MICT, Inc. - FORM 8-K/A - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
8-K/A - 8K/A - MICT, Inc.	zk1212283.htm
EX-99.1 - EXHIBIT 99.1 - MICT, Inc.	exhibit_99-1.htm
EX-99.3 - EXHIBIT 99.3 - MICT, Inc.	exhibit_99-3.htm

Exhibit 99.2

MICRONET LTD.

BALANCE SHEETS

	June 30,				December 31,
	2012		2011		2011
	Unaudited				*
	NIS in thousands
ASSETS

CURRENT ASSETS:
Cash and cash equivalents		18,779		5,787		8,337
Short-term investments		11,602		23,212		18,113
Trade receivables, net		14,271		4,519		9,431
Other accounts receivable		1,742		753		2,745
Inventories		22,899		10,583		21,353

		69,293		44,854		59,979
DISCONTINUED OPERATION		-		1,521		-

		69,293		46,375		59,979

NON-CURRENT ASSETS:
Receivables and prepaid expenses		68		80		89
Employee benefit assets		5,274		5,733		5,761
Property, plant and equipment, net		6,409		6,059		6,525
Intangible assets		159		168		120
Deferred taxes		972		-		-

		12,882		12,040		12,495

		82,175		58,415		72,474

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated balance sheets as of December 31, 2011.

MICRONET LTD.

STATEMENTS OF FINANCIAL POSITION

	June 30,					December 31,
	2012		2011			2011
	Unaudited					*
	NIS in thousands
LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Current maturities of convertible debentures		2,711		2,794			2,513
Trade payables		10,267		6,086			15,991
Other accounts payable		10,392		4,254			5,574

		23,370		13,134			24,078
DISCONTINUED OPERATION		-		676			-

		23,370		13,810			24,078
NON-CURRENT LIABILITIES:
Convertible debentures		2,272		4,313			2,106
Deferred revenues		282		-			64
Conversion option of convertible debentures		32		27			7
Employee benefit liabilities		7,872		8,323			8,493

		10,458		12,663			10,670

EQUITY:
Share capital		1,985		1,931			1,931
Share premium		17,549		14,873			14,873
Capital reserve for share-based payment transactions		3,280		4,913			5,197
Retained earnings		25,533		10,257			15,725
Capital reserve for discontinued operation		-		(32	)		-

Total equity		48,347		31,942			37,726

		82,175		58,415			72,474

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated balance sheets as of December 31, 2011.

UA-2

MICRONET LTD.

STATEMENTS OF COMPREHENSIVE INCOME

	Six months ended June 30,						Three months ended June 30,						Year ended December 31,
	2012			2011			2012			2011			2011
	Unaudited												*
	NIS in thousands (except per share data)

Revenues		54,775			13,330			28,750			8,558			44,888
Cost of revenues		34,000			10,650			17,627			6,669			31,917

Gross profit		20,775			2,680			11,123			1,889			12,971

Selling and marketing expenses		1,157			643			533			325			1,723
General and administrative expenses		3,708			2,611			1,974			1,228			5,980
Research and development expenses		3,022			2,697			1,413			1,334			5,174
Gain from disposal of property, and equipment, net		(6	)		(1	)		-			-			(43	)

Total operating expenses		7,881			5,950			3,920			2,887			12,834

Operating income (loss)		12,894			(3,270	)		7,203			(998	)		137

Finance income		925			218			986			149			1,239
Finance expenses		(499	)		(710	)		(432	)		(300	)		(1,235	)

Income (loss) before taxes on income		13,320			(3,762	)		7,757			(1,149	)		141
Taxes on income		212			-			1,099			-			-

Income (loss) from continuing operations		13,108			(3,762	)		6,658			(1,149	)		141
Income (loss) from discontinued operation, net		-			(1,049	)		-			(264	)		516

Net income (loss)		13,108			(4,811	)		6,658			(1,413	)		657

Other comprehensive income (loss) (net of tax effect):
Foreign currency translation adjustments of discontinued foreign operation		-			(11	)		-			(4	)		(11	)
Transfer to profit or loss duo to sale of foreign operation		-			-			-			-			32

		-			(11	)		-			(4	)		21

Total comprehensive income (loss)		13,108			(4,822	)		6,658			(1,417	)		678

Net earnings (loss) per share (in NIS):

Basic net earnings (loss) from continuing operations		0.7890			(0.2230	)		0.4058			(00.068	)		0.0084

Diluted net earnings from continuing operations		0.7451			(0.2230	)		0.3795			(0.0680	)		0.0079

Basic net earnings (loss) from discontinued operation		-			(0.0620	)		-			(0.0160	)		0.0300

Diluted net earnings from discontinued operation		-			(0.0620	)		-			(0.0160	)		0.0290

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated statements of comprehensive income for the year ended December 31, 2011.

