Bos Better Online Solutions Ltd 6-K, filed Sep 29, 2022
Bos Better Online Solutions Ltd (BOSC)
About this 6-K
Bos Better Online Solutions Ltd filed this 6-K on September 29, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d -16
Under the Securities Exchange Act of 1934
For the Month of September
Commission file number
(Translation of Registrant’s Name into English)
20 Freiman Street, Rishon LeZion, 7535825, Israel
(Address of principal executive office)
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 ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___________
B.O.S. Better Online Solutions Ltd.
This Form 6-K, including the exhibits, is hereby incorporated by reference into all effective registration statements, filed by us under the Securities Act of 1933, as amended, to the extent not superseded by documents or reports subsequently filed or furnished.
Attached hereto are the following exhibits:
1
SIGNATURE
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.
| B.O.S. Better Online Solutions Ltd. | ||
| (Registrant) | ||
| By: | /s/ Moshe Zeltzer | |
| Moshe Zeltzer | ||
| Chief Financial Officer | ||
Dated: September 29, 2022
2
EXHIBIT INDEX
3
Exhibit 99.1
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND IT’S SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
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, 2022 | December 31, 2021 | |||||||
| 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, 2022 | December 31, 2021 | |||||||
| 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, | ||||||||
| 2022 | 2021 | |||||||
| 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, | ||||||||
| 2022 | 2021 | |||||||
| 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, 2021 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| Issuance of ordinary shares and warrants, net | ||||||||||||||||||||
| Exercise of options into ordinary shares | ||||||||||||||||||||
| Share-based compensation expense | - | |||||||||||||||||||
| Net income | - | |||||||||||||||||||
| Balance as of June 30, 2021 (unaudited) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
| 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) | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
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, | ||||||||
| 2022 | 2021 | |||||||
| 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 | ( | ) | ||||||
| Decrease (Increase) in inventories | ( | ) | ||||||
| Increase (decrease) in trade payables | ( | ) | ||||||
| Decrease in operating lease liabilities | ( | ) | ( | ) | ||||
| Decrease in employees and payroll accruals, deferred revenues, accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Net cash 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, | ||||||||
| 2022 | 2021 | |||||||
| 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 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):
| March 09, 2022 | ||||
| Goodwill | ||||
| Customer relationship | ||||
| Non-competition | ||||
| * | ||||
| * |
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, 2022, the Company has three operating segments that include Intelligent Robotics, RFID and Supply Chain Solutions. |
| 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. |
| D. | On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The outbreak has reached all of the regions in which we do business, and governmental authorities around the world have implemented numerous measures attempting to contain and mitigate the effects of the virus, including travel bans and restrictions, border closings, quarantines, shelter-in-place orders, shutdowns, limitations or closures of non-essential businesses, and social distancing requirements. | |
| The global spread of COVID-19 and actions taken in response have caused and may continue to cause disruptions and/or delays in our supply chain, shipments, and caused significant economic and business disruption to our customers and vendors. | ||
| The extent of the impact of COVID-19 on our business and results of operations will depend on future developments, which are highly uncertain, including the duration and severity of the outbreak, the effects of subsequent waves of COVID-19, the ability to maintain our supply chain and restrictions on our business and personnel that may be imposed by governmental rules and regulations implemented to contain or treat COVID-19. | ||
Management is monitoring and assessing the impact of the COVID-19 pandemic daily, including recommendations and orders issued by government and public health authorities. |
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, 2021, 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 unaudited condensed 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, 2022 have been included. Operating results for the six-month period ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022, or any other interim period in the future.
The consolidated balance sheet at December 31, 2021 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, 2021 included in the Company’s Annual Report on Form 20-F, filed with the Securities Exchange Commission on March 31, 2022.
| NOTE 4:- | INVENTORIES |
Composition:
June 30, 2022 | December 31, 2021 | |||||||
| 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:- | GOODWILL AND INTANGIBLE ASSETS, NET |
A. Composition:
June 30, 2022 | December 31, 2021 | Weighted average amortization period | ||||||||||
| Unaudited | Audited | |||||||||||
| Cost: | ||||||||||||
| Brand name | ||||||||||||
| Customer list | ||||||||||||
| Software | ||||||||||||
| Customer relationship | ||||||||||||
| Non-competition | - | |||||||||||
| Backlog | ||||||||||||
| Accumulated amortization and impairments: | ||||||||||||
| Brand name | ||||||||||||
| Customer list | ||||||||||||
| Software | ||||||||||||
| Customer relationship | ||||||||||||
| Non-competition | - | |||||||||||
| Backlog | ||||||||||||
| Amortized cost | $ | $ | ||||||||||
| B. | Amortization expenses amounting to $ |
| C. | The changes in the carrying amount of goodwill for the period ended June 30, 2022 are as follows: |
| Goodwill | ||||
| Balance as of December 31,2021 | ||||
| Changes during six months ended June 30, 2022 : | ||||
| Recognition of goodwill | ||||
| Balance as of June 30, 2022 | $ | |||
On March 09, 2022, the Company’s RFID division acquired the assets of Dagesh Ltd., which provides inventory counting services in Israel, mainly for retail stores.
