Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

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
	0.19	5.78%	3.48	3.40	3.48	3.29	3.14	3.29	95,980	00:59:41

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of September 2024

Commission file number: 001-33668

SUPERCOM LTD.

(Translation of Registrant’s name into English)

3, Rothschild Street,

Tel Aviv,

Israel

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

SUPERCOM LTD.

Effective August 22, 2024, SuperCom Ltd. (the “Company”) effected a 1-for-20 reverse stock split (the “Reverse Split”) of its issued and outstanding ordinary shares, NIS 2.5 par value per share (the “ordinary shares”). As a result of the Reverse Split, every 20 shares of the pre-split issued and outstanding ordinary shares automatically converted into one post-split ordinary share, with a corresponding reduction of the number of ordinary shares that the Company is authorized to issue. All fractional shares will be rounded up. As a result of the Reverse Split, all options, warrants and convertible securities of the Company outstanding immediately prior to the Reverse Split were adjusted by dividing the number of ordinary shares into which the options and warrants are exercisable and the convertible securities are convertible by 20 and multiplying the exercise price or the conversion price thereof by twenty, all in accordance with the terms of the plans, agreements or arrangements governing such securities.

Accordingly, all ordinary share and per share data, par value and exercise price data for applicable ordinary share equivalents included in the Condensed Interim Consolidated Financial Statements of the Company and its subsidiaries as of June 30, 2024 and in the Company’s Management's Discussion and Analysis of Results Operations included in this Report on Form 6-K have been retroactively adjusted to give effect to the Reverse Split, unless otherwise indicated.

6-K Items

1.	Condensed Interim Consolidated Financial Statements of SuperCom Ltd. and its subsidiaries as of June 30, 2024.

2.	Management's Discussion and Analysis of Results Operations.

101.1NS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definitions Linkbase Document

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SuperCom Ltd.

	By: /s/ Ordan Trabelsi
	Name: Ordan Trabelsi
	Title: Chief Executive Officer

Date: September 3, 2024

Exhibit 1

SUPERCOM LTD

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

as of June 30, 2024

(Unaudited)

SUPERCOM LTD

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

as of June 30, 2024

(Unaudited)

IN U.S. DOLLARS

INDEX

	Page

Interim Consolidated Balance Sheets	3

Interim Consolidated Statements of Operations	4

Interim Statements of Changes in Shareholders' equity	5

Interim Consolidated Statements of Cash Flows	6

Notes to Interim Consolidated Financial Statements	7 - 9

SUPERCOM LTD

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

	June 30, 2024			December 31, 2023
	Unaudited			Audited
CURRENT ASSETS
Cash and cash equivalents		5,747			5,206
Restricted bank deposits		347			371
Trade receivable, net		16,524			13,357
Other accounts receivable and prepaid expenses		1,780			1,742
Inventories, net (Note 3)		2,782			2,503
Patents		5,283			5,283
Total current assets		32,463			28,462

LONG-TERM ASSETS
Severance pay funds		-			-
Deferred tax long term		919			501
Property and equipment, net		2,889			2,701
Other Intangible assets, net (Note 4)		5,251			5,576
Goodwill		7,026			7,026
Operating lease right-of-use asset		1,025			487
Total non-current assets		17,110			16,291

TOTAL ASSETS		49,573			44,753

CURRENT LIABILITIES
Trade payables		2,345			1,883
Employees and payroll accruals		1,121			1,015
Related parties		-			100
Accrued expenses and other liabilities		517			485
Deferred revenue		695			726
Short-term loan and other		1,690			1,194
Total current liabilities		6,368			5,403

LONG-TERM LIABILITIES
Long-term loan		29,181			33,952
Deferred revenue		49			305
Deferred tax liability LT		170			170
Accrued severance pay		-			-
Operating lease liabilities		-			108
Total non-current liabilities		29,400			34,535

SHAREHOLDERS' EQUITY:
Ordinary shares		21,970			9,094
Additional paid-in capital		95,822			102,670
Accumulated deficit		(103,985	)		(106,948	)
Total shareholders' equity		13,807			4,816

Total Liabilities and Shareholders' Equity		49,575			44,754

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

SUPERCOM LTD

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

	Six months ended June 30
	2024		2023
	Unaudited		Unaudited
REVENUES		14,397		14,124

COST OF REVENUES		6,867		10,276

GROSS PROFIT		7,530		3,848

OPERATING EXPENSES
Research and development, net		1,900		1,662
Sales and marketing		1,210		1,128
General and administration		2,748		2,374
		570		405
Total operating expenses		6,428		5,569

OPERATING (LOSS) INCOME		1,102		(1,721	)

FINANCIAL EXPENSES (INCOME), NET		1,443		(869	)

