UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
As of September 30, 2015
Commission File Number 000-29360
RiT TECHNOLOGIES LTD.
(Translation of registrant's name into English)
24 Raoul Wallenberg Street, Tel Aviv 69719, Israel
(Address of principal executive offices)
_____________________
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 S 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): £
____________________
This Report on Form 6-K is hereby incorporated by reference into the Registrant's Registration Statements on Form S-8 (File Nos. 333-90750, 333-117646, 333-141680, 333-169241 and 333-200999) and Form F-3 (File Nos. 333-183566 and 333-190443), to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
CONTENTS
This Form 6-K consists of the following documents:
RiT Technologies Ltd. Unaudited Condensed Consolidated Interim Financial Statements for the six months ended June 30, 2015 and Notes thereto.
A copy thereof is attached as Exhibit 99.1 to this Form 6-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2015
A copy thereof is attached as Exhibit 99.2 to this Form 6-K.
Press release dated September 29, 2015: RiT Technologies Reports Second Quarter and Six Month 2015 Results
A copy of the press release is attached as Exhibit 99.3 to this Form 6-K.
Press release dated September 24, 2015: Global Investment Bank Deploys RiT's CenterMind Software to Manage Its Global IT Infrastructure
A copy of the press release is attached as Exhibit 99.4 to this Form 6-K.
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.
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RiT TECHNOLOGIES LTD.
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Date: September 30, 2015
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By:
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/s/ Amit Mantsur |
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Amit Mantsur |
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CFO
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EXHIBIT INDEX
Exhibit Number
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Description of Exhibit
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99.1
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RiT Technologies Ltd. Unaudited Condensed Consolidated Interim Financial Statements for the six months ended June 30, 2015 and Notes thereto.
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99.2
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Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2015.
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99.3
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RiT Technologies Reports Second Quarter and Six Month 2015 Results
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99.4
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Global Investment Bank Deploys RiT's CenterMind Software to Manage Its Global IT Infrastructure
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Page 3 of 3
Exhibit 99.1
RiT Technologies Ltd.
and Subsidiaries
Condensed Consolidated Interim
Financial Statements
As of June 30, 2015
(Unaudited)
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RiT Technologies Ltd. and Subsidiaries
Unaudited Condensed Consolidated Interim Financial Statements as at June 30, 2015
Table of Contents
Page
RiT Technologies Ltd. and Subsidiaries
Unaudited Condensed Consolidated Interim Balance Sheets
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June 30
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December 31
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Assets
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Current Assets:
|
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Cash and cash equivalents
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1,232 |
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1,604 |
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Trade receivables, net*
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5,951 |
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1,680 |
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Other current assets
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431 |
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335 |
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Inventories
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3,495 |
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3,617 |
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Total Current Assets
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11,109 |
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7,236 |
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Assets held for severance benefits
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893 |
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967 |
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Capitalized software development costs, net
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193 |
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0 |
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Property and equipment, net
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445 |
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471 |
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Total non-Current Assets
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1,531 |
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1,438 |
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Total Assets
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12,640 |
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8,674 |
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Liabilities and Shareholders' Equity
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Current Liabilities:
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Trade payables
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1,755 |
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967 |
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Other payables and accrued liabilities
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1,515 |
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1,554 |
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Total Current Liabilities
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3,270 |
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2,521 |
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Principal shareholder convertible loan
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3,000 |
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1,000 |
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Liability in respect of employees' severance
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benefits
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1,168 |
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1,224 |
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Total of non-Current Liabilities
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4,168 |
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2,224 |
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Total Liabilities
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7,438 |
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4,745 |
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Shareholders' Equity:
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Share capital
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3,384 |
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3,384 |
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Treasury stock
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(27 |
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(27 |
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Additional paid-in capital
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73,380 |
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72,239 |
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Accumulated deficit
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(71,535 |
) |
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(71,667 |
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Total Shareholders' Equity
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5,202 |
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3,929 |
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Total Liabilities and Shareholders' Equity
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12,640 |
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8,674 |
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*
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Includes balances in the amounts of $3,343,778 and $288,340 with related parties as of June 30, 2015 and December 31, 2014, respectively and net of the allowance for doubtful accounts in the amount of $382,120 and $796,540 as of June 30, 2015 and December 31, 2014, respectively.
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The accompanying notes are an integral part of the condensed consolidated interim financial statements.
RiT Technologies Ltd. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Operations
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Sales
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7,936 |
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3,690 |
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Cost of sales
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4,307 |
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2,355 |
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Gross profit
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3,629 |
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1,335 |
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Operating expenses:
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Research and development, net
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825 |
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1,473 |
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Sales and marketing
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1,483 |
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2,163 |
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General and administrative
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1,145 |
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2,133 |
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Total operating expenses
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3,453 |
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5,769 |
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Operating margin / (loss)
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176 |
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(4,434 |
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Financing expenses, net
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(44 |
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(49 |
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Profit /(Loss) before income tax
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132 |
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(4,483 |
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Taxes on income
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- |
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- |
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Net Profit /(Loss)
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132 |
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(4,483 |
) |
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Net Profit (Loss) Per Share - Basic and Diluted
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0.01 |
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(0.35 |
) |
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Weighted Average Number of Ordinary
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Shares Outstanding - Basic and Diluted
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15,541,306 |
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12,763,218 |
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The accompanying notes are an integral part of the condensed consolidated interim financial statements.
RiT Technologies Ltd. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Shareholders’ Equity
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Additional
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Deferred
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Ordinary
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Treasury
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Ordinary
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Treasury
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Paid-In
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Accumulated
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Balance as of January 1, 2014
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17,030 |
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12,763,218 |
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2,125 |
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2,782 |
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(27 |
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66,942 |
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(62,268 |
) |
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7,429 |
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Conversion of convertible loan from principal shareholder
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- |
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2,778,088 |
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- |
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602 |
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- |
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4,456 |
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- |
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5,058 |
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Issuance of shares
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of warrants
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Issuance of shares in At-The-Market
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Stock compensation expense
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- |
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- |
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- |
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- |
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- |
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|
841 |
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- |
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841 |
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Net loss for the year
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- |
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- |
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- |
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- |
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- |
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- |
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(9,399 |
) |
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(9,399 |
) |
Balance as of December 31, 2014
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17,030 |
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15,541,306 |
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2,125 |
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3,384 |
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(27 |
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72,239 |
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(71,667 |
) |
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3,929 |
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|
|
|
|
|
|
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Issuance of warrants
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|
- |
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- |
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|
- |
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|
- |
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|
- |
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|
955 |
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- |
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955 |
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Stock compensation expense
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- |
|
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- |
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- |
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- |
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- |
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186 |
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- |
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186 |
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Net margin for the period
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- |
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- |
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- |
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|
- |
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|
|
- |
|
|
|
- |
|
|
|
132 |
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|
|
132 |
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Balance as of June 30, 2015
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17,030 |
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15,541,306 |
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2,125 |
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3,384 |
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(27 |
) |
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73,380 |
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(71,535 |
) |
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5,202 |
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*
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Ordinary Shares – NIS 0.8 par value
Authorized shares: 50,000,000 Ordinary Shares as of June 30, 2015 and December 31, 2014; issued and outstanding Ordinary Shares 15,541,306 as of June 30, 2015 and December 31, 2014 (excluding 2,125 which are held by a subsidiary).
Deferred Shares – NIS 0.1 par value
Authorized shares include 20,230 Deferred Shares, of which 17,030 are issued and outstanding as of June 30, 2015 and December 31, 2014.
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The accompanying notes are an integral part of the condensed consolidated interim financial statements.