UA-3

MICRONET LTD.

STATEMENTS OF CHANGES IN EQUITY

	Share capital		Share premium		Capital reserve for share-based payment transactions			Retained earnings			Total equity
	Unaudited
	NIS in thousands

Balance at January 1, 2012 *		1,931		14,873		5,197			15,725			37,726

Net income		-		-		-			13,108			13,108

Total comprehensive income		-		-		-			13,108			13,108
Dividend declared		-		-		-			(3,300	)		(3,300	)
Exercise of warrants		54		2,159		(1,523	)		-			690
Expiration of warrants		-		517		(517	)		-			-
Cost of share-based payment		-		-		123			-			123

Balance at June 30, 2012		1,985		17,549		3,280			25,533			48,347

	Share capital		Share premium		Capital reserve for share-based payment transactions		Retained earnings			Foreign currency translation adjustments of discontinued foreign operation			Capital reserve for discontinued operation			Total equity
	Unaudited
	NIS in thousands

Balance at January 1, 2011 *		1,931		14,873		4,636		15,068			(21	)		-			36,487

Net loss		-		-		-		(4,811	)		-			-			(4,811	)
Other comprehensive loss, net of tax		-		-		-		-			(11	)		-			(11	)

Total comprehensive loss		-		-		-		(4,811	)		(11	)		-			(4,822	)
Discontinued operation		-		-		-		-			32			(32	)		-
Cost of share-based payment		-		-		277		-			-			-			277

Balance at June 30, 2011		1,931		14,873		4,913		10,257			-			(32	)		31,942

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated statements of changes in equity for the year ended December 31, 2011.

UA-4

MICRONET LTD.

STATEMENTS OF CHANGES IN EQUITY

	Share capital		Share premium		Capital reserve for share-based payment transactions			Retained earnings			Total equity
	Unaudited
	NIS in thousands

Balance at April 1, 2012		1,931		14,873		5,263			22,175			44,242

Net income		-		-		-			6,658			6,658

Total comprehensive income		-		-		-			6,658			6,658
Dividend declared		-		-		-			(3,300	)		(3,300	)
Exercise of warrants		54		2,159		(1,523	)		-			690
Expiration of warrants		-		517		(517	)		-			-
Cost of share-based payment		-		-		57			-			57

Balance at June 30, 2012		1,985		17,549		3,280			25,533			48,347

	Share capital		Share premium		Capital reserve for share-based payment transactions		Retained earnings			Foreign currency translation adjustments of discontinued foreign operation			Capital reserve for discontinued operation			Total equity
	Unaudited
	NIS in thousands

Balance at April 1, 2011		1,931		14,873		4,643		11,670			(28	)		-			33,089

Net loss		-		-		-		(1,413	)		-			-			(1,413	)
Other comprehensive loss, net of tax		-		-		-		-			(4	)		-			(4	)

Total comprehensive loss		-		-		-		(1,413	)		(4	)		-			(1,417	)
Discontinued operation		-		-		-		-			32			(32	)		-
Cost of share-based payment		-		-		270		-			-			-			270

Balance at June 30, 2011		1,931		14,873		4,913		10,257			-			(32	)		31,942

The accompanying notes are an integral part of the interim financial statements.

UA-5

MICRONET LTD.

STATEMENTS OF CHANGES IN EQUITY

	Share capital		Share premium		Capital reserve for share-based payment transactions		Retained earnings		Foreign currency translation adjustments of discontinued foreign operation			Total equity
	*
	NIS in thousands

Balance at January 1, 2011		1,931		14,873		4,636		15,068		(21	)		36,487

Net income		-		-		-		657		-			657
Foreign currency translation adjustments of discontinued foreign operation		-		-		-		-		(11	)		(11	)
Transfer to profit or loss due to sale of foreign operation		-		-		-		-		32			32

Total comprehensive income		-		-		-		657		21			678
Cost of share-based payment		-		-		561		-		-			561

Balance at December 31, 2011		1,931		14,873		5,197		15,725		-			37,726

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated statements of changes in equity for the year ended December 31, 2011.

UA-6

MICRONET LTD.