LOSS BEFORE INCOME TAX		2,545		(2,590	)

INCOME TAX BENEFIT		418		-

NET LOSS FOR THE PERIOD		2,963		(2,590	)

NET LOSS PER SHARE

Basic		2.26		(10.66	)

Diluted		1.19		(10.66	)

Weighted average number of ordinary shares used in computing basic net loss per share		1,311,924		242,946

Weighted average number of ordinary shares used in computing diluted net loss per share		2,483,714		242,946

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

SUPERCOM LTD

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(U.S. dollars in thousands, except share data)

	Ordinary shares
	Number of Shares		Share capital		Additional paid-in capital			Accumulated deficit			Total shareholders' equity
Balance as of December 31, 2022		210,316		3,057		103,000			(102,926	)		3,131
Changes during the six months ended June 30, 2023 (unaudited):
Net loss		-		-		-			(2,590	)		(2,590	)
Exercise of options and debt conversion		22,027		301		424			-			725
Share Issuance		46,410		1,552		649			-			2,201

Balance as of June 30, 2023 (unaudited)		278,753		4,910		104,073			(105,516	)		3,467

Balance as of December 31, 2023		664,552		9,094		102,670			(106,948	)		4,816
Changes during the six months ended June 30, 2023 (unaudited):
Net loss		-		-		-			2,963			2,963
Exercise of options and debt conversion		901,086		7,415		(4,140	)		-			3,275
Share Issuance		405,808		5,460		(2,707	)		-			2,753

Balance as of June 30, 2024 (unaudited):		1,971,446		21,970		95,822			(103,985	)		13,807

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

SUPERCOM LTD

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. dollars in thousands)

	Six months ended June 30
	2024			2023
	Unaudited			Unaudited
Cash flows from operating activities:

Net loss		2,963			(2,590	)

Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,477			1,306
Increase in trade receivables, net		(3,167	)		(1,579	)
Increase in other accounts receivable and prepaid expenses		(38	)		(114	)
Increase (decrease) in inventories, net		(279	)		352
Increase(decrease) in trade payables		462			(793	)
Decrease (increase) in deferred tax		(418	)		-
Increase (Decrease) in employees and payroll accruals		106			(264	)
Increase (decrease) in accrued severance pay		-			23
Increase(decrease) in long-term loan and other debt		(1,643	)		809
Increase (decrease) in accrued expenses and other liabilities		(413	)		(559	)
Net cash used in operating activities		(949	)		(3,409	)

Cash flows from investing activities:
Purchase of property and equipment		(611	)		(1,041	)
Decrease (Increase) in severance pay fund		-			(25	)
Capitalization of software development costs		(574	)		(684	)
Net cash provided by (used in) investing activities		(1,185	)		(1,750	)

Cash flows from financing activities:
Issuance of share capital, net of issuance costs		2,753			2,201
Long-term debt, net		-			-
Related parties		(100	)		(26	)
Net cash provided by (used in) financing activities		2,653			2,175

Increase (decrease) in cash, cash equivalents and restricted cash		519			(2,984	)
Cash, cash equivalents and restricted cash at the beginning of the year		5,577			4,505

Cash, cash equivalents and restricted cash at the end of the period		6,096			1,521

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

SUPERCOM LTD

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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 e-GOV, IoT, Communication and Cyber Security solutions to governments and organizations, both private and public, throughout the world; (i) IoT products and solutions reliably identify, track and monitor people or objects in real-time, enabling customers to detect unauthorized movement of people, vehicles and other monitored objects. The Company provides an all-in-one field-proven PureSecurity suite, accompanied by services specifically tailored to meet the requirements of an IoT customer; (ii) Proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, the Company have helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors, and Lands; (iii) Solutions for carrier wi-fi, enterprise connectivity as well as its legacy backhaul services and products; (iv) Cutting edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption methodologies, and comprehensive device and port control, The Company maps sensitive information and controls data flow through email, web, external devices, and additional channels.

b.	Liquidity Analysis

The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past 3 years. As of six months ended June 30, 2024, the Company had an accumulated deficit of $103,985 and net cash used in operating activities of $949, compared to $3,409 for six months ended June 30, 2023.

Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and noted that as of June 30, 2024, the Company had cash, cash equivalent, and restricted cash of $6,096 and positive working capital of $26,095

Additionally, the Company secured financing of $20,000 during 2018, of which $6,000 remains available to the Company to draw during the 12 months following the balance sheet date, under certain conditions. Throughout 2021, the Company also secured through the issuance of multiple notes aggregate gross proceeds of $12,000 of subordinated debt.

