SuperCom Ltd. Files 20-F Annual Report

TL;DR

<b>SuperCom Ltd. has submitted its 2023 annual report on Form 20-F, detailing its financial performance and business operations.</b>

AI Summary

SuperCom Ltd (SPCB) filed a Foreign Annual Report (20-F) with the SEC on April 22, 2024. SuperCom Ltd. filed its annual report on Form 20-F for the fiscal year ended December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's primary business address is located at 1 Arie Shenkar Street, Hertzliya, Israel. SuperCom Ltd. was formerly known as Vuance Ltd. and Vuance. The company operates within the Semiconductors & Related Devices industry.

Why It Matters

For investors and stakeholders tracking SuperCom Ltd, this filing contains several important signals. This filing provides investors with a comprehensive overview of SuperCom's financial health, operational activities, and strategic direction for the fiscal year 2023. As a 20-F filing, it is a mandatory annual report for foreign private issuers like SuperCom, offering insights into their governance, risk factors, and financial statements under SEC regulations.

Risk Assessment

Risk Level: — SuperCom Ltd shows moderate risk based on this filing. The company's former names and name change dates suggest a history of restructuring or rebranding, which can sometimes indicate underlying business challenges or strategic shifts that warrant closer examination.

Analyst Insight

Investors should review the detailed financial statements and risk factors within the 20-F to assess SuperCom's performance and future prospects.

Key Numbers

• 2023-12-31 — Fiscal Year End (Period of report)
• 2024-04-22 — Filing Date (Date of filing)
• 001-33668 — SEC File Number (SEC file number for SuperCom Ltd.)
• 3674 — SIC Code (Standard Industrial Classification for Semiconductors & Related Devices)

Key Players & Entities

• SuperCom Ltd. (company) — Filer name
• Vuance Ltd (company) — Former company name
• Vuance (company) — Former company name
• SEC (regulator) — Regulator overseeing the filing
• 1 Arie Shenkar Street, Hertzliya (company) — Business address

FAQ

Industry Context

SuperCom Ltd. operates in the Semiconductors & Related Devices industry, a sector characterized by rapid technological advancements and global supply chains.

Regulatory Implications

As a foreign private issuer, SuperCom Ltd. is subject to SEC regulations, including the filing of annual reports on Form 20-F, which adhere to specific disclosure requirements.

What Investors Should Do

1. Review SuperCom's financial statements for the fiscal year 2023.
2. Analyze the risk factors section for potential business challenges.
3. Compare current year performance with previous years' filings.

Year-Over-Year Comparison

This filing represents the annual report for the fiscal year 2023, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $1.00 — on December 31, 2023, was NIS 3.627 per $1.00. This Annual Report contains various "

Filing Documents

• zk2431316.htm (20-F) — 2993KB
• exhibit_12-1.htm (EX-12.1) — 8KB
• exhibit_12-2.htm (EX-12.2) — 8KB
• exhibit_13-1.htm (EX-13.1) — 5KB
• exhibit_13-2.htm (EX-13.2) — 6KB
• exhibit_15-1.htm (EX-15.1) — 3KB
• exhibit_97.htm (EX-97.CLAWBACKPOLICY) — 38KB
• image1.jpg (GRAPHIC) — 41KB
• 0001178913-24-001418.txt (&nbsp;) — 12301KB
• spcb-20231231.xsd (EX-101.SCH) — 77KB
• spcb-20231231_cal.xml (EX-101.CAL) — 59KB
• spcb-20231231_def.xml (EX-101.DEF) — 271KB
• spcb-20231231_lab.xml (EX-101.LAB) — 808KB
• spcb-20231231_pre.xml (EX-101.PRE) — 435KB
• zk2431316_htm.xml (XML) — 2456KB

Item 18

Item 17 Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No This annual report on Form 20-F is incorporated by reference into the registrant's Registration Statements on Form S-8, File No. 333-175785 , 333-121231 , and on Form F-3 File No. 333-261442 INTRODUCTION Founded in 1988, we are a global provider of traditional and digital identity solutions, advanced Internet of Things") IoT(" and connectivity solutions, and cyber security products and solutions, to governments and private and public organizations throughout the world. We are comprised of three main Strategic Business Units (SBU): e-Gov, IoT and Connectivity, 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). IoT and Connectivity Our IoT products and solutions reliably identify, track and monitor people or objects in real time, enabling our customer