STATEMENTS OF CASH FLOWS

	Six months ended June 30,						Three months ended June 30,						Year ended December 31,
	2012			2011			2012			2011			2011
	Unaudited												*
	NIS in thousands

Cash flows from operating activities:

Net income (loss)		13,108			(4,811	)		6,658			(1,413	)		657

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to the profit or loss items:

Depreciation and amortization		710			821			92			480			1,413
Finance expenses (income), net		(426	)		492			(554	)		151			(4	)
Share-based payment		123			277			58			270			561
Change in liabilities in respect of investment grants		-			-			-			-			(150	)
Gain from disposal of property, plant and equipment		(6	)		(1	)		-			-			(43	)
Gain from disposal of discontinued operation		-			-			-			-			(1,683	)
Taxes on income		212			(123	)		1,099			(123	)		10
Change in employee benefit liabilities, net		(134	)		161			27			42			303

		479			1,627			722			820			407
Changes in asset and liability items:

Increase in trade receivables		(4,445	)		(2,978	)		(1,641	)		(1,213	)		(6,649	)
Decrease (increase) in other accounts receivable		998			(527	)		794			(294	)		(2,241	)
Decrease (increase) in inventories		(1,674	)		(3,333	)		4,924			(2,100	)		(14,169	)
Increase (decrease) in trade payable		(5,727	)		3,549			(7,305	)		2,901			13,399
Increase in other accounts payable		657			835			691			395			1,806

		(10,191	)		(2,454	)		(2,537	)		(311	)		(7,854	)
Cash paid and received during the period for:

Interest paid		-			-			-			-			(416	)
Interest received		534			926			204			348			1,113
Taxes paid		-			(22	)		-			(20	)		(27	)
Taxes received		-			565			-			-			566
Dividend received		-			15			-			11			20

		534			1,484			204			339			1,256

Net cash provided by (used in) operating activities		3,930			(4,154	)		5,047			(565	)		(5,534	)

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated statements of cash flows for the year ended December 31, 2011.

UA-7

MICRONET LTD.

STATEMENTS OF CASH FLOWS

	Six months ended June 30,						Three months ended June 30,						Year ended December 31,
	2012			2011			2012			2011			2011
	Unaudited												*
	NIS in thousands
Cash flows from investing activities:

Purchase of property, and equipment		(428	)		(216	)		(99	)		(63	)		(1,159	)
Purchase of intangible assets		(84	)		(153	)		(55	)		(5	)		(152	)
Proceeds from sale of property, plant and equipment		13			1			-			-			43
Proceeds from sales of securities measured at fair value through profit or loss, net		6,388			7,735			(392	)		2,767			13,055
Increase in long-term receivables and prepaid expenses		21			(39	)		255			55			(48	)
Collection of loans to employees, net		5			22			16			70			29
Proceeds from disposal of discontinued operation (a)		-			-			-			-			1,494

Net cash provided by investing activities		5,915			7,350			(275	)		2,824			13,262

Cash flows from financing activities:

Proceeds from exercise of warrants		690			-			690			-			-
Repayment of convertible debentures		-			-			-			-			(2,550	)
Receipt of investment grant		-			897			-			897			967
Repayment of investment grant		-			(1,136	)		-			(1,136	)		(1,336	)

Net cash used in financing activities		690			(439	)		690			(439	)		(2,919	)

Exchange rate differences on cash and cash equivalent balances		(93	)		(131	)		50			(134	)		(18	)

Increase in cash and cash equivalents		10,442			2,626			5,512			1,686			4,791
Cash and cash equivalents at the beginning of the period		8,337			3,546			13,267			4,486			3,546

Cash and cash equivalents at the end of the period *)		18,779			6,172			18,779			6,172			8,337
* Composition of cash and cash equivalents at the end of the period:

Cash and cash equivalents from continuing operations		18,779			5,787			18,779			5,787			8,337
Cash and cash equivalents from discontinued operation		-			385			-			385			-

		18,779			6,172			18,779			6,172			8,337

Non-cash financing activity:

Dividend declared but not yet paid		(3,300	)		-			(3,300	)		-			-

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated statements of cash flows for the year ended December 31, 2011.

UA-8

MICRONET LTD.

STATEMENTS OF CASH FLOWS

		Six months ended June 30,				Three months ended June 30,				Year ended December 31,
		2012		2011		2012		2011		2011
		Unaudited								*
		NIS in thousands

(a)	Proceeds from disposal of discontinued operation:

	The subsidiary's assets and liabilities at date of sale:

	Working capital (excluding cash and cash equivalents)		-		-		-		-		(385	)
	Property, plant and equipment		-		-		-		-		43
	Other assets		-		-		-		-		121
	Exercise of capital reserve		-		-		-		-		32
	Gain on sale of discontinued operation		-		-		-		-		1,683

			-		-		-		-		1,494

Data of net cash flows provided by (used in) discontinued operation:

	Six months ended June 30,					Three months ended June 30,					Year ended December 31,
	2012		2011			2012		2011			2011
	Unaudited										*
	NIS in thousands

Operating activities		-		(1,035	)		-		71			(1,158	)

Investing activities		-		(191	)		-		(4	)		(1,302	)

Financing activities		-		-			-		-			-

The accompanying notes are an integral part of the interim financial statements.

