SuperCom Ltd — Regulatory Filings 2010

Dec 20, 2010

6-K 1 zk1009203.htm 6-K zk1009203.htm Licensed to: 01edgar09 Document Created using EDGARizer 5.2.3.0 Copyright 1995 - 2009 Thomson Reuters. All rights reserved.

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 December, 2010

VUANCE LTD.

(Translation of registrant’s name into English)

Sagid House “Hasharon Industrial Park”

P.O. Box 5039

Qadima 60920, 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 x Form 40-F o

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): o

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): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

Third Quarter 2010 Results

Vuance Ltd. (the “Company”), a leading provider of Wireless Verification Solutions, including active radio frequency identification equipment (“Active RFID”), completed its unaudited condensed financial statements for the third quarter period ending September 30, 2010.

The Company has focused its sales and marketing efforts on its core competencies, which include Active RFID technology and its PureRFid Suite, and on servicing existing projects, such as contract with a European country to provide an end-to-end system for a national multi-ID issuing and control system.

Third Quarter 2010 Selected Unaudited Financial Results

Revenues from continuing operations for the quarter ended September 30, 2010 decreased 9% to $2.3 million compared to $2.5 million in the year-ago third quarter. The third quarter revenues from continuing operations increased compared sequentially to the $1.9 million reported for the second quarter of 2010. The year-over-year decrease was largely driven by a decrease in revenues from the European International Airport Project, which were fully recognized through December 31, 2009. The quarter-over-quarter increase was due to an increase in revenues from the national multi-ID issuing and control system project.

Gross profit from continuing operations decreased 7% to $1.7 million for the third quarter compared to $1.8 million for the prior-year third quarter. Gross profit margin for the quarter was 74% compared to 73% in the third quarter of 2009, and compared sequentially to 75% in the second quarter.

Total operating expenses from continuing operations for the third quarter of 2010 were $2.1 million, compared to $1.85 million for the second quarter of 2010 and compared to $1.9 million for the third quarter of 2009. The quarter-over-quarter increase was mainly due to an increase in sales and marketing expenses associated with the increase in revenues.

The Company reported an operating loss from continuing operations for the third quarter of $410,000 compared sequentially to an operating loss from continuing operations of $407,000 for the second quarter of 2010 and compared to an operating loss from continuing operations of $113,000 in the year-ago third quarter. The year-over-year increase was largely driven by allowance for doubtful account in the amount of $222,000, related to the European Project.

The net loss from continuing operations for the third quarter was $621,000, or $0.10 per basic and diluted share (based on 6.0 million weighted average shares) compared to a net loss from continuing operations of $287,000, or $0.05 per basic and diluted share (based on 5.6 million shares) in the year-ago third quarter. Sequentially, the $621,000 net loss from continuing operations for the third quarter of 2010 compares to a net loss from continuing operations of $552,000, or $0.10 per basic and diluted share, for the three months ended June 30, 2010 (based on 5.7 million weighted average shares).

As of September 2010, the Company has not been in compliance with certain convertible bond in the amount of $2,500,000.00, issued on November 16, 2006, as amended from time to time thereafter, therefore the convertible bond in the amount of $2,452,000, and a long term loan in the amount of $1,684,000 are due for immediate payment and have been reclassified to short term liability.

The Company's unaudited condensed financial statements have been prepared on a going concern basis, which presumes the realization of assets and the settlement of liabilities in the normal course of operations. The application of the going concern basis is dependent upon the Company having sufficient available cash resources and achieving profitable operations to generate sufficient cash flows to fund continued operations. Should the Company fail to generate sufficient cash flows from operations, it will require additional financing to remain a going concern. The reported unaudited condensed financial statements are in accordance with generally accepted accounting principles, or GAAP.

VUANCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

AT SEPTEMBER 30, 2010

2010	2009	2009
Unaudited		Audited
U.S. dollars in thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	164	975	656
Restricted cash deposits	130	453	330
Trade receivables, net	769	1,729	857
Other accounts receivable and prepaid expenses	367	385	315
Inventories, net	227	808	82
Assets attributed to discontinued operations	-	-	1,996
Total current assets	1,657	4,350	4,236
SEVERANCE PAY FUND	257	272	283
PROPERTY AND EQUIPMENT, NET	122	256	157
OTHER ASSETS:
Goodwill	-	685	-
Intangible assets and deferred charges, net	-	1,111	6
Total other assets	-	1,796	6
Total assets	2,036	6,674	4,682

VUANCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

AT SEPTEMBER 30, 2010

2010		2009		2009
Unaudited				Audited
U.S. dollars in thousands
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Short-term bank credit	-		369		-
Trade payables	1,111		1,969		982
Employees and payroll accruals	148		246		462
Accrued expenses and other liabilities	3,457		2,696		2,859
Short-term loan and others	1,684		-		-
Convertible bonds	2,574		288		430
Liabilities attributed to discontinued operations	-		-		1,599
Total current liabilities	8,974		5,568		6,332
LONG-TERM LIABILITIES:
Convertible bonds	444		2,796		2,624
Long-term loan and others	424		1,454		1,693
Accrued severance pay	275		312		304
Total long-term liabilities	1,143		4,562		4,621
SHAREHOLDERS' EQUITY (DEFICIT):
Ordinary shares	113		87		89
Additional paid-in capital	41,212		40,997		41,019
Accumulated deficit	(49,406	)	(44,540	)	(47,379	)
Total shareholders' equity (deficit)	(8,081	)	(3,456	)	(6,271	)
Total liabilities and shareholders' equity (deficit)	2,036		6,674		4,682

VUANCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2010

Sep-30				Sep-30				Dec-31
2010		2009		2010		2009		2009
Unaudited				Unaudited				Audited
U.S. dollars in thousands, except share data
REVENUES	5,506		7,658		2,291		2,506		9,304
COST OF REVENUES	1,441		2,745		588		675		3,365
GROSS PROFIT	4,065		4,913		1,703		1,831		5,939
OPERATING EXPENSES:
Research and development	308		648		92		213		898
Selling and marketing	3,409		4,131		1,393		1,431		5,131
General and administrative	1,684		1,087		628		300		1,778
Total operating expenses	5,401		5,866		2,113		1,944		7,807
OPERATING LOSS	(1,336	)	(953	)	(410	)	(113	)	(1,868	)
FINANCIAL EXPENSES, NET	(479	)	(393	)	(198	)	(164	)	(620	)
LOSS BEFORE TAXES ON INCOME	(1,815	)	(1,346	)	(608	)	(277	)	(2,488	)
TAXES ON INCOME	(37	)	(24	)	(13	)	(10	)	(71	)
NET LOSS FROM CONTINUING OPERATIONS	(1,852	)	(1,370	)	(621	)	(287	)	(2,559	)
LOSS FROM DISCONTINUED OPERATIONS	(175	)	(876	)	(8	)	(200	)	(2,526	)
NET LOSS FOR THE PERIOD	(2,027	)	(2,246	)	(629	)	(487	)	(5,085	)
LOSS PER SHARE BASIC AND DILUTED:
Loss from continuing operations	(0.32	)	(0.25	)	(0.10	)	(0.05	)	(0.46	)
Loss from discontinued operations	(0.03	)	(0.16	)	(0.00	)	(0.04	)	(0.46	)
Net loss per share	(0.35	)	(0.41	)	(0.10	)	(0.09	)	(0.92	)
Weighted average number of ordinary shares used in computing basic and diluted loss per share	5,827,398		5,453,701		6,030,046		5,586,713		5,511,948

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.

Vuance Ltd. (formerly, SuperCom Ltd.)
By:	/s/ Arie Trabelsi
	Name: Arie Trabelsi
	Title: Chief Executive Officer

Date: December 20, 2010­­­­