Financial Data and Key Metrics Changes - Annual revenues increased by 44% to $17.7 million in 2022, with a remarkable year-over-year growth of 69% in Q4 [27][72] - Operating cash use decreased from $9.4 million in 2021 to $4.7 million in 2022, reflecting positive cash flow generation from projects [16][56] - The company achieved positive EBITDA in both Q3 and Q4 of 2022, with EBITDA of $400,000 in Q3 and $770,000 in Q4 [74][92] Business Line Data and Key Metrics Changes - The IoT division was the primary growth engine, achieving a staggering 76% growth in revenues during 2022 [72][74] - Gross profit increased by 3% to $6.4 million compared to $6.2 million in the previous year, despite higher costs associated with new project launches [52][55] - The company launched two new products, PureOne and PureProtect, enhancing its product portfolio and market reach [34][44] Market Data and Key Metrics Changes - Revenue from European countries increased by 230% to $9.6 million, accounting for approximately 54% of total sales in 2022 [36] - The electronic monitoring market is projected to reach roughly $2.1 billion by 2026, with the US and Europe constituting about 95% of the market [32] - The company won contracts valued at over $40 million in the past year, indicating strong market demand [28][31] Company Strategy and Development Direction - The company aims to revolutionize the public safety sector through proprietary electronic monitoring technology and data intelligence [29] - A strategic focus on expanding presence in developed countries where the opportunity is greatest, particularly in the electronic monitoring market [30][32] - The company plans to enhance its US market growth through strategic acquisitions of local electronic monitoring service providers [70][71] Management's Comments on Operating Environment and Future Outlook - Management highlighted the countercyclical nature of the electronic monitoring industry, with growing public policy shifts towards monitoring instead of incarceration [89][102] - The company anticipates sustained growth by expanding market share in the US and Europe, supported by a strong reputation and technological advantage [89][90] - Management expressed confidence in achieving cash flow positivity as more projects generate positive cash flow [117][118] Other Important Information - The company has a stable cash position with $4.5 million in cash and equivalents at the end of 2022 [56] - One-time expenses of approximately $1.1 million were incurred mainly due to reorganization expenses related to the legacy business [57] - The company is not currently pursuing acquisition offers, focusing instead on organic growth plans [114][122] Q&A Session Summary Question: Future EBITDA expectations - Management indicated that while fluctuations in EBITDA are expected due to project nature, they aim to maintain positive EBITDA [92] Question: Competitive environment in Europe - Management noted that despite competition, their technology remains strong, and they have maintained a high win rate in competitive RFPs [83] Question: Interest from potential acquirers - Management acknowledged vague discussions of interest from potential acquirers but emphasized a focus on current growth plans rather than pursuing acquisition discussions [114][122]

Company Overview [Business and Strategy](index=3&type=section&id=Introduction_summary) SuperCom provides global identity, IoT, and cybersecurity solutions to governments and organizations through three strategic business units enhanced by key acquisitions - The company is structured into three main **Strategic Business Units (SBUs)**: e-Gov, IoT and Connectivity, and Cyber Security[17](index=17&type=chunk) - The **e-Gov SBU** provides digital and traditional identity solutions, such as national IDs and passports, to governments worldwide[17](index=17&type=chunk)[18](index=18&type=chunk) - The **IoT and Connectivity SBU** offers solutions for real-time tracking and monitoring of people and objects, enhanced by the acquisitions of Leaders in Community Alternatives (LCA) and Alvarion Technologies[19](index=19&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The **Cyber Security SBU** was established through the acquisitions of Prevision and Safend, providing endpoint data protection and cybersecurity services to a broad customer base[23](index=23&type=chunk)[24](index=24&type=chunk) [Selected Financial Data](index=4&type=section&id=Selected%20Financial%20Data) The company's revenues increased to $17.6 million in 2022, though it has experienced net losses over the past five years alongside declining shareholders' equity and rising long-term liabilities **Selected Consolidated