On March 1, 2022, the Company raised $4.65 million in a registered direct offering with a single accredited institutional investor of an aggregate of 156,500 of its ordinary shares, and 220,079 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00020 per share, and concurrent private placement to the Purchaser of the Company’s private warrants to purchase an aggregate of 282,434 or ordinary shares at an exercise price of $14.00 per share.

On July 27, 2022, the Company raised $1.74 million in a cash exercise of Company’s private warrants, as amended, of 282,434 of its ordinary shares at exercise price of $6.16, and concurrent private placement to the accredited institutional investor of the Company’s private warrants to purchase an aggregate of 282,434 or ordinary shares at an exercise price of $6.4 per share.

On March 31, 2023, the Company raised $2.4 million in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 24,250 of its ordinary shares, and 51,631 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 75,881 of its ordinary shares at an exercise price of $33.2 per share.

On August 3, 2023, the Company raised $2.75 million in a registered offering with a single accredited institutional investor through the sale of an aggregate of 33,050 of its ordinary shares, and 128,715 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent issuance to such Purchaser of the Company’s warrants to purchase an aggregate of 161,765 of its ordinary shares at an exercise price of $17 per share.

On November 15, 2023, the Company raised approximately $2.0 million in gross proceeds in a warrant exercise and reload with a single accredited institutional investor through warrant exercise of 54,050 warrant to ordinary shares, and warrant exercise of 183,596 warrant to pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent warrant reload to such Purchaser of the Company’s private warrants to purchase an aggregate of 475,291 of its ordinary shares at an exercise price of $10 per share.

On April 19, 2024, the Company raised approximately $2.9 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 143,694 of its ordinary shares, and 262,114 pre-funded warrants to purchase ordinary shares with an exercise price of $0.0002 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 450,808 of its ordinary shares at an exercise price of $7.6 per share

To date, the Company has used the proceeds from the secured financing, subordinated debt, and private placement (i) to satisfy certain indebtedness; and (ii) for general corporate purposes, and (iii) for working capital needs for multiple new government customer contracts with significant positive cash flow.

Furthermore, the available $6 million secured credit facility from Fortress Investment Group may provide the Company with additional access to capital if needed.

The Company believes that based on the above-mentioned secured financings, management’s plans, significant cost savings, and expected cash streams from the Company’s current contracts with customers worldwide, it will be able to fund its operations for at least the next 12 months.

NOTE 1: GENERAL (Cont.)

c.	Senior Secured Credit Facility

On September 6, 2018 and October 26, 2018, through a two-stage closing process, the Company entered into a Senior Secured Credit Facility with affiliates of Fortress Investment Group LLC("Fortress") with an aggregate principal amount of up to $20,000 (the "Credit Facility"). The Initial Term Loan which finalized on October 26, 2018 has an aggregate principal of $10,000, and the Incremental Term Loan provides for up to an additional $10,000 in principal through Incremental Draws of at least $1,000 each. In 2019, a total of $4,000 gross was drawn on the Incremental Term Loan, and some of the terms of the Credit Facility were amended to support the needs of the company. The Credit Facility bears interest on the borrowed balance at a rate per annum equal to LIBOR plus an applicable margin (the "Interest Margin") dependent on the EBITDA Leverage Ratio which is calculated and reset on a quarterly basis (8.0% for an EBITDA Leverage Ratio greater than or equal to 2.50x; 7.0% for an EBITDA Leverage Ratio less than 2.50x). At the Company's election, interest is paid in cash or in-kind in the amount of 4% per annum of the Interest Margin. The balance of interest is payable in cash monthly in arrears. For amounts which remain un-borrowed, the Company incurs interest at a rate of 0.50% per annum ("Unused Fee"). From closing and until today, the Company only paid monthly interest payments. The majority of the principal to be paid via a bullet payment at the maturity date, which the company expects to be amended to December 2028.

The Credit Facility is subject to an original issue discount equal to 2.5% of any drawn amounts, and amounts repaid cannot be re-borrowed. At maturity, an end-of-term fee of 2.25% to 4.5% is owed by the Company for any amounts drawn. In connection with securing the Credit Facility, the Company incurred legal and due diligence fees, which are recorded together with the original issue discount and end-of-term fee, and amortized into interest expense over the life of the Credit Facility.

In connection with the Credit Facility, the Investor received 1,250 warrants initially and an additional 3,750 warrants for amendments (the “Credit Facility Warrants”) and purchased 5,335 unregistered common shares at a share price of $37.4 from the Company at a total of $200. The Credit Facility Warrants mature 7 years from the date of issuance, were set to be issued at a strike price at a premium to the then current market price.

