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SBET SharpLink Gaming

Filed: 6 May 21, 5:09pm


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549



F O R M  6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

For the month of May 2021

MER TELEMANAGEMENT SOLUTIONS LTD.
(Name of Registrant)

14 Hatidhar Street, P.O. Box 2112
Ra’anana 4366516, Israel
(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of 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): ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ☐          No ☒

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- __________


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.

 MER TELEMANAGEMENT SOLUTIONS LTD.
 (Registrant)
  
Date:  May 6, 2021
By: /s/ Ofira Bar
        Ofira Bar
        Chief Financial Officer



MTS Announces 2020 Half Year 2020 Financial Results

Ra’anana, Israel / Powder Springs, Georgia, USA - May 6, 2021 - Mer Telemanagement Solutions Ltd. (MTS) (Nasdaq Capital Market: MTSL), a global provider of telecommunications expense management (TEM), call accounting and contact center software, today released its financial results for the six and twelve months ended December 31, 2020.

On April 15, 2021, we entered into a definitive agreement and Plan of Merger (the “Merger Agreement”) with SharpLink, Inc., a leading online technology company that works with sports leagues, fantasy sports sites and media companies to connect fans to relevant and timely betting content sourced from its sportsbook partners.

Financial information

The Company recorded revenues of $1.9 million for the six months ended December 31, 2020, compared with $2.6 million for the six months ended December 31, 2019. The Company incurred losses of $(1.2) million for the six months ended December 31, 2020, or $(0.17) per diluted share compared with net income of $85,000, or $0.01 per diluted share, for the comparable period in 2019. On a non-GAAP basis (as described and reconciled below), The Company posted a net loss of $(224,000) or $(0.03) per diluted share, for the six months ended December 31, 2020 compared with  net income of $262,000, or $0.04 per diluted share, for the comparable period in 2019.

The Company recorded revenues of $4 million for the year ended December 31, 2020 compared with $5.2 million for the comparable period in 2019. The Company incurred a net loss of $(1.8) million or $(0.30) per diluted share, for the year ended December 31, 2020 compared with a net loss of $(135,000) or $(0.03) per diluted share for the comparable period 2019. On a non-GAAP basis (as described and reconciled below), the Company posted a net loss of $(376,000), or $(0.06) per diluted share for the year ended December 31, 2020 compared with net income of $79,000, or $0.02 per diluted share for the comparable period in 2019.

During the period 2018-2020 an institutional investor invested, $3 million in a newly-created class of convertible preferred shares and $0.2 million in ordinary shares of the Company, at a price per preferred share and ordinary share of $1.14. The preferred shares are convertible into ordinary shares on a one to one basis. The stock purchase agreement with the institutional investor included a green shoe option for future investment of up to $1.5 million in the Company’s preferred shares at a price per preferred share of $1.14. During, 2019 and 2020, the institutional investor fully exercised its green shoe option as part of its $3 million investment.


As previously reported on April 15, 2021, we entered into a definitive agreement and Plan of Merger (the “Merger Agreement”) with SharpLink, Inc. (“SharpLink”), a leading online technology company that works with sports leagues, fantasy sports sites and media companies to connect fans to relevant and timely betting content sourced from its sportsbook partners, and New SL Acquisition Corp., a company incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of the Company (“Merger Sub”). On the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by the Company’s shareholders, Merger Sub will be merged with and into SharpLink (the “Merger”) with SharpLink surviving the Merger as a wholly-owned subsidiary of the Company.

Mr. Roy Hess, Chief Executive Officer of MTS, said, “We are excited to achieve this major milestone by signing the definitive merger agreement with SharpLink, a promising leading online technology company that works with sports leagues, fantasy sports sites and media companies. We are also excited about our future growth strategy as well as the current industry's rapid expansion both in the U.S. and globally. Our results in 2020 reflect the substantial reduction of our ongoing operations which were impacted by the COVID-19 pandemic. During 2020, the Company continued implementing its efficiency plan and reduced its operational expenses which contributed to improved operating margins. Excluding the impact of one-time non-cash impairment charges, our net loss for the second half of 2020 was $(224,000) on a non-GAAP basis. In June 2019, we introduced Omnis - Contact Center Software with “Out-Of-The-Box” capabilities and open channel architecture. During the end of 2019, we started to see initial revenues from this new product, which we consider to be our main growth engine in the coming years. While our marketing of this new product was delayed by the onset of the pandemic we intend to accelerate its introduction in 2021.” Mr. Hess concluded, “we are looking forward to completing the SharpLink transaction in the near future and beginning a new chapter in the life of our company.”

About MTS

Mer Telemanagement Solutions Ltd. (MTS) is focused on innovative products and services for enterprises in the area of telecom expense management (TEM), call accounting and contact center software. Headquartered in Israel, MTS markets its solutions through wholly-owned subsidiaries in Israel, the U.S and Hong Kong, as well as through distribution channels. For more information please visit the MTS web site: www.mtsint.com.

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Company’s ability to achieve  profitable operations, its ability  to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements, the impact of COVID-19 on the Company and its customers, customer acceptance of new products, the impact of competitive products and pricing, market acceptance, the lengthy sales cycle, proprietary rights of the Company and its competitors, risk of operations in Israel,  general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission.