Financial Data (2018-2022)** | (U.S. dollars in thousands, except per share data) | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Income Statement Data:** | | | | | | | Revenues | 17,649 | 12,267 | 11,770 | 16,475 | 21,882 | | Gross profit | 6,388 | 6,204 | 5,581 | 6,348 | 8,139 | | Operating loss | (6,005) | (6,737) | (3,749) | (8,173) | (9,675) | | Net (loss) | (7,457) | (10,138) | (7,867) | (11,505) | (15,740) | | Basic loss per share | (2.0) | (3.9) | (4.5) | (7.1) | (10.3) | | **Balance Sheet Data (End of Period):** | | | | | | | Cash and cash equivalents and restricted cash | 4,505 | 4,604 | 3,952 | 1,210 | 1,639 | | TOTAL ASSETS | 42,040 | 42,119 | 40,344 | 40,004 | 44,349 | | Total Long-term Liabilities | 33,670 | 32,124 | 15,827 | 17,359 | 11,256 | | SHAREHOLDERS' EQUITY | 3,131 | 4,392 | 4,919 | 8,332 | 19,550 | Key Information [Risk Factors](index=8&type=section&id=D.%20Risk%20Factors) The company faces significant risks from customer concentration, a history of net losses, international operational challenges, a material weakness in financial controls, and geopolitical instability - The company has a significant customer concentration risk, with **one large customer accounting for 36% of consolidated net revenue in 2022**[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - The company has been profitable in only one of the last seven fiscal years and has historically funded its operations through equity and debt financing, with future financing not guaranteed on favorable terms[55](index=55&type=chunk) - International operations are a key source of risk, with approximately **61% of 2022 revenues derived from markets outside the United States**[71](index=71&type=chunk) - A **material weakness has been identified in the company's internal control over financial reporting**, which could result in material misstatements in financial statements[103](index=103&type=chunk) - The company's location and operations in Israel expose it to **political, economic, and military instability** in the region[104](index=104&type=chunk)[105](index=105&type=chunk) - As a foreign private issuer, SuperCom is exempt from certain SEC reporting and NASDAQ governance rules, potentially resulting in **less information being available to investors**[116](index=116&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) Information on the Company [History and Development of the Company](index=22&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Founded in 1988, SuperCom evolved into a global security provider through strategic shifts and key acquisitions between 2013 and 2016 that established its current business structure - SuperCom Ltd. was incorporated in Israel on July 4, 1988[123](index=123&type=chunk) - The company significantly expanded its product depth and global presence between 2013 and 2016 through a series of **strategic acquisitions**[135](index=135&type=chunk) - Key acquisitions include: the SmartID division of OTI (2013), Prevision Ltd (2015), Leaders in Community Alternatives, Inc (LCA) (2016), Safend Ltd (2016), and Alvarion Technologies Ltd (2016)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Business Overview](index=24&type=section&id=B.%20Business%20Overview) SuperCom operates globally through e-Gov, IoT, and Cyber Security SBUs, with a strategy focused on synergies, global expansion, and long-term government contracts - The company's growth strategy includes leveraging its customer base across its SBUs, expanding IoT and Cyber Security activities globally, and securing additional long-term government contracts[160](index=160&type=chunk) - The company owns a portfolio of **52 issued patents in the United States** and **74 issued patents in the rest of the world**[222](index=222&type=chunk) **Revenue by Segment (in thousands of dollars)** | Segment | 2022 | 2021 | | :--- | :--- | :--- | | e-Gov | $637 | $1,729 | | IoT | $15,628 | $8,904 | | Cyber Security | $1,384 | $1,634 | | **Total** | **$17,649** | **$12,267** | **Revenue by Geographic Market (in thousands of dollars)** | Region | 2022 | 2021 | | :--- | :--- | :--- | | Africa | $374 | $1,586 | | Europe | $9,559 | $2,912 | | South and center America | - | $37 | | United States | $6,877 | $6,820 | | Israel | $693 | $757 | | Asia Pacific | $146 | $155 | | **Total** | **$17,649** | **$12,267** | **Revenue by Products and Services (in thousands of dollars)** | Type | 2022 | 2021 | | :--- | :--- | :--- | | Products | $10,099 | $4,475 | | Services | $7,550 | $7,792 | | **Total revenues** | **$17,649** | **$12,267** | [Organizational Structure](index=34&type=section&id=C.