In 2021, the Company secured through the issuance of subordinated notes, gross proceeds of $12,000. For the consideration of $12,000 in gross proceeds, SuperCom issued to a certain institutional investor in February 2021 and June 2021, two-year unsecured, subordinated promissory notes in the amounts of $7,000 and $5,000, respectively, both with similar structures and terms. Given the subordination agreement between the senior secured loan investor, the subordinated debt investor and the Company, the subordinated investor may request that the balance of the subordinated debt be paid only after the senior secured Fortress debt is paid in full. The notes have a 5% annual coupon and a built-in increase to the balance of the notes by 5% every 6 months for the first 24 months, for any portion of the notes which has not been paid down prior to maturity. All principal and interest accrued is required to be paid in only one-bullet payment at maturity, and the company has the right to pre-pay any portion of either note at any time without a pre-payment penalty. The company has an option at its discretion only, at any time after 12 months to pay down all or a portion of either note using its ordinary shares, subject to certain conditions being met.

During 2024, 2023, 2022 and 2021 the Company converted $ 5,535, $500, $211 and $7,601, respectively, of the remaining principal and accrued interest of subordinated notes into the Company’s ordinary shares.

As of June 30, 2024, the outstanding principal, including accrued interest, of the Credit Facility and the aggregate balance for these Subordinated Debt was $29,181.

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.

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, 2024 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, 2023.

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, 2023, and the accompanying notes. There have been no changes in the significant accounting policies from those disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 Form 20-F/A.

NOTE 3: INVENTORIES, NET

	June 30, 2024		December 31, 2023
	$		$
Raw materials, parts and supplies		1,672		1,380
Finished products		1,110		1,123

		2,782		2,503

As of June 30, 2024 and December 31, 2023, inventory is presented net of write-offs for slow inventory in the amount of approximately $2,227 and $2,215, respectively.

NOTE 4: OTHER INTANGIBLE ASSETS, NET

	June 30, 2024		December 31, 2023
	$		$
Customer relationship & Other		155		532
IP & Technology		1,591		1,878
Capitalized software development costs		3,505		3,094

		5,251		5,504

NOTE 5: COMMITMENTS AND CONTINGENT LIABILITIES – LITIGIATION

We are party to legal proceedings in the normal course of our business. There are no material pending legal proceedings to which we are a party or of which our property is subject. Although the outcome of claims and lawsuits against us cannot be accurately predicted, we do not believe that any of the claims and lawsuits, will have a material adverse effect on our business, financial condition, results of operations or cash flows for any quarterly or annual period.

Exhibit 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OPERATIONS

The following discussion and analysis should be read together with our unaudited consolidated financial statements and the related notes as of June 30, 2024, which appear elsewhere in this report.

Cautionary Note Regarding Forward-Looking Statements

The discussion and analysis in this section contain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, with respect to our business, financial condition and results of operations. Such forward-looking statements reflect our current views with respect to future events and financial results. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. These include statements regarding our earnings, projected growth and forecasts, and similar matters which are not historical facts. We remind readers that forward-looking statements are merely predictions and therefore are inherently subject to uncertainties and other factors which could cause the actual future events or results to differ materially from those described in the forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) inability to realize benefits from acquisitions, (ii) our inability to manage our growth profitably, (iii) intense competition in our industry, (iv) acquisition of businesses disrupting our business and harming our financial condition and operations, (v) the need to obtain additional financing , (vi) our ability to respond promptly and effectively to market changes, (vii) our ability to obtain and maintain contracts with governments, (viii) our dependence on third-party representatives to generate revenues and supply components, (ix) unfavorable global economic conditions, (x) developments affecting international operations and foreign markets, (xi) breaches of network or information technology security, (xii) intellectual property litigation, and (xiii) such other factors discussed throughout Item 3. D. Risk Factors of our Annual Report on Form 20-F for the year ended December 31, 2022. Any forward-looking statement made by us in this section is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Overview

Founded in 1988, we are a global provider of traditional and digital identity solutions, advanced IoT, and cyber security products and solutions to governments and private and public organizations worldwide.

We are comprised of three main Strategic Business Units(SBU): e-Gov, IoT and Connectivity (or “IoT”), and Cyber Security:

e-Gov

Through our proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, we have helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors, and Lands.

We have focused on expanding our activities in the traditional identification, or ID, and electronic identification, or e-Gov, market, including the design, development, and marketing of identification technologies and solutions to governments in Europe, Asia, America, and Africa using our e-Government platforms. Our activities include: (i) utilizing paper secured by different levels of security patterns (UV, holograms, etc.); and (ii) electronic identification secured by biometric data, principally in connection with the issuance of national Multi-ID documents (IDs, passports, driver’s licenses, vehicle permits, and visas, Secure Land Certificated) border control applications and Land Information System (LIS).

