Ladies and gentlemen, good morning, and welcome to SuperCom's First Quarter 2024 Financial Results and Corporate Update Conference Call. 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. Joining me from SuperCom's leadership team is Ordan Trabelsi, SuperCom's President and Chief Executive Officer. I'd like to remind you that during this call, SuperCom management may be making forward-looking statements, including statements that address SuperCom's expectations for future performance or operational results. Forward-looking statements involve risks, uncertainties and other factors that may cause SuperCom's actual results to differ materially from those statements. For more information about these risks, uncertainties and factors, please refer to the risk factors described in SuperCom's most recently filed periodic reports on Form 20-F and Form 6-K and SuperCom's press release that accompanies this call, particularly the cautionary statement in it. Today's conference call includes EBITDA, a non-GAAP financial measure that SuperCom believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, a comparable GAAP financial measure, please see the reconciliation table located in SuperCom's earnings press release that accompanies this call. Reconciliations for other non-GAAP financial measures and comparable GAAP financial measures are available there as well. The content of this call contains time-sensitive information that is accurate only as of today, May 15, 2024. Except as required by law, SuperCom disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the floor over to SuperCom's President and CEO, Ordan Trabelsi.

Thank you, operator. Good morning, everyone, and thank you for joining us today. Earlier this morning, we issued a press release with our financial results for the first quarter of 2024. You can find a copy of it in the Investor Relations section of our website at supercom.com. Today, I'll start my comments with a brief update on our recent business highlights, strategy, and Q1 results, followed by a Q&A session. SuperCom had a great start to the year with a strong first quarter. We achieved an 8-year record quarterly net income of $800,000, representing a $2.3 million improvement year-over-year. We're thrilled with this outstanding performance and look forward to maintaining this momentum in the coming quarters. During the quarter, we executed in advance on various projects in our portfolio, such as a $33 million national EM project in Romania. We utilized operating leverage and prior investments in our proprietary technology to achieve a significant EBITDA increase of 400% year-over-year to a level of $2 million EBITDA this quarter. For those new to SuperCom, our mission is to revolutionize the public safety sector worldwide with our proprietary electronic monitoring technology, data intelligence, and suite of complementary services. With over 35 years of experience since our founding in 1988, we've been a trusted partner to dozens of national governments worldwide, providing cutting-edge electronic and digital security solutions. Our strategic blueprint is straightforward yet powerful. Lead with innovative technology, develop superior solutions, expand our global presence, and deliver outstanding service. This strategy is backed by the following: our proprietary electronic monitoring technology, which scores highly in competitive government tenders and supports various programs such as house arrest, GPS monitoring, rehabilitation services, domestic violence prevention, and more. Since 2018, SuperCom has secured over 50 new multiyear government projects. Our strong growing reputation as a premium provider of electronic monitoring solutions and services enhances our market position with each new customer win and our strategic focus on the IoT tracking business in developed markets, where the opportunity is greatest, with the electronic market projected to reach $2.3 billion by 2028, the electronic monitoring market, the U.S. and Europe constitute about 95% of these markets. Altogether, these successes and opportunities have resulted in a growing project pipeline and substantial recurring revenue. Last year, we continued to amplify our technological leadership with significant R&D investments, leading to the launch of advanced solutions like PureProtect and PureOne. These offerings are already making headway in various markets, including the U.S., and are pivotal in SuperCom's expansion. PureProtect is a life-saving domestic violence monitoring solution. This solution provides improved protection to families suffering from domestic violence. This innovative solution addresses domestic violence issues and further enhances the company's portfolio of products and services. PureOne is an all-in-one GPS tracking ankle bracelet monitoring solution that integrates comprehensive monitoring capabilities into a single device. Like many of our products, it offers top-notch features, placing it above competition in most metrics such as battery life, weight, comfort, and more. So these 2 products, PureProtect and PureOne, have been significant innovations which have helped us redefine and disrupt competitors and segments in the industry. Our cloud-based software-enabled PureSecurity product line has been particularly effective in monitoring domestic violence offenders and managing real-time information as well. The real-time advantage is a game changer in the industry because it empowers authorities with actionable insights and timely interventions to mitigate potential risks and enhance public safety. These products have also been well received and have significantly expanded the company's addressable market. We've been very pleased with the reception and traction of our newest solutions and expect them to help facilitate the accelerated expansion of SuperCom into the U.S. market and further European countries. We fortified our operational infrastructure