%20Organizational%20Structure) SuperCom Ltd is the parent company of several wholly-owned subsidiaries in the U.S and Israel that execute its business strategy across its core segments - The company's active, wholly-owned subsidiaries as of April 2023 include SuperCom Inc (USA), Leaders in Community Alternatives, Inc (USA), Safend Ltd (Israel), Prevision Ltd (Israel), and Alvarion Technologies Ltd (Israel)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) [Property, Plants and Equipment](index=34&type=section&id=D.%20Property,%20Plants%20and%20Equipment) The company conducts its operations from leased facilities in Israel and California, with total rental expenses amounting to $817,160 in 2022 - The company leases all its properties, with primary locations in Tel Aviv and Herzliya, Israel, and office premises in California for its subsidiary, LCA Inc[233](index=233&type=chunk)[234](index=234&type=chunk) - Total annual rental fees were **$817,160 in 2022**, up from $714,000 in 2021[236](index=236&type=chunk) Operating and Financial Review and Prospects [Operating Results](index=35&type=section&id=A.%20Operating%20Results) In 2022, revenues grew 44% driven by the IoT segment, but gross margin declined while the net loss improved to $7.5 million due to lower 'Other expenses' - **Total revenues increased by 44% in 2022 to $17.6M**, largely due to a 76% increase in IoT segment revenue to $15.6M[255](index=255&type=chunk) - **Gross profit margin decreased to 36.2% in 2022** from 50.6% in 2021, mainly due to costs from a new contract's implementation and a shift in revenue mix[256](index=256&type=chunk) - Operating expenses (excluding 'Other expenses') **rose 31.3% to $11.3M in 2022**, driven by increased R&D and sales and marketing activities[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - **Net loss for 2022 was $7.5M**, an improvement from a net loss of $10.1M in 2021, primarily due to a $3.2M reduction in 'Other expenses'[265](index=265&type=chunk) **Consolidated Income Statement Data (% of Total Revenues)** | | 2022 | 2021 | | :--- | :--- | :--- | | Revenues | 100% | 100% | | Cost of revenues | 63.8% | 49.4% | | **Gross profit** | **36.2%** | **50.6%** | | Research and development | 19.3% | 22.5% | | Selling and marketing | 15.1% | 13.5% | | General and administrative | 29.4% | 33.8% | | Other expenses | 6.4% | 35.7% | | **Operating loss** | **(34.0%)** | **(54.9%)** | | **Net Loss** | **(42.3%)** | **(82.6%)** | [Liquidity and Capital Resources](index=40&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company has an accumulated deficit but maintains positive working capital and has bolstered liquidity through financing activities, which management believes is sufficient for the next 12 months - The company has experienced net losses and significant cash outflows, with an **accumulated deficit of $102.9 million** as of December 31, 2022[279](index=279&type=chunk)[621](index=621&type=chunk) - The company raised approximately **$4.65 million** in a registered direct offering in March 2022 and an additional **$2.4 million** in March 2023[282](index=282&type=chunk)[283](index=283&type=chunk) - Management believes that existing financing and expected cash from customer contracts will be sufficient to fund operations for at least the next 12 months[284](index=284&type=chunk)[629](index=629&type=chunk) **Summary of Cash Flows (in thousands of dollars)** | | Year ended Dec 31, 2022 | Year ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $ (4,654) | $ (9,413) | | Net cash used in investing activities | $ (2,189) | $ (1,639) | | Net cash provided by financing activities | $ 6,744 | $ 11,704 | | **Net (decrease)/increase in cash** | **$ (99)** | **$ 652** | [Critical Accounting Policies](index=41&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant judgment, particularly in revenue recognition, allowance for doubtful accounts, and the valuation of intangible assets and goodwill - The company adopted **ASC 606 for revenue recognition**, which impacts how revenue from software licenses, maintenance, and long-term contracts is recognized[291](index=291&type=chunk)[294](index=294&type=chunk) - As of December 31, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was **$33.13 million**, with 43% expected to be recognized as revenue within 12 months[324](index=324&type=chunk)[698](index=698&type=chunk) - The allowance for doubtful accounts is a significant estimate, standing at **$12.67 million** as of December 31, 2022[329](index=329&type=chunk) - The company capitalizes software development costs incurred during the application development stage and amortizes them over an estimated useful life of 5 years[700](index=700&type=chunk)[701](index=701&type=chunk) [Research and Development](index=45&type=section&id=C.