Contacts:
 
Ofira Bar
CFO
Tel: +972-9-7777-540
Email: ofira.bar@mtsint.com          


CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

  December 31, 
  2020  2019 
       
ASSETS      
       
CURRENT ASSETS:      
Cash and cash equivalents $1,504  $1,732 
Restricted cash  1,003   1,464 
Trade receivables (net of allowance for credit losses of $69 and $75, at December 31, 2019 and 2020, respectively  407   499 
Other accounts receivable and prepaid expenses (Note 3)  399   236 
Assets of discontinued operations (Note 1b)  178   172 
         
Total current assets
  3,491   4,103 
         
NON- CURRENT ASSETS:        
         
Severance pay fund  252   653 
Property and equipment, net (Note 4)  35   62 
Deferred taxes (Note 7)  171   - 
Goodwill  1,502   3,225 
         
Total non-current assets
  1,960   3,940 
         
Total assets
 $5,451  $8,043 


CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands (except share and per share data)

  December 31, 
  2020  2019 
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
CURRENT LIABILITIES:      
Trade payables $114  $149 
Deferred revenues  745   962 
Accrued expenses and other liabilities (Note 5)  1,769   2,317 
Liabilities of discontinued operations (Note 1b)  496   516 
         
Total current liabilities
  3,124   3,944 
         
LONG-TERM LIABILITIES:        
Accrued severance pay  306   831 
Deferred tax liability (Note 7)  -   163 
         
Total long-term liabilities
  306   994 
         
COMMITMENTS AND CONTINGENT LIABILITIES (Note 6)        
         
SHAREHOLDERS' EQUITY (Note 9):        
Share capital -        
Ordinary shares of NIS 0.03 par value: Authorized: 17,000,000 shares at December 31, 2020 and 2019; Issued: 4,426,791 and 3,614,208 shares at December 31, 2020 and 2019, respectively; Outstanding 4,424,991 and 3,612,408 shares at December 31, 2020 and 2019, respectively  37   30 
Preferred Shares of NIS 0.03 par value: Authorized: 3,000,000 shares at December 31, 2020 and 2019; Issued and Outstanding: 1,831,579 and 2,008,772 shares at December 31, 2020 and 2019, respectively  15   16 
Additional paid-in capital  31,360   30,635 
Treasury shares at cost (1,800 Ordinary shares at December 31, 2020 and 2019)  (29)  (29)
Accumulated deficit  (29,362)  (27,547)
         
Total shareholders' equity
  2,021   3,105 
         
Total liabilities and shareholders' equity
 $5,451  $8,043 


CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share and per share data)

  
Twelve months ended
December 31,
  
Six months ended
December 31,
 
  2020  2019  2020  2019 
  Audited  Audited  Unaudited  Unaudited 
Revenues:            
Services $3,383  $4,273  $1,568  $2,094 
Product sales  635   920   347   499 
                 
Total revenues
  4,018   5,193   1,915   2,593 
                 
Cost of revenues:                
Services  1,511   1,486   818   701 
Product sales  284   371   111   175 
                 
Total cost of revenues
  1,795   1,857   929   876 
                 
Gross profit  2,223   3,336   986   1,717 
                 
Operating expenses:                
Research and development  -   545   -   277 
Selling and marketing  752   817   293   264 
General and administrative  1,867   1,890   930   912 
 Goodwill impairment  1,723   254   1,106   254 
Total operating expenses
  4,342   3,506   2,329   1,707 
                 
Operating income (loss)  (2,119)  (170)  (1,343)  10 
Financial income (expenses), net  16   (18)  8   7 
                 
Income (loss) before taxes on income  (2,103)  (188)  (1,335)  17 
Taxes on income (tax benefit), net  (325)  4   (217)  3 
                 
Net Income (loss) from continuing operations  (1,778)  (192)  (1,118)  14 
                 
Income (loss) from discontinued operations  (37)  57   (36)  71 
                 
Net Income (loss) $(1,815) $(135) $(1,154) $85 
                 
Net loss per share:                
Basic and diluted net profit (loss) per share from continuing operations $(0.29) $(0.04) $(0.16) $0.00 
Basic and diluted net profit (loss) per share from discontinued operations  ( 0.01)  0.01   ( 0.01)  0.01 
Basic and diluted net loss per share $(0.30) $(0.03) $( 0.17) $0.01 
Weighted average number of shares used in computing basic net profit (loss) per share  5,954,795   5,013,374   6,873,156   5,864,372 
                 
Weighted average number of shares used in computing diluted net profit (loss) per share  5,954,795   5,081,865   6,873,156   6,031,193 


RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except share and per share data)

  
Twelve months ended
December 31,
  
Six months ended
December 31,
 
  2020  2019  2020  2019 
  Unaudited  Unaudited  Unaudited  Unaudited 
             
GAAP net income (loss) from continuing operations  (1,778)  (192)  (1,118)  14 
Stock-based compensation expenses  21   47   7   34 
Intangible assets amortization, net of tax effects  -   21   -   11 
Goodwill impairment, net of tax effect  1,381   203   887   203 
                 
Non-GAAP net Income (loss) $(376) $79  $(224) $262 
                 
Net loss per share:                
                 
GAAP basic and diluted net profit (loss) per share $(0.29) $(0.04) $(0.16) $0.00 
                 
Non-GAAP basic and diluted net profit (loss) per share $(0.06) $0.02  $(0.03) $0.04 
                 
Weighted average number of shares used in computing non-GAAP basic net profit (loss) per share  5,954,795   5,013,374   6,873,156   5,864,372 
                 
Weighted average number of shares used in computing non-GAAP diluted net profit (loss) per share  5,954,795   5,081,865   6,873,156   6,031,193