In consideration for the acquisition,
BOS shall pay NIS
F-12
B.O.S. BETTER ONLINE SOLUTIONS LTD.
AND ITS SUBSIDIARIES
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
In addition, BOS shall pay to Dagesh, by March 2023:
An earn-out payment of
The Company estimates the additional amounts
detailed above to be approximately $
As part of the purchase
price allocation for the acquisition, the Company recorded goodwill in the amount of $
The acquired business operations was determined to be included in the RFID segment.
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 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 2022 and 2026. 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.
The components of lease costs, lease term and discount rate are as follows:
| Six Months Ended | ||||
| June 30, 2022 | ||||
| (unaudited) | ||||
| Operating lease cost: | ||||
| Vehicles | ||||
| Facilities rent | ||||
| Remaining Lease Term | ||||
| Vehicles | ||||
| Facilities rent | ||||
| Weighted Average Discount Rate | ||||
| Vehicles | % | |||
| Facilities rent | % | |||
The following is a schedule, by years, of maturities of operating lease liabilities as of June 30, 2022:
| June 30, 2022 | ||||
| (unaudited) | ||||
| Period: | ||||
| The remainder of 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| Total operating lease payments | ||||
| Less: imputed interest | ||||
| Present value of lease liabilities | ||||
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 |
Until December 31, 2019, the Company presented two reportable segments consisting of the Intelligent Robotics and RFID Division segment and the Supply Chain Solutions segment. Commencing January 1, 2020 the Company decided to review its business operations in three reportable segments, consisting of the RFID segment, Supply Chain Solutions segment and the Intelligent Robotics segment. Previous presentation was adjusted to conform to the current presentation.
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. The Company applies ASC 280, Segment Reporting.
| a. | Information about the operating segments for the six months ended June 30, 2022 and 2021 is as follows: |
| RFID | Supply Chain Solutions | 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 | $ | |||||||||||||||||||
F-15
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 Chain Solutions | Intelligent Robotics | Intercompany | Consolidated | ||||||||||||||||
Six months ended June 30, 2021: | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
| Gross profit | $ | $ | $ | $ | $ | |||||||||||||||
| Allocated operating expenses | $ | $ | $ | $ | $ | |||||||||||||||
| Unallocated operating expenses | $ | |||||||||||||||||||
| Income (loss) from operations | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
| Financial expenses | $ | ( | ) | |||||||||||||||||
| Net Income before tax | $ | |||||||||||||||||||
| Tax on income | $ | ( | ) | |||||||||||||||||
| Net Income | $ | |||||||||||||||||||
| b. | The following presents total revenues for the six months ended June 30, 2022 and 2021 based on the location of customers: |
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Unaudited | ||||||||
| Israel | $ | $ | ||||||
| Far East | ||||||||
| India | ||||||||
| Europe | ||||||||
| United States | ||||||||
| Others | ||||||||
| $ | $ | |||||||
F-16
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 April 2022, a total of |
| b. | On May 2, 2022, the Company entered into a definitive agreement with several investors for the sale of |
| c. | In June 2021, a total of |
| d. | On March 31, 2021, the Company issued |
| e. |
| NOTE 9: | SUBSEQUENT EVENTS |
| a. | On May 9, 2022, |
F-17
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021
The following discussion and analysis of the results of BOS Better Online Solutions Ltd. (sometimes referred to herein as, “BOS”, the “Company”, “we”, “us” or “our’) should be read in conjunction with our interim condensed consolidated financial statements as of and for the six months ended June 30, 2022, appearing elsewhere in this Form 6-K, our audited consolidated financial statements and other financial information as of and for the year ended December 31, 2021 appearing in our Annual Report on Form 20-F for the year ended December 31, 2021 and Item 5—“Operating and Financial Review and Prospects” of that Annual Report.
Forward-Looking Statements
Statements in this Report on Form 6-K may constitute “forward-looking statements” within the meaning of the United States Federal securities laws that are based on our beliefs and assumptions as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate”, “believe”, “estimate”, “expect”, “plan”, “intend”, “should”, “predict”, “potential”, “opinion” or the negative of these terms or similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those described herein. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Factors that could cause or contribute to such differences include, but are not limited to, those set forth under “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2021, as well as those discussed elsewhere in that Annual Report and in our other filings with the Securities and Exchange Commission.
Overview
BOS is a global provider of Intelligent Robotics and Supply Chain solutions for enterprises, and manages its business in three reportable divisions: the Intelligent Robotics Division, the RFID Division and the Supply Chain Division.
Results of Operation
Revenues for the six months ended June 30, 2022 were $21.14 million, compared to $16.56 million in the six months ended June 30, 2021. The increase is mainly attributed to the Supply Chain division.
Gross profit for the six months ended June 30, 2022 amounted to $4.48 million (a gross margin of 21.1%), compared to $3.28 million (a gross margin of 19.8%) for the six months ended June 30, 2021.
Sales and marketing expenses for the six months ended June 30, 2022 were $2.38 million or 11.2% of revenues compared to $1.93 million or 11.6% of revenues in the six months ended June 30, 2021.
General and administrative expenses for the six months ended June 30, 2022 were $1 million, compared to $0.88 million in the six months ended June 30, 2021.
Operating income in the six months ended June 30, 2022 amounted to $1 million, compared to an operating income of $0.36 million in the six months ended June 30, 2021.
Financial expenses for the six months ended June 30, 2022 were $529,000, compared to $98,000 in the six months ended June 30, 2021. This increase in expenses is attributed to foreign exchange differences between the Israeli NIS and the US dollar.
Net income in the six months ended June 30, 2022 amounted to $472,000, compared to a net income of $264,000 in the six months ended June 30, 2021. On a per share basis, the basic and diluted net income per share in the six months ended June 30, 2022 was $0.09, compared to a $0.05 net loss per share in the six months ended June 30, 2021.
Liquidity and Capital Resources
As of June 30, 2022, we had $317,000 in long-term bank loans, and current maturities of $573,000. Cash and cash equivalents as of June 30, 2022 amounted to $1.1 million.
On May 2, 2022, the Company entered into a definitive agreement with several investors for the sale of 450,000 ordinary shares and 225,000 warrants that are exercisable into the same number of ordinary shares, for a total gross amount of $990,000 or $911,000 net of incremental and direct issuance expenses. The warrants have an exercise price of $2.2 per ordinary share and are exercisable over a five-year term.
The Company had a positive working capital of $9.4 million as of June 30, 2022, and it is the Company’s opinion that the current working capital is sufficient for the Company’s present requirements. Working capital requirements will vary from time-to-time and will depend on numerous factors, including but not limited to, the operating results, scope of sales, supplier and customer credit terms, and acquisition activities.
We have in-balance sheet financial instruments and off-balance sheet contingent commitments. Our in-balance sheet financial instruments consist of our assets and liabilities. As of June 30, 2022, our trade receivables’ and trade payables’ aging days were 85 and 80 days, respectively. The fair value of our financial instruments is similar to their book value. Our off-balance sheet contingent commitments consist of: (a) royalty commitments that are directly related to our future revenues, and (b) directors’ and officers’ indemnities, in excess of the proceeds received from liability insurance, which we obtain.
Cash Flows
Net cash used in operating activities in the six months ended June 30, 2022 was $331,000, compared to $498,000 in the six months ended June 30, 2021.
Net cash used in investing activities in the six months ended June 30, 2022 amounted to $1.05 million. Net cash used in investing activities in the six months ended June 30, 2021 amounted to $246,000. On March 9, 2022, the company’s RFID division acquired the assets of the Dagesh Ltd. which provides inventory counting services in Israel, mainly for retail stores. In consideration for the acquisition, BOS shall pay NIS 2.3 million (approximately $700,000) of which NIS 1.5 million were paid at the closing, NIS 700,000 were paid in April 2022, and NIS 100,000 shall be paid by March 2023.
On May 9, 2022, the Company entered into an agreement to purchase 546 square meters of offices, 495 square meters of warehouse space and nine parking spaces in Rishon Lezion. The purchased real estate is part of the facilities leased by BOS in Rishon Lezion. BOS shall pay for this acquisition NIS 6.5 million (approximately $1.9 million). On May 9, 2022, BOS paid an advance payment of $650,000.
Net cash provided by financing activities in the six months ended June 30, 2022 was $514,000, compared to $1.64 million in the six months ended June 30, 2021.
On May 2, 2022, the Company entered into a definitive agreement with several investors for the sale of 450,000 units, each consisting of one ordinary share and one half warrant to purchase an ordinary share, at a unit purchase price of $2.2. The warrants have an exercise price of $2.2 per ordinary share and are immediately exercisable into ordinary shares over a five-year term. The sale was made in a registered direct offering for a total gross amount of $990 or $911 net of incremental and direct issuance expenses.
On January 4, 2021, the Company entered into a definitive agreement with several institutional investors for the sale of 800,000 units, each consisting of one ordinary share and 0.9 of a warrant to purchase an ordinary share at a combined purchase price of $2.5. The warrants have an exercise price of $2.75 per share and are immediately exercisable into ordinary shares over a five-year term. The sale was made in a registered direct offering for a total gross amount of $2,000 or $1,841 net of incremental and direct issuance expenses.