%20Research%20and%20Development,%20Patents%20and%20Licenses,%20etc.) The company increased its R&D investment to $4.6 million in 2022, with $1.2 million capitalized, to enhance products across its business segments - As of December 31, 2022, the company employed 29 people in research and development activities[331](index=331&type=chunk) **R&D Spending (in thousands of dollars)** | | 2022 | 2021 | | :--- | :--- | :--- | | Total R&D Spend | $4,617 | $3,502 | | Capitalized Software Costs | $1,205 | $739 | | R&D Expense | $3,412 | $2,763 | Directors, Senior Management and Employees [Directors and Senior Management](index=45&type=section&id=A.%20Directors%20and%20Senior%20Management) The company's leadership includes experienced executives, with a four-member board chaired by Arie Trabelsi and key management roles held by his sons - Arie Trabelsi serves as a Director and has extensive experience in the communications industry[335](index=335&type=chunk) - Key executive officers include **Ordan Trabelsi (President & CEO)** and **Barak Trabelsi (COO & CTO)**[340](index=340&type=chunk)[341](index=341&type=chunk) - The board of directors is comprised of four members: Arie Trabelsi, and three independent directors: Tal Naftali Shmuel, Oren Raoul De Lange, and Shoshana Cohen Shapira[334](index=334&type=chunk)[353](index=353&type=chunk) [Compensation](index=47&type=section&id=B.%20Compensation) In 2022, total compensation for seven directors and executive officers was $666,357 in salaries and bonuses, plus $56,205 in pension benefits - As of December 31, 2022, directors and executive officers as a group held options to purchase **640,000 ordinary shares** at an average exercise price of $3.25 per share[348](index=348&type=chunk) **2022 Compensation for All Directors and Executive Officers (7 persons)** | Compensation Type | Amount (USD) | | :--- | :--- | | Salaries, fees, commissions and bonuses | $666,357 | | Pension, retirement and similar benefits | $56,205 | [Board Practices](index=48&type=section&id=C.%20Board%20Practices) Governed by Israeli law, the board has four members, including two external directors, and has established Audit and Compensation Committees with independent majorities - The board is comprised of four members, including two external directors, Shoshana Cohen Shapira and Oren Raoul De Lange, as required by Israeli Companies Law[353](index=353&type=chunk) - The company has an Audit Committee and a Compensation Committee, both of which must include all external directors and have a majority of independent directors[362](index=362&type=chunk)[365](index=365&type=chunk) - The company follows Israeli corporate law for approving transactions with office holders and controlling shareholders, requiring multi-level approvals[369](index=369&type=chunk)[379](index=379&type=chunk)[382](index=382&type=chunk) [Employees](index=55&type=section&id=D.%20Employees) As of December 31, 2022, SuperCom had 122 full-time employees, with the largest department being Research, Development & Operations and the workforce split between the US and Israel/Europe **Employee Headcount by Department and Geography** | | Dec. 31, 2022 | Dec. 31, 2021 | | :--- | :--- | :--- | | **By Department** | | | | Research, Development & Operations | 91 | 93 | | Marketing and Sales | 9 | 8 | | Administration | 22 | 13 | | **Total** | **122** | **114** | | **By Geography** | | | | Israel & Europe | 58 | 53 | | United States | 64 | 61 | | **Total** | **122** | **114** | [Share Ownership](index=56&type=section&id=E.%20Share%20Ownership) Director Arie Trabelsi is the largest beneficial owner with 15.69% of shares, while the company utilizes stock option plans for incentives, with 811,050 options outstanding at year-end 2022 - As of December 31, 2022, director **Arie Trabelsi beneficially owned 15.69%** of the outstanding shares, primarily through his control of Sigma Wave Ltd[404](index=404&type=chunk)[405](index=405&type=chunk) - As of December 31, 2022, there was **$1,125,448 of unrecognized compensation cost** related to non-vested share-based compensation arrangements[414](index=414&type=chunk) **Stock Option Activity** | | 2022 | 2021 | | :--- | :--- | :--- | | **Number of options** | | | | Outstanding at Beginning of year | 21,388 | 33,484 | | Granted | 800,937 | - | | Exercised | (1,666) | (4,496) | | Canceled and forfeited | (9,610) | (7,600) | | **Outstanding at end of year** | **811,050** | **21,388** | | **Exercisable at end of year** | **213,597** | **15,950** | Major Shareholders and Related Party Transactions [Major Shareholders](index=58&type=section&id=A.