* Derived from the audited consolidated statements of cash flows for the year ended December 31, 2011.

UA-9

MICRONET LTD.

NOTE 1:- GENERAL

Micronet Ltd. ("the Company") was founded and incorporated in Israel on May 6, 1982. The Company is engaged in the development, manufacture and marketing of mobile computer platforms and terminals for managing vehicles fleets and employees in the MRM (Mobile Resource Management) field. The Company offers solutions and services to its customers for maximizing the efficiency of vehicle fleets and field workers that are needed to provide service while in motion, in a wide range of industries, such as repair and maintenance services, for the private and public sectors, varieties of public transport vehicles, municipal services and the security and emergency services.

On November 21, 2006, the Company issued to the public 3,200,000 Common shares of NIS 0.1 par value each and NIS 17,000,000 par value of debentures (Series A), which are convertible into Common shares, for an overall consideration of NIS 34,500 thousand. The shares and debentures have been traded on the Tel-Aviv Stock Exchange since December 4, 2006.

These financial statements have been prepared in a condensed format as of June 30, 2012 and for the six and three months periods then ended ("interim financial statements"). These financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2011 and for the year then ended and accompanying notes ("annual financial statements").

On May 23, 2012, the Company's Board of Directors decided to distribute a gross dividend totaling NIS 3.3 million to the Company's shareholders. The dividend was paid on July 1, 2012.

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the interim financial statements:

The interim financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, "Interim Financial Reporting".

The significant accounting policies and methods of computation adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the annual financial statements.

UA-10

MICRONET LTD.

NOTE 3:- SHARE-BASED PAYMENT TRANSACTIONS

On June 4, 2012, the Company's CEO exercised 340,000 options into 340,000 Common shares of NIS 0.1 par value each for an exercise increment of NIS 0.893 per unit.

On June 4, 2012, the Company's Chairman of the Board exercised 200,000 options into 200,000 Common shares of NIS 0.1 par value each for an exercise increment of NIS 1.9338 per unit.

On June 14, 2012, the Company's Vice President of Development was granted 40,000 options that are exercisable into 40,000 Common shares of NIS 0.01 par value each. The exercise of the options is NIS 2.5 per option. The Company's share price as of the grant date was NIS 3.234.

The following are the data that have been used in the fair value measurement in accordance with the binomial model:

Dividend yield on the share (%)		5.87
Expected volatility of the share prices (%)		55.29-61.4
Risk-free interest rate (%)		Period 1 – 2.24
		Period 2 – 2.59
		Period 3 – 3.40
		Period 4 – 4.24
		Period 5 – 4.87
Expected life of options (years) from the grant date		5

The fair value of the options was determined to be NIS 55 thousand at the data of the grant in accordance with the above data.

On March 5, 2012, the Company's Chief Operating Officer was granted 55,000 options that are exercisable into 55,000 Common shares of NIS 0.01 par value each. The exercise price of the options is NIS 2.5 per option. The Company's share price as of the grant date was NIS 1.836. The options vest over a period of four years and the life of the options is 5 years.

UA-11

MICRONET LTD.

NOTE 3:- SHARE-BASED PAYMENT TRANSACTIONS (Cont.)

The following are the data that have been used in the fair value measurement in accordance with the binomial model:

Dividend yield on the share (%)		0
Expected volatility of the share prices (%)		48.23-60.96
Risk-free interest rate (%)		Period 1 – 2.53
		Period 2 – 3.13
		Period 3 – 3.75
		Period 4 – 4.77
Expected life of options (years) from the grant date		5.22

The fair value of the options was determined to be NIS 44 thousand at the data of the grant in accordance with the above data.

NOTE 4:- TAXES ON INCOME

Carry-forward losses for tax purposes and other temporary differences:

Deferred tax assets totaling approximately NIS 972 thousand have been recognized in respect of deductible temporary differences: research and development expenses, allowance for doubtful accounts, employee benefits, revaluation of securities and differences in depreciation of property, plant and equipment.

Tax assessments:

On June 21, 2012, a final tax assessment agreement was signed between the Company and the income tax authorities for the years 2006-2010. The total tax expenses, linkage and interest accrued following the agreement for said years amounted to approximately NIS 205 thousand.

MICT, Inc. - FORM 8-K/A - EX-99.2 - EXHIBIT 99.2 - November 19, 2012

Attached files

MICT, Inc. Reports