SuperCom Ltd — Regulatory Filings 2004

Sep 29, 2004

6-K 1 form6k.htm FORM 6-K form 6-K Licensed to: v Document Created using EDGARIZER HTML Copyright 2004 EDGARfilings, Ltd., an IEC company. All rights reserved EDGARfilings.com

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

SUPERCOM LTD.

Millennium Bldg.

3 Tidhar Street, P.O.B. 2094

Raanana 43665 Israel

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__

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 No X

SUPERCOM LTD.

Form 6-K

TABLE OF CONTENTS

Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2004 (unaudited) and December 31, 2003	3
Condensed Consolidated Statements of Operations (unaudited) for the six months ended June 30, 2004 and 2003	5
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2004 and 2003	6
Signatures	7
Exhibit Index	8

2

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	2003		June 30, — 2004
			Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$ 1,912	$	1,528
Restricted cash deposits	681		434
Short-term deposit	1,196		601
Marketable debt securities	117		-
Trade receivables (net of allowance for doubtful accounts of $ 3,333 as of December 31, 2003 and June 30, 2004)	1,808*	)	1,798
Other accounts receivable and prepaid expenses	680		879
Inventories	3,236		2,836
Total current assets	9,630		8,076
LONG-TERM INVESTMENTS:
Long term trade receivables	364*	)	305
Investment in an affiliate and others	275		275
Severance pay fund	333		356
	972		936
PROPERTY AND EQUIPMENT, NET	1,676		1,886
OTHER ASSETS	156		134
	$ 12,434	$	11,032

*) Reclassified.

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

3

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands

	2003		June 30, — 2004
			Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank credit and current maturities of long-term loan	$ 2,131	$	1,741
Trade payables	1,085		1,033
Employees and payroll accruals	161		192
Accrued expenses and other liabilities	822		660
Total current liabilities	4,199		3,626
LONG-TERM LIABILITIES:
Long-term loan, net of current maturities	187		185
Accrued severance pay	436		465
Total long-term liabilities	623		650
SHAREHOLDERS' EQUITY:
Share capital: Ordinary shares of NIS 0.01 par value -
Authorized: 26,500,000 shares at December 31, 2003 and June 30, 2004; Issued and outstanding: 12,906,872 and 12,966,872 shares at December 31, 2003 and June 30, 2004, respectively	40		41
Additional paid-in capital	25,814		25,856
Deferred stock compensation	-		(14	)
Receipt on account of shares	-		775
Accumulated deficit	(18,242	)	(19,902	)
Total shareholders' equity	7,612		6,756
	$ 12,434	$	11,032

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

4

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	2003		2004		2003		2004
	Unaudited
Revenues	$ 3,905		$ 2,484		$ 1,021		$ 1,173
Cost of revenues	1,504		1,564		447		738
Gross profit	2,401		920		574		435
Operating expenses:
Research and development	465		377		229		183
Selling and marketing	1,547		1,129		260		572
General and administrative	939		944		438		441
Total operating expenses	2,951		2,450		927		1,196
Operating loss	550		1,530		353		761
Financial expenses, net	146		77		131		70
Other expenses, net	41		53		11		49
Net loss	$ 737		$ 1,660		$ 495		$ 880
Basic and diluted net loss per share	$ (0.06	)	$ (0.13	)	$ (0.04	)	$ (0.07	)
Weighted average number of Ordinary shares used in computing basic and diluted net loss per share	12,706,339		12,949,070		12,706,339		12,966,872

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

5

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	2003		2004		2003		2004
	Unaudited
Cash flows from operating activities:
Net loss	$ (737	)	$ (1,660	)	$ (495	)	$ (880	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	189		167		93		81
Accrued severance pay, net	10		6		9		(3	)
Amortization of deferred stock compensation	26		5		1		1
Decrease (increase) in trade receivables	(1,649	)	69		(165	)	(126	)
Decrease (increase) in other accounts receivable and prepaid expenses	76		(199	)	(206	)	(314	)
Decrease (increase) in inventories	246		330		(199	)	50
Increase (decrease) in trade payables	294		(52	)	436		187
Increase (decrease) in employees and payroll accruals	42		56		25		(15	)
Increase (decrease) in accrued expenses and other liabilities	603		(162	)	(52	)	207
Loss from sale of Marketable Securities	-		7		-		7
Others	6		-		6		2
Net cash used in operating activities	(894	)	(1,433	)	(547	)	(803	)
Cash flows from investing activities:
Proceeds from sale of property and equipment	1		-		1		-
Purchase of property and equipment	(31	)	(257	)	(13	)	(100	)
Purchase of other asset	-		(28	)	-		(28	)
Investment in short-term deposit	(791	)	595		-		604
Proceeds from redemption of marketable debt securities	335		110		-		2
Restricted cash deposits	(15	)	247		(7	)	(63	)
Net cash provided by (used in) investing activities	(501	)	667		(19	)	415
Cash flows from financing activities:
Short-term bank credit, net	768		(555	)	583		(212	)
Proceeds from long-term loan	167		400		167		400
Issuance expenses related to conversion of loan into shares	-		(1	)	-		-
Proceeds from payable on account of shares	-		775		-		775
Principal payment of long-term loan	(175	)	(237	)	(87	)	(119	)
Net cash provided by (used in) financing activities	760		382		663		844
Decrease in cash and cash equivalents	(635	)	(384	)	97		456
Cash and cash equivalents at the beginning of the period	4,567		1,912		3,835		1,072
Cash and cash equivalents at the end of the period	$ 3,932		$ 1,528		$ 3,932		$ 1,528
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest	$ 37		$ 69		$ 13		$ 29
Supplemental disclosure of non-cash investing activities:
Transfer of inventory to property and equipment	$ -		$ 70		$ -		$ -
Conversion of loan to ordinary shares	$ -		$ 25		$ -		$ -

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

6

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/ Eyal Tuchman

Eyal Tuchman

Chief Financial Officer

Date: September 29, 2004

7

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Press Release dated September 29, 2004

8