%20Major%20Shareholders) As of year-end 2022, Sigma Wave Ltd, controlled by director Arie Trabelsi's family, was the only known beneficial owner with over 5% of the company's shares - As of December 31, 2022, **Sigma Wave Ltd. beneficially owned 10.9%** of the outstanding shares[416](index=416&type=chunk) - Sigma Wave Ltd is controlled by the family of Arie Trabelsi, a director and parent of CEO Ordan Trabelsi and COO Barak Trabelsi[417](index=417&type=chunk) - As of December 31, 2022, approximately **92.3% of the company's ordinary shares were held of record by the U.S. nominee company CEDE & Co**[420](index=420&type=chunk) [Related Party Transactions](index=59&type=section&id=B.%20Related%20Party%20Transactions) The company engages in transactions with director and controlling shareholder Arie Trabelsi, including a management fee agreement and short-term, interest-free loans - The company has a management fee agreement with director Arie Trabelsi, with accrued expenses of **$85,000** as of December 31, 2022[422](index=422&type=chunk) - Mr and Mrs Trabelsi have provided short-term, interest-free loans to the company, with an outstanding balance of **$166,000** as of December 31, 2022[423](index=423&type=chunk) Financial Information [Legal Proceedings and Dividend Policy](index=59&type=section&id=A.%20Consolidated%20Statements%20and%20Other%20Financial%20Information) The company is involved in incidental legal proceedings and has never paid cash dividends, intending to retain future earnings to fund business growth - The company is party to legal proceedings in the normal course of business but does not believe any will have a material adverse effect[426](index=426&type=chunk) - The company has **never paid cash dividends** and intends to retain future earnings for business use, with no plans for dividends in the foreseeable future[427](index=427&type=chunk) Additional Information [Memorandum and Articles of Association](index=61&type=section&id=B.%20Memorandum%20and%20Articles%20of%20Association) As an Israeli public company, its Articles of Association outline director duties, related-party transaction approvals, and an authorized capital of 10 million ordinary shares - The company is authorized to issue **10,000,000 ordinary shares** with a par value of NIS 2.5 per share[447](index=447&type=chunk) - The company's governance is subject to the Israeli Companies Law, which codifies the fiduciary duties of office holders and requires specific approval procedures for related-party transactions[452](index=452&type=chunk)[454](index=454&type=chunk)[462](index=462&type=chunk) - The company has adopted a compensation policy for office holders, which must be approved by the board and shareholders every three years[459](index=459&type=chunk)[461](index=461&type=chunk) [Taxation](index=67&type=section&id=E.%20Taxation) This section details Israeli and U.S. tax considerations, including a 23% Israeli corporate tax rate, dividend withholding rules, and the company's status as a non-PFIC - The general corporate tax rate for Israeli companies was **23% in 2022**[490](index=490&type=chunk) - Gains on the sale of ordinary shares are generally **exempt from Israeli capital gains tax** for non-Israeli residents[498](index=498&type=chunk) - Dividends distributed to non-residents are generally subject to a **25% withholding tax**, which may be reduced by a tax treaty[506](index=506&type=chunk) - The company believes it is not currently a **Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes[523](index=523&type=chunk) Quantitative and Qualitative Disclosures About Market Risks [Market Risk Exposure](index=72&type=section&id=Exposure%20to%20Market%20Risks) The company's primary market risk is foreign currency exchange rate fluctuations, particularly between the U.S. dollar and the New Israeli Shekel - The principal market risk is exposure to **foreign currency fluctuations**, mainly between the U.S. dollar and the NIS[538](index=538&type=chunk)[539](index=539&type=chunk) - A hypothetical 10% movement in foreign currency rates against the U.S. dollar would result in an approximate **$0.4 million change** in the expected 2022 net income[540](index=540&type=chunk) Controls and Procedures [Evaluation of Controls and Procedures](index=73&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of year-end 2022 due to a material weakness in internal control over financial reporting - Management concluded that **disclosure controls and procedures were ineffective** as of December 31, 2022[545](index=545&type=chunk) - A **material weakness** was identified in internal control over financial reporting due to a lack of sufficient resources and segregation of duties in its accounting function[547](index=547&type=chunk) - Notwithstanding the material