Ladies and gentlemen, good morning, and welcome to SuperCom's fourth-quarter and year-end 2022 financial results and corporate update conference call. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes.

I'd now like to turn the call over to Stephanie Prince of PCG. Stephanie, over to you..

Thank you, Jenny, and thank you to everyone joining us. With me on the call today is Ordan Trabelsi, SuperCom’s President and Chief Executive Officer.

I’d like to remind you that during this call, SuperCom management may be making forward-looking statements, including statements that address SuperCom’s expectations for future performance or operational results.

Forward-looking statements involve risks, uncertainties, and other factors that may cause SuperCom’s actual results to differ materially from those statements.

For information about these risks, uncertainties, and factors, please refer to the risk factors described in SuperCom’s most recently filed periodic report on Form 20-F, on Form 6-K, and SuperCom’s press release that accompanies this call, particularly the cautionary statements in it.

Today’s conference call also includes EBITDA, a non-GAAP financial measure that SuperCom believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP.

For a reconciliation of this non-GAAP financial measure to net loss, our comparable GAAP financial measure, please see the reconciliation table located in SuperCom’s earnings press release that accompanies this call. Reconciliations for other non-GAAP financial measures and comparable GAAP financial measures are available there as well.

The content of this call contains time-sensitive information that is accurate only as of today, April 20, 2023. Except as required by law, SuperCom disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

It is now my pleasure to turn the call over to SuperCom’s, President of CEO, Ordan Trabelsi.

Ordan?.

Just checking Ordan, are you on mute?.

Yes, yes. Thank you. Sorry about that. Thank you, Stephanie, and good morning, everyone. And thank you for joining us today. Earlier this morning, we issued a press release with our financial results for the fourth quarter and year ended 2022. You can find a copy in the Investor Relations section of our website at supercom.com.

Today, I'll start my comments with a brief update on our recent business highlight, strategy, and Q4 and 2022 results, followed by a Q&A session. SuperCom had a great year in 2022.

Annual revenues increased by 44% to $17.7 million, and the company reach a positive EBITDA in both the third and fourth quarters after years of investment in our leading IoT technology.

We also improved our operating cash flow significantly from an operating cash use of $9.4 million in 2021 to $4.7 million in 2022, roughly half, reflecting positive cash flow generation from new and old projects. During the past year, we won several important contracts in the US and Europe, guided over $40 million in total.

And we're excited at the opportunities we see ahead. I'll go more into details in a few moments. To those new to SuperCom, SuperCom's mission is to revolutionize the public safety sector worldwide through proprietary electronic monitoring technology, data intelligence, and complementary services.

Over the past 34 years since founding in 1988, we've been a trusted partner of dozens of governments worldwide, providing them with cutting-edge electronic and digital security solutions. Our strategy is to deliver technology with our top-notch solutions, expand our presence, and deliver outstanding services.

We successfully executed that strategy by focusing on the following key factors. Our proprietary real-time monitoring technologies scores highly in competitive RFP and supports various programs, such as house arrest, GPS monitoring, rehabilitation services, domestic violence prevention, and more.

SuperCom has won over 50 new multi-year governmental projects in 2018. And just in the past year alone, the announced project wins valued at over $40 million. Our strong implication and recognition of the premium provider of electronic monitoring technology and services also contribute to our win rate.

With each new customer win and project deployment, we further strengthen our reputation and competitive position. Third, we managed a strategic focus and attention to our IoT tracking business in developed countries where the opportunity is the greatest.

The electronic monitoring market is estimated to reach roughly $2.1 billion by 2026, up from $1.2 billion in 2021. The US and Europe constitute about 95% of the market. In Europe, there's recently been an increase in our peak activity, with over $200 million of project bid opportunities in the past 18 months.

Although these exceptional opportunities have resulted in a growing pipeline of business, that has an average of high recurring revenue rate after installation.