to support our growth and have revamped our sales strategy with a proactive outreach approach. Our sales team with deep industry expertise has been instrumental in achieving new wins and driving growth. Over the past months, we announced many new project wins in the U.S. and Europe. SuperCom has continued displacing incumbent vendors and achieved an over 65% win rate in Europe in competitive tenders over the recent years. Despite macroeconomic uncertainties and the ongoing Israel-Gaza war, SuperCom solutions are increasingly relevant. Factors like high recidivism rates and the escalating cost of incarceration make our solutions not only cost-effective but also essential for governments looking to enhance public safety and reduce costs. The company's PureSecurity technology solution has been designed to address this trend, offering an effective way for institutions to enforce home confinement, ease prison overcrowding, and lower costs significantly. For example, the total daily cost for monitoring an offender on home confinement or GPS monitoring is approximately $10 to $35 compared to the much higher cost of $100 to $140 at a correctional facility. Most importantly, home confinement has been shown to reduce recidivism, highlighting its effectiveness in helping the offenders improve their lives and communities. On top of these growth drivers, we have witnessed a surge in the adoption of victim protection solutions worldwide, which aligns perfectly with our strategic plan and the launch of our new product, PureProtect. In the European market, SuperCom expanded its business in over 10 countries and secured significant new contracts, which are typically awarded through a competitive tender process. Besides winning new projects, we continue to execute and receive ongoing orders from our partners. Just about 3 weeks ago, we announced the receipt of new orders valued at over $5 million from European governments. Thanks to our optimized and efficient production processes, over 50% of these orders have already been delivered. Last year, we secured a new national program with the Finnish government to deploy our domestic violence monitoring solution. The deployment of our PureSecurity suite consisting of PureProtect, PureTrack, PureTag, and PureMonitor demonstrates the versatility and effectiveness of our solutions and underscores our leadership in the electronic monitoring space. Our collaboration in Finland is a prime example of the confidence that clients have in SuperCom, as those who experience our services often choose to broaden their engagement with our diverse array of solutions. Notably, at the end of 2022, the company won the largest industry award for the year for a national electronic monitoring project in Romania, valued at $33 million, including up to 15,000 monitored offenders per month for up to 6 years. During 2023, we announced orders valued at over $10 million from Romania's Ministry of Interior, further extending our engagement in the country's national EM project. This large-scale project reinforces the strength of our PureSecurity suite and cements our position as a trusted partner for governments worldwide. We also launched our domestic violence solutions in other European regions and recently launched them in the U.S. Although SuperCom already does business in multiple U.S. states, we are actively focused on further expanding our presence in the U.S. Our wholly owned subsidiary, LCA located in California, is actively expanding the size and scope of existing programs, winning rebids with existing customers, and winning new programs with new customers. The company strategically prioritizes PureOne's expansion into new markets and geographies. It has received high praise during this introduction into various regions of the U.S. where PureOne has been successfully deployed and is actively utilized to monitor live offenders. Moreover, sales activities for PureOne have commenced in promising new markets outside Europe and North America. Our new strategic sales team and new wins have been the first step in executing the company's U.S. market expansion strategy and have already driven increased activity within existing customers and multiple new demos, resulting in the significant increase in the company's pipeline. Launching our PureOne solution in late 2023 was a significant milestone in our U.S. expansion strategy. As in '24, we've already announced 3 new project wins in North America to provide the solution. The first through LCA, we won a new project in California, valued up to $2 million to provide a comprehensive program focused on re-entry services for all adult inmates. The award is a result of winning the formal, competitive bid process. Moreover, LCA secured a new electronic monitoring contract in California with an established California services provider in the judicial sector. This contract is particularly notable for SuperCom's successful displacement of a long-term incumbent vendor. Finally, SuperCom won a new project in Canada with a renowned Canadian industry partner in the tracking solutions sector. This project expands the existing collaboration with this long-standing partner, transitioning from providing RF-based tracking technology to embracing new GPS technologies. As I mentioned earlier, introducing our PureOne solution was a game changer in securing these contracts and underscores our competitive edge and commitment to delivering innovative and superior technology solutions. By securing these contracts, we further reinforce our position as a market leader. We review our recent wins as indicators of our growing influence and expansion, potentially in North America and worldwide. As we mentioned in previous calls, we believe there's also an opportunity to enhance our U.S. growth through strategic acquisitions of local electronic monitoring service providers with a strong reputation and customer base in their local