weakness, management believes the consolidated financial statements are **fairly presented in all material respects**[548](index=548&type=chunk) Corporate Governance and Other Information [Audit Committee Financial Expert](index=73&type=section&id=ITEM%2016A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) The Board of Directors has determined that two independent audit committee members, Mr. De Lange and Mrs. Shapira, qualify as "audit committee financial experts" - The Board has identified **Mr. De Lange and Mrs. Shapira** as audit committee financial experts[550](index=550&type=chunk) [Principal Accountant Fees and Services](index=74&type=section&id=ITEM%2016C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) In 2022, the company incurred $155,000 in fees from its principal accounting firm, all for audit services and pre-approved by the Audit Committee **Accountant Fees (in thousands of dollars)** | Service Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | $155,000 | $160,000 | | Audit-related fees | - | - | | Tax fees | - | $12,000 | | **Total** | **$155,000** | **$172,000** | [Changes in Certifying Accountant](index=75&type=section&id=ITEM%2016F.%20CHANGES%20IN%20REGISTRANT'S%20CERTIFYING%20ACCOUNTANT) On December 21, 2022, SuperCom replaced its auditor with Yarel + Partners due to the former firm's reduced auditing practices, with no disagreements on accounting principles - The company replaced its auditor, Halperin Ilanit, with **Yarel + Partners** on December 21, 2022[560](index=560&type=chunk) - There were **no disagreements** with the former auditor on any matters of accounting principles, financial statement disclosure, or auditing scope[563](index=563&type=chunk) [Corporate Governance](index=75&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) As a foreign private issuer, SuperCom follows Israeli home country governance practices in lieu of certain NASDAQ rules for director nominations and equity plan approvals - The company follows its home country (Israel) governance practices in lieu of certain NASDAQ rules, including those for director nominations and shareholder approval of equity compensation plans[567](index=567&type=chunk)[568](index=568&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=78&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor's report for 2022 highlights several Critical Audit Matters, including goodwill impairment, allowance for receivables, capitalized software costs, and going concern - The 2022 audit identified four **Critical Audit Matters**: Goodwill Impairment Assessment, Allowance for accounts receivables, Assessment of capitalized internal costs to develop software, and Going concern assessment[580](index=580&type=chunk)[581](index=581&type=chunk)[583](index=583&type=chunk) - The 2021 audit identified three **Critical Audit Matters**: Goodwill Impairment Assessment, Allowance for accounts receivables, and Going concern assessment[596](index=596&type=chunk)[598](index=598&type=chunk)[601](index=601&type=chunk) [Consolidated Financial Statements Data](index=83&type=section&id=Consolidated%20Financial%20Statements) The 2022 consolidated financial statements show total assets of $42.0 million, a net loss of $7.5 million, and negative operating cash flow of $4.7 million **Consolidated Balance Sheets (As of December 31, in thousands of dollars)** | | 2022 | 2021 | | :--- | :--- | :--- | | **TOTAL CURRENT ASSETS** | **26,290** | **26,108** | | **TOTAL LONG-TERM ASSETS** | **15,750** | **16,011** | | **TOTAL ASSETS** | **42,040** | **42,119** | | **TOTAL CURRENT LIABILITIES** | **5,239** | **5,603** | | **TOTAL LONG TERM LIABILITIES** | **33,670** | **32,124** | | **TOTAL LIABILITIES** | **38,909** | **37,727** | | **Total shareholders' equity** | **3,131** | **4,392** | | **Total liabilities and shareholders' equity** | **42,040** | **42,119** | **Consolidated Statements of Operations (For the Year Ended December 31, in thousands of dollars)** | | 2022 | 2021 | | :--- | :--- | :--- | | Total revenues | 17,649 | 12,267 | | Gross profit | 6,388 | 6,204 | | Total operating expenses | 12,393 | 12,941 | | Operating loss | (6,005) | (6,737) | | Financial expenses, net | (1,751) | (3,396) | | **Net loss** | **(7,457)** | **(10,138)** | | **Basic and Diluted Net loss per share** | **$(2.0)** | **$(3.9)** |

Exhibit 10.1 SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this "Agreement") is dated as of March 30, 2023, between SuperCom Ltd., an Israeli corporation (the "Company"), and the purchaser identified on the signature pages hereto (including its successors and assigns, the "Purchaser"). WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act" or "Act") and ...