In 2022, we continued to invest in R&D to ensure our products remain the most competitive in the market and continue to introduce new features and technology to our proprietary platforms, such as a -- result, we successfully finalized development and deployment of two new products, one, which is called PureProtect life-saving domestic balance monitoring solution.

This calibrated product has undergone rigorous testing. And it's already been successfully implemented in multiple projects, including the $33 million project in Romania. Thirdly, expanding the company's addressable market. Another new product that launched this year is the PureOne.

It's an all-in-one ankle bracelet monitoring solution that integrates comprehensive monitoring capabilities into a single device with lightweight design, longer battery life, high precision, and future-proof features. But PureOne offers a more efficient and effective electronic monitoring solution.

This product also spans SuperCom's market reach to a market that favor a one-piece solution, such as many regions in the US. We've been very pleased with its early reception and traction of our newest products and expect them to facilitate the rapid expansion of supermarket also into the US market.

In 2022, we not only maintained our technological advantage, but also invested in enhancing our operational infrastructure and expanding our workforce. Furthermore, we bolstered the company's global sales efforts by recruiting new sales team members with industry expertise to drive our shift from passive bidding to an active outreach strategy.

Throughout the year, we announced many new project wins in the US and Europe. We're super proud to be continuously displacing incumbent vendors with over 65% win rate in European competitive RFPs.

We're proud to have won so many new contracts in this short period, especially during economic uncertainty and market volatility due to the looming threat of recession and unstable geopolitics. Our business is recession resistant in nature. And as the possibility of potential recession increases, there are multiple tailwinds that support our growth.

As many of you have heard me describe before, these global factors include high recidivism rates of roughly 75% or more, prison overcrowding of over 100%, and high incarceration costs. In 2020, the US alone spent over $80 billion to approximately 2.2 billion -- 2.3 million people incarcerated, which equates to nearly 1% of the entire US population.

For those reasons, among others, we see a growing global trend of the government turning to innovative solutions and alternatives to incarceration to ensure public safety, and our PureSecurity technology solution have been designed to address those trends.

PureSecurity provides an effective way for institutions to enforce home confinement while easing prison overcrowding and significantly lowering costs.

For example, the total daily cost for monitoring an offender at home through violence or GPS monitoring is approximately $10 to $35 a day compared to the much higher cost of $100 to $140 a day at a correctional facility.

Most importantly, home confinement has been shown to reduce recidivism, highlighting its effectiveness in helping offenders improve their lives and communities.

On top of these growth drivers, we have witnessed a surge in adoption of victim protection solutions worldwide, which align perfectly with our strategic plan and the launch of our new product, PureProtect.

During the past year, we extended our presence across Europe by winning significant new contracts, which, as I mentioned, are typically awarded through competitive RFP processes. SuperCom now does business in over 10 countries across Europe, and we look forward to increasing that number in the years ahead.

Revenue for European countries increased by 230% to $9.6 million from $2.9 million in 2021 and accounted for roughly 54% of our sales mix in 2022. We won the largest industry award of the year for national electronic monitoring project in Romania, guided at $33 million. It include about the 15,000 monitored offenders per month.

Our domestic violence solution in PureProtect is expected to enhance the security of many families as part of this project. The project was 15,000 per month over six years.

Just a few weeks ago, we announced that we have received a $7.1 million follow-on order, a second order under the contract, which follows the initial order of over $8.1 million back in 2022. We've also launched a domestic violence mission up in other regions of Europe and are planning to launch in the US soon.

In Israel, there's potential for new domestic violence project as well. The government is trying to pass a law requiring domestic violence offenders to be monitored with technology such as ours. Finland was one of the most recent project launched.

The $3.6 million national traffic monitoring project was awarded by the national government to deploy SuperCom's PureSecurity electronic monitoring suite. Earlier this year, we also won contracts in Sweden and Croatia. SuperCom was awarded Croatia's first national electronic monitoring projects, which we already launched.

And we secured a new contract with Sweden's juvenile national electronic monitoring project, the third and final remaining national EM project in Sweden, which are now all held by SuperCom. We've also been working to increase our business in the US.