On December 26, 2013, we acquired the SmartID division of On Track Innovations Ltd., or OTI, including all contracts, software, other related technologies, and intellectual property, or IP, assets. The SmartID division has a strong international presence, with a broad range of competitive and well-known e-Gov solutions and technology. The acquisition significantly expanded the breadth of our e-Gov capabilities globally, while providing us with outstanding market and technological experts, together with leading ID software platforms and technologies.

IoT and Connectivity

IoT

Our IoT products and solutions reliably identify, track and monitor people or objects in real-time, enabling our customers to detect unauthorized movement of people, vehicles, and other monitored objects. We provide an all-in-one field-proven IoT suite, accompanied by services specifically tailored to meet the requirements of IoT solutions. Our proprietary IoT suite of hybrid hardware, connectivity and software components is the foundation of these solutions and services. Our IoT division has primarily focused on growing the following markets: (i) public safety, (ii) healthcare and homecare, (iii) Smart Cities, (iv) Smart Campus, and (iv) transportation.

During 2006, we identified the growing electronic tracking and monitoring vertical markets for public safety, real time healthcare and homecare, and transportation management. We have developed the PureRF Hybrid suit of wrist devices, connectivity, and controlling software, from 2012 we have developed the next generation IoT suite of devices, connectivity and Monitoring software; the PureSecurity Hybrid Suite of wrist band, tags, beacons, PureCom, Pure Monitors, PureTrack and other components.

On January 1, 2016, we acquired Leaders in Community Alternatives, Inc., or LCA. LCA is a California-based, private criminal justice organization providing community-based services and electronic monitoring programs to government agencies in the U.S. for more than 25 years. LCA offers a broad range of competitive solutions for governmental institutions across the

U.S. in addressing realignment strategies and plans.

Connectivity

In 2016, as part of our strategy to enhance and broaden our IoT connectivity products and solutions offerings for public safety, enterprises, hospitality, and smart cities markets, on May 18, 2016, we acquired Alvarion Technologies Ltd. or Alvarion. Alvarion designs solutions for carrier wi-fi, enterprise connectivity, smart city, smart hospitality, connected campuses, and connected events that are both complete and heterogeneous to ensure ease of use and optimize operational efficiency. Carriers, local governments and hospitality sectors worldwide deploy Alvarion’s intelligent wi-fi networks to enhance productivity and performance, as well as its legacy backhaul services and products.

Cyber Security

During 2015, we identified the cyber security market as a very fast-growing market where we believe that SuperCom has major advantages due to synergic technologies and shared customer base to our e-Gov, IoT, and connectivity SBUs. In 2015, we acquired Prevision Ltd., or Prevision, a company with a strong presence in the market and a broad range of competitive and well- known cyber security services. During the first quarter of 2016, we acquired Safend Ltd, or Safend, an international provider of cutting-edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption methodologies, and comprehensive device and port control. Safend maps sensitive information and controls data flow through email, web, external devices, and additional channels.

Both acquisitions significantly expanded the breadth of our cyber security capabilities globally while providing us with outstanding market and technological experts and over 3,000 customers in the United States, Europe, and Asia, and more than three million software license seats deployed by multinational enterprises, government agencies and small to mid-size companies around the globe, together with leading data and cyber security platforms and technologies.

General

Our consolidated financial statements appearing in this report are prepared in U.S. dollars and in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Transactions and balances originally denominated in dollars are presented at their original amounts. Transactions and balances in other currencies are re-measured into dollars in accordance with the principles set forth in Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 830, “Foreign Currency Translation.” The majority of our sales are made outside Israel in U.S. dollars. In addition, substantial portions of our costs are incurred in U.S. dollars. Since the U.S. dollar is the primary currency of the economic environment in which we and certain of our subsidiaries operate, the U.S. dollar is our functional and reporting currency and, accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured using the foreign exchange rate at the balance sheet date. Operational accounts and non-monetary balance sheet accounts are measured and recorded at the exchange rate in effect at the date of the transaction. The financial statements of certain subsidiaries, whose functional currency is not the U.S. dollar, have been translated into U.S. dollars. All balance sheet accounts have been translated using the exchange rates in effect at the balance sheet date. Statement of operations amounts have been translated using the average exchange rate for the period. The resulting translation adjustments are reported as a component of shareholders’ equity in accumulated other comprehensive income (loss).

Results of Operations

Revenues

Our revenues for the six months ended June 30, 2024, increased by $0.3 million, or 2%, to $14.4 million compared to $14.1 million for the six months ended June 30, 2023.

Cost of Sales

Our cost of sales increased in the first six months of 2024 to $7.5 million from $10.2 million in the first six months of 2023, a decrease of 27%. This decrease in cost of sales was primary due to the change in revenue’s mix toward recurring revenue with higher Gross margin.

