Exhibit 99.1
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2023
IN U.S. DOLLARS
UNAUDITED
INDEX
- - - - - - - - - -
F-1
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, 2023 | December 31, 2022 | |||||||
Unaudited | Audited | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted bank deposits | ||||||||
Trade receivables (net of allowance for doubtful accounts of $ | ||||||||
Other accounts receivable and prepaid expenses | ||||||||
Inventories | ||||||||
Total current assets | ||||||||
NON-CURRENT ASSETS: | ||||||||
Long-term assets | ||||||||
Property and equipment, net | ||||||||
Operating lease right-of-use assets, net | ||||||||
Intangible assets, net | ||||||||
Goodwill | ||||||||
Total non-current assets | ||||||||
Total assets | $ | $ |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-2
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)
June 30, 2023 | December 31, 2022 | |||||||
Unaudited | Audited | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Current maturities of non-current loans | $ | $ | ||||||
Operating lease liabilities, current | ||||||||
Trade payables | ||||||||
Employees and payroll accruals | ||||||||
Deferred revenues | ||||||||
Advances net of inventory in progress | ||||||||
Accrued expenses and other liabilities | ||||||||
Total current liabilities | ||||||||
NON-CURRENT LIABILITIES: | ||||||||
Loans, net of current maturities | ||||||||
Operating lease liabilities, non-current | ||||||||
Deferred revenues | ||||||||
Accrued severance pay | ||||||||
Total non-current liabilities | ||||||||
COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Share capital | ||||||||
Ordinary shares: Authorized; | ||||||||
Additional paid-in capital | ||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Accumulated deficit | ( | ) | ( | ) | ||||
Total equity | ||||||||
Total liabilities and shareholders’ equity | $ | $ |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-3
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)
Six months period ended June 30, | ||||||||
2023 | 2022 | |||||||
Unaudited | Unaudited | |||||||
Revenues | $ | $ | ||||||
Cost of revenues | ||||||||
Gross profit | $ | $ | ||||||
Operating costs and expenses: | ||||||||
Research and development | ||||||||
Sales and marketing | ||||||||
General and administrative | ||||||||
Total operating costs and expenses | ||||||||
Operating income | ||||||||
Financial expenses, net | ( | ) | ( | ) | ||||
Income before taxes on income | ||||||||
Taxes on income | ||||||||
Net income | $ | $ | ||||||
$ | $ | |||||||
Weighted average number of shares used in computing net income per share: | ||||||||
Basic | ||||||||
Diluted |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-4
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
U.S. dollars in thousands, except per share data
Six months period ended June 30, | ||||||||
2023 | 2022 | |||||||
Unaudited | Unaudited | |||||||
Net income | $ | $ | ||||||
Cash flow hedging instruments: | ||||||||
Change in unrealized gains and losses | ||||||||
Gain in respect of derivative instruments designated for cash flow hedge, net of taxes | ||||||||
Other comprehensive gain | ||||||||
Comprehensive income | $ | $ |
The accompanying notes are an integral part of the consolidated financial statements.
F-5
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
U.S. dollars in thousands (except share data)
Ordinary shares | Share capital and additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit | Total shareholders’ equity | ||||||||||||||||
Balance as of January 1, 2022 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
Issuance of ordinary shares and warrants, net | ||||||||||||||||||||
Exercise of options into ordinary shares | ||||||||||||||||||||
Share-based compensation expense | - | |||||||||||||||||||
Net income | - | |||||||||||||||||||
Balance as of June 30, 2022 (unaudited) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
Balance as of January 1, 2023 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
Issuance of ordinary shares and warrants, net | - | |||||||||||||||||||
Exercise of options into ordinary shares | ||||||||||||||||||||
Share-based compensation expense | - | |||||||||||||||||||
Net income | - | |||||||||||||||||||
Balance as of June 30, 2023 (unaudited) | $ | $ | ( | ) | $ | ( | ) | $ |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-6
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months period ended June 30, | ||||||||
2023 | 2022 | |||||||
Unaudited | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | $ | ||||||
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | ||||||||
Interest and exchange rate of loans | ( | ) | ( | ) | ||||
Severance pay, net | ( | ) | ( | ) | ||||
Share-based compensation expenses | ||||||||
Increase in trade receivables, net | ( | ) | ( | ) | ||||
Decrease (Increase) in other accounts receivable and other long term assets | ( | ) | ||||||
Increase in inventories | ( | ) | ( | ) | ||||
Increase (decrease) in trade payables | ( | ) | ||||||
Decrease in operating lease liabilities | ( | ) | ( | ) | ||||
Decrease (Increase) in employees and payroll accruals, deferred revenues, accrued expenses and other liabilities | ( | ) | ||||||
Net cash provided by (used in) operating activities | $ | $ | ( | ) | ||||
Cash flows to investing activities: | ||||||||