We're proud to have made good progress towards our goals of multiple projects in California, Idaho, Texas, and Wyoming during 2022.

For example, in the fourth quarter, Leaders and Community Alternatives, or LCA, our wholly owned subsidiary based in California, won a new project contract valued at approximately $4.25 million with the Northern California counties to provide adult re-entry services.

LCA has provided services in these counties for many years, including adult day reporting services and electronic monitoring. The new project expands its scope of the contracted re-entry services to include jail-based sites and several community-based sites.

It also focuses on re-entry services, including case management, substance abuse education, job preparedness, and criminogenic risk reduction. This program was already launched in Q1 of 2023. The recent win in Idaho, our business's third win and third new customer in Idaho in less than a year, which adds to organically growing customer base.

These wins also clearly illustrate how rapidly our technology can spread to adjacent new customers. SuperCom now does business in multiple US states, with US revenue now accounting for 39% of our sales mix in 2022.

Also, in the fourth quarter, SuperCom data protection and security subsidiary, called Safend, received two orders totaling approximately $870,000. The first's valued at $270,000 from a government security agency to renew and expand their cybersecurity protection programs.

The other is valued at $600,000, and it's for license fees for additional seat expansion and recurring maintenance fees for our 50,000 seats. Safend's high-margin products have been around for years and have a promising outlook had it continued.

The rapid advancement of digital technology has led to an alarming rise in cybersecurity threats, making cybersecurity solutions more crucial than ever before. As a result, Safend's products are in high demand as they offer effective protection against cyberattacks.

Our new strategic sales team and new wins have been the first steps in executing the company's US market expansion strategy and have already driven increased activity with existing customers and numerous new demos and evaluations in new potential ones.

And as we talked about before, we believe there is also an opportunity to enhance our US growth through strategic acquisitions of local electronic monitoring service providers with a strong reputation and a customer base in their respective local markets.

We constantly monitor the market and potential acquisitions that could generate significant value by immediately expanding market presence and providing vertical integration synergies.

Our acquisition of LCA in 2016 of $3 million is a great example, acquired in less than one times revenues, but with very strategic synergies on top line and cost effective. This LCA acquisition has led to over $30 million in new projects in California alone since the acquisition. I'll now turn over to the financials.

During our previous conference call, I mentioned that we were anticipating contributions to our financial results in Q4 of the projects we discussed. I'm delighted to share that our revenue has recorded a remarkable year-over-year growth of 69%, amounting to $5.1 million in the fourth quarter.

Moreover, our annual revenue growth increased by 44% to $17.7 million in 2022, with our IoT division being the primary growth engine. To put things into perspective, while the global electronic monitoring market growth was approximately 10% in 2022, SuperCom's IoT revenues achieved a staggering 76% growth during the same period.

This growth is a testament to the fact that the market prefers our solutions over the alternative. Furthermore, we are proud to announce our return to positive EBITDA in the third and fourth quarter.

And we achieved an EBITDA of $400,000 in the third quarter, and $770,000 in the fourth quarter of 2022, and positive EBITDA in 2022 altogether, which resulted from targeted spending and high year-over-year increases in revenue.

Revenue from developed countries continues to increase, reflecting the completion of our transition plan to transform our business from the unstable emerging countries to developed countries.

As a reminder, the legacy business comprised of one-time project revenues in Africa and South America with sometimes hard collectability attempts, which is a sharp contrast to IoT-attractive business in developed countries which generates high recurring revenue, high collectability, and high predictability with multi-year government contracts.

Gross profit increased by 3% to $6.4 million compared to $6.2 million in the year before. This decrease was concurrent with increases in cost of goods, which resulted from supporting the launch phase of the mentioned new projects.

Typically, in initial stages of projects tend to incur higher expenses, while the more advanced stages yield higher gross margins. As a result, our gross profit fluctuates depending on the composition of our project portfolio and the distribution of project upon these stages.