Gross Margin

Our gross margin decreased in the first six months of 2024 to 52.3% compared to 27.2% in the first half of 2023.

The increase in gross margin was primary due to the change in revenue mix, mainly due to the end of the implementation stage of new IoT contract in Europe representing lower gross margin’ and the increase of recurring revenue representing higher gross margin.

Expenses

Our operating expenses decreased in the first six months of 2024 to $6.4 million, or by 16%, from $5.5 million in the first six months of 2023. This increase in operating expenses in the first half of 2024 was primarily due to (i) increase of $0.2 million in research and development expenses, (ii) increase of $0.1 million in sales and marketing expenses, (iii) increase of $0.4 million in general and administration expenses, (iv) an increase of $0.2 million in other expenses.

Financial Expenses, net

We had financial income of $1,433 thousands in the first half of 2024 compared to a financial expenses of $869 thousands in the first half of 2023. The increase in financial income was due to (i) changes in the exchange rate of the NIS against the U.S. dollar in 2024 compared to 2023, (ii) an interest fee on loans and credit lines of $764 thousands, and (iii) a debt conversion with premium rate over the fair market value of $2.4m.

Income Tax Benefit

We recorded an income tax expense in the amount of $0 during the first half of the year 2024, compared to an income tax expense in the amount of $0 thousand during the first half of the year 2023.

Net Loss

As a result of the changes in our operational expenses, financial expense that we recorded in the first half of 2024, as described above, our net profit in the first half of 2024 was $2,963 thousand compared to a net loss of $2,590 thousands in the first half of 2023.

Document And Entity Information	6 Months Ended
Document And Entity Information	Jun. 30, 2024
Cover [Abstract]
Document Type	6-K
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Entity Registrant Name	SUPERCOM LTD.
Entity Central Index Key	0001291855
Current Fiscal Year End Date	--12-31

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
CURRENT ASSETS
Cash and cash equivalents	$ 5,747	$ 5,206
Restricted bank deposits	347	371
Trade receivable, net	16,524	13,357
Other accounts receivable and prepaid expenses	1,780	1,742
Inventories, net	2,782	2,503
Patents	5,283	5,283
Total current assets	32,463	28,462
LONG-TERM ASSETS
Severance pay funds	0	0
Deferred tax long term	919	501
Property and equipment, net	2,889	2,701
Other Intangible assets, net	5,251	5,576
Goodwill	7,026	7,026
Operating lease right-of-use asset	1,025	487
Total non-current assets	17,110	16,291
TOTAL ASSETS	49,573	44,753
CURRENT LIABILITIES
Trade payables	2,345	1,883
Employees and payroll accruals	1,121	1,015
Related parties	0	100
Accrued expenses and other liabilities	517	485
Deferred revenue	695	726
Short-term loan and other	1,690	1,194
Total current liabilities	6,368	5,403
LONG-TERM LIABILITIES
Long-term loan	29,181	33,952
Deferred revenue	49	305
Deferred tax liability LT	170	170
Accrued severance pay	0	0
Operating lease liabilities	0	108
Total non-current liabilities	29,400	34,535
SHAREHOLDERS' EQUITY:
Ordinary shares	21,970	9,094
Additional paid-in capital	95,822	102,670
Accumulated deficit	(103,985)	(106,948)
Total shareholders' equity	13,807	4,816
Total Liabilities and Shareholders' Equity	$ 49,575	$ 44,754

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
REVENUES	$ 14,397	$ 14,124
COST OF REVENUES	6,867	10,276
GROSS PROFIT	7,530	3,848
OPERATING EXPENSES
Research and development, net	1,900	1,662
Sales and marketing	1,210	1,128
General and administration	2,748	2,374
Other operating expenses	570	405
Total operating expenses	6,428	5,569
OPERATING (LOSS) INCOME	1,102	(1,721)
FINANCIAL EXPENSES (INCOME), NET	1,443	(869)
LOSS BEFORE INCOME TAX	2,545	(2,590)
INCOME TAX BENEFIT	418	0
NET LOSS FOR THE PERIOD	$ 2,963	$ (2,590)
NET LOSS PER SHARE
Basic	$ 2.26	$ (10.66)
Diluted	$ 1.19	$ (10.66)
Weighted average number of ordinary shares used in computing basic net loss per share	1,311,924	242,946
Weighted average number of ordinary shares used in computing diluted net loss per share	2,483,714	242,946