markets. We constantly monitor the market for potential acquisitions that could generate significant value by immediately expanding our market presence and providing vertical integration synergies. Our acquisition of LCA in 2016 for $3 million is a great example. The successful acquisition has provided a great strategic value to the company, through which we won over $35 million in new project wins generated in California alone. I'll now turn to the financials. During our previous conference call, I mentioned that we anticipated contributing to our financial results in the subsequent quarters as our ongoing projects matured. I am delighted to share we've substantially improved our financial and operating results. We've seen a gross profit margin increase by 123% to 55% from 25%. Moreover, we sustained positive EBITDA in each of the last 4 years, 2020 to 2023, and seen remarkable operating improvements as evidenced by a record net income of $800,000 this quarter along with $400,000 EBITDA growth year-over-year to $2 million. This is driven by the significant growth in our company's revenue in the past few years, targeted spending, and operating leverage. This quarter's profitability metrics demonstrate how we can seize the high-margin potential of our project portfolio through successful execution and progression in different stages of these projects. The following is a comparison between the financial results of the first quarter of 2024 and the first quarter of 2023. Gross profit increased by 139% to $3.8 million compared to $1.6 million, which was a direct outcome of the progress we made across our projects. Our margins typically enhance as projects mature. Typically, the initial project stages incur high expenses, while advanced stages yield higher gross margins causing fluctuations in our gross profit, depending on project composition and deployment stages. As the project pipeline matures, we expect an upward trend in gross margins based on the evolving project portfolio as we deploy additional bracelets in regions where we run existing projects on our infrastructure. The contribution margins from a traditional bracelet can be high, even as high as 70% or more. We decreased our R&D expenses by $90,000 while we continue to develop and launch new features and improve existing products, keeping us at the edge of innovation and technology leadership in our space. In addition, our sales and marketing expenses decreased by $50,000 while we increased our revenues year-over-year. Moreover, our general and administrative expenses increased by $300,000 to accommodate our management team expansion also in the U.S., which has already yielded results as evidenced by 3 new contracts we have won in the past months. The company's operating income improved by $1.8 million from $700,000 compared to an operating loss of $1.8 million before, resulting in a significant increase in our gross profit. EPS improved to positive $0.04 compared to negative EPS of $0.32 in the prior year period. The company's EBITDA improved by 400% to $2 million compared to $400,000 reflecting benefits from operating leverage associated with higher revenues, deployed new IoT projects, and continued progress on the phases in our ongoing projects. This achievement underscores our focus on sustained growth and profitability. Our net income improved by $2.3 million from a net loss of $1.5 million last quarter to a net profit of $800,000 this quarter. Our non-GAAP net profit improved by $1.6 million to $1.35 million profit compared to the $250,000 loss in the former year period. Positive non-GAAP EPS improved to $0.07 compared to negative non-GAAP EPS of $0.05. Our cash position is stable. We have a credit facility in place, and we focus on reducing our need for external cash as we continue to win and execute more new projects. Also, last month, we completed a successful close of a $2.9 million public offering to support the company's continued innovation and growth initiatives, a testament to the investment community's trust in our vision and strategic trajectory. In addition, the company had one-time expenses of $280,000, mainly pertaining to the legacy business and allowance of doubtful debt. We continue to invest in our sales and marketing as well as R&D to drive revenue growth and expand our global footprint and execute our business plan. In closing, I'd like to thank our global team for their hard work to achieve our company's record-setting performance this quarter. We have developed the right technology and products to help criminal justice systems clients overcome challenges and make better use of over $80 billion spent annually in the U.S. on operating rehabilitation centers and prisons. With research showing an approximate 75% recidivism rate in the U.S., there's significant room for improvement when effective programs and technology are deployed. We're excited about the growth we are experiencing and about the growing demand for our products. After several years during which we transitioned from a legacy business to the IoT tracking of offenders business, we're happy to show the shift to nice growth in revenue and profit. We believe that we're well positioned for continued growth and continued expansion by capitalizing on the many new opportunities before us. These are being driven by multiple factors, including our strong presence, and reputation in the U.S. and European markets, the countercyclical nature of the electronic monitoring industry, the growing public policy shift to monitoring instead of incarceration, and the growing adoption of domestic violence prevention solutions. We anticipate sustained growth by further expanding our market share in the U.S. and Europe. Our commitment to preserving our technological advancement as a robust growth foundation remains steadfast as we continue to invest in this area. With that, I'll turn the call over to the operator for questions.