RiT Technologies Ltd. and Subsidiaries
Unaudited Condensed Consolidated Interim Statements of Cash Flows
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Net margin for the period
|
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132 |
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(4,483 |
) |
Adjustments to recognize net loss to net cash
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used in operating activities:
|
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Severance pay benefits, net
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18 |
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59 |
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Depreciation of property and equipment
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83 |
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88 |
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Loss from disposal of fixed assets
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- |
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1 |
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Amortization of capitalized software development costs
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2 |
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- |
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Stock compensation expense
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186 |
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|
518 |
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Changes in operating assets and liabilities:
|
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|
|
|
|
|
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Decrease (increase) in trade receivables, net
|
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(4,271 |
) |
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1,607 |
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Decrease (increase) in other current assets
|
|
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(96 |
) |
|
|
(268 |
) |
Decrease (Increase) in inventories
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|
122 |
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|
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(709 |
) |
Increase (decrease) in trade payables
|
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|
859 |
|
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(639 |
) |
Interest on principal shareholder convertible loan
|
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|
- |
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24 |
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Decrease in other payables and accrued expenses
|
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(39 |
) |
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|
(156 |
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|
|
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Net cash used for operating activities
|
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(3,004 |
) |
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|
(3,958 |
) |
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Investing activities:
|
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Purchase of property and equipment
|
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(128 |
) |
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(106 |
) |
Capitalization of R&D expenses
|
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(195 |
) |
|
|
- |
|
|
|
|
|
|
|
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Net cash used for investing activities
|
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(323 |
) |
|
|
(106 |
) |
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|
|
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|
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Financing activities:
|
|
|
|
|
|
|
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Proceeds from issuance of Warrants, net
|
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|
955 |
|
|
|
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Proceeds from principle shareholder loan (Note 9)
|
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|
2,000 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
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Net cash provided by financing activities
|
|
|
2,955 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
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Net decrease in cash and cash equivalents
|
|
|
(372 |
) |
|
|
(4,064 |
) |
Cash and cash equivalents at the beginning of the period
|
|
|
1,604 |
|
|
|
5,194 |
|
|
|
|
|
|
|
|
|
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Cash and cash equivalents at the end of the period
|
|
|
1,232 |
|
|
|
1,130 |
|
|
|
|
|
|
|
|
|
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Non - cash investing activities
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
5 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 1 - General
RiT Technologies Ltd., an Israeli company, which was incorporated and commenced operations in 1989, pioneered the development of intelligent physical layer solutions, designed to provide superior control, utilization and maintenance of networks.
RiT Technologies Ltd. has a wholly-owned subsidiary in the United States, RiT Technologies Inc. (the “US subsidiary”), which was incorporated in 1993 under the laws of the State of New Jersey. The US subsidiary is primarily engaged in the selling and marketing in the United States of RiT Technologies Ltd’s products.
In this document the terms the “Company” or “RiT” refer to RiT Technologies Ltd. together with its US subsidiary.
The Company is a leading provider of intelligent infrastructure management (IIM) solutions and a developer of an innovative indoor optical wireless technology solution.
The Company’s IIM products provide and enhance security and network utilization for data centers, communication rooms and work space environments. The products help companies plan provision, monitor and troubleshoot their communications networks, maximizing utilization, reliability and physical security of the network while minimizing unplanned downtime. The IIM solutions are deployed around the world, in a broad range of organizations, including data centers in the private sector and by government agencies, financial institutions, airport authorities, healthcare and educational institutions.
The Company’s Beamcaster™ product is the first of the Company’s indoor optical wireless technology solutions. It is designed to help customers streamline deployment, reduce infrastructure design, installation and maintenance complexity and enhance security in a cost effective way. During the third quarter of 2013, the Company commenced selling initial pilot installations of Beamcaster™.
Based on the most current sales and spending projections, the Company anticipates that its existing capital resources (including, as necessary, the line of credit available under the Convertible Loan Agreement with its majority shareholder (as described in Note 3)) will be adequate to satisfy its working capital and capital expenditure requirements for at least the next twelve months. The Company may need to raise additional funds to support the execution of its long-term growth strategy through drawing down amounts available under the Convertible Loan Agreement or additional capital raises. There is no assurance that the Company will be able to raise additional capital.
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 2 – Basis of Preparation
Statement of compliance
The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and do not include all of the information required for full annual financial statements. They should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s 2014 annual consolidated financial statements, which were filed with the U.S. Securities and Exchange Commission as part of the Company’s annual report on Form 20-F for the year ended December 31, 2014.
In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015 or for any other future period.
Recently issued accounting standards
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. The new standard will be effective for the Company beginning January 1, 2017.
Application of the standard prior to its effective date is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 3 - Shareholders’ Equity
A. Share Capital
|
1.
|
As of June 30, 2015, the number of the Company’s ordinary shares outstanding was 15,541,306 (excluding 2,125 treasury shares held by a subsidiary).
|
|
2.
|
On June 11, 2009 the Company entered into a Loan Agreement with STINS COMAN (the Loan Agreement and all the amendments and addendums thereto, the "Convertible Loan Agreement"). On June 17, 2009, the Company entered into an Addendum to the Loan Agreement Also on June 17, 2009, the Company’s Audit Committee and Board of Directors approved the Loan Agreement and the Addendum thereto, which were approved by the Company’s shareholders at the Company’s annual general meeting held on September 14, 2009.
|
Pursuant to the Convertible Loan Agreement, STINS COMAN agreed to extend to the Company an unsecured loan, originally of up to $10 million (the “Maximum Amount”) at an annual interest rate of 2.47%. The Maximum Amount was increased several times via additional addendums/Amendments signed on June 17, 2009, February 17, 2010, April 14, 2011, December 8, 2011, April 17, 2012, August 6, 2012, October 23, 2012 and August 12, 2014 andas of June 30, 2014 was $45 million. At any time commencing October 1, 2009 through December 31, 2016, the Company may call and receive any portion of the loan from STINS COMAN, but no more than $5 million at a time (up to the Maximum Amount) and at intervals of at least 30 days between each call request.
Under the Convertible Loan Agreement, the Company is required to repay the outstanding principal amount and the interest accrued thereon after 36 months from receipt of each part of the funds respectively. STINS COMAN has the right to convert any outstanding principal amount of the loan and the interest accrued thereon, in whole or in part, into the Company’s ordinary shares at a conversion price per share equal to the market price of the Company’s ordinary shares on NASDAQ on the day the Company received the funds from STINS COMAN, plus a premium of 10% thereon. The conversion is subject to 30 days prior notice and to the execution of a definitive purchase agreement to be substantially similar to the Securities Purchase Agreement entered between the parties on September 11, 2008.
In the six months ended June 30, 2015 the Company drew down $2.0 million under the Convertible Loan Agreement. As of June 30, 2015 the Company has the right to draw an additional $12.1 million under the Convertible Loan Agreement.
|
3.
|
During the year ended December 31, 2013, the Company issued 16,028 ordinary shares and raised approximately $55,000 in an at-the-market offering of securities. After deducting the expenses related to the offering, the Company recorded $3,000, net of expenses, in the statement of shareholders’ equity via the at-the-market offering.
|
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 3 - Shareholders’ Equity (cont’d)
A. Share Capital (cont’d)
|
4.
|
On November 27, 2013 the Company closed a $6.0 million (excluding expenses) underwritten public offering of 3,000,000 ordinary shares and warrants to purchase up to 1,500,000 ordinary shares at an offering price of $2.00 per share and $0.01 per warrant. In addition, the underwriter exercised its over-allotment option to purchase warrants to acquire an additional 225,000 ordinary shares at an offering price of $0.01 per warrant. The warrants have a per share exercise price of $2.50, are exercisable immediately, and expire five years from the date of issuance. In addition, the Company issued the underwriters warrants to purchase up to an aggregate of five percent (5%) of the ordinary shares sold in the offering (150,000 ordinary shares). These warrants are exercisable commencing 12 months after the closing of the public offering and are exercisable in whole or in part for four years thereafter and have an exercise price equal to 125% of the offering price of the ordinary shares sold ($2.50). The warrants began trading on The NASDAQ Capital Market on November 22, 2013 under the symbol “RITTW.” A registration statement on Form F-1 relating to the offering was filed with the Securities and Exchange Commission. The net amount received by the Company from the offering, after deducting all offering expenses, was $4,946,000.
|
B. Share options and Warrants
|
1.
|
RiT Technologies Ltd. 2003 Option Plan
|
In July 2003, the Board of Directors of the Company adopted the RiT Technologies Ltd. 2003 Share Option Plan, or the 2003 Plan, which is currently, administered by the board of directors itself. The purpose of the 2003 Plan is to provide incentives to employees, directors, consultants and contractors of the Company or any subsidiary thereof. The exercise price and vesting schedule of options granted under the 2003 Plan are approved by the Board of Directors, as specified in the grant letter issued by us to the grantee. The contractual life of options granted under the plan is six years. Unless otherwise determined by the board of directors, the options fully vest on the third anniversary following their grant, vesting in three equal annual installments.
From January 1, 2015 through June 30, 2015 the Company granted a total of 65,000 options to employees and contractors at exercise prices ranging from $1.25 per ordinary share.
For the six months ended June 30, 2015 and 2014 the Company recorded compensation expense related to the grant of options in the amount of $186,000 and $518,000, respectively.
As of June 30, 2015, the total number of options granted under the 2003 Plan is 1,708,336 and the total number of options outstanding under the 2003 Plan is 672,539. As of June 30, 2015, 654,922 options are available for future grant.
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 3 - Shareholders’ Equity (cont’d)
2. RiT Technologies Inc. Employee Stock Option Plan
In May 1999, the Board of Directors of the Company adopted the RiT Technologies, Inc. Employee Stock Option Plan, or the RiT Inc. Plan, pursuant to which options to purchase the company’s ordinary shares may be granted to the employees of RiT Technologies, Inc.
As of June 30, 2015, the number of options granted under the RiT Inc. Plan is 27,242 and the number of options outstanding under the RiT Inc. Plan is 3,550. The RiT Inc. Plan expired in May 2009.
3. RiT Technologies Ltd. Issuance of warrants to Invencom
In June 22nd 2015, the Company issued to Invencom Technologies Ltd. ("Invencom"), an affiliate of the controlling shareholder of the Company (the "Transaction"), a warrant which allows Invencom to purchase up to 6,000,000 ordinary shares of the Company, at an exercise price of $2.5 per share (the “Warrant”).
The purchase price for the Warrant was based on the average market price of the warrants we issued as part of the underwritten public offering we completed on November 27, 2013 (the "Public Warrants"), so that the aggregate purchase amount for the Warrant equaled to: (a) the average market price of the Public Warrants in the ten trading days period prior to the closing of this transaction, multiplied by (b) 6,000,000 (which is the number of the Warrant's underlying Ordinary Shares).
The Parties closed the transaction on June 22, 2015 at 11:30 AM Israel Time (the "Closing"). The purchase price per warrant was closed at US$0.15911 (which was the average market price of the Public Warrants in the ten trading days period prior to the Closing), resulting in an aggregate purchase amount of US$954,660 for the Warrant (the "Purchase Amount"). The Purchase Amount was paid to the Company at the Closing.
The effective date of the Warrant (the "Commencement Date" set forth in the Warrant), was set to July 8, 2015.
C. Dividends
Dividends may be paid by the Company only out of RiT Technologies Ltd.’s earnings and other surpluses as calculated in Israeli currency and as defined in the Israeli Companies Law, 1999 (as amended), as at the end of the most recent fiscal year or as accrued over a period of the last two years whichever is higher. Notwithstanding the foregoing, dividends may be paid with the approval of a court, provided that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due. There are no restrictions on the ability of the US subsidiary to transfer funds to RiT Technologies Ltd., its parent company, and there are no restrictions on the transfer of funds to foreign shareholders for the payment of dividends. To date, the Company has never declared or paid any cash dividends on its ordinary shares. The Company currently intends to retain any future earnings to finance operations and to expand its business and, therefore, does not expect to pay any cash dividends in the foreseeable future.
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 4 - Supplementary Financial Statements Information
A. Balance Sheets
1. Cash and cash equivalents
Comprised of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and deposits *
|
|
|
1,232 |
|
|
|
1,604 |
|
|
*
|
As of June 30, 2015 $51,000 is deposited in NIS bearing an average annual interest of 0.02%. An amount of $42,000 was pledged against the Company's bank guarantees and the Company maintains balances in the account to cover this guarantee.
|
|
*
|
As of December 31, 2014 $50,000 is deposited in NIS bearing an average annual interest of 0.15%. An amount of $42,000 was pledged against the Company's bank guarantees and the Company maintains balances in the account to cover this guarantee.
|
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 4 - Supplementary Financial Statements Information (cont’d)
A. Balance Sheets (cont’d)
2. Trade receivables, net
Trade receivables, net, consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
6,333 |
|
|
|
2,477 |
|
Less allowance for doubtful accounts (*)
|
|
|
(382 |
) |
|
|
(797 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
5,951 |
|
|
|
1,680 |
|
* The following are the changes in the allowance for doubtful accounts:
Changes in the allowance for doubtful accounts
|
|
|
|
|
|
|
|
Balance as of December 31, 2013
|
|
|
615 |
|
Additions
|
|
|
215 |
|
Deductions
|
|
|
(33 |
) |
|
|
|
|
|
Balance as of December 31, 2014
|
|
|
797 |
|
Additions
|
|
|
3 |
|
Deductions
|
|
|
(418 |
) |
|
|
|
|
|
Balance as of June 30, 2015
|
|
|
382 |
|
3. Other current assets
Other current assets consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from the Government of Israel:
|
|
|
|
|
|
|
Value added tax authorities
|
|
|
17 |
|
|
|
61 |
|
Other
|
|
|
414 |
|
|
|
274 |
|
|
|
|
431 |
|
|
|
335 |
|
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 4 - Supplementary Financial Statements Information (cont’d)
A. Balance Sheets (cont’d)
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw materials and subassemblies
|
|
|
2,456 |
|
|
|
2,051 |
|
Work in process
|
|
|
127 |
|
|
|
44 |
|
Finished products
|
|
|
912 |
|
|
|
1,522 |
|
|
|
|
3,495 |
|
|
|
3,617 |
|
|
5.
|
Other payables and accrued liabilities
|
Other payables and accrued liabilities consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees and employee institutions
|
|
|
821 |
|
|
|
828 |
|
Accrued expenses
|
|
|
253 |
|
|
|
394 |
|
Provision for product warranty
|
|
|
100 |
|
|
|
100 |
|
Other
|
|
|
341 |
|
|
|
232 |
|
|
|
|
1,515 |
|
|
|
1,554 |
|
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 4 - Supplementary Financial Statements Information (cont’d)
|
B.
|
Statements of operations
|
|
(a)
|
Classification of sales by geographical destination:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
17 |
|
|
|
54 |
|
Europe
|
|
|
4,826 |
|
|
|
1,429 |
|
Israel
|
|
|
1,725 |
|
|
|
1,143 |
|
South and Latin America
|
|
|
24 |
|
|
|
487 |
|
Asia Pacific
|
|
|
1,337 |
|
|
|
530 |
|
Rest of the world
|
|
|
7 |
|
|
|
47 |
|
|
|
|
7,936 |
|
|
|
3,690 |
|
|
(1)
|
Sales are attributed to geographical areas based on location of customers.
The Company’s property and equipment is primarily located in Israel.
|
During the six months ended June 30, 2015 there were three customers that represented *50%, 13% and *11% of total sales. During the six months ended June 30, 2014 there were three customers that represented 18%, 13% and 11% of total sales.
* 50% and 11% are related parties.
2. Cost of sales
Cost of sales consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll and related benefits
|
|
|
317 |
|
|
|
559 |
|
Materials purchased
|
|
|
1,680 |
|
|
|
1,555 |
|
Subcontracted work
|
|
|
1,800 |
|
|
|
704 |
|
Write-down of inventories
|
|
|
- |
|
|
|
- |
|
Other production costs
|
|
|
388 |
|
|
|
246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4,185 |
|
|
|
3,064 |
|
Decrease / (increase) in inventories
|
|
|
122 |
|
|
|
(709 |
) |
|
|
|
4,307 |
|
|
|
2,355 |
|
RiT Technologies Ltd. and Subsidiaries
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Note 5 - Related Parties Balances and Transactions
The Company is party to many related party agreements and transactions. These agreements and transactions have all been approved by the appropriate bodies in accordance with the Israeli Companies Law and regulations promulgated thereunder based on the belief that the terms are beneficial to the Company and no less favorable to the Company than terms which might be available to the Company from unaffiliated third parties.
A. Balances with related parties
The following related party balances are included in the balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal/controlling:
|
|
|
|
|
|
|
Accounts receivable trade
|
|
|
3,344 |
|
|
|
287 |
|
Principal shareholder convertible loan
|
|
|
3,000 |
|
|
|
1,000 |
|
B. Income from or expenses to related parties
The following related party transactions are included in the statements of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income:
|
|
|
|
|
|
|
Sales
|
|
|
4,893 |
|
|
|
251 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
Financing expense
|
|
|
31 |
|
|
|
24 |
|
Note 6 - Subsequent Events
1.
|
On August 9, 2015, the Company closed an equity investment in its recently incorporated Israeli-subsidiary named RiT Wireless Ltd. ("RiT Wireless"), by Invencom Technologies Ltd., ("Invencom", an Israeli private company and an affiliate of Stins Coman, the controlling shareholder of the Company.
Under the terms of said investment, Invencom purchased ordinary shares of RiT Wireless for a purchase price of $5,000,000, which reflects a post-money valuation of approximately $15 million for RiT Wireless. The purchase price will be paid in three installments, the first of which was $1.3 million paid at the closing by Invencom to RiT Wireless. Following the investment transaction, Invencom owns 33% of the ordinary shares of RiT Wireless and RiT owns the remaining 67%.
Prior to said investment, the Company and RiT Wireless finalized a restructuring relating to the Indoor Wireless Optical Network (IWON) Technology including its product known as Beamcaster, whereby said technology was contributed to RiT Wireless, for no consideration, by means of a Technology Transfer Agreement signed between the parties. In addition, the Company and RiT Wireless entered into a Transition Services Agreement under which, the Company will provide transition services to RiT Wireless, including administration services, sublease of office and warehouse space, bookkeeping, IT Services and more. The Effective Date in both, the Technology Transfer Agreement and the Transition Services Agreement, was set to be as of July 1, 2015.
|
16
Exhibit 99.2
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Except for the historical information contained in the following sections, the statements contained in the following sections are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts, “projects,” “should,” “would” or similar expressions that convey uncertainty of future events or outcomes and the negatives of those terms.
The forward-looking statements contained in the following sections reflect our views as of the date hereof about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to, those factors described in “Risk Factors” and “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2014.
Any forward-looking statements contained in the following sections speak only as of the date hereof, and we caution readers not to place undue reliance on such statements. Such forward-looking statements do not purport to be predictions of future events or circumstances, and therefore, there can be no assurance that any forward-looking statement contained herein will prove to be accurate. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or any other reason.
General
Introduction
You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited consolidated financial statements for the six months ended June 30, 2015 and the related notes, and together with our audited consolidated financial statements for the year ended December 31, 2014 filed with the Commission as part of our Annual Report on Form 20-F for the year ended December 31, 2014. These financial statements have been prepared in accordance with U.S. GAAP.
Unless we have indicated otherwise or the context otherwise requires, references in the following sections to: (1) "we", "us", "our", "RiT", the "Registrant" or the "Company" are to RiT Technologies Ltd. and its wholly-owned US subsidiary; (2) "dollars" or "$" are to United States Dollars; (3) “NIS” are to New Israeli Shekels, the currency of the State of Israel; (4) "Commission" is to the United States Securities and Exchange Commission; (5) "Companies Law" or the "Israeli Companies Law" are to the Israeli Companies Law, 5759-1999, as amended; (6) “STINS” or “STINS COMAN” are to STINS COMAN Incorporated, a Russian corporation headquartered in Moscow, Russia, and which is our largest shareholder; (7) "Invencom" are to Invencom Technologies Ltd. (formerly known as Quartz (Israel) Commerce & Investments Ltd.), an Israeli private company owned by the wife of Mr. Sergey Anisimov, Chairman of the Board of Directors of the Company and president of STINS COMAN; (8) "Convertible Loan Agreement" or "Convertible Loan" are to the Convertible Loan Agreement between RiT and STINSCOMAN, dated June 11, 2009, as amended on June 17, 2009, February 17, 2010, April 14, 2011, December 8, 2011, April 17,2012, August 6, 2012, October 23, 2012 and August 12, 2014; (9) "IIM" are to Intelligent Infrastructure Management; (10) "Enterprise" and "carrier"" relate to the sectors we formerly identified as "datacom" and "telecom," respectively, with our enterprise solutions also referred to as our IIM solutions; (11) “APAC” means Asia Pacific; (12) "R&D" are to research and development; and (13)“NGN” means Next Generation Networks.
We commenced operations in 1989. We are a leading provider of IIM solutions and a developer of an innovative indoor optical wireless technology solution. Our IIM products provide and enhance security and network utilization for data centers, communication rooms and work space environments. They help companies plan and provision, monitor and troubleshoot their communications networks, maximizing utilization, reliability and physical security of the network while minimizing unplanned downtime. Our IIM solutions are deployed around the world, in a broad range of organizations, including data centers in the private sector, government agencies, financial institutions, airport authorities, healthcare and education institutions. Our Beamcaster™ product is the first of our indoor optical wireless technology solutions. It is designed to help customers streamline deployment, reduce infrastructure design, installation and maintenance complexity and enhance security in a cost effective way. During the third quarter of 2013, we commenced selling initial pilot installations of Beamcaster™.
Financial Highlights for the Six Months Ended June 30, 2015
Sales: Sales for the six months ended June 30, 2015 totaled $7.94 million, a 115.1% increase compared with $3.7 million for the six months ended June 30, 2014. The increase was attributable primarily to increase in sales in Eastern Europe, Asia Pasific and Israel, the company had sold $4.9M to the two new distributers in Russia and Singapore. The increase in sales in the above regions was set off by reduced in sales to Latin America due to the bad economic situation in Brazil.
Cost of sales: Cost of sales as a percentage of revenues for the six months ended June 30, 2015 was 54.3%, compared to 63.8% for the same period in 2014. The improvement is mainly due to mix of products sold and the fact that our fixed costs remained at the same level or even slightly decreased while the sales amount increased significantly.
Operating expenses: Operating expenses for the six months ended June 30, 2015 totaled $3.5 million, a decrease of 40.1% compared with $5.8 million for the same period in 2014. The decrease resulted from a decrease in all of our operating expenses. Reduction in our research and development expenses of $0.6 million during the six months ended June 30, 2015 as compared to the same period in 2014 was attributable mainly to a decrease in personnel and a capitalization of expenses made for the first time on 2015. Reduction in our Sales and Marketing expenses of $0.7 million during the six months ended June 30, 2015 as compared to the same period in 2014 was attributable mainly to a decrease in personnel in RiT Inc. and in various locations around the world. Reduction in our general and administrative expenses of $1.0 million during the six months ended June 30, 2015 as compared to the same period in 2014 resulting from outstanding collection of a few customers’ debts which we have classified as doubtful debts in 2014, as well as a decrease in stock compensation expense.
Net margin: Net margin for the first six months of 2015 was $0.1 million. Net loss for the first six months of 2014 was $4.5 million. The net margin is due to an increase in sales and due to the reduction in expenses as described above.
Cash and cash equivalents: Our cash and cash equivalents decreased from $1.6 million as of December 31, 2014 to $1.2 million as of June 30, 2015. As of June 30, 2015, we had drawn down, in the aggregate, a principal amount of approximately $32.9 million under the Convertible Loan Agreement, $29.9 million of which has been converted into ordinary shares. As of June 30, 2015, we could borrow up to an additional $12.1 million from STINS COMAN under the Convertible Loan Agreement.
Shareholders’ equity: Our shareholders’ equity increased from approximately $3.9 million as of December 31, 2014 to approximately $5.2 million as of June 30, 2015 as a result of the profit recorded during the first six months of 2015, issuance of warrants to Invencom and the stock based compensation expenses we recorded during this period.
Recent Developments
On January 15, 2015, March 12, 2015, and March 15, 2015, we drew down $1.0, $0.56 and $0.44 million in accordance, under the Convertible Loan. Accordingly, as of the date hereof, the total outstanding principal amount under the Convertible Loan is $3.0 million.
On August 9, 2015, the Company closed an equity investment in its recently incorporated Israeli-subsidiary named RiT Wireless Ltd. ("RiT Wireless"), by Invencom Technologies Ltd., ("Invencom", an Israeli private company and an affiliate of Stins Coman, the controlling shareholder of the Company.
Under the terms of said investment, Invencom purchased ordinary shares of RiT Wireless for a purchase price of $5,000,000, which reflects a post-money valuation of approximately $15 million for RiT Wireless. The purchase price will be paid in three installments, the first of which was $1.3 million paid at the closing by Invencom to RiT Wireless. Following the investment transaction, Invencom owns 33% of the ordinary shares of RiT Wireless and RiT owns the remaining 67%.
Prior to said investment, the Company and RiT Wireless finalized a restructuring relating to the Indoor Wireless Optical Network (IWON) Technology including its product known as Beamcaster, whereby said technology was contributed to RiT Wireless, for no consideration, by means of a Technology Transfer Agreement signed between the parties. In addition, the Company and RiT Wireless entered into a Transition Services Agreement under which, the Company will provide transition services to RiT Wireless, including administration services, sublease of office and warehouse space, bookkeeping, IT Services and more. The Effective Date in both, the Technology Transfer Agreement and the Transition Services Agreement, was set to be as of July 1, 2015.
Critical Accounting Policies
A comprehensive discussion of our critical accounting estimates and assumptions is included in the “Operating and Financial Review and Prospects” section in our Annual Report on Form 20-F for the year ended December 31, 2014.
Results of Operations
Comparison of Six Months Ended June 30, 2015 and 2014
The following table sets forth, for the periods indicated, certain financial data expressed in dollars (U.S. dollars in thousands) and as a percentage of total revenue:
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
Sales
|
|
$
|
7,936
|
|
|
|
100.0
|
%
|
|
$
|
3,690
|
|
|
|
100.0
|
%
|
Cost of sales
|
|
|
4,307
|
|
|
|
54.3
|
%
|
|
|
2,355
|
|
|
|
63.8
|
%
|
Gross profit
|
|
|
3,629
|
|
|
|
45.7
|
%
|
|
|
1,335
|
|
|
|
36.2
|
%
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net
|
|
|
825
|
|
|
|
11.3
|
%
|
|
|
1,473
|
|
|
|
39.9
|
%
|
Sales and marketing, net
|
|
|
1,483
|
|
|
|
18.7
|
%
|
|
|
2,163
|
|
|
|
58.6
|
%
|
General and administrative
|
|
|
1,145
|
|
|
|
14.4
|
%
|
|
|
2,133
|
|
|
|
57.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
3,453
|
|
|
|
43.5
|
%
|
|
|
5,769
|
|
|
|
156.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin (loss)
|
|
|
176
|
|
|
|
2.2
|
%
|
|
|
(4,434
|
)
|
|
|
(120.2
|
)%
|
Financing loss, net
|
|
|
(44
|
)
|
|
|
(0.6
|
)%
|
|
|
(49
|
)
|
|
|
(1.3
|
)%
|
Margin (Loss) before income tax expense
|
|
|
132
|
|
|
|
1.7
|
%
|
|
|
(4,483
|
)
|
|
|
(121.5
|
)%
|
Taxes on income
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
Net margin (loss)
|
|
$
|
132
|
|
|
|
1.7
|
%
|
|
$
|
(4,483
|
)
|
|
|
(121.5
|
)%
|
Sales. Sales consist of gross sales of products less discounts. For additional details regarding the manner in which we recognize revenues, see the discussion under “Critical Accounting Policies - Revenue Recognition” in our Annual Report on Form 20-F for the year ended December 31, 2014.
Primarily all of our revenues in the first six months of 2015 and 2014 were from sales of enterprise solutions. The following table provides a breakdown of our revenues (including maintenance and services revenues) by geographical area (based on location of customers) and relative percentages of our total revenue during the periods indicated (U.S. dollars in thousands):
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
United States
|
|
$
|
17
|
|
|
|
0.2
|
%
|
|
$
|
54
|
|
|
|
1.5
|
%
|
Europe
|
|
|
4,826
|
|
|
|
60.8
|
%
|
|
|
1,429
|
|
|
|
39
|
%
|
Israel
|
|
|
1,725
|
|
|
|
21.7
|
%
|
|
|
1,143
|
|
|
|
31
|
%
|
Latin America
|
|
|
24
|
|
|
|
0.3
|
%
|
|
|
487
|
|
|
|
13
|
%
|
Asia Pacific
|
|
|
1,337
|
|
|
|
16.8
|
%
|
|
|
530
|
|
|
|
14
|
%
|
Rest of the World
|
|
|
7
|
|
|
|
0.1
|
%
|
|
|
47
|
|
|
|
1.5
|
%
|
Total
|
|
$
|
7,936
|
|
|
|
100
|
%
|
|
$
|
3,690
|
|
|
|
100
|
%
|
Sales increased to $7.9 million in the first six months of 2015, a 115% decrease compared with approximately $3.7 million for the first six months of 2014. The increase was attributable primarily to increase in sales in Eastern Europe and Asia Pasific, the company had sold $4.9M to the two new affiliated distributers in Russia and Singapore. The increase in sales in the above regions was set off by reduced in sales to Latin America due to the bad economic situation in Brazil.
Cost of Sales. Cost of sales consists primarily of materials, sub-contractors expenses, shipping costs, compensation costs attributable to employees, write-downs of inventory and overhead expenses related to our manufacturing operations.
Cost of sales was $4.3 million in the first six months of 2015 and $2.3 million in the first six months of 2014. Cost of sales as a percentage of sales decreased to 54.3% in the first six months of 2015 compared to 63.8% for the first six months of 2014. The improvement is mainly due to mix of products sold and the fact that our fixed costs remained at the same level or even slightly decreased while the sales amount increased significantly.
Gross Profit. Gross profit increased from 36.2% in the first six months of 2014 to 45.7% in the first six months of 2015, mainly due to the increase in sales and to the reduction in fixed costs in the our cost of sales during the period, as described above.
Operating Expenses. The following table sets forth a breakdown of our operating expenses for the periods indicated:
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
2015 vs. 2014
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
Research and development, net
|
|
$
|
825
|
|
|
$
|
1,473
|
|
|
|
(44.0
|
)%
|
Sales and marketing
|
|
|
1,483
|
|
|
|
2,163
|
|
|
|
(31.4
|
)%
|
General and administrative
|
|
|
1,145
|
|
|
|
2,133
|
|
|
|
(46.3
|
)%
|
Total
|
|
$
|
3,453
|
|
|
$
|
5,769
|
|
|
|
(40.1
|
)%
|
Research and Development Expenses. R&D expenses consist primarily of compensation costs attributable to employees engaged in ongoing R&D activities, development-related raw materials and sub-contractors, and other related costs.
R&D expenses were $0.8 million in the first six months of 2015 compared with approximately $1.5 million in the first six months of 2014. As a percentage of sales, R&D expenses decreased to 10.4% in the first six months of 2015 from 39.9% in the first six months of 2014, resulting mainly from the decrease in salaries expense of $0.6 million due to decrease in personnel and capitalization of developments costs on 2015.
During the six months ended June 30, 2015 we did not receive grants from the Israeli Office of the Chief Scientist comparing $236,000 received during the six months ended June 30, 2014.
Sales and Marketing Expenses. Sales and marketing expenses consist primarily of costs relating to compensation attributable to employees engaged in sales and marketing activities, promotion, advertising, trade shows and exhibitions, sales support, travel, commissions and related expenses.
Sales and marketing expenses were approximately $1.5 million in the first six months of 2015 and $2.2 million in the first six months of 2014. The decrease is primarily a result of decrease in personnel in RiT Inc. and in various locations around the world.
General and Administrative. General and administrative expenses consist primarily of compensation costs for administration, finance and general management personnel, office maintenance and administrative costs and doubtful debt expenses.
General and administrative expenses were approximately $1.1 million in the first six months of 2015 compared with $2.1 million in the first six months of 2014. As a percentage of sales, G&A expenses decreased in 46% in the first six months of 2015 from 57.8% in the first six months of 2014, resulting from outstanding collection of a few customers’ debts which we have classified as doubtful debts in 2014, as well as a decrease in stock compensation expense.
Financing Loss, Net. Financing loss, net was approximately $44,000 in the first six months of 2015 compared with approximately $49,000 in the first six months of 2014.
Net Margin. Net Margin for the first six months of 2015 was $0.1 million for the first six months of 2015 comparing to net loss of approximately $4.5 million for the first six months of 2014. The change from loss to margin is primarily as a result of the increase in sales and to the decrease in operating expenses as described above.
Liquidity and Capital Resources
In the past few years, we financed our operations through cash generated from operations, R&D and marketing grants from the Government of Israel, private and public capital raises and loans from our major shareholder, STINS COMAN, including the conversion thereof into our ordinary shares.
As described below in more detail, as of September 24, 2015, we have the right to draw an additional $12.1 million under the Convertible Loan Agreement until December 31, 2016.
Principal Financing Activities
Our principal financing activities during the past six years were:
|
·
|
In June 2009, we entered into the Convertible Loan Agreement with STINS COMAN, according to which STINS COMAN agreed to extend to us a loan of, initially, up to $10 million (the "Maximum Amount") at an annual interest rate of 2.47%. The Convertible Loan Agreement, including the Maximum Amount, has been amended several times, including lastly on August 12, 2014. Currently, the Maximum Amount is set at $45 million and the period during which we may call and receive any portion of the loan not already used is scheduled to expire on December 31, 2016 (the "Term"). Under the Convertible Loan Agreement, as amended, the Company may call and receive any portion of the loan from STINS COMAN, but no more than $5 million at a time (up to the said Maximum Amount of $45 million) and at intervals of at least 30 days between each call request. As of September 24, 2015, we had drawn approximately $32.9 million of the principal of the loan under the Convertible Loan Agreement, which we received in installments, such that we still have available withdrawals of up to $12.1 million.
|
Part of the outstanding loans from STINS COMAN have been converted into our ordinary shares as follows: (1) in May 2010, approximately $1.5 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 615,485 of our ordinary shares, reflecting an average conversion price of $2.465 per share, (2) in September 2010, approximately $1.5 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 687,128 of our ordinary shares, reflecting an average conversion price of $2.214 per share, (3) in March 2011, approximately $1.2 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 408,787 of our ordinary shares, reflecting an average conversion price of $2.876 per share, (4) in June 2011, approximately $1.0 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 177,006 of our ordinary shares, reflecting an average conversion price of $5.680 per share, (5) in December 2011, approximately $3.2 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 636,874 of our ordinary shares, reflecting an average conversion price of $5.090 per share, (6) in June 2012, approximately $4.2 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 1,146,114 of our ordinary shares, reflecting an average conversion price of $3.667 per share, (7) in December 2012, approximately $3.8 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 1,119,743 of our ordinary shares, reflecting an average conversion price of $3.42 per share, (8) in March 2013, approximately $4.5 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 1,021,166 of our ordinary shares, reflecting an average conversion price of $4.440 per share, (9) in June 2013, approximately $2.0 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 449,738 of our ordinary shares, reflecting an average conversion price of $4.46 per share, (10) in September 2013, approximately $2.0 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 582,494 of our ordinary shares, reflecting an average conversion price of $3.45 per share, and (11) in September 2014, approximately $5.0 million, representing principal and accrued interest, were converted pursuant to a share purchase agreement into 2,778,088 of our ordinary shares, reflecting an average conversion price of $1.82 per share . See “Related Party Transactions” included in our Annual Report on Form 20-F for the year ended December 31, 2014.
On November 27, 2013, we consummated an underwritten public offering of 3,000,000 ordinary shares and warrants to purchase up to 1,725,000 ordinary shares at an offering price of $2.00 per share and $0.01 per warrant (including warrants to purchase 225,000 ordinary shares issued to the underwriter, Aegis Capital Corp., upon exercise of its over-allotment option), or the Public Warrants. In connection with the offering, we also issued to the underwriter warrants to acquire an additional 150,000 ordinary shares, or the Underwriter Warrants. All of the warrants have a per share exercise price of $2.50, are exercisable immediately (except for the Underwriter Warrants that become exercisable on November 27, 2014), and expire 5 years from the date of issuance, i.e., on November 27, 2018. The Public Warrants began trading on The NASDAQ Capital Market on November 22, 2013 under the symbol "RITTW." Total gross proceeds from the offering were approximately $6.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company. The net amount received by us from the offering, after deducting all offering expenses, was approximately $4.95 million.
In June 22nd 2015, the Company issued to Invencom Technologies Ltd. ("Invencom"), an affiliate of the controlling shareholder of the Company (the "Transaction"), a warrant which allows Invencom to purchase up to 6,000,000 ordinary shares of the Company, at an exercise price of $2.5 per share (the “Warrant”).
The purchase price for the Warrant was based on the average market price of the warrants we issued as part of the underwritten public offering we completed on November 27, 2013 (the "Public Warrants"), so that the aggregate purchase amount for the Warrant equaled to: (a) the average market price of the Public Warrants in the ten trading days period prior to the closing of this transaction, multiplied by (b) 6,000,000 (which is the number of the Warrant's underlying Ordinary Shares).
The Parties closed the transaction on June 22, 2015 at 11:30 AM Israel Time (the "Closing"). The purchase price per warrant was closed at US$0.15911 (which was the average market price of the Public Warrants in the ten trading days period prior to the Closing), resulting in an aggregate purchase amount of US$954,660 for the Warrant (the "Purchase Amount"). The Purchase Amount was paid to the Company at the Closing.
The effective date of the Warrant (the "Commencement Date" set forth in the Warrant), was set to July 8, 2015.
Working Capital and Cash Flows
On June 30, 2015, we had cash and cash equivalents of approximately $1.2 million, compared with $1.6 million on December 31, 2014.
The following table presents the major components of net cash flows used in and provided by operating, investing and financing activities for the six months ended June 30, 2015 and 2014 (dollars in thousands):
|
|
|
2015
|
|
|
|
2014
|
|
Net cash used in operating activities
|
|
$
|
(3,004
|
)
|
|
$
|
(3,958
|
)
|
Net cash used in investing activities
|
|
|
(323
|
)
|
|
|
(106
|
)
|
Net cash provided by financing activities
|
|
|
2,955
|
|
|
|
-
|
|
Net cash used in operating activities was $3.0 million in the first six months of 2015 compared to $4.0 million in the first six months of 2014. Net cash used in operating activities during the first six months of 2015 consisted primarily from increase in trade receivables set off by an increase in trade payables. Net cash used in operating activities during the first six months of 2014 consisted primarily from the net loss in the period, increased inventories, decreased trade payables and increased current assets, partially offset by a decrease in trade receivables.
Net cash used for investing activities was $323,000 in the first six months of 2015 and $106,000 in the first six months of 2014. Our principal investing activity in 2014 was purchase of property and equipment, and in 2015- capitalization of R&D expenses.
Net cash provided by financing activities was $2.96 million in the first six months of 2015 and $0 million in the first six months of 2014. The increase is a result of an increase in loan proceeds from the Convertible Loan and issuance of Warrants to Invencom.
Our contractual and contingent obligations and commitments as of June 30, 2015, primarily consisted of obligations associated with our future operating lease obligations, our suppliers’ obligations and a contingent liability to the Chief Scientist. See Note 5 to our consolidated financial statements included in our Annual Report on Form 20-F for the year ended December 31, 2014 and “Tabular Disclosure of Contractual Obligations” in our Annual Report on Form 20-F for the year ended December 31, 2014.
Principal Capital Expenditure and Divestitures
During the six months ended June 30, 2015 and 2014, our capital expenditures totaled approximately $0.1 million for both periods, all of which was used for the purchase of machinery, computers and research and development equipment. Other than similar future capital expenditures consistent with the amounts described above, In addition, on 2015 we started to capitalize costs related to our new ERP system that is planned to be fully deployed on 2016.
We did not make any significant divestitures in the past three years, on the third quarter of 2015 we commenced another restructuring process, please see above under recent developments.
Outlook
We believe that our cash and cash equivalents, together with cash generated from operations, as well as the availability of additional loans of up to approximately $12.1 million as of September 24, 2015 from STINS COMAN pursuant to the Convertible Loan Agreement, will be sufficient to finance our operations for at least the next 12 months. Subject to the terms of the Convertible Loan Agreement we are permitted to draw down any remaining principal amount outstanding under the agreement.
We cannot assure you that our actual cash requirements will not be greater than we currently expect, if circumstances change during 2015. In addition, we may need to raise additional funds during 2016 to support the execution of our long-term growth strategy described herein. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. If we are unsuccessful in raising such financing on acceptable terms, we will not be able to carry out our plan and our operations and growth strategy would be materially adversely affected.
Exhibit 99.3
|
|
|
RiT Technologies Ltd.
24 Raoul Wallenberg St.
Tel Aviv, 69719, Israel
Tel: +972-77-2707270
Fax: +972-3-6474115
|
RiT Technologies Reports Second Quarter and Six Month 2015 Results
-Q2 2015 Revenue Increased 172% Year-Over-Year to $4.5 Million
-Q2 2015 Gross Margin Increased to 47% Compared to 31% in Q2 2014
Tel Aviv, Israel – September 29, 2015 – RiT Technologies (NASDAQ: RITT), a leading provider of Converged Infrastructure Management Solutions that enable companies to maximize utilization and security of their network infrastructure announced today its results for the second quarter and six months ended June 30, 2015.
Financial Highlights for the Second Quarter Ended June 30, 2015
|
·
|
Revenue for Q2 2015 increased 172% to $4.5 million, compared to $1.7 million in Q2 2014
|
|
·
|
Gross margin for Q2 2015 improved to 47%, compared to 31% in Q2 2014
|
|
·
|
Net Income for Q2 2015 was $0.1 million, or $0.01 per (basic and diluted) share, compared to a net loss of $(2.6) million or $(0.20) per (basic and diluted) share in Q2 2014
|
|
·
|
Cash and cash equivalents as of June 30, 2015 was $1.2 million
|
|
·
|
Shareholders' equity as of June 30, 2015, increased to $5.2 million, compared to $3.9 million on December 31, 2014
|
Financial Highlight for the Six Month Period Ended June 30, 2015
|
·
|
Revenue for the first six months of 2015 increased 115% to $7.9 million, compared to $3.7 million in the same period of 2014
|
|
·
|
Gross margin for the first six months of 2015 improved to 46%, compared to 36% in the same period of 2014
|
|
·
|
Net profit for the first six months of 2015 was $0.1 million, or $0.01 per (basic and diluted) share, compared to a net loss of $(4.5) million, or $(0.35) loss per (basic and diluted) share recorded in the first six months of 2014
|
"Throughout the first half of 2015, RiT continued to capitalize on the combined strength of our improved operational platform and product/service offering, which resulted in favorable revenue growth and increased profitability," noted Yossi Ben-Harosh President and Chief Executive Officer of RiT Technologies. “With a robust and growing pipeline of opportunities, supported by a focused business strategy and commitment to superior execution, I am confident RiT is positioned to deliver increasingly strong results during the second half of 2015 and beyond.”
"In addition to my joining in July, RiT has added proven, seasoned professionals to the sales and senior management teams to further strengthen the Company’s position in the market. I am encouraged by what I’ve seen to date and look forward to the increasing contribution of these key indivudals," concluded Mr. Ben-Harosh.
To more effectively define its service offering, RiT launched a new subsidiary RiT Wireless - focusing on global market penetration of RiT’s advanced Indoor Wireless Optical Networks technology, Beamcaster 2.0.
|
|
|
RiT Technologies Ltd.
24 Raoul Wallenberg St.
Tel Aviv, 69719, Israel
Tel: +972-77-2707270
Fax: +972-3-6474115
|
And in addition two distinct lines of business as part of its strategy to focus on new opportunities with specific technologies and deployment models that address unique challenges and application needs:
|
·
|
RiT Connectivity – a line of business that includes RiT’s flagship products of SCS (smart cabling systems) and IIM (intelligent infrastructure management); with a commitment to maintaining its market leadership as the premium IIM solution in the market.
|
|
·
|
RiT Software – a line of business promoting RiT’s growth engine software product Converged Infrastructure Management System, CM 3.0, a platform that provides a unified way to manage converged systems and services to improve network utilization, streamline infrastructure operations, reduce costs and enhance data security.
|
About RiT Technologies
RiT Technologies (NASDAQ: RITT) is a leading provider of converged IT infrastructure management and connectivity solutions that improve network utilization, streamline infrastructure operations and enhance data security reduce network operation cost and optimize future investments.
RiT offers a platform that provides a unified way to manage converged systems and services to improve network utilization, streamline infrastructure operations, reduce cost and enhance data security. RiT’s platform includes connectivity solutions such as IIM, (Intelligent Infastructure Management), converged infrastructure management software, and indoor optical wireless technology.
Deployed around the world in data centers, large corporations, government agencies, financial institutions, telecommunications, airport authorities, healthcare organizations and educational facilities. RiT’s shares are traded on the NASDAQ Capital Market under the symbol RITT.
Safe Harbor Statement
In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate", "forecast", “target”, “could” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described under the heading “Risk Factors” in our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 20-F, which may be revised or supplemented in subsequent reports filed with the SEC. These factors include, but are not limited to, the following: our ability to raise additional financing, if required; the continued development of market trends in directions that benefit our sales; our ability to maintain and grow our revenues; our dependence upon independent distributors, representatives and strategic partners; our ability to develop new products and enhance our existing products; the availability of third-party components used in our products; the economic condition of our customers; the impact of government regulation; and the economic and political situation in Israel. Except as otherwise required by applicable law, we expressly disclaim any obligation to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
CONTACTS:
Amit Mantsur
CFO
M: +972. 55.882.3734
amitm@rittech.com
www.rittech.com
|
|
|
|
|
RiT Technologies Ltd.
24 Raoul Wallenberg St.
Tel Aviv, 69719, Israel
Tel: +972-77-2707270
Fax: +972-3-6474115
|
RiT TECHNOLOGIES LTD.
|
|
STATEMENTS OF OPERATIONS (U.S GAAP)
|
|
(U.S dollars in thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
Three
Months Ended
June 30
|
|
|
Six
Months Ended
June 30
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Sales
|
|
|
4,549 |
|
|
|
1,674 |
|
|
|
7,936 |
|
|
|
3,690 |
|
Cost of sales
|
|
|
2,428 |
|
|
|
1,151 |
|
|
|
4,307 |
|
|
|
2,355 |
|
Gross profit
|
|
|
2,121 |
|
|
|
523 |
|
|
|
3,629 |
|
|
|
1,335 |
|
Operating expenses
|
|
Research and development, net
|
|
|
450 |
|
|
|
786 |
|
|
|
825 |
|
|
|
1,473 |
|
Sales and marketing, net
|
|
|
740 |
|
|
|
1,007 |
|
|
|
1,483 |
|
|
|
2,163 |
|
General and administrative
|
|
|
789 |
|
|
|
1,298 |
|
|
|
1,145 |
|
|
|
2,133 |
|
Total operating expenses
|
|
|
1,979 |
|
|
|
3,091 |
|
|
|
3,453 |
|
|
|
5,769 |
|
Operating margin / (loss)
|
|
|
142 |
|
|
|
(2,568 |
) |
|
|
176 |
|
|
|
(4,434 |
) |
Financing loss, net
|
|
|
(28 |
) |
|
|
(23 |
) |
|
|
(44 |
) |
|
|
(49 |
) |
Other income (expenses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax expense
|
|
|
114 |
|
|
|
(2,591 |
) |
|
|
132 |
|
|
|
(4,483 |
) |
Taxes on income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Profit / (Loss)
|
|
|
114 |
|
|
|
(2,591 |
) |
|
|
132 |
|
|
|
(4,483 |
) |
Net Profit (Loss) Per Share -Basic and diluted
|
|
|
0.01 |
|
|
|
(0.20 |
) |
|
|
0.01 |
|
|
|
(0.35 |
) |
Weighted average number of ordinary shares Outstanding- basic and diluated
|
|
|
15,541,306 |
|
|
|
12,763,218 |
|
|
|
15,541,306 |
|
|
|
12,763,218 |
|
|
|
|
RiT Technologies Ltd.
24 Raoul Wallenberg St.
Tel Aviv, 69719, Israel
Tel: +972-77-2707270
Fax: +972-3-6474115
|
RiT TECHNOLOGIES LTD.
|
|
CONSOLIDATED BALANCE SHEETS (U.S GAAP)
|
|
(U.S dollars in thousands, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
June 30,
2015 US$
thousands
|
|
|
December 31,
2014 US$
thousands
|
|
Assets
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
1,232 |
|
|
|
1,604 |
|
Trade receivables, net
|
|
|
5,951 |
|
|
|
1,680 |
|
Other current assets
|
|
|
431 |
|
|
|
335 |
|
Inventories
|
|
|
3,495 |
|
|
|
3,617 |
|
Total Current Assets
|
|
|
11,109 |
|
|
|
7,236 |
|
|
|
|
|
|
|
|
|
|
Assets held for severance benefits
|
|
|
893 |
|
|
|
967 |
|
In Process R&D (IPR&D)
|
|
|
193 |
|
|
|
0 |
|
Property and equipment, net
|
|
|
445 |
|
|
|
471 |
|
Total non-Current Assets
|
|
|
1,531 |
|
|
|
1,438 |
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
12,640 |
|
|
|
8,674 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
1,755 |
|
|
|
967 |
|
Other payables and accrued liabilities
|
|
|
1,515 |
|
|
|
1,554 |
|
Total Current Liabilities
|
|
|
3,270 |
|
|
|
2,521 |
|
|
|
|
|
|
|
|
|
|
Principal shareholder convertible loan
|
|
|
3,000 |
|
|
|
1,000 |
|
Liability in respect of employees' severance
|
|
|
|
|
|
|
|
|
benefits
|
|
|
1,168 |
|
|
|
1,224 |
|
Total of non-Current Liabilities
|
|
|
4,168 |
|
|
|
2,224 |
|
Total Liabilities
|
|
|
7,438 |
|
|
|
4,745 |
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
Share capital
|
|
|
3,384 |
|
|
|
3,384 |
|
Treasury stock
|
|
|
(27 |
) |
|
|
(27 |
) |
Additional paid-in capital
|
|
|
73,380 |
|
|
|
72,239 |
|
Accumulated deficit
|
|
|
(71,535 |
) |
|
|
(71,667 |
) |
Total Shareholders' Equity
|
|
|
5,202 |
|
|
|
3,929 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity
|
|
|
12,640 |
|
|
|
8,674 |
|
Page 4 of 4
Exhibit 99.4
|
|
|
RiT Technologies Ltd.
24 Raoul Wallenberg St.
Tel Aviv, 69719, Israel
Tel: +972-77-2707270
Fax: +972-3-6474115
|
Global Investment Bank Deploys RiT’s CenterMind Software
to Manage its Global IT Infrastructure
Visibility and control of over 20 million network elements improves data center agility
Tel Aviv, Israel – September 24, 2015 – RiT Technologies (NASDAQ: RITT), a leading provider of Converged Infrastructure Management Solutions that enable companies to maximize utilization and security of their network infrastructure announced today that a global investment bank has deployed CenterMind, RiT’s IT Infrastructure Management Software, to manage its global IT infrastructure, with over 20 million network elements and ports worldwide. The software provides real time visibility and control of the entire IT network in order to improve data center agility, optimize capacity, reduce downtime, enforce best-practice policies and reduce operational costs.
Replacing a legacy cable management system that was used by the investment bank for over ten years, RiT’s CenterMind solution provides connectivity documentation, asset management, auto discovery, and planning tools for deploying IT equipment, with the ability to schedule and manage work orders. CenterMind is fully integrated with the investment bank’s IT service management (ITSM) system to provide one integrated and comprehensive solution.
CenterMind was selected due to its ability to discover and document IT assets and network connectivity more efficiently, advanced planning and change management tools, ease of customization and RiT’s professional services. In addition, CentreMind includes comprehensive reports which can be easily customized to meet the investment bank’s needs.
“Companies are required to build an agile IT infrastructure in order to address rapidly changing business needs and seize market opportunities”, said Raphael Sankar, VP Sales & Business Development with RiT. “An IT infrastructure management software, such as CenterMind, provides such agility and flexibility, while maximizing the utilization of existing IT facilities.”
About RiT Technologies
RiT Technologies (NASDAQ: RITT) is a leading provider of converged IT infrastructure management and connectivity solutions that improve network utilization, streamline infrastructure operations and enhance data security reduce network operation cost and optimize future investments.
RiT offers a platform that provides a unified way to manage converged systems and services to improve network utilization, streamline infrastructure operations, reduce cost and enhance data security. RiT’s platform includes connectivity solutions such as IIM, (Intelligent Infastructure Management), converged infrastructure management software, and indoor optical wireless technology.
Deployed around the world in data centers, large corporations, government agencies, financial institutions, telecommunications, airport authorities, healthcare organizations and educational facilities. RiT’s shares are traded on the NASDAQ Capital Market under the symbol RITT.
|
|
|
RiT Technologies Ltd.
24 Raoul Wallenberg St.
Tel Aviv, 69719, Israel
Tel: +972-77-2707270
Fax: +972-3-6474115
|
Safe Harbor Statement
In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate", "forecast", “target”, “could” and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described under the heading “Risk Factors” in our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 20-F, which may be revised or supplemented in subsequent reports filed with the SEC. These factors include, but are not limited to, the following: our ability to raise additional financing, if required; the continued development of market trends in directions that benefit our sales; our ability to maintain and grow our revenues; our dependence upon independent distributors, representatives and strategic partners; our ability to develop new products and enhance our existing products; the availability of third-party components used in our products; the economic condition of our customers; the impact of government regulation; and the economic and political situation in Israel. Except as otherwise required by applicable law, we expressly disclaim any obligation to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
CONTACTS:
Kobi Haggay
VP Products and Marketing
M: +972.54.4338382
kobi.haggay@rittech.com
www.rittech.com
|
Monica Maron
Spicetree Communications
Mobile: +972-54-5429529
monica.maron@spicetreecom.com
|
Page 2 of 2
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