T42 year-end trading update and CLN extension

T42 IOT Tracking Solutions PLC

07 March 2024

 

7 March 2024

t42 IoT Tracking Solutions plc

("t42" or the "Company")

T42 year-end trading update and CLN extension

t42 IoT Tracking Solutions plc (AIM: TRAC) ("t42" or the "Company"), the provider of global shipping containers tracking solutions, is pleased to provide the following trading update for the year ended 31 December 2023 ("FY2023") and details of a CLN extension.

Trading update

The Company expects to report total revenues for FY2023 of approximately US$4.0 million (2022: $4.0 million), including approximately $2.0 million of SaaS income representing approximately 50% of the total revenues for the period (2023: 50%). Gross margins have been increased and general expenses reduced, as the Company continues to restructure and adjust cross disciplinary policies to its new strategy focus on the shipping container market.

The Company is focusing on its priority shipping container market, leveraging cutting-edge technology to maintain a distinct advantage within the industry. The Company's recent announcement, on 5 February 2024, of its agreement with a leading provider of end-to-end goods management services evidences the Company's success in innovation and market leadership. Furthermore, the Company continues its proactive approach to addressing industry challenges, for example the integration of cutting-edge technology to resolve communication issues through its collaboration with Sateliot IOT, announced in December 2023. In addition, optimization solutions for power consumption represent another facet of the Company's commitment to technological advancement and sustainability.

The Board remains confident in the Company's technological capabilities and the value of the Company's supply chain tracking solutions. Furthermore, strategic collaborations with leading players in the shipping container market provide the Company with valuable insights into market demand and the opportunities for commercial partnerships, as the Company seeks to secure additional long-term agreements with its diverse client base.

CLN extension update

Further to its announcements on 20 December 2023 and 17 January 2024, the Company announces that it has entered into an agreement ("Agreement") for the extension of the maturity date of the £925,000 unsecured convertible loan notes ("CLNs") until 20 January 2025. Under the Agreement the following terms have been agreed with the holders of the CLNs ("Lenders"):

·    Coupon: the interest payable on the CLNs shall be 10% per annum, commencing from 1 January 2024. 

·    Conversion: the Lenders will have the right to convert, at their discretion, the principal amount of the CLNs  into such number of T42 shares ("Conversion Shares") corresponding to  28.82% of the Company's issued ordinary share capital immediately following the date of conversion, if the aggregate principal amount is converted, and into a pro-rata number of Conversion Shares in case of a partial conversion. The Lenders shall not issue a conversion notice if this would result in a breach of Rule 9 of the UK Takeover Code.

·    Anti-Dilution: the Agreement includes anti-dilution provisions to protect the equity interest percentage of the Lenders, so that in the event of the exercise or conversion of existing warrants, options or other instruments convertible into new t42 ordinary shares (subject to certain exceptions), the Lenders will be issued for no additional consideration such number of t42 shares such that, together with the t42 shares already held, each Lender's percentage shareholding shall remain the same. Under these provisions (and the similar provisions in the convertible loan from Ewave Mobile Ltd ("Ewave") in July 2023), a maximum of up to approximately 84.27 million additional new shares would be issued to the Lenders and Ewave. In light of this, the Company expects to propose, at its forthcoming AGM, relevant increased share authorities.

·    Security: security is provided by way of parent guarantee and fixed and floating charges over the assets of t42. The floating charge ranks pari-passu with the floating charge provided to Ewave under the Ewave loan and the fixed charge security over the intellectual property rights of t42 is second ranking, subordinated only to the fixed charge in favor of Ewave under the Ewave loan.

·    Conversion/Repayment Events: in the event of certain major transactions or financing investments the lender may elect for conversion or repayment of the CLNs.  

·    Cancellation of warrants: the 1,541,667 outstanding 3-year warrants granted to the Lenders in December 2021 have been cancelled.

In conjunction with the Agreement, the Company has also entered into an addendum to the loan agreement with Ewave Mobile Ltd, announced on 26 July 2023, pursuant to which they have consented to the CLN extension and will also have the same conversion rights as the CLN holders in the event of a major transaction.

Avi Hartmann, CEO of t42, commented: "We are thrilled about the promising future ahead for the Company. Our sustained focus on long-term strategies, coupled with our technological edge and deep client collaborations, paves the way for continued success. With our innovative solutions and commitment to excellence, we are poised to thrive and lead in our industry."

Contacts: 

t42 IoT Tracking Solutions PLC                   

Michael Rosenberg, Chairman                                                                                                        07785 727595

  Avi Hartmann, CEO                                                                                                                  [phone]

Strand Hanson Limited (Nominated Adviser and Financial Adviser)                020 7409 3494

James Harris/ Richard Johnson/ Robert Collins

  Peterhouse Capital Limited                                                                                                 020 7469 0930

Lucy Williams/Duncan Vasey/Eran Zucker

Notes to Editors

t42 IoT Tracking Solutions plc (AIM: TRAC), formerly Starcom Systems plc, provides real-time tracking, analysis, monitoring, and security IoT solutions for the global container and freight market and covers 55 countries, over 100 distributors, and 50 logistics and support partners.

t42's multi-sensor IoT tracking devices use a wide range of detection capabilities with cloud-based analytics and alerts, with real-time data transmission, analysis, and actionable insights. Its devices are used by ports, cargo owners, shipping companies, freight forwarders, insurance companies, customs authorities, homeland security, and police for end-to-end global container tracking and digital transformation of shipments.

For more information on the Company, please visit: https://www.t42.co.uk/.  

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

 

END