Selected Financial Data

Selected Financial Data The following table presents selected consolidated financial data as of the dates and for each of the periods indicated. The selected consolidated financial data set forth below should be read in conjunction with and is qualified entirely by reference to "Item 5. Operating and Financial Review and Prospects" and our consolidated financial The following summary consolidated financial data for and as of the five years ended December 31, 2023 are derived from our audited consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Our audited consolidated financial statements for the two years ended December 31, 2023 and 2022 appear elsewhere in this Annual Report. Our selected consolidated financial data for the years ended December 31, 2019, 2020 and 2021 have been derived from our audited consolidated financial statements not included in this Annual Report on Form 20-F (this "Annual Report"). Income Statement Data: Year Ended December 31, 2023 2022 2021 2020 2019 (U.S. dollars in thousands, except per share data) Summary of Statement of Operations Data: Revenues 26,570 17,649 12,267 11,770 16,475 Cost of revenues 16,347 11,261 6,063 6,189 10,127 Gross profit 10,223 6,388 6,204 5,581 6,348 Operating expenses: Research and development 3,110 3,412 2,763 2,386 3,971 Selling and marketing 2,200 2,657 1,655 1,721 3,526 General and administrative 5,460 5,186 4,149 4,074 5,389 Other (income) expenses 2,812 1,138 4,374 1,149 1,635 Total operating expenses 13,582 12,393 12,941 9,330 14,521 Operating loss (3,359 ) (6,005 ) (6,737 ) (3,749 ) (8,173 ) Financial expenses, net (663 ) (1,751 ) (3,396 ) (4,113 ) (3,289 ) loss before income tax (4,022 ) (7,756 ) (10,133 ) (7,862 ) (11,462 ) Income tax (expense) benefit - 299 (5 ) (5 ) (43 Net (loss) (4,022 )

Risk Factors

Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY 16 A. History and Development of the Company 16 B. Business Overview 18 C. Organizational Structure 27 D. Property, Plants and Equipment 28 ITEM 4A. UNRESOLVED STAFF COMMENTS 29 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 29 A. Operating Results 29 B. Liquidity and Capital Resources 33 C. Research and Development, Patents and Licenses, etc. 39 D. Trend Information 39 E. Off-Balance Sheet Arrangements 39 F. Tabular Disclosure of Contractual Obligations ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 40 A. Directors and Senior Management 40 B. Compensation 41 C. Board Practices 42 D. Employees 50 E. Share Ownership 51 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 53 A. Major Shareholders 53 B. Related Party Transactions 53 C. Interests of Experts and Counsel 53 ITEM 8. FINANCIAL INFORMATION 53 A. Consolidated Statements and Other Financial Information 53 B. Significant Changes 54 ITEM 9. THE OFFER AND LISTING 54 A. Offer and Listing Details 54 B. Plan of Distribution 55 C. Markets 55 D. Selling Shareholders 55 E.

Dilution

Dilution 55 F. Expenses of the Issue 55 iv ITEM 10. ADDITIONAL INFORMATION 56 A. Share Capital 56 B. Memorandum and Articles of Association 61 C. Material Contracts 61 D. Exchange Controls 61 E. Taxation 61 F. Dividends and Paying Agents 66 G. 66 H. Documents on Display 66 I. Subsidiary Information 66 ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS 66 ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 67 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 67 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 67 ITEM 15.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 67 ITEM 16. [ RESERVED ] 68 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 68 ITEM 16B. CODE OF ETHICS 68 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 68 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 69 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 69 ITEM 16F. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT 69 ITEM 16G. CORPORATE GOVERNANCE 69 ITEM 16H. MINE SAFETY DISCLOSURE 69 ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 69 ITEM 16J. INSIDER TRADING POLICIES 69 ITEM 16K. CYBERSECURITY 70 ITEM 17.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 71 ITEM 18.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 71 ITEM 19. EXHIBITS 72

SIGNATURES

SIGNATURES 78 v PART I ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable. ITEM 3. KEY INFORMATION A. [reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D.

Risk Factors

Risk Factors Investing in our ordinary shares involves a high degree of risk. You should carefully consider the risks described below, together with the financial and other information contained in this Annual Report, before you decide to invest in our ordinary shares. If any of the following risks actually occur, our business, financial condition and results of operations could be materially adversely affected. In that case, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. Risks Related to Our Business If we are unable to manage our growth profitably, our business, financial results and stock price could suffer. Our future financial results will depend in part on our ability to profitably manage our growth. Management will need to maintain existing customers and attract new customers, recruit, retain and effectively manage employees, as well as expand operations and integrate customer support and financial control systems. If integration - related expenses and capital expenditure requirements are greater than anticipated or if we are unable to manage our growth profitably after the acquisition, our financial results and the market price of our ordinary shares may decline. Purchase price allocation in connection with our acquisition of OTI's SmartID division, Safend, Alvarion and Prevision requires estimates, which may be subject to change in the future. Future changes to these estimates could impact our future operating results. The application of purchase price allocation requires that the total purchase price we paid for the SmartID division of OTI, Safend, Alvarion and Prevision be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date. All amounts in excess of or below the fair value are recorded as goodwill or extraordinary profit, as applicable. The allocation process requires an analysis and valuation of acquired assets, in

View Full Filing

View this 20-F filing on SEC EDGAR