Exhibit 99.1
Maris-Tech Ltd.
Condensed Financial Statements
As of and for the six months
ended June 30, 2023
(Unaudited)
Maris-Tech Ltd.
Condensed Financial Statements as of and for the six months ended June 30, 2023 (Unaudited)
Table of contents
F-1
Maris-Tech Ltd.
Condensed Balance Sheets
U.S. dollars
(Unaudited)
| June 30, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term deposits | ||||||||
| Trade receivables, net | ||||||||
| Other receivables | ||||||||
| Inventories | ||||||||
Total current assets | $ | $ | ||||||
| Non-current assets | ||||||||
| Restricted deposits | $ | $ | ||||||
| Property, plant and equipment, net | ||||||||
| Severance pay deposits | ||||||||
| Operating lease right-of-use assets | ||||||||
Total non-current assets | $ | $ | ||||||
| Total assets | $ | $ | ||||||
The accompanying notes are an integral part of the condensed interim financial statements.
F-2
Maris-Tech Ltd.
Condensed Balance Sheets
U.S. dollars
(Unaudited)
| June 30, 2023 | December 31, 2022 | |||||||
| Liabilities and equity | ||||||||
| Current liabilities | ||||||||
| Trade payables | $ | $ | ||||||
| Current maturities of long-term loans from related party | - | |||||||
| Other current liabilities | ||||||||
| Total current liabilities | $ | $ | ||||||
| Long-term liabilities | ||||||||
| Long-term loans from related party, net of current maturities | $ | $ | ||||||
| Non-current operating lease liabilities | ||||||||
| Accrued severance pay | ||||||||
| Total long-term liabilities | $ | $ | ||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies | ||||||||
| Equity | ||||||||
| Shareholders’ equity (capital deficiency) | ||||||||
| Ordinary shares, no par value per share: authorized | ||||||||
| Treasury stock | ( | ) | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
The accompanying notes are an integral part of the condensed financial statements.
F-3
Maris-Tech Ltd.
Condensed Statements of Operations
U.S. dollars
(Unaudited)
| Six months ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit (loss) | ( | ) | ||||||
| Operating expenses | ||||||||
| Research and development, net | ||||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Financial income, net | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| $ | ( | ) | $ | ( | ) | |||
| Weighted average number of ordinary shares used in computing loss per ordinary share | ||||||||
The accompanying notes are an integral part of the condensed financial statements.
F-4
Maris-Tech Ltd.
Condensed Statements of Changes in Shareholders’ Equity (Capital Deficiency)
U.S. dollars
(Unaudited)
| Number of Shares issued | Number of Preferred Shares issued | Treasury stock | Share capital | Additional paid in capital | Treasury stock | Accumulated deficit | Total shareholders’ capital deficiency | |||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | - | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Changes during the six months period ended June 30, 2023: | ||||||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||
| Repurchase of treasury stock | ( | ) | $ | ( | ) | ( | ) | |||||||||||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Balance at June 30, 2023 | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Balance at January 1, 2022 | $ | - | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Changes during the six months period ended June 30, 2022: | ||||||||||||||||||||||||||||||||
| Issuance of ordinary shares and warrants upon initial public offering (“IPO”), net of issuance costs | - | |||||||||||||||||||||||||||||||
| Conversion of preferred shares into ordinary shares | ( | ) | - | - | ||||||||||||||||||||||||||||
| Reclassification of warrants to purchase ordinary shares from liability to equity | - | - | - | |||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of the condensed interim financial statements.
F-5
Maris-Tech Ltd.