Corporate Presentation, January 2023 NASDAQ: SPCB Safe Harbor Statement General. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded or followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should ...

SuperCom Ltd. (NASDAQ:SPCB) Q3 2022 Earnings Conference Call October 26, 2022 10:00 AM ET Company Participants Stephanie Prince - PCG Advisory Ordan Trabelsi - President and CEO Conference Call Participants Operator Ladies and gentlemen, good morning, and welcome to the SuperCom Third Quarter 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also be ...

Exhibit 1 SUPERCOM LTD CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS as of June 30, 2022 (Unaudited) SUPERCOM LTD | | 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 – 10 | 2 SUPERCOM LTD CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands) ...

SuperCom Ltd. (NASDAQ:SPCB) Q2 2022 Earnings Conference Call August 9, 2022 8:30 AM ET Company Participants Stephanie Prince - PCG Advisory Ordan Trabelsi - President and CEO Conference Call Participants Operator Ladies and gentlemen, good morning, and welcome to SuperCom's Second Quarter 2022 Financial Results and Corporate Update Conference Call. At this time all participantsÂ' are in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Op ...

Supercom Ltd (NASDAQ:SPCB) Q1 2022 Earnings Conference Call May 12, 2022 8:30 AM ET Company Participants Ordan Trabelsi - President & CEO Conference Call Participants Operator Ladies and gentlemen, good morning, and welcome to SuperCom's First Quarter 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions]. Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. Joini ...

Customer Dependence and Revenue Sources - In the year ended December 31, 2021, 10% of consolidated net revenue was attributable to sales to one large customer[42]. - In the year ended December 31, 2020, 23% of consolidated net revenue was attributable to sales to two large customers[43]. - In the year ended December 31, 2019, 7% of consolidated net revenue was attributable to sales to one large customer[44]. - The company depends on orders from large customers for a substantial portion of its revenues, and the loss of these customers could adversely impact its business[42]. - Approximately 44% of the company's revenues for the years ended December 31, 2021, and 50% for 2020 were derived from sales to markets outside of the United States[70]. Financial Performance and Challenges - The company has had profitable operations in only one of the last seven years ended December 31, 2021[54]. - The global macroeconomic environment remains challenging, influenced by factors such as the COVID-19 pandemic and geopolitical tensions, which may adversely affect business operations[67]. - The company may experience material impacts on its business if global economic conditions deteriorate further[67]. - The company’s financial and operating results have historically fluctuated due to reliance on a limited number of customers and the nature of e-Gov and IoT solutions[74]. - Total revenue for the year ended December 31, 2021, was $12,267,000, an increase of 4.23% from $11,770,000 in 2020[211]. Competition and Market Risks - The company faces intense competition in the IoT, e-Gov, and Cyber Security markets, which are characterized by rapidly changing technology and customer requirements[45]. - The average selling prices for the company's products may decline due to competitive pricing pressures, which could adversely affect gross margins[47]. - The company faces significant risks in expanding international operations, including regulatory approvals and geopolitical uncertainties[70]. - The company’s operating results may be adversely affected by unfavorable economic conditions and supply chain disruptions[79]. Technology and Product Development - The company has sought to acquire complementary businesses to compete effectively, but future acquisitions may not perform as planned and could disrupt operations[51]. - The company plans to continue acquiring technologies to expedite time to market for new products[208]. - The company altered its IoT strategy in 2012 to focus on public safety, healthcare, and transportation management, enhancing its product offerings including the Pure Security Suite and PureTrack[135]. - The company currently holds 52 issued patents in the United States and 74 issued patents globally[222]. Government Contracts and Regulations - The company is subject to risks associated with government contracts, including budgetary restrictions and potential cancellation of contracts[59]. - Government regulations on radio frequency technology may delay product introductions in the U.S. and European markets[95]. - The sales cycle for government customers typically ranges from three to 24 months, while for commercial customers it ranges from one to 12 months, impacting revenue timing[76]. COVID-19 Impact - The COVID-19 pandemic has materially adversely affected the company's financial results and operations during the fiscal year ended December 31, 2021[98]. - The company is continuously monitoring operations to mitigate risks arising from the COVID-19 pandemic[103]. Shareholder and Corporate Governance - The company has a significant shareholder, Sigma Wave Ltd., owning approximately 16.1% of outstanding shares, which may influence corporate decisions[106]. - SuperCom Ltd. operates under Israeli law, which may differ from U.S. corporate governance standards, affecting shareholder rights[117][118]. Employee and Operational Challenges - The company faces high competition for qualified technical personnel, which may disrupt its operations[92]. - The company relies on third-party representatives, resellers, and distributors for marketing and distribution, which could result in delays and impact sales revenues[61]. Acquisitions and Historical Context - SuperCom Ltd. was incorporated in Israel on July 4, 1988, and has undergone several reorganizations and acquisitions since its establishment[125][126]. - The company sold its entire equity interest in a U.S. subsidiary, InkSure Technologies, Inc., for approximately $6.6 million in 2002[127]. - The acquisition of Security Holding Corp. in 2007 was completed for approximately $4.34 million in ordinary shares and direct expenses of about $600,000[129]. - The company has made four acquisitions in 2016 to enhance capabilities in e-Gov, IoT, and Cyber Security segments[212]. Product Offerings and Innovations - The company offers a complete end-to-end in-house solution for credentialing and verifying individuals, utilizing the MAGNA™ platform for e-passports, national identity cards, and more[169]. - The IoT division features a hybrid IoT suite tailored for industries such as public safety and healthcare, enhancing resource utilization and real-time monitoring[175]. - The PureRF Suite offers a comprehensive asset management solution using active RFID technology, enabling precise identification and tracking of people and objects[177]. - The GPS offender tracking system includes the PureTrack smartphone device and supports various communication methods, enhancing monitoring capabilities[188].

Financial Data and Key Metrics Changes - The company achieved a 4% increase in revenue for the full year of 2021, marking the first growth since 2017 [34] - EBITDA decreased to $2.1 million in 2021 from $2.8 million in 2020, impacted by the completion of a maintenance contract with an African client [34] - Gross margins improved to 51% in 2021, up from 47% the previous year, primarily due to enhancements in the Services segment [35] - The company reported an operating loss of $6.7 million in 2021, compared to a loss of $3.7 million in 2020, largely due to one-time expenses [37] Business Line Data and Key Metrics Changes - The IoT division grew from $7.6 million to $8.9 million, indicating a shift from legacy identification business to public safety business [46] - E-Gov revenues declined from $1.9 million to $1.7 million, while cybersecurity revenues decreased from $2.2 million to $1.6 million [46] Market Data and Key Metrics Changes - The electronic monitoring market was valued at approximately $1.1 billion in 2020 and is estimated to reach $1.6 billion by 2025, with the U.S. and Europe constituting about 95% of these markets [18] - The company has seen an uplift in RFP bid activity in Europe, with over $200 million in expected project bid opportunities in the next 18 months [19] Company Strategy and Development Direction - The company is focusing on revolutionizing the public safety sector through proprietary electronic monitoring technology and data intelligence [12] - A strategic shift has been made away from legacy business towards recurrent revenues in developed countries, particularly in the IoT tracking business [23] - The company aims to enhance growth through strategic acquisitions and local support providers with strong reputations [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future despite the uncertainties posed by the global pandemic and geopolitical crises [9] - The company anticipates continued project wins and deployment as it executes its business plan [54] Other Important Information - The company raised $4.65 million in a registered direct offering in March 2022, providing additional liquidity to execute its business plan [32] - The company has won over $25 million worth of projects in California since acquiring LCA in 2016, indicating strong market presence [24] Q&A Session Summary Question: Can you tell us more about the contract closed in Croatia? - Management expressed excitement about winning Croatia's first nationwide electronic monitoring contract, competing against several vendors and scoring the highest [39][40] Question: Is the Finland contract live yet, and what are the delays? - Management clarified that they do not expect similar delays with Croatia as seen in Finland, where an appeal process caused delays [45] Question: What are the revenue figures for e-Gov and cybersecurity? - Management provided unaudited figures showing e-Gov revenues declined from $1.9 million to $1.7 million, and cybersecurity revenues decreased from $2.2 million to $1.6 million, while IoT grew from $7.6 million to $8.9 million [46]