israel and according to the law of the foreign state in which the relief was granted.
|
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