Condensed Statements of Cash Flows
U.S. dollars
(Unaudited)
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss from operations | $ | ( | ) | $ | ( | ) | ||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Financial income | ( | ) | ( | ) | ||||
| Share-based compensation | ||||||||
| Change in fair value of warrants | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase (decrease) in accrued severance pay | ( | ) | ||||||
| Decrease (increase) in trade receivables, net | ( | ) | ||||||
| Increase in other receivables | ( | ) | ( | ) | ||||
| Increase in inventories | ( | ) | ( | ) | ||||
| Increase (decrease) in trade payables | ( | ) | ||||||
| Increase (decrease) in other current liabilities | ( | ) | ||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from investing activities: | ||||||||
| Proceeds from (investment in) short-term deposits, net | $ | $ | ( | ) | ||||
| Investment in severance funds | ( | ) | ||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | $ | $ | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayment of short-term bank credit | $ | ( | ) | |||||
| Issuance of shares and warrants | ||||||||
| Issuance costs paid | ( | ) | ||||||
| Repayment of long-term bank loans | ( | ) | ||||||
| Repurchase of treasury stock | ( | ) | ||||||
| Repayment of loan from related party | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | $ | |||||
| Increase in cash, cash equivalents and restricted deposit | ||||||||
| Cash, cash equivalents and restricted deposit at the beginning of the year | ||||||||
| Cash, cash equivalents and restricted deposits at the end of the period | $ | $ | ||||||
The accompanying notes are an integral part of the condensed interim financial statements.
F-6
Maris-Tech Ltd.
Condensed Statements of Cash Flows
U.S. dollars
(Unaudited)
| Six Months Ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Cash paid during the period for: | ||||||||
| Interest received | $ | |||||||
| Interest paid | $ | $ | ||||||
| Supplemental disclosures of non-cash flow information | ||||||||
| Reclassification of warrants to purchase ordinary shares from liability to equity | $ | |||||||
The below table reconciles cash, cash equivalents and restricted deposits as reported in the consolidated balance sheets to the total of the same amounts shown in the consolidated statements of cash flows:
| Six months ended | ||||||||
| June 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted deposits | ||||||||
| Total | $ | $ | ||||||
The accompanying notes are an integral part of the condensed interim financial statements.
F-7
Maris-Tech Ltd.
Notes to Condensed Interim Financial Statements
U.S. dollars
(Unaudited)
Note 1 - General
| A. | Introduction |
Maris-Tech Ltd. (the “Company”) was incorporated in 2008 in Israel. The Company develops, designs and manufactures high-end digital video and audio products and solutions for the professional as well as the civilian and home security markets, which can be sold off the shelf or fully customized to meet customers’ requirements.
On February 4, 2022, the Company closed an initial public
offering (“IPO”). In connection with the IPO, the Company issued and sold
The Company operates in Israel and sells to customers in other countries, including the United States, Australia, United Kingdom and Switzerland.
| B. | Basis of Presentation |
The accompanying unaudited condensed financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed interim financial statements should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2022. The condensed balance sheet as of December 31, 2022 is derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP.
In the opinion of management, all adjustments considered necessary for a fair statement, consisting of normal recurring adjustments, have been included. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.
Use of Estimates:
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the assets, liabilities, revenue, costs and expenses that are reported in the condensed interim financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates.
F-8
Maris-Tech Ltd.
Notes to Condensed Interim Financial Statements
U.S. dollars
(Unaudited)
Note 1 - General (Continued)
| C. | Significant Accounting Policies |
Except as described in Note 1D below, these interim unaudited condensed financial statements have been prepared according to the same accounting policies as those discussed in the Company’s audited financial statements and related notes for the year ended December 31, 2022.
| D. | Recently Adopted Accounting Pronouncements |
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Updates (ASU) 2016-13 “Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for the fiscal year beginning on January 1, 2023, including interim periods within that year. The adoption of this guidance did not have a material impact on the Company’s financial statements.
| E. | Liquidity and Capital Resources |
The Company has experienced net losses and negative
cash flows from operations since its inception and has relied on its ability to fund its operations primarily through proceeds from sales
of Ordinary Shares and warrants of the Company, loans from banks and long-term loans from shareholders. As of June 30, 2023 and December 31,
2022, the Company had working capital of $
On February 4, 2022, in connection with the IPO (including
the partial exercise of the over-allotment and exercise of pre-funded warrants issued and sold in the IPO), the Company issued and sold
Based on management’s projections of the business results for the next twelve months, management concluded that the Company has sufficient liquidity to satisfy its obligations over the next twelve months from September 29, 2023, the date of issuance of these financial statements.