Your first question for today is from Matthew Galinko with Maxim Group.

Could you start by elaborating on your gross margin? It seems to be one of the stronger quarters we've seen lately. Can you explain why this quarter specifically reached that mid-50% range, if my calculations are accurate? Additionally, how sustainable is this, considering your current growth cycle?

Great question. As you can see, there's a general trend of increasing our gross margins as we progress in our current projects. There are some fluctuations due to significant contributions from the Romania project, and as the project mix varies each quarter, it influences the gross margins associated with it. Generally, in the early stages of projects, there are substantial hardware installations and training, which require a lot of resources and involve lower margins. As we move to later stages, we focus more on manufacturing bracelets and providing software maintenance and support. Therefore, the later we are in a project, the higher the margins tend to be. While smaller new projects may not significantly impact margins, larger projects will have a greater effect and usually follow the trend of starting with lower margins and achieving higher ones as they progress.

Got it. And it sounds like your focus is on the North American market today, maybe because you have those products now available. But can you talk a little bit about kind of North America versus Europe for 2024, I guess, is there more to be had in the U.S. market today?

The U.S. market is approximately three to four times the size of the European market according to market research. We have been performing exceptionally well in Europe, achieving over a 65% win rate in recent years by bidding on national projects one by one. Even with a smaller sales team, we consistently win due to our strong technology. The U.S. market is more fragmented and requires a greater on-site presence, so we are expanding our team to meet that need. We have created the PureOne product, which is a comprehensive solution tailored to the expectations and needs of the U.S. market. This product is designed with optimized features such as battery life, lightweight design, and remote charging, allowing us to stand out when competing against established vendors. We see the U.S. market as a significant opportunity for us since we have not fully capitalized on it yet. While the potential exists, we are still in the early stages, and our pipeline is expanding. Currently, we are conducting several active live demonstrations and aim to continue growing this aspect of our business. Ultimately, this market could become as large as, or even larger than, the European market.

I have one final question before I rejoin the queue. I believe you mentioned that you have a win rate of over 65% in Europe, and you're beginning to make headway in the U.S. and North America with your new products. What has been the competitive reaction to your successes so far with this strategy? Are there companies attempting to catch up to you in terms of product offerings? Or do you feel that you still maintain a unique focus in the market that allows you to keep an advantage?