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Ordinary shares [Member]	Additional paid-in capital [Member]	Accumulated deficit [Member]	Total
Balance at Dec. 31, 2022	$ 3,057	$ 103,000	$ (102,926)	$ 3,131
Balance (in shares) at Dec. 31, 2022	210,316
Net loss	$ 0	0	(2,590)	(2,590)
Exercise of options and debt conversion	$ 301	424	0	725
Exercise of options and debt conversion (in shares)	22,027
Share Issuance	$ 1,552	649	0	2,201
Share Issuance (in shares)	46,410
Balance at Jun. 30, 2023	$ 4,910	104,073	(105,516)	3,467
Balance (in shares) at Jun. 30, 2023	278,753
Balance at Dec. 31, 2023	$ 9,094	102,670	(106,948)	4,816
Balance (in shares) at Dec. 31, 2023	664,552
Net loss	$ 0	0	2,963	2,963
Exercise of options and debt conversion	$ 7,415	(4,140)	0	3,275
Exercise of options and debt conversion (in shares)	901,086
Share Issuance	$ 5,460	(2,707)	0	2,753
Share Issuance (in shares)	405,808
Balance at Jun. 30, 2024	$ 21,970	$ 95,822	$ (103,985)	$ 13,807
Balance (in shares) at Jun. 30, 2024	1,971,446

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ 2,963	$ (2,590)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	1,477	1,306
Increase in trade receivables, net	(3,167)	(1,579)
Increase in other accounts receivable and prepaid expenses	(38)	(114)
Increase (decrease) in inventories, net	(279)	352
Increase(decrease) in trade payables	462	(793)
Decrease (increase) in deferred tax	(418)	0
Increase (Decrease) in employees and payroll accruals	106	(264)
Increase (decrease) in accrued severance pay	0	23
Increase(decrease) in long-term loan and other debt	(1,643)	809
Increase (decrease) in accrued expenses and other liabilities	(413)	(559)
Net cash used in operating activities	(949)	(3,409)
Cash flows from investing activities:
Purchase of property and equipment	(611)	(1,041)
Decrease (Increase) in severance pay fund	0	(25)
Capitalization of software development costs	(574)	(684)
Net cash provided by (used in) investing activities	(1,185)	(1,750)
Cash flows from financing activities:
Issuance of share capital, net of issuance costs	2,753	2,201
Long-term debt, net	0	0
Related parties	(100)	(26)
Net cash provided by (used in) financing activities	2,653	2,175
Increase (decrease) in cash, cash equivalents and restricted cash	519	(2,984)
Cash, cash equivalents and restricted cash at the beginning of the year	5,577	4,505
Cash, cash equivalents and restricted cash at the end of the period	$ 6,096	$ 1,521

GENERAL

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1: GENERAL

b.	Liquidity Analysis

Furthermore, the available $6 million secured credit facility from Fortress Investment Group may provide the Company with additional access to capital if needed.

c.	Senior Secured Credit Facility

As of June 30, 2024, the outstanding principal, including accrued interest, of the Credit Facility and the aggregate balance for these Subordinated Debt was $29,181.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6 Months Ended
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	Jun. 30, 2024
Condensed 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, 2024 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, 2023. 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, 2023, and the accompanying notes. There have been no changes in the significant accounting policies from those disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2023 included in the 2023 Form 20-F/A.

INVENTORIES, NET

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

INVENTORIES, NET

NOTE 3: INVENTORIES, NET

	June 30, 2024		December 31, 2023
	$		$
Raw materials, parts and supplies		1,672		1,380
Finished products		1,110		1,123

		2,782		2,503

As of June 30, 2024 and December 31, 2023, inventory is presented net of write-offs for slow inventory in the amount of approximately $2,227 and $2,215, respectively.

OTHER INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

OTHER INTANGIBLE ASSETS, NET

NOTE 4: OTHER INTANGIBLE ASSETS, NET

	June 30, 2024		December 31, 2023
	$		$
Customer relationship & Other		155		532
IP & Technology		1,591		1,878
Capitalized software development costs		3,505		3,094

		5,251		5,504

COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION	6 Months Ended
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENT LIABILITIES - LITIGIATION	NOTE 5: COMMITMENTS AND CONTINGENT LIABILITIES – LITIGIATION We are party to legal proceedings in the normal course of our business. There are no material pending legal proceedings to which we are a party or of which our property is subject. Although the outcome of claims and lawsuits against us cannot be accurately predicted, we do not believe that any of the claims and lawsuits, will have a material adverse effect on our business, financial condition, results of operations or cash flows for any quarterly or annual period.