Thus, a short-term decrease in gross profit accompanied by an increase in income can signify anticipation of long-term growth in gross profit. This is, of course, contingent upon ever-evolving composition of our full project portfolio. Equipment purchase for the years ended December 31, 2022, and '21 amounted to $524,000 and $946,000 respectively.

It's worth noting that inventory from previous years was helpful in our business in 2022 as well. We increased our annual research and development expenses by $650,000. We continue to develop and launch new products and improve existing ones, keeping us at the edge of innovation and technology leadership in our space.

In addition, our annual sales and marketing expenses increased by $1 million to support the company's new proactive growth strategy. And general and administrative expenses increased by $1 million, as we continue to expand our management and finance teams.

Our cash, cash equivalents, and restricted cash balance at the end of 2022 was $4.5 million compared to $4.6 million at the end of '21. Our cash position is stable. We have credit facilities in place.

And we reduced our cash needs -- our cash as we continue to win and execute larger projects, such as we saw in 2022, where our cash use went down from $9.4 million to roughly $4.7 million when compared to the previous year.

In addition, the company had one-time expenses of roughly $1.1 million, driven mainly by reorganization expenses pertaining to legacy business and allowance for doubtful debts. The company had an operating loss of $6 million versus an operating loss of $6.7 million in the previous year.

In closing, we're excited about the growth we are experiencing and about the growing demand for our products.

After five years in which we transitioned from our legacy business to the IoT business, we finally see the shift to growth in revenue for the second year in a row and believe that we're well-positioned for continued growth by capitalizing on the many opportunities before us.

This has been driven by multiple factors, including our strong presence and reputation in the US and European markets, the countercyclical nature of electronic monitoring industry, the growing public policy shift to monitoring instead of incarceration, and the return to post-COVID return levels of business activity.

We anticipate sustained growth by further expanding our market share in the US and Europe. Our commitment to preserving a technological advantage and a robust growth foundation remain steadfast as we continue to invest in these areas. With that, I'll turn the call over to operator to open for questions.

Operator?.

Thank you very much. [Operator Instructions] Matthew Galinko, Maxim Group..

All right, great. Thanks for taking my question and congrats on a really strong close for the year and the growth we're seeing. I'd like to touch on sales and marketing. Particularly, I know you're up year over year for the full year. But if we look at the sequential pattern, you're down to the run rate you were at at the end of '21.

So I'm just curious if -- why are we seeing that decline in the back half in sales and marketing spending? And does that tell us anything about waning investment in the initiatives in the US? Or is that still full steam ahead?.

Great question. Let me just open up some of the financials from last year, because you're talking about comparison to the first quarters of 2021..

Yeah. Or even if you look sequentially from Q3 '22 to Q4 '22 or from Q2 '22 to Q4 '22, you'll see that step down over a couple of quarters..

Okay. So we're having some -- okay. So from -- okay. Let me just evaluate just for one moment, please. Yes, okay. So sales and marketing does depend on the projects that we're trying to secure. It's not just a fixed cost, as you might think of a normal sales teams because the commissions also fall into it.

So when a new project is when, we typically have a higher commission payments to our sales teams. And also, if we have any partnerships or other companies that are working with us, there's also expenses around that. That being said, our sales and marketing expenses are, on average, relatively stable. We did hire new sales people.

So there's expansion in our sales and marketing expenses compared to, let's say, the beginning of 2021 or 2020. And we continue to expect to invest in sales and marketing in the US and Europe.

That being said, we're also going to look for opportunities to optimize our costs, with our consideration for our goal of improved profitability and lower cash use, as you see the trend that we're exemplifying already, from 2021 to 2022, to use less operating cash.

And we're keeping that in mind as we continue to grow our expansion throughout the world..

Got it. Thanks. And then I guess a follow-up question on that last point. Obviously, a very strong performance on the EBITDA line in the second half of '22 and a very strong revenue performance throughout the year.

I know you're not guiding to it, but is it reasonable for us to expect EBITDA -- or is it a target to be EBITDA positive in 2023?.