Note 2 - Commitments and Contingencies
Liens
The Company’s long-term restricted deposits in the amount of
$
In June 2023, the Company received grant approval
in the amount of NIS
F-9
Maris-Tech Ltd.
Notes to Condensed Interim Financial Statements
U.S. dollars
(Unaudited)
Note 2 - Commitments and Contingencies (Continued)
Upon sales of products that were developed under the development project,
the Company will be obliged to pay royalties to the IIA at a rate of
Note 3 - Revenues
Disaggregation of revenue
| Six months ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Sales of products | $ | $ | ||||||
| Non-recurring engineering and proof of concept contracts | ||||||||
| $ | $ | |||||||
Note 4 - Net loss per Share
| Six months ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Numerator: | ||||||||
| Net loss | $ | $ | ||||||
| Denominator: | ||||||||
| $ | $ | |||||||
| * |
| Six months ended | ||||||||
| June 30, 2023 | June 30, 2022 | |||||||
| Options to purchase Ordinary Shares | ||||||||
| Warrants | ||||||||
| Total potentially dilutive securities | ||||||||
F-10
Maris-Tech Ltd.
Notes to Condensed Interim Financial Statements
U.S. dollars
(Unaudited)
Note 5 - Equity
Share capital
As of June
30,2023, the Company’s share capital was composed of
On June 1,
2022, the Company announced that its board of directors has authorized a share repurchase plan (the “Repurchase Plan”) allowing
the Company to invest up to $
The Repurchase Plan authorizes the Company’s management to repurchase Ordinary Shares, from time to time, in open market transactions, and/or in privately negotiated transactions or in any other legally permissible ways, depending on market conditions, share price, trading volume and other factors. Such repurchases will be made in accordance with applicable U.S. securities laws and regulations, under the U.S. Securities Exchange Act of 1934, as amended, and applicable Israeli law, and was subject to the approval of the Israeli court, which ensured that the Company has enough resources for the Repurchase Plan without affecting its other on-going obligations and commitments. The Repurchase Plan does not obligate the Company to repurchase any specific number of the Ordinary Shares and may be suspended or terminated at any time at management’s discretion.
On March 31, 2023, the Company completed the Repurchase
Plan. The Company repurchased
Note 6 - Share Based Compensation
On May 15, 2023, the compensation committee of the board of directors
of the Company, approved and recommended that the Company’s shareholders to approve, the repricing of the exercise price of the
existing options to purchase Ordinary Shares of the Company of certain of the Company’s officers, directors and service providers,
who currently provide services to the Company, from $
Note 7 - Related Party Transactions
On March 2, 2023, the Company entered into an amendment (the “Amendment”) to the loan facility agreement (as amended on June 30, 2021, the “Loan Facility Agreement”) with Israel Bar, the Company’s Chief Executive Officer, director and largest shareholder, and Joseph Gottlieb, another director and the Company’s second largest shareholder, pursuant to which the Company (i) amended the repayment terms set in the Loan Facility Agreement to provide that the amounts outstanding under the Loan Facility Agreement shall be due and payable in 24 equal monthly payments, commencing on February 4, 2024, subject to availability of free cash (as defined in the Amendment) of the Company, and (ii) clarified that the total amount due to Mr. Gottlieb under the Loan Agreement is NIS
Note 8 - Subsequent event
On July 31, 2023, the Company entered into a service agreement (the
“Service Agreement”) with Parazero Technologies Ltd. (“Parazero”), pursuant to which the Company will provide to Parazero
certain business development services (the “Services”). In consideration for the Services provided by the Company, Parazero
shall pay the Company $
In addition, in July 2023, the Company has purchased
The Company determined that the Service Agreement and the purchase of shares is a related party transaction, as the chairman of the board of directors of the Company also serves as the Chairman of the board of directors of Parazero. The Company analyzed the terms of the Service Agreement and concluded that the terms represent a transaction conducted at arm's length.
F-11