When discussing our response in terms of products, many of our competitors operate in a market with around 10 international players, which has significant entry barriers. Major companies like Google or Apple are unlikely to enter without an acquisition, as it takes years of experience to compete effectively. Some other players haven't updated their technology recently and rely on established relationships to maintain their contracts. The average market growth rate is around 7% to 13% per year, while we have been growing at a compound annual growth rate of about 70%. This means we are outpacing the market and our competitors significantly. Although some are attempting to enhance their technology, we have not encountered any threats from those who can match our level of progress and innovation. Our technology not only features advanced capabilities, but we are also continuously expanding these capabilities and adding new features at a rapid pace. With each project, we enhance our offerings based on developments made for one customer, which can then be applied to others. For instance, in Finland, we started with one program and subsequently added domestic violence initiatives, which we are replicating in Sweden with additional offerings. The advantage of our technology lies in its cloud-based nature, which allows us to apply new features to our leased bracelets. Once we develop a new capability, we can easily share it with both existing and new customers.

Your next question for today is from Dan Schetz, a private investor.

First of all, it was great to see positive net income and the gross margin expansion was fantastic. My question is about the repeated capital raises over the last couple of years that have diluted existing shareholders. I'm a long-time shareholder and a big fan of the company, but I'm hopeful that we have turned a corner now with some net profitability. I know we recently raised some money at a price higher than the stock was trading at. Are you planning on any additional capital raises? I'm hoping that we can keep that to a minimum, if so.

Thank you for your ongoing support of SuperCom and for your insightful questions. I served as the CEO in the U.S. before moving to Israel in 2021 to take on the global CEO role. During that time, we adjusted our strategy to prioritize growth after experiencing revenue declines for about five years. As a result, our revenues increased from $11.7 million in 2021 to $12.5 million, then to over $17 million, and last year we surpassed $25 million. This rapid growth required us to intensify our focus on expansion, which involved additional costs and a need for cash. However, it’s encouraging to note that our cash usage has decreased over the years, dropping from approximately $9 million in operating cash three years ago to around $4.5 million, and last year it ranged between $2 million and $3 million. As projects like the Romania initiative progress to later stages, they become more positive in cash flow, helping us manage our cash requirements. We recently raised capital to provide further support and a buffer against fluctuations. Presently, our operating cash situation is looking positive, with some periods even at breakeven or cash flow positive. Occasionally, we experience slight cash flow negativity when we need to pre-manufacture items for projects. However, these scenarios tend to balance out due to the numerous projects underway, which stabilize one another. Looking ahead, we anticipate our cash needs will lessen, even though larger projects may necessitate upfront cash investments, which could lead us to consider additional capital raises. We aim to keep these to a minimum, and as observed, our cash usage has been on a downward trend. After three years of growth, we're pleased that our operating cash demands have decreased, allowing us to rely more on our internal cash flow instead of outside funding.

I appreciate that commentary and the feedback. I just caution you to keep in mind the existing shareholders when that capital raise happens because we've suffered a significant amount of dilution over the last couple of years.

We are very aware of the situation, and hopefully, over time, the valuation will reflect the efforts we've made to grow the company throughout the years.

Your next question for today is from Mike Walters, a private investor.

Mr. Trabelsi, thank you for taking the time to provide us with another great quarterly update. I always value your quarterly earnings and conference calls. Congratulations to your team on achieving another quarter of record growth. As a long-term investor for four years now, I've been pleased with your methodical progress over time. I also appreciate the answers to the questions that were asked. The growth has had its ups and downs, and I appreciate your response. You also addressed one of my concerns, which is that whenever you need to tap into capital, you are investing in projects that could potentially benefit us as shareholders in the future, correct?

Can you repeat the last sentence? You broke out for a second.

Whenever your use of capital is aimed at potentially increasing shareholder value in the future?

Yes, of course. The management team, including myself, owns shares and is very focused on increasing their value. However, in the short term, we need to raise capital to achieve our long-term goals. We believe our current stock price does not reflect the company's true intrinsic value. We are trading at much lower multiples compared to the industry, even though we are growing ten times faster than the average in the industry. Over time, we expect the market value to align with the intrinsic value, and investors will come to recognize the company's valuations.