So we were EBITDA positive as you know as well, roughly $400,000 and $770,000 in Q3 and Q4. We try to maintain EBITDA positivity even though we are aware there's fluctuations because of the project nature of our business. So in Romania, Q3 and Q4, with the launch of the project, there's a lot of revenue associated with it.

We announced another order of $7 million earlier this year in 2023. And that can create some fluctuations in revenues, as we saw between the quarters. And accordingly, that could create the fluctuation in the EBITDA.

So while the EBITDA could fluctuate between the quarters, when you look at annual basis or over a long-term basis, we try to stay above zero to be EBITDA positive. And as we continue to maintain more steady revenues and revenue growth, we will also look for additional pockets to optimize our expenses.

We have the natural operating leverage baked in because we have the same fixed expenses for customer support, and inventory management, and project deployment, whether it's a $30 million project or a $2 million project. As the project sizes grow, we're seeing improvements and growth in our potential contribution for each unit that's deployed.

It's not yet reflected in the gross margins in the financials because we're in early stages of Romania, where the gross margins are lower because of a lot of installations and deployment of IT. But the projects will continue, and that will be less of the prevailing revenue mix.

And that will allow for increasing our gross margin for that project specifically. Now based on how other projects will fall into the mix, we'll see how the gross margin evolves altogether as well as the EBITDA, which we hope to maintain positive, even though it's not a clear guidance.

Because we're still more guided by our long-term goals to expand our market presence and get closer and closer to a leader position as a player in the EM market..

All right. Thanks. I’ll jump back in the queue..

Thank you very much. [Operator Instructions] Matthew Galinko..

Hey, thanks. I wanted to ask about the competitive environment, particularly in Europe, where I know you've talked about some large opportunities in the pipeline.

Has it intensified in recent quarters? Do you feel like you still have an edge to maintain the sorts of win rates you've seen in the last couple of years?.

Great question. And what we've been seeing over the past few years, except for the win in Romania, which we didn't expect that we'll win a new project for them. And [indiscernible] just the new projects for Croatia. So besides the existing projects that are running the lead, that we tried to win by displacing a competitor, new ones keep arriving.

And they reach out to us, usually, through local companies. And we're still considered a player with great technology and a very strong momentum in the market. As we mentioned, our IoT group -- our IoT revenues grew by 75% to 76% year over year, where the market grew by 10%.

So we're still -- the start application is still very strong and our technology still scores very highly. We don't -- even though the competition sometimes invest in R&D and developing new products, we haven't seen much of a threat from a technology perspective or technology scoring perspective.

Our challenges and competitiveness is having to displace players that have a very comfortable position in a country where they've been for five, 10, 15, 20 years. I'm talking about more of the operation side.

Having the officers get a company's new technology, the new processes, with a new company, and new vendor, that is more of a hurdle for us than the actual technology scores. Because we still have the newest features, the newest capabilities, the best performance, the best metrics.

And we continue to invest and continue to come out with new products, as we mentioned earlier. PureOne and PureProtect are brand-new products this year, which are leaders in the industry.

And two players, also, in the industry have merged in the last year, two large players that, we believe, makes it easier for us to compete, a little bit less stress on pricing and variability. Because they would have to generally have two bids into the competition, where we only have one. So we maintain a competitive advantage as discussed.

We have the new products. And the PureOne is actually an important product for us in completing the gap, so to speak, in our product portfolio. Because in the US, a lot of the vendors focus on the 1P solution. They haven't yet introduced solutions with a smartphone, with communication, with all the capabilities that the smartphone offers.

And judges in counties and other small regions in the US are less familiar with the new technology of smartphone integrated in these kind of solutions, such as Astra 1P solution. So we developed a 1P solution for them, similar to the old architecture.

But we made it in our version with longest battery lives and lightest weight and mobile battery charging and more capabilities and sleek design. So that really helped us in terms of our competitive edge on the product front, where we were missing.