INVENTORIES, NET (Tables)

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Schedule of inventory, net

	June 30, 2024		December 31, 2023
	$		$
Raw materials, parts and supplies		1,672		1,380
Finished products		1,110		1,123

		2,782		2,503

OTHER INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of other intangible assets, net

	June 30, 2024		December 31, 2023
	$		$
Customer relationship & Other		155		532
IP & Technology		1,591		1,878
Capitalized software development costs		3,505		3,094

		5,251		5,504

GENERAL (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended					6 Months Ended		12 Months Ended
	Aug. 03, 2023	Mar. 01, 2022	Apr. 19, 2024	Nov. 15, 2023	Mar. 31, 2023	Jul. 27, 2022	Feb. 28, 2021	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2020	Dec. 31, 2018
Accumulated deficit								$ 103,985			$ 106,948
Net cash used in operating activities								949	$ 3,409
Cash, cash equivalents and restricted cash								6,096	$ 1,521		$ 5,577	$ 4,505
Net working capital								26,095
Amount of secured financing														$ 20,000
Remaining available secured financing													$ 6,000
Gross proceeds of subordinated debt							$ 12,000			$ 12,000
Amount of direct offering cost	$ 2,750	$ 4,650	$ 2,900	$ 2,000	$ 2,400	$ 1,740
Pre-funded warrant issued purchase of ordinary shares	128,715	220,079	262,114	183,596	51,631
Number of warrants to purchase ordinary shares	33,050	156,500	143,694	54,050	24,250	282,434
Concurrent private placement of warrant to purchase ordinary shares	161,765	282,434	450,808	475,291	75,881	282,434
Concurrent private placement of exercise price	$ 17	$ 14	$ 7.6	$ 10	$ 33.2	$ 6.4
Exercise price of warrants	$ 0.0002	$ 0.0002	$ 0.0002	$ 0.0002	$ 0.0002	$ 6.16
Secured Credit Facility [Member] \| Fortress Investment Group [Member]
Remaining available secured financing								$ 6,000

GENERAL - Senior Secured Credit Facility (Narrative) (Details) $ / shares in Units, $ in Thousands	1 Months Ended	6 Months Ended	12 Months Ended
	Feb. 28, 2021 USD ($)	Jun. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2021 USD ($)	Oct. 26, 2018 USD ($)
Line of Credit Facility [Line Items]
Gross proceeds of subordinated debt	$ 12,000				$ 12,000
Subordinated promissory note term					2 years
Consideration unsecured subordinated promissory note		$ 5,535	$ 500	$ 211	$ 7,601
Subordinated Debt		$ 29,181
Certain Institutional Investor [Member]
Line of Credit Facility [Line Items]
Aggregate principal amount	$ 7,000						$ 5,000
Consideration unsecured subordinated promissory note					$ 12,000
Fortress [Member]
Line of Credit Facility [Line Items]
Initial warrants received by investor \| shares		1,250
Additional warrants \| shares		3,750
Unregistered common shares issued \| shares		5,335
Value of unregistered common shares issued		$ 200
Share price \| $ / shares		$ 37.4
Credit facility warrants, maturity term		7 years
Outstanding principal of credit Facility		$ 6,000
Credit Facility [Member]
Line of Credit Facility [Line Items]
Unused fee (as a percent)		0.50%
Original issue discount (as a percent)		2.50%
Credit Facility [Member] \| Minimum [Member]
Line of Credit Facility [Line Items]
Term fee (as a percent)		2.25%
Credit Facility [Member] \| Maximum [Member]
Line of Credit Facility [Line Items]
Term fee (as a percent)		4.50%
Credit Facility [Member] \| EBITDA Leverage Ratio Greater Than or Equal to 2.50 Times [Member]
Line of Credit Facility [Line Items]
EBITDA leverage ratio		2.5
Credit Facility [Member] \| EBITDA Leverage Ratio Less Tan 2.50x [Member]
Line of Credit Facility [Line Items]
Interest margin		7.00%
EBITDA leverage ratio		2.5
Credit Facility [Member] \| Fortress [Member]
Line of Credit Facility [Line Items]
Aggregate principal amount								$ 20,000
Current borrowing capacity								1,000
Gross draw down amount						$ 4,000
Initial Term Loan [Member] \| Fortress [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity								10,000
Incremental Term Loan [Member] \| Fortress [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity								$ 10,000

INVENTORIES, NET (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials, parts and supplies	$ 1,672	$ 1,380
Finished products	1,110	1,123
Inventories, net	2,782	2,503
Valuation adjustment for slow inventory	$ 2,227	$ 2,215

OTHER INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Other intangible assets, including operating lease right-of-use asset	$ 5,251	$ 5,504
Customer relationship & Other [Member]
Other intangible assets, including operating lease right-of-use asset	155	532
IP & Technology [Member]
Other intangible assets, including operating lease right-of-use asset	1,591	1,878
Capitalized software development costs [Member]
Other intangible assets, including operating lease right-of-use asset	$ 3,505	$ 3,094

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SPCB SuperCom Ltd