Purchase of property and equipment | ( | ) | ( | ) | ||||
Acquisition of assets (b) | ( | ) | ( | ) | ||||
Net cash used in investing activities | $ | ( | ) | $ | ( | ) |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-7
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Six months period ended June 30, | ||||||||
2023 | 2022 | |||||||
Unaudited | ||||||||
Cash flows from financing activities: | ||||||||
Proceeds received from issuance units that consist of ordinary shares and warrants, net | - | |||||||
Proceeds received from issuance of shares upon options exercised, net | - | |||||||
Proceeds received from loans | - | |||||||
Repayment of loans | ( | ) | ( | ) | ||||
Net cash provided by (used in) financing activities | $ | ( | ) | $ | ||||
Change in cash and cash equivalents, and restricted cash | ( | ) | ||||||
Cash, cash equivalents and restricted cash at the beginning of the period | ||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | $ | ||||||
Supplementary cash flow activities: | ||||||||
(a) Cash paid during the period for: | ||||||||
Interest | $ | $ |
(b) Net cash used to pay for the acquisition of assets (see Note 5):
April 02, 2023 | ||||
Suppliers relationship | ||||
Accrued expenses | ( | ) | ||
Amount of cash paid |
The accompanying notes are an integral part of the condensed interim consolidated financial statements.
F-8
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1:– | GENERAL |
A. | B.O.S. Better Online Solutions Ltd. (“BOS” or the “Company”) is an Israeli corporation. The Company’s shares are listed on NASDAQ under the ticker BOSC. |
B. | As of June 30, 2023, the Company has |
C. | The Company’s wholly owned subsidiaries include: |
1. | BOS-Dimex Ltd., (“BOS-Dimex”), is an Israeli company that comprises the RFID segment. BOS-Dimex provides comprehensive turn-key solutions for Automatic Identification and Data Collection (AIDC), combining a mobile infrastructure with software applications of manufacturers that we represent. BOS-Dimex also offers on-site inventory count services in the fields of apparel, food, convenience and pharma as well as asset tagging and counting services for corporate and governmental entities. |
2. | BOS-Odem Ltd. (“BOS-Odem”), an Israeli company, is a distributor of electronic components to customers worldwide, mainly in the aerospace and defense industries. BOS-Odem is also a supply chain service provider for aviation customers that prefer to consolidate their component acquisitions through a supplier that is able to provide a comprehensive solution to their components-supply needs. BOS-Odem is part of the Supply Chain Solutions segment; and |
3. | Ruby-Tech Inc., a New York corporation, is a wholly owned subsidiary of BOS-Odem and a part of the Supply Chain Solutions segment. |
F-9
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:– | SIGNIFICANT ACCOUNTING POLICIES |
The significant accounting policies applied in the financial statements of the Company as of December 31, 2022, were applied consistently in these financial statements.
A. | Use of estimates in the preparation of financial statements |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these consolidated financial statements, the most significant estimates and assumptions include (i) net realizable value of the inventory, (ii) impairment analysis of goodwill and intangible assets, (iii) allowance for doubtful accounts; and (vi) revenue recognition.
B. | Income per share |
The Company computes net income per share in accordance with ASC 260, “Earnings per share”. Basic income per share is computed by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period, net of the weighted average number of treasury shares (if any).
Diluted income per ordinary share is computed similar to basic income per share, except that the denominator is increased to include the number of additional potential ordinary shares that would have been outstanding if the potential ordinary shares had been issued and if the additional ordinary shares were dilutive. Potential ordinary shares are excluded from the computation for a period in which a net income is reported or if their effect is anti-dilutive.
An amount of
C. | Reclassified amounts |
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications did not have material effect on the reported results of operations, shareholder’s equity or cash flows.
D. | Recently issued accounting pronouncements |
There are currently no accounting standards that have been issued but not yet adopted that we believe will have a significant impact on our consolidated financial position, results of operations or cash flows.
F-10
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 3:– | UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS |
These accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position as of June 30, 2023 have been included. Operating results for the six-month period ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ended December 31, 2023, or any other interim period in the future.
The consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements.
The unaudited interim financial statements should be read in conjunction with the Company’s annual financial statements and accompanying notes as of December 31, 2022 included in the Company’s Annual Report on Form 20-F, filed with the Securities Exchange Commission on March 30, 2023.
NOTE 4:- | INVENTORIES |
Composition:
June 30, 2023 | December 31, 2022 | |||||||
Unaudited | Audited | |||||||
Raw materials | $ | $ | ||||||
Inventory in progress | ||||||||
Finished goods | ||||||||
Net – advances from customers | ( | ) | ( | ) | ||||
$ | $ |
F-11
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 5:– | INTANGIBLE ASSETS, NET |
A. Composition:
June
30, | December 31, 2022 | Weighted average amortization period | ||||||||||
Unaudited | Audited | |||||||||||
Cost: | ||||||||||||
Customer relationship | ||||||||||||
Suppliers relationship* | ||||||||||||
Non-competition | ||||||||||||
Accumulated amortization and impairments: | ||||||||||||
Customer relationship | ||||||||||||
Suppliers relationship | ||||||||||||
Non-competition | ||||||||||||
Amortized cost | $ | $ |
B. | Amortization expenses amounting to $ |
* |
On April 2, 2023, Proteus sold to the Company
its share in the joint activity in consideration of $
Pursuant to the sale agreement, Proteus will gradually phase out its marketing and sale of the products until the end of 2023.
On May 31, 2023, the Company entered into an agreement
with Microwave Ltd. for the purchase of its distribution rights for certain products, in consideration of $
F-12
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 6:– | LEASES |
We have entered into several non-cancellable operating lease agreements for our offices and vehicles. Our leases have original lease periods expiring between 2023 and 2034. Payments due under such lease contracts include primarily fix payments. We assume renewals in our determination of the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Six Months Ended | ||||
June 30, 2023 | ||||
(unaudited) | ||||
Operating lease cost: | ||||
Vehicles | ||||
Facilities rent | ||||
Remaining Lease Term | ||||
Vehicles | ||||
Facilities rent | ||||
Weighted Average Discount Rate | ||||
Vehicles | % | |||
Facilities rent | % |
June 30, 2023 | ||||
(unaudited) | ||||
Period: | ||||
The remainder of 2023 | ||||
2024 | ||||
2025 | ||||
2026 | ||||
2027 | ||||
2028-2034 | ||||
Total operating lease payments | ||||
Less: imputed interest | ||||
Present value of lease liabilities |
F-13
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 7:– | SEGMENTS AND GEOGRAPHICAL INFORMATION |
Commencing January 1, 2020 the Company
presents its business operations in
The Company’s management makes financial decisions and allocates resources, based on the information it receives from its internal management system. The Company allocates resources and assesses performance for each operating segment using information about revenues and gross profit.
a. |
RFID | Supply Chain Solutions | Intelligent Robotics | Intercompany | Consolidated | ||||||||||||||||
Six months ended June 30, 2023: | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Gross profit | $ | $ | $ | $ | $ | |||||||||||||||
Allocated operating expenses | $ | $ | $ | $ | $ | |||||||||||||||
Acquisition expenses | $ | $ | ||||||||||||||||||
Unallocated operating expenses | $ | |||||||||||||||||||
Operating Income (loss) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
Financial expenses | $ | ( | ) | |||||||||||||||||
Net Income before tax | $ | |||||||||||||||||||
Tax on income | $ | |||||||||||||||||||
Net Income | $ |
F-14
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 7:– | SEGMENTS AND GEOGRAPHICAL INFORMATION – Cont. |
RFID | Supply | Intelligent Robotics | Intercompany | Consolidated | ||||||||||||||||
Six months ended June 30, 2022: | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | |||||||||||||||
Gross profit | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
Allocated operating expenses | $ | $ | $ | $ | $ | |||||||||||||||
Acquisition expenses | $ | $ | ||||||||||||||||||
Unallocated operating expenses | $ | |||||||||||||||||||
Operating Income (loss) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
Financial expenses | $ | ( | ) | |||||||||||||||||
Net Income before tax | $ | |||||||||||||||||||
Tax on income | $ | |||||||||||||||||||
Net Income | $ |
b. |
June 30, | ||||||||
2023 | 2022 | |||||||
Unaudited | ||||||||
Israel | $ | $ | ||||||
Far East | ||||||||
India | ||||||||
Europe | ||||||||
United States | ||||||||
Others | ||||||||
$ | $ |
F-15
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except for per share prices)
NOTE 8:– | SHAREHOLDERS’ EQUITY |
a. | In June 2023, a total of |
b. | On May 2, 2022, the Company entered into a definitive agreement with several investors for the sale of
|
c. | In April 2022, a total of |
NOTE 9:– | SUBSEQUENT EVENTS |
In July 2023, a total of
F-16