And on the areas where we have been for many years, like the house arrest and GPS monitoring and domestic violence, we maintain a strong leading position, we believe..

Got it. And maybe last one for me is a little bit maybe a two-part question. You mentioned continuing to invest in R&D and product.

Do you anticipate -- or is it reasonable to expect that you'll have more products that rollout in the next year or two that you expect to either capture new customers with or upsell into existing customers? Is that something that you could continue to grow wallet share, if it makes sense to ask it that way? And I'll start with that one..

Okay. Yeah, we do expect to have new products and new generations of our existing products. It does depend on the projects that we win. For example, we won the Sweden Ministry of Justice project a few years ago, a $7 million project. And they required, also, inmate tracking in the prison.

So the same bracelet would track the felons while they're in prison. And when they go on holidays or weekends, sometimes to their families, they track them in the city outside the prison facility. In some areas, they wanted alcohol monitoring, where we monitor the alcohol in their blood.

Here, they wanted domestic violence for Romania, which we had and we, of course, enhanced also to support projects with such as size, 15,000 offenders simultaneously, but also to integrate new capabilities that we saw our customers were interested in from our previous deployments of domestic violence around the world.

So as we win more projects, we continue to evolve our platform. And that same evolved platform goes with us over when we bid on other new projects. And another thing that you mentioned which is important is multiple modules to the same customers.

So some of these customers start with house arrest, or GPS monitoring, or alcohol monitoring, or domestic violence, but then they expand into other capabilities. Because typically, once the government is running this kind of solution, there's no reason to only have one program. There's no reason to only have house rest.

If you have house arrest, people are only required to stay at home. But some are able to also go the work and finance their families, and they're not at risk. So they're okay with GPS monitoring. Some are not even on house arrest, they're just on domestic violence. They can't be -- they have restraining orders.

They can't be close to the wife or whoever is the victim. So each of these programs, while they have different applications and they're all in the criminal justice umbrella, they're very useful in different manners. And once you have platform deployed, it's very, very easy to add additional product.

The cost is lower, and also, the relationship is there with the customer. So as we've done -- and we've been doing this for 34 years in SuperCom, even before we started focusing on tracking. Back in the government identification space, we would do driver's licenses and then passports and visas.

And at some point, we even tried to be in payments and other solutions. So once we get our foot in the door, so to speak, we look to expand with additional modules. And now, we have so many different modules and programs we can offer to our customers.

So out of the revenues and the wins that we've announced are the first module, or the first one or two. And over the years, they expand.

And then we expect that certain customers will grow on revenues and also new customers to opt in for a more holistic solution with more capabilities, more cost savings for them, maybe better security for their constituents and their communities..

Got it. Thanks. Last question, really, around -- you talked a little bit about electronic monitoring being countercyclical or having some countercyclical tailwind.

Anything specific you could point to, conversations with customers or just broadly in talking to existing or pipeline customers? Is there a sense that municipalities and governments are increasingly recognizing the cost of not being in an EM program? Or anything you could point to there would be great. Thanks..

What exactly did you say? Are our customers experiencing a cost from not being?.

Right, yeah.

So to the extent of being -- if EM is a attractive alternative to incarceration from a cost perspective, are you seeing additional interest due to the environment we're in today?.

Yes. Well, first of all, as you mentioned, and we talked about this for a while, there's roughly 90% savings, such as the $80 billion operating prisons in the US in 2020 would have been -- they could have saved $70 billion if they put everyone on house arrest.

Not everyone is a good fit for house arrest, but the vast majority of the -- a big population is non-violent offenders, which could be great for programs like these. So there is definitely the government of cost savings and also the element of producing recidivism. Because right now, they'll go to prison.

They sometimes become more knowledgeable in committing crime. And when they return to society, they don't have the proper financial services and proper company in society. They end up recommitting crimes with a high recidivism rate of over 75%. We have been able to -- on various programs in EM around the world, you see that go down to 35%.