I appreciate that. It seems to me that you all have a strong and growing understanding of our fundamentals. Would you say that's probably correct?

We have a growing pulse, sorry?

Yes, yes, a great pulse on your fundamentals in that they are growing in the right direction.

Yes. As you can see from some of the improvements in profitability, we try to focus on fundamentals and also the underlying technology and the health of our projects. We're able to rebid these projects to win the rebids, as we said, because we have a great relationship with our customers and maintaining a great reputation helps us to win more projects in other places around the world.

That kind of leads into my next question. On June 29th last year, you guys issued a press release that you incorporated advanced AI capabilities to enhance your monitoring solutions?

Yes.

You have integrated advanced AI models to enhance your EM offerings by providing real-time data insights and improving decision-making. I was curious about this because you have been regularly announcing contracts over the past couple of years. Does the advancement in your AI capabilities strengthen with each contract? Does it make your onboarding process more efficient?

You're likely familiar with AI in general. The more data you have, the more useful it becomes. For us, we have begun designing the implementation for many of these construction modules. We possess a significant amount of data, not just from recent onboarding but accumulated over the years with tens of thousands of customers across different regions globally. This data can assist in tracking offenders, especially since one officer may monitor 50 to 100 offenders simultaneously, making it challenging to keep track of everything. When behaviors indicate emerging trends, we can often predict incidents before the officer even realizes it. These AI insights are valuable for learning and enhancing our processes. However, many of these initiatives are still in various design and implementation phases, presenting a substantial opportunity for additional value creation for our customers as we roll them out more efficiently and comprehensively. The labor-intensive monitoring tasks that require numerous clicks and shifts will benefit from these advancements, ultimately improving program efficiency, reducing costs, and saving officer time.

That's also what I was thinking. Your company employs over 100 people, and in one of your answers, you mentioned implementing a new sales team.

What did you say about employees, sorry?

Employees, I think you're over 100. Is that true?

Yes. Globally, we're over 100, yes, 120.

120, awesome, you're probably pretty proud of them and the progress...

Yes, we've had a great run in the last quarters. We're doing very well with the growth and profitability and winning new projects, and there’s a lot of work for a relatively small team, a lot of work and we're doing many of these things at the same time. So yes, we're very happy with our teams.

I'm pleased with your progress as well. I was a bit taken aback by the $5.7 million estimate. I thought that might pose a challenge because, in the past, estimates did not seem to reflect your actual progress. However, I felt this one pushed you a bit with the $5.7 million revenue, and I was glad to see that it reached $6.9 million. I'm truly proud of your ongoing growth, and I'm eager to continue investing with you for the long term.

Your next question is a follow-up from Matthew Galinko.

Two quick follow-ups for you. First, I guess the balance sheet question. I noticed your receivables were up in the first quarter compared to the end of '23. Just wanted to see, I guess, is there a meaningful difference in payment terms between U.S. and European EM clients? And I guess what moves the payment terms around?

Sometimes, the timing of orders at the end of the quarter affects cash flow. For instance, we might receive a $5 million order, start manufacturing and delivering, and recognize revenue before actually receiving the cash. Conversely, it's possible to receive cash right before the quarter ends, which can positively affect accounts receivable in the report. Some projects are paid upon delivery, while others follow consistent monthly payments based on leases. We have a variety of projects, but those that are more lease-like, particularly in the U.S., tend to be on a more consistent monthly basis. In contrast, the delivery projects, often seen in European national projects, involve clients purchasing and manufacturing the units.

Got it. Given how strong Romania has been for you over the last few quarters, I'm curious how you view the business excluding Romania. You have a lot of wins, but how do you manage the risk? How do you plan to fill any potential gaps if Romania slows down with the rest of your pipeline?

First of all, Romania is still running well, and they're ordering more and more. We'll see if the customer continues to maintain its positivity and satisfaction as you've seen with other customers in the world. There's always opportunities for growth programs and additional programs. Meanwhile, we're not just relying on Romania of course, we're bidding on other projects in Europe and in the U.S., we have active demos and a lot of those will come to add-on to Romania and also add on to the base of other projects that we have there. Romania is certainly a nice win. Rather than just being a nice win, which gives us nice revenue to profitability, it is also a good reference because you may remember in the past, there were some projects we can bid on because we didn't have references of a certain size. Here, you're looking at a 15,000 simultaneous units project with domestic violence. There aren't many of these in the world, and we've been implementing it successfully. When other projects of large size come out, we could bid and show that we've been doing this very nicely, and that puts us in a new area where we weren't if you look 3 or 4 years ago.

I guess as a follow-up to that, does your success at something Romania scale in Europe help as a reference for doing state-level projects in the U.S. or North America?

Yes, the closer you are geographically, the easier it is to succeed in Texas after working in California. Similarities arise when projects are within the same country. A $33 million project involving 50,000 units is significant no matter where it is, and it's our largest to date. We have progressed from starting with smaller projects in Lithuania worth $100,000 and $200,000 to larger ones in Canada at $1.8 million, then to $3 million and $4 million in Finland and Denmark, and $7 million in Sweden, culminating in the $33 million project in Romania. This growth certainly aids us. In the U.S., we are continuing to secure contracts at the county level while also exploring opportunities at the state level and potentially on the federal level. Our focus is on where we can achieve the highest return on investment for every dollar spent. Although some projects offer a nice return, the expected return can be lower due to uncertainty surrounding large projects we haven't yet fully engaged with. In Europe, we can bid with greater assurance as we have a good understanding of how outcomes will unfold and how competition ranks on these projects, thanks to our extensive experience. In the U.S., we are developing that same expertise, which we will leverage more effectively over time. We're still in the early phases in the U.S., and that's what makes it exciting; there is a significant opportunity there, and we are well-positioned to capitalize on it.

Your next question is from Eric Hamilton, a private investor.

I know you're concentrating on the prison market, but what about the migrant market? Are there any opportunities for you to solicit your products to countries that have migration problems?

Can you repeat that? Migration problems over the borders?

Yes, yes. Are the countries that have these issues interested in getting the bracelets or monitors from you to monitor the migrants coming into their countries?

Good question. It's something that we're looking into and considering further. We know that in the U.S., there's the ICE program, and they use similar technology to track people coming over the border; they call them detainees. They're coming over the border from Mexico, and they're being tracked for a period of time until they decide the status and if they're approved to enter fully. They have big programs with, I think, over 100,000 units. Other countries are considering and have considered not just now but also over the recent years various programs like that, and we've been looking into it, but we have not yet made that our biggest focus. Our biggest focus has been on the programs in the country for offender monitoring; that's where the complexity is the greatest. Since we have technological prowess, we're able to score higher; we even go straight to the largest projects with the highest complexities. But these are other ones that are complementary that could be added and it's something that over time, we'll probably look into further, even though we've already started looking.

Well, the technology that you've done for the prison systems, would the same technology be used for a migrant monitoring system?

The government can use technology in various ways, but the underlying technology remains consistent. Different policies lead to different rules and procedures, but the technological capabilities are unchanged. We offer bracelets that allow for tracking someone's location and have anti-tampering features, making them difficult to remove. There are numerous backend processes and data intelligence that analyze people's actions. We can offer significant flexibility and customization to our clients, each of whom has unique requirements. This is a simple adjustment rather than a complete overhaul, as the technology is already in place.

I have to think that this is an area that you should be investing in and trying to get some of these substantial contracts if the technology is the same for a migrant as it would be for an inmate. It just makes sense that you would be taking some personnel and trying to get yourself involved in this migrant problem because it's huge. I think it would be a good way of the governments monitoring these people that come into the countries.

First of all, you're right. Certainly, it is a good idea to look at complementary markets with similar technology, and that's what we've been doing consistently. That's how we enter domestic violence tracking and also the inmate tracking over the years. I appreciate the thoughts and the focus on this. The question for us, when it comes to new projects and new types of programs, is how ready the customers are to actually deploy these programs. A lot of times, especially in countries outside the U.S. and Europe, we see them trying to enter the normal electronic monitoring market, let's say, in South America, and they seem very excited and you spend a lot of time and effort, and then at the end, they're not ready for one reason or another to actually deploy something like this. With migrants, like the other ones, we need to understand how likely the programs are actually deployed before we invest a significant amount of time and adjustments for them. But we do interact with local partners in any country we work on these projects, and they give us continuous updates also for stuff like this. We're not crossing it off; it's not something we're emphasizing and it's something that we continuously look at. But we assess it versus the likelihood of other projects; like in Romania, they did a new project for electronic monitoring, a brand new project for them; they were very serious about it, and you see it also by how quickly they deployed it with us and their continued growth of the project.

Okay. Well, let's hope that you can develop more products so you can enhance the value of the company because the issue of just diluting the value of the shareholders by providing more shares or doing more outstanding shares is not a winning formula. You need to either bid higher on the projects to cover your overhead and to have money for R&D. It's great to get projects, but if you are losing money on contracts, that's no win for anybody.

We're definitely making money on our contracts and succeeding with our technology rather than competing on price like some companies do. However, these projects can be large and require capital, which sometimes necessitates raising funds. Our stock price was higher in the past, and current valuations don't always reflect the company's true worth. As our intrinsic value becomes clearer, it makes raising capital easier with less dilution. While we don't dominate the market, it has been somewhat challenging regarding valuations in the past few years. We're continuing to grow and introduce new products, and we're pleased with our progress, even though we recognize the issue of dilution and strive to minimize it as much as possible.

Can you get your clients that are interested in giving you an order to upfront you with some of the initial capital cost to process their order? Can they do some upfront loading of giving you some money when they give you a purchase order?

That's a great question. The governments usually are the ones that decide the structure of the payment terms, but these are competitive processes. There are 5, 6, or 7 players competing, and the government says these are the payment terms that I want. It's hard to come and say, no, with us, you're going to pay upfront and with everyone else; they're going to pay over time. Sometimes, we have the ability to do that, especially when it's an existing customer that's been working with us for many years. They already have our system deployed, and they already know us, so then we have more flexibility. But also sometimes, we don't have that flexibility, and we have to conform to the structure that the customer demands. We've been doing that for 35 years.

I understand all your responses and completely grasp the situation. It’s about building relationships with clients so they recognize that we offer the best technology and the best product. We want them to join us, but we need their support to ensure we can provide them with the product without going into debt.

Yes, we engage in those discussions when we have the opportunity, and as the relationship matures over the years. It's a matter of being sensitive and strategic with these government clients. We've been collaborating with them for 35 years, starting with passports, ID cards, and driver licenses before moving into offender monitoring. This has always been intertwined with payment terms as part of government contracts. Initially, we have less influence, but over time, we gain more leverage as our technology becomes more distinctive and recognized as that of an industry leader, which is something we consistently strive for. This is why we continue to invest in research and development. With increased capabilities, we anticipate that as we grow larger, our opportunities for expansion will also increase. Once we achieve this, we will be in a better position to negotiate improved payment terms with our customers. Our transition from South America and Africa to the U.S. and Europe has already yielded significant benefits in terms of collections and payment structures over the past 5 to 7 years. Even within these regions, as we've mentioned, there is always potential for further enhancement.

You have significant potential. There seems to be a disconnect between the value of the shares and that potential. Now that you've demonstrated the ability to achieve net profits consistently, it should positively impact the value of the shares.

Yes, over time, that's what we hope to happen. Thank you very much for your questions and for your support of SuperCom.

At this time, I will pass the call back to Ordan for closing remarks.

I want to thank all of you for participating in today's call and for your interest in SuperCom. Please contact us directly if you have any additional questions. We look forward to sharing our progress with you on the next conference call, filings, and press releases. Thank you, and have a great day.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.