So there is -- beyond the cost, there's a general improvement in public safety. So when I say countercyclical -- yes, when the markets are looking into a looming recession, they're trying to save costs. And you see that with corporations and also with governmental entities.

They certainly look at this as a viable opportunity for them to save costs, but also countercyclical and redundant and resilient. And we saw that also during COVID. Because people have to -- there has to be criminal justice services and you have to continue to detain offenders. So there's an essential service, as you might say.

So even as -- if there is a recession one day, putting aside the fact that the recession could lead to a lower economic situation for many families and more crime, which would actually lead to more tracking of offenders, that's one opportunity. But at the least, it will continue running as is.

So all these programs, almost, that we see around the world, whether it's in Europe or the US. They started to -- started in 2004 and are, right now, 100 or 1,000 times larger than they were back then. Over the last 19, 20 years, they've grown a lot and continue to grow through various market cycles, through 2008, 2010, through COVID.

And we expect that to continue still. For -- it is interesting that investors talk to us sometimes. They're looking for diversity in the portfolio. And this will be a little less sensitive to the macro economy. This is a great opportunity for them, because they have to continue monitoring offenders. Criminal justice industry has to continue running.

They're cost saving. And also, which is unfortunate, recession and low economic status families lead to more crime in community. And then we have a bigger role to help prevent the crime and help monitoring these offenders..

Thank you..

Thank you very much. [Malcolm Moshwitz], private investor..

Yeah. Thanks. My name is Malcolm, not Moshwitz. First of all, I want to congratulate you for the great quarter and great year. And I wanted to ask you, you raised the money the last quarter.

Do you have -- do you think you have enough money to continue on for the [indiscernible]?.

Yes. Good question. And on top of this, on the script and on the Q&A, we saw a negative cash burn from operations, cash used. In 2021, we had a $9.4 million. That has decreased to $4.7 million in 2022. And that's because of these projects that are generating positive cash flow.

We expect Romania to continue generating positive cash flow as well as these other projects in Sweden, in Denmark. And as we continue to add more projects, the positive cash flows from them would overcome any fixed cost that we have from being a public company, just running to a recent recession in the world.

So at that stage, we'll be cash flow positive. And we hope to achieve that. But meanwhile, we raised some cash, and our balance is good. And it gives us ability to launch more projects and to support existing ones for the near future. And so over time, we'll expect to have a lower need for operating cash support from the market.

And it will depend on what kind of projects we launch. We have over $200 million in our pipeline. Some of these are massive projects, and some require working capital increases. If we're trying to target $100 million or more in size, we need somewhat more working capital than we have today.

I think if that happens, we're now going to be happy to support our increased -- growth in our working capital needs at that time..

Okay. Great. Thanks. I have another follow-up question.

Do you have any negotiations for the [indiscernible] in the market by big companies who want to buy you?.

Can you repeat that? Are there any negotiations with other companies wanting to buy us?.

Yeah. Are you on the shelf? I mean, are there other companies who maybe want to buy you? Maybe a safety company or, I don't know, a security company. Maybe they want to buy you.

Did you talk with any companies about it?.

So we are currently not on the shelf. We have not put ourself out there for acquisition. We think we have a good opportunity going forward, and we're trying to capitalize on it before doing something like that.

That being said, because we continuously win against many of our competitors, there's been, I'd say vague discussions from various sources of potential interest to buy SuperCom. But it's not something that we have pursued extensively or looked into. Because we're really focused on our current organic growth plans with this plan and prospects..

Thank you. Thank you. I appreciate you taking my call and keep up the good work. Thank you very much..

Thank you very much to you as well..

Thank you. Thank you very much. [Operator Instructions] Okay, Ordan. I think we have no more in the queue now. I can hand back over to you for any closing remarks..

Thank you, operator. And I want to thank all of you for participating in today's call and for your interest in SuperCom. Please contact us directly if you have any additional questions or through our IR firm. We look forward to sharing our progress with you on our next conference calls, filings, and press releases.

Thank you, once again, and have a great day..

Thank you very much, everybody. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation..