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As Of Filer Filing For·On·As Docs:Size Issuer Agent 7/22/14 Hotel Outsource Mgmt Int’l Inc PRER14C 1:4.6M Edgar Agents LLC/FA |
Document/Exhibit Description Pages Size 1: PRER14C Amended Information Statement HTML 2.39M
(1)
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Tile of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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(1)
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Amount previously paid:
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(2)
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Form, schedule or registration statement no.:
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(3)
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Filing party:
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(4)
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Date filed:
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By Order of the Board of Directors
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/s/ Daniel Cohen | ||
Director and CEO
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Date: July ___, 2014
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·
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Hotel Outsource Management International, Inc. is a holding company for several subsidiaries including HOMI Industries Ltd.
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·
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HOMI shall transfer all of the intellectual property rights it holds, all of the outstanding stock of its subsidiaries (excluding HOMI Industries) and all other assets of HOMI and its subsidiaries to HOMI Industries.
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·
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In consideration for these assets, HOMI Industries shall assume all of the liabilities of HOMI as of December 31, 2013, except for an IRS claim which HOMI is in the process of resolving.
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·
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Daniel Cohen, an officer, director and shareholder of HOMI, and Moise Laurent Elkrief, , the beneficial owner of the HOMI shares held by the majority shareholder of HOMI, shall acquire all of the issued and outstanding stock of HOMI Industries for $1.00
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·
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By acquiring all of the issued and outstanding shares of HOMI Industries’, Messrs. Cohen and Elkrief shall be acquiring all of the assets and liabilities of HOMI. (See “Actions to Be Taken”)
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·
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Once this corporate action is complete, HOMI shall not have any assets or liabilities (except for the IRS claim).
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·
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HOMI has received an independent valuation of the company which states that HOMI, taking into consideration its debts and cash flow, has a negative value. (See “Actions to Be Taken – Independent Valuation”)
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Tomwood Ltd.(1)
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1,758,135 shares, representing approximately 59.6%
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330,562 shares, representing approximately 11.2%
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Avraham Bahry
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169,546 shares, representing approximately 19.7%
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GTL Investment Ltd.
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116,973 shares, representing approximately 13.6%
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Starboard Enterprises
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80,676 shares, representing approximately 9.4%
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Jacob Ronnel
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50,102 shares, representing approximately 5.8%
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Ariel Almog
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41,705 shares, representing approximately 4.8%
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Talia Chacham
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35,717 shares, representing approximately 4.1 %
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Guy Bahry
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22,903 shares, representing approximately 2.7%
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As Reported
As of
March 31,
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Pro forma
Adjustments
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Pro forma
Results
As of
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||||||||||
2014
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||||||||||||
ASSETS
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||||||||||||
CURRENT ASSETS:
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||||||||||||
Cash and cash equivalents
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144 | (144 | ) | - | ||||||||
Short-term bank deposits
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47 | (47 | ) | - | ||||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of March 31, 2014)
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324 | (324 | ) | - | ||||||||
Other accounts receivable
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115 | (115 | ) | - | ||||||||
Inventories
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266 | (266 | ) | - | ||||||||
TOTAL CURRENT ASSETS
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896 | (896 | ) | - | ||||||||
PROPERTY AND EQUIPMENT, NET:
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||||||||||||
Minibars and related equipment
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3,703 | (3,703 | ) | - | ||||||||
Other property and equipment
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30 | (30 | ) | - | ||||||||
TOTAL PROPERTY AND EQUIPMENT
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3,733 | (3,733 | ) | - | ||||||||
OTHER ASSETS:
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||||||||||||
Deferred expenses, net
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3 | (3 | ) | - | ||||||||
Intangible assets
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41 | (41 | ) | - | ||||||||
TOTAL OTHER ASSETS
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44 | (44 | ) | - | ||||||||
TOTAL
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4,673 | (4,673 | ) | - |
As Reported
As of
March 31,
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Pro forma
Adjustments
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Pro forma
Results
As of
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||||||||||
2014
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LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
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CURRENT LIABILITIES:
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||||||||||||
Short-term loans from related parties
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600 | (600 | ) | - | ||||||||
Current maturities of long term loans from related parties
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96 | (96 | ) | - | ||||||||
Current maturities of long-term loans from others
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409 | (409 | ) | - | ||||||||
Trade payables
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613 | (613 | ) | - | ||||||||
Accrued expenses and other current liabilities
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562 | (512 | ) | 50 | ||||||||
TOTAL CURRENT LIABILITIES
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2,280 | (2,230 | ) | 50 | ||||||||
LONG-TERM LIABILITIES:
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Long-term loans from related parties, net of current maturities
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653 | (653 | ) | - | ||||||||
Long-term loans from others ,net of current maturities
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1,470 | (1,470 | ) | - | ||||||||
Accrued severance pay, net
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76 | (76 | ) | - | ||||||||
TOTAL LONG-TERM LIABILITIES
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2,199 | (2,199 | ) | - | ||||||||
SHAREHOLDERS' EQUITY (DEFICIT):
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||||||||||||
Share capital -
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||||||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of March 31, 2014 .
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- | - | - | |||||||||
Common stock of $ 0.001 par value –
200,000,000 shares authorized; 2,949,484 shares issued and outstanding as of March 31, 2014 .
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3 | - | 3 | |||||||||
Additional paid-in capital
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13,221 | - | 13,221 | |||||||||
Capital Reserve
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1,414 | - | 1,414 | |||||||||
Accumulated other comprehensive income
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72 | - | 72 | |||||||||
Accumulated deficit
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(14,516 | ) | (244 | ) | (14,760 | ) | ||||||
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)
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194 | (244 | ) | (50 | ) | |||||||
TOTAL
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4,673 | (4,673 | ) | - |
NOTES:-
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The statement of HOMI Inc. pro forma balance sheet as of March 31 2014 has been prepared on the following basis:
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1.
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Transfer of all the Company's operations, trademark registrations and operations subsidiaries, as well as all of the debt of the Company and the debt of the operations subsidiaries to Daniel Cohen and Moise Laurent Elkrief ("the Purchasers") .
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2.
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The statement of the Company pro forma balance sheet as of March 31, 2014 does not constitute audited financial statements.
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●
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No capital expenditure on the minibars
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A new revenue stream, if no minibars were previously installed and operational
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No labor expenses and no operating costs
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No purchase of goods and no inventory management
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Added service to guests, thereby improving the customer’s competitive edge
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No downside: hotel is minimizing its risks, both financial and other
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Added flexibility, via the customer’s option to purchase the system
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Outsourcing allows the hotel to focus on major revenue sources
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Quality of service: we specialize in the field
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Increased control and management, extensive reporting
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No maintenance by customer
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Periodic technical and technological upgrades
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Implementation of our exclusive operating procedures
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Procurement of the consumables that are offered in the minibars
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Management of inventory control and monitoring of expiry dates of consumables
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Implementation of procedures to handle and reduce rebates
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Periodic reconciliation of accounts
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Training of minibar attendants and front office employees
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Maintenance and support
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Taking active involvement in the selection and pricing of consumables
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Implementing innovative and attractive product mixes for different room categories
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Producing attractive, creative and novel menus
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Improving minibar visibility
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Proposing and implementing effective promotional activities
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Reducing rebates & manual emptying of minibars by guests
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In-depth and real-time data logging and reporting, thereby creating extensive sales statistics and enabling effective data-mining, designed to adapt the system to improve performance
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●
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Our corporate headquarters are located at 80 Wall Street, Suite 815, New York, New York, in the offices of Schonfeld & Weinstein, L.L.P., at no additional cost to us. Schonfeld & Weinstein, L.L.P. serves as our US Counsel and also owns shares in our company.
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●
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HOMI Israel’s corporate headquarters are currently located at 20 Galgalei HaPladah Street, 2nd Floor, Herzliya Pituach 4672220, Israel, with a monthly rent of approximately $2,900. This office is leased from an unaffiliated third party.
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HOMI USA has its corporate headquarters at 1 Embarcadero Center, Suite 500, San Francisco, California 94111. The monthly rent is $500. Most of HOMI USA’s operations are conducted from the office we utilize at the Hyatt Regency San Francisco, which is one of our customers.
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●
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In connection with our European operations, we also lease an office in Geneva, Switzerland, for a monthly rent of approximately $1,600 (approximately CHF1,535 ).
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(1)
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The purchase of the minibars system to be installed in hotels; this capital expense is charged to property and equipment and depreciated over a period of ten years;
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(2)
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The purchase of the consumables to be placed in the minibars; we purchase these products from various vendors; sometimes the customer will purchase the alcoholic beverages to be placed in the minibars and we reimburse the customer for such purchases;
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(3)
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Labor costs of the minibar attendants;
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(4)
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General and Administrative, and marketing expenses;
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(5)
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Maintenance of the minibar systems;
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(6)
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Finance expenses.
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Location
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Percentage of Revenues
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|||||||
2012
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2013
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|||||||
United States of America
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30.7 | % | 20.2 | % | ||||
ROW
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10.6 | % | 10.1 | % | ||||
Israel
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58.7 | % | 69.7 | % | ||||
Totals
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100 | % | 100 | % |
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In March and June, 2005, HOMI and the subsidiary in the U.S. received from Horizon Challenges Investment Company Ltd. (“Horizon”) loans in the total amount of $ 1.1 million, which Horizon undertook to provide to the Company (“the Financing”), pursuant to a Financing Agreement, dated as of March 1, 2005, as amended on May 17, 2005. The loans bore interest at the rate of 11.67% and were to be repaid in monthly installments for nine years. The loans were secured by a lien on all minibars in respect of which the loan was received, and a security interest and assignment of a portion of HOMI and its subsidiaries’ monthly revenues from those minibars, in the
amount required to pay each month’s repayments on all outstanding loans, principal plus interest. Total liabilities for the years ended December 31, 2013 and 2012 amounted to approximately $ 129,000 and $ 257, 000,respectively. These loans have since been paid in full as of May 28, 2014, with all liens and security interests canceled.
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(2)
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HOMI Industries entered into loans as detailed below.
As security and collateral for repayment of the loans, HOMI Industries encumbered in lender's favor the computerized minibar system, including HOMI® computerized minibars, a central unit and a license to HOMI® software, which HOMI’s affiliate installed at the hotels and operates for the hotels under an outsource operation agreement which HOMI’s affiliate signed with the hotel.
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Date of the loan
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Lender
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Amount
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Hotel
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Location
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No. of
Minibars
Encumbered
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||||||||
Moise and Sonia Elkrief
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$ | 93,000 |
Leonardo Ramat Hachayal
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Tel Aviv, Israel
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166 | ||||||||
Moise and Sonia Elkrief
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$ | 99,000 |
Strand
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New York, USA
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177 | ||||||||
Oded Yeoshoua
Amir Schechtman
Ilan Bahry
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$ | 140,000 |
Wyndham
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New York, USA
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280 | ||||||||
Oded Yeoshoua
Amir Schechtman
Ilan Bahry
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NIS 672,000 ($174,000 when received)
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Royal Beach
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Eilat, Israel
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363 | |||||||||
Oded Yeoshoua
Amir Schechtman
Ilan Bahry
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$ | 108,000 |
Herods
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Jerusalem, Israel
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270 | ||||||||
GPF S.A
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$ | 55,000 |
Breshit
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Mitzpe Ramon, Israel
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110 | ||||||||
Troy Creative Solutions LTD
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$ | 99,000 |
Dan Accadia
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Hertzeliya, Israel
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210 | ||||||||
Sparta Technical Solutions Ltd.
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$ | 67,000 |
Comfort Inn Chicago Hotel
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Chicago, USA
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130 | ||||||||
Sparta Technical Solutions Ltd.
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$ | 166,000 |
Dan
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Eilat, Israel
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375 | ||||||||
Troy Creative Solutions LTD
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$ | 109,000 |
Waldorf
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Jerusalem, Israel
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230 | ||||||||
Uri Avraham
Amir Schechtman
Ilan bahry
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$ | 109,000 |
Royal Beach
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Tel Aviv, Israel
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230 | ||||||||
Francisec Kobri
Amir Schechtman
Evyatar Hacohen
Ilan Bahry
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$ | 133,000 |
Dan
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Tel Aviv, Israel
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280 | ||||||||
Or Saada
Amir Schechtman
Ilan Bahry
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$ | 165,000 |
Sheraton
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Tel Aviv, Israel
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313 |
Izak Asif Consulting & Management LTD
Amir Schechtman
Ilan bahry
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$ | 71,000 |
Cramim
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Jerusalem, Israel
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150 | ||||||||
Alon Morduch
Assigned from Bahry Business & Finance (1994) LTD. Signed September 1,2012.
Ilan Bahry
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$ | 201,000 |
Hilton Olympia
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London, UK
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401 | ||||||||
Hotel Outsource Investment LTD
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$ | 128,000 |
Mela
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New York, USA
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231 | ||||||||
Hotel Outsource Investment LTD
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$ | 45,000 |
Indigo
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Ramat Gan, Israel
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91 | ||||||||
Troy Creative Solutions LTD
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$ | 35,000 |
Dan
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Jerusalem, Israel
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77 | ||||||||
Troy Creative Solutions LTD
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$ | 30,000 |
Adiv
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Tel Aviv, Israel
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66 | ||||||||
Antonio Perez
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€ 35,000 ($48,000 when received)
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Mama Shelter
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Bordeaux, France
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97 |
●
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More than 5% of the outstanding shares of our common stock;
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●
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Each of our officers and directors;
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●
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All of our officers and directors as a group.
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Names and Address of Beneficial Owner
|
Number of Common Shares
Beneficially Owned
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% Beneficially Owned (1)
|
||
10 Iris Street, PO Box 4591
Caesarea, Israel 30889
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330,562
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11.2%
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Jacob Ronnel
21 Hasvoraim Street
Tel Aviv, Israel
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50,102
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1.7%
|
||
Ariel Almog (2)
224 Maypoint Drive,
San Raphael, CA
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41,705
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1.4%
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Avraham Bahry
1 Gan Hashikmin Street
Ganei-Yehuda-Savion, Israel
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169,546
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5.7%
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Kalman Huber
17, Levy Eshkol st.
Tel Aviv, Israel
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0
|
0
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||
Tomwood Ltd.
Vanterpool Plaza
Wickhams Cay 1 Road Town
Tortola, BVI XOVG111O
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1,758,135
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59.6%
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All officers and directors as a
group (5 people) (1)(2)
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550,210
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18.7%
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Daniel Cohen |
Hotel Outsource Management International, Inc.
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80 Wall Street, Suite 815
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New York, New York 10005 |
PART I - FINANCIAL INFORMATION
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PAGE
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Item 1 – CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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Balance Sheets -
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F-2-F-3
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Statements of Operations -
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Three months ended March 31, 2012 and 2011
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F-4
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Statements of Cash Flows -
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Three months ended March 31, 2012 and 2011
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F-5-F-6
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Notes to Financial Statements
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F-7-F-10
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As of
March 31,
|
As of
|
|||||||
2011
|
||||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
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101 | 291 | ||||||
Short-term bank deposits
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55 | 54 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of March 31, 2012 and December 31,2011)
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605 | 436 | ||||||
Other accounts receivable
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269 | 240 | ||||||
Inventories
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380 | 355 | ||||||
TOTAL CURRENT ASSETS
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1,410 | 1,376 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
4,138 | 3,964 | ||||||
Other property and equipment
|
18 | 13 | ||||||
TOTAL PROPERTY AND EQUIPMENT
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4,156 | 3,977 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
16 | 17 | ||||||
Intangible assets
|
46 | 47 | ||||||
TOTAL OTHER ASSETS
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62 | 64 | ||||||
TOTAL
|
5,628 | 5,417 |
As of
March 31,
|
As of
|
|||||||
2011
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
Unaudited
|
Audited
|
||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of long term loans from related parties
|
152 | 133 | ||||||
Current maturities of long-term loans from others
|
229 | 228 | ||||||
Trade payables
|
803 | 555 | ||||||
Accrued expenses and other current liabilities
|
447 | 389 | ||||||
TOTAL CURRENT LIABILITIES
|
1,631 | 1,305 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties, net of current maturities
|
832 | 557 | ||||||
Long-term loans from others ,net of current maturities
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2,289 | 2,341 | ||||||
Accrued severance pay, net
|
44 | 38 | ||||||
TOTAL LONG-TERM LIABILITIES
|
3,165 | 2,936 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of March 31, 2012 and December 31, 2011;
|
- | - | ||||||
Common stock of $ 0.001 par value –
205,000,000 shares authorized; 89,453,364 shares issued and outstanding as of March 31, 2012 and as of December 31, 2011;
|
89 | 89 | ||||||
Additional paid-in capital
|
10,185 | 10,185 | ||||||
Accumulated other comprehensive income
|
335 | 362 | ||||||
Accumulated deficit
|
(9,777 | ) | (9,460 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
832 | 1,176 | ||||||
TOTAL
|
5,628 | 5,417 |
For the Three Months Ended
|
||||||||
2011
|
||||||||
Unaudited
|
||||||||
Revenues
|
858 | 710 | ||||||
Cost of revenues:
|
||||||||
Depreciation
|
(145 | ) | (166 | ) | ||||
Other
|
(530 | ) | (420 | ) | ||||
Gross profit
|
183 | 124 | ||||||
Operating expenses:
|
||||||||
Research and development
|
(34 | ) | (26 | ) | ||||
Selling and marketing
|
(62 | ) | (94 | ) | ||||
General and administrative
|
(309 | ) | (363 | ) | ||||
Operating loss
|
(222 | ) | (359 | ) | ||||
Financing expenses and foreign currency translation, net
|
(84 | ) | (86 | ) | ||||
Other income(expenses), net
|
(11 | ) | 3 | |||||
Net loss
|
(317 | ) | (442 | ) | ||||
Basic and diluted net loss per share
|
(0.0035 | ) | (0.0049 | ) | ||||
Number of shares used in computing basic and diluted net loss per share
|
89,453,364 | 89,453,364 |
For the Three Months Ended
|
||||||||
2011
|
||||||||
Unaudited
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(317 | ) | (442 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
150 | 177 | ||||||
Increase in accrued severance pay, net
|
6 | 2 | ||||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
8 | (13 | ) | |||||
Changes in assets and liabilities:
|
||||||||
Increase in inventories
|
(24 | ) | (37 | ) | ||||
Decrease (Increase) in trade receivables
|
(167 | ) | 31 | |||||
Increase (Decrease) in related parties
|
28 | (3 | ) | |||||
Increase in other accounts receivable
|
(55 | ) | (5 | ) | ||||
Increase (Decrease) in trade payables
|
(44 | ) | 87 | |||||
Increase (Decrease) in accounts payable and accrued expenses
|
33 | (26 | ) | |||||
Net cash used in operating activities
|
(382 | ) | (229 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
26 | 16 | ||||||
Purchases and production of property and equipment
|
(37 | ) | (211 | ) | ||||
Short-term bank deposits, net
|
(1 | ) | 3 | |||||
Net cash used in investing activities
|
(12 | ) | (192 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from related parties
|
275 | - | ||||||
Payments of long- term loans to related parties
|
(16 | ) | (19 | ) | ||||
Payments of long-term loans to others
|
(51 | ) | (88 | ) | ||||
Proceeds from others
|
- | 500 | ||||||
Net cash provided by financing activities
|
208 | 393 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(4 | ) | 15 | |||||
Decrease in cash and cash equivalents
|
(190 | ) | (13 | ) | ||||
Cash and cash equivalents at the beginning of the period
|
291 | 708 | ||||||
Cash and cash equivalents at the end of the period
|
101 | 695 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities
and cash flow information:
|
For the Three Months Ended
|
|||||||
2011
|
||||||||
Unaudited
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment on short-term credit
|
442 | 34 | ||||||
Receivables in regard to property and equipment
|
140 | 261 | ||||||
Cash paid during the period for interest
|
77 | 73 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products. The HOMI® 336 (the "System"), a novel, computerized minibar system designed to increase the accuracy of the automatic billing and reduce the cost of operating the minibars. Further, the HOMI® 330 system, a smaller version of the HOMI® 336, is currently in production.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
March 31,
|
||||||||
2011
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.269 | $ | 0.262 | ||||
Euro (EU)
|
$ | 1.333 | $ | 1.292 | ||||
Australian Dollar (AU$)
|
$ | 1.039 | $ | 1.015 | ||||
Pound Sterling (GBP)
|
$ | 1.599 | $ | 1.542 | ||||
Consumer Price Index ("CPI"):
|
120.38 | 120.38 | ||||||
Three Months Ended
March 31,
|
||||||||
Increase in Rate of Exchange:
|
2012 | 2011 | ||||||
NIS
|
2.86 | % | 1.77 | % | ||||
EU
|
3.17 | % | 6.50 | % | ||||
AU$
|
2.36 | % | 1.57 | % | ||||
GBP
|
3.70 | % | 3.94 | % | ||||
Consumer Price Index ("CPI"):
|
0.0 | % | 0.90 | % |
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
31.03.2012 | 31.03.2011 | |||||||
HOMI Industries Ltd. (1)
|
Israel
|
|||||||||
HOMI Israel Ltd. (3), (4)
|
Israel
|
4,390 | 3,510 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (3), (4)
|
U.S.A. and
Canada
|
3,386 | 4,187 | |||||||
HOMI Europe SARL (2)
|
Europe
|
917 | 604 | |||||||
8,693 | 8,301 |
HOMI U.S.A.
|
HOMI
Israel Ltd.
|
Europe
|
Total
|
||||
Number of minibars
|
1,244
|
1,388
|
1,499
|
4,131
|
HOMI U.S.A.
|
HOMI
Israel Ltd.
|
Europe
|
Total
|
||||
Number of minibars
|
246
|
819
|
0
|
1,065
|
(4)
|
The Company operates 964 minibars in Israel and 72 minibars in the U.S.A. that are not owned by the Company.
|
Three Months Ended March 31,
|
||||||||
Description
|
2012
|
2011
|
||||||
Unaudited
|
||||||||
Directors' Fees and Liability Insurance
|
9 | 10 | ||||||
Consulting and Management Fees
|
96 | 148 | ||||||
Financial Expenses
|
20 | 18 | ||||||
Benefit Reduction for loan
|
19 | - | ||||||
Total
|
144 | 176 |
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1 –CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
||
Balance Sheets -
|
||
F-2-F-3
|
||
Statements of Operations -
|
||
Six and three months ended June 30, 2012 and 2011
|
F-4
|
|
Statements of Cash Flows -
|
||
Six months ended June 30, 2012 and 2011
|
F-5-F-6
|
|
Notes to the Financial Statements
|
F-7-F11
|
As of
June 30,
|
As of
|
|||||||
2011
|
||||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
140 | 291 | ||||||
Short-term bank deposits
|
54 | 54 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of June 30, 2012 and December 31,2011)
|
554 | 436 | ||||||
Other accounts receivable
|
206 | 240 | ||||||
Inventories
|
352 | 355 | ||||||
TOTAL CURRENT ASSETS
|
1,306 | 1,376 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
4,116 | 3,964 | ||||||
Other property and equipment
|
28 | 13 | ||||||
TOTAL PROPERTY AND EQUIPMENT
|
4,144 | 3,977 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
14 | 17 | ||||||
Intangible assets
|
45 | 47 | ||||||
TOTAL OTHER ASSETS
|
59 | 64 | ||||||
TOTAL
|
5,509 | 5,417 |
As of
June 30,
|
As of
|
|||||||
2011
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
(Unaudited)
|
(Audited)
|
||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of long-term loans from related parties
|
180 | 133 | ||||||
Current maturities of long-term loans from others
|
237 | 228 | ||||||
Trade payables
|
935 | 555 | ||||||
Accrued expenses and other current liabilities
|
405 | 389 | ||||||
TOTAL CURRENT LIABILITIES
|
1,757 | 1,305 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties ,net of current maturities
|
786 | 557 | ||||||
Long-term loans from others ,net of current maturities
|
466 | 2,341 | ||||||
Accrued severance pay, net
|
46 | 38 | ||||||
TOTAL LONG-TERM LIABILITIES
|
1,298 | 2,936 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of June 30, 2012 and December 31, 2011;
|
- | - | ||||||
Common stock of $ 0.001 par value –
205,000,000 shares authorized; 199,950,602 shares issued and outstanding as of June 30, 2012 and 89,453,364 as of December 31, 2011.
|
200 | 89 | ||||||
Additional paid-in capital
|
12,074 | 10,185 | ||||||
Capital reserve
|
1,597 | 300 | ||||||
Accumulated other comprehensive income
|
44 | 62 | ||||||
Accumulated deficit
|
(11,461 | ) | (9,460 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
2,454 | 1,176 | ||||||
TOTAL
|
5,509 | 5,417 |
For the Three
|
For the Six
|
|||||||||||||||
Months Ended June 30,
|
Months Ended June 30,
|
|||||||||||||||
2011
|
2012
|
2011
|
||||||||||||||
(Unaudited)
|
||||||||||||||||
Revenues
|
870 | 863 | 1,728 | 1,573 | ||||||||||||
Costs of revenues:
|
||||||||||||||||
Depreciation
|
(145 | ) | (164 | ) | (290 | ) | (330 | ) | ||||||||
Other
|
(613 | ) | (549 | ) | (1,143 | ) | (969 | ) | ||||||||
Gross profit
|
112 | 150 | 295 | 274 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
(32 | ) | (24 | ) | (66 | ) | (50 | ) | ||||||||
Selling and marketing
|
(72 | ) | (82 | ) | (134 | ) | (176 | ) | ||||||||
General and administrative
|
(297 | ) | (370 | ) | (606 | ) | (733 | ) | ||||||||
Operating loss
|
(289 | ) | (326 | ) | (511 | ) | (685 | ) | ||||||||
Financing expenses and foreign currency translation, net
|
(98 | ) | (97 | ) | (182 | ) | (183 | ) | ||||||||
Benefit Reduction for Loan*
|
(1,296 | ) | - | (1,296 | ) | - | ||||||||||
Other expenses, net
|
(1 | ) | (4 | ) | (12 | ) | (1 | ) | ||||||||
Loss before taxes on income
|
(1,684 | ) | (427 | ) | (2,001 | ) | (869 | ) | ||||||||
Provision for income taxes
|
- | (1 | ) | - | (1 | ) | ||||||||||
Net loss
|
(1,684 | ) | (428 | ) | (2,001 | ) | (870 | ) | ||||||||
Basic and diluted net loss per share
|
(0.022 | ) | (0.005 | ) | (0.022 | ) | (0.010 | ) | ||||||||
Number of shares used in computing basic and diluted net loss per share
|
90,681,111 | 89,453,364 | 90,067,238 | 89,453,364 |
*See also Note 5.
|
For the Six Months Ended
|
||||||||
2011
|
||||||||
(Unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(2,001 | ) | (870 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
302 | 346 | ||||||
Increase in accrued severance pay, net
|
8 | 4 | ||||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
(21 | ) | (43 | ) | ||||
Financial expenses for the benefit component in converting a loan into shares
|
1,296 | - | ||||||
Benefit component in loans amortization
|
37 | - | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease (Increase) in inventories
|
4 | (67 | ) | |||||
Increase in trade receivables
|
(118 | ) | (75 | ) | ||||
Increase in related parties
|
33 | 2 | ||||||
Decrease (Increase) in other accounts receivable
|
(24 | ) | 55 | |||||
Increase in trade payables
|
49 | 185 | ||||||
Increase (Decrease) in accounts payable and accrued expenses
|
(22 | ) | 51 | |||||
Net cash used in operating activities
|
(457 | ) | (412 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
60 | 38 | ||||||
Purchases and production of property and equipment
|
(132 | ) | (233 | ) | ||||
Short-term bank deposits, net
|
- | 3 | ||||||
Net cash provided by (used in) investing activities
|
(72 | ) | (192 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from (payments to) related parties, net
|
30 | (28 | ) | |||||
Proceeds from (payments of) long term loans from others, net
|
129 | 375 | ||||||
Proceeds from long-term loans from shareholders, net
|
220 | - | ||||||
Net cash provided by financing activities
|
379 | 347 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(1 | ) | 30 | |||||
Decrease ( Increase ) in cash and cash equivalents
|
(151 | ) | (227 | ) | ||||
Cash and cash equivalents at the beginning of the period
|
291 | 708 | ||||||
Cash and cash equivalents at the end of the period
|
140 | 481 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
For the Six Months Ended
|
|||||||
2011
|
||||||||
(Unaudited)
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment on short-term credit
|
460 | 87 | ||||||
Receivables in regard to property and equipment
|
51 | 216 | ||||||
Conversion of loan into shares
|
2,000 | - | ||||||
Cash paid during the year for interest
|
151 | 121 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products. The HOMI® 336 (the "System"), a novel, computerized minibar system designed to increase the accuracy of the automatic billing and reduce the cost of operating the minibars. Further, the HOMI® 330 system, a smaller version of the HOMI® 336, is currently in production.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
June 30,
|
||||||||
2011
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.255 | $ | 0.262 | ||||
Euro (EU)
|
$ | 1.257 | $ | 1.292 | ||||
Australian Dollar (AU$)
|
$ | 1.017 | $ | 1.015 | ||||
Pound Sterling (GBP)
|
$ | 1.563 | $ | 1.542 | ||||
Canadian Dollar (CAN$)
|
$ | 0.975 | $ | 0.979 | ||||
Consumer Price Index ("CPI"):
|
121.88 | 120.38 | ||||||
Six Months Ended
June 30,
|
||||||||
Increase (Decrease) in Rate of Exchange and the Consumer Price Index ("CPI") in Israel:
|
2012 | 2011 | ||||||
NIS
|
(2.67 | %) | 3.9 | % | ||||
EU
|
(2.70 | %) | 8.5 | % | ||||
AU$
|
0.20 | % | 1.7 | % | ||||
GBP
|
1.36 | % | 3.4 | % | ||||
CAN$
|
0.00 | % | 1.1 | % | ||||
Consumer Price Index ("CPI"):
|
1.25 | % | 1.1 | % | ||||
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
30.06.2012 | 30.06.2011 | |||||||
HOMI Industries Ltd. (1)
|
Israel
|
|||||||||
HOMI Israel Ltd. (1), (3)
|
Israel
|
4,347 | 3,710 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (1), (3)
|
U.S.A. and Canada
|
3,516 | 4,187 | |||||||
HOMI Europe (1), (2), (3)
|
Europe
|
1,499 | 776 | |||||||
9,362 | 8,673 |
HOMI U.S.A.
|
HOMI
Israel Ltd.
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,490 | 2,233 | 1,499 | 5,222 |
HOMI U.S.A.
|
HOMI
Israel Ltd.
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
246 | 819 | 0 | 1,065 |
For the Three Months Ended
June 30,
|
For the Six Months Ended
|
|||||||||||||||
2011
|
2012
|
2011
|
||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Directors' Fees and Liability Insurance
|
9 | 10 | 18 | 20 | ||||||||||||
Consulting and Management Fees
|
106 | 146 | 202 | 294 | ||||||||||||
Financial Expenses
|
43 | 18 | 82 | 36 | ||||||||||||
Total
|
158 | 174 | 302 | 350 |
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1 – INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
||
Balance Sheets -
|
||
F-2-F-3
|
||
Statements of Operations -
|
||
Nine and three months ended September 30, 2012 and 2011
|
F-4
|
|
Statements of Cash Flows -
|
||
Nine months ended September 30, 2012 and 2011
|
F-5-F-6
|
|
Notes to Financial Statements
|
F-7-F-12
|
As of
September 30,
|
As of
|
|||||||
2011
|
||||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
94 | 291 | ||||||
Short-term bank deposits
|
54 | 54 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of September 30, 2012 and December 31, 2011)
|
560 | 436 | ||||||
Other accounts receivable
|
169 | 240 | ||||||
Inventories
|
326 | 355 | ||||||
TOTAL CURRENT ASSETS
|
1,203 | 1,376 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
3,975 | 3,964 | ||||||
Other property and equipment
|
23 | 13 | ||||||
TOTAL PROPERTY AND EQUIPMENT
|
3,998 | 3,977 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
11 | 17 | ||||||
Intangible assets
|
45 | 47 | ||||||
TOTAL OTHER ASSETS
|
56 | 64 | ||||||
TOTAL
|
5,257 | 5,417 |
As of
September 30,
|
As of
|
|||||||
2011
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
(Unaudited)
|
(Audited)
|
||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of loans from related parties
|
218 | 133 | ||||||
Current maturities of long-term loans from others
|
306 | 228 | ||||||
Trade payables
|
732 | 555 | ||||||
Accrued expenses and other current liabilities
|
495 | 389 | ||||||
TOTAL CURRENT LIABILITIES
|
1,751 | 1,305 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties, net of current maturities
|
1,035 | 557 | ||||||
Long-term loans from others, net of current maturities
|
431 | 2,341 | ||||||
Accrued severance pay, net
|
40 | 38 | ||||||
TOTAL LONG-TERM LIABILITIES
|
1,506 | 2,936 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of September 30, 2012 and December 31, 2011;
|
- | - | ||||||
Common stock of $ 0.001 par value –
200,000,000 shares authorized; 199,950,602 shares issued and outstanding as of September 30, 2012 and 89,453,364 as of December 31, 2011;
|
200 | 89 | ||||||
Additional paid-in capital
|
12,074 | 10,185 | ||||||
Capital Reserve
|
1,596 | 300 | ||||||
Accumulated other comprehensive income
|
12 | 62 | ||||||
Accumulated deficit
|
(11,882 | ) | (9,460 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
2,000 | 1,176 | ||||||
TOTAL
|
5,257 | 5,417 |
For the Three
|
For the Nine
|
|||||||||||||||
Months Ended September 30,
|
Months Ended September 30,
|
|||||||||||||||
2011
|
2012
|
2011
|
||||||||||||||
(Unaudited)
|
||||||||||||||||
Revenues
|
780 | 885 | 2,509 | 2,458 | ||||||||||||
Costs of revenues:
|
||||||||||||||||
Depreciation
|
(146 | ) | (163 | ) | (436 | ) | (493 | ) | ||||||||
Other
|
(504 | ) | (599 | ) | (1,647 | ) | (1,568 | ) | ||||||||
Gross profit
|
130 | 123 | 426 | 397 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
(44 | ) | (25 | ) | (110 | ) | (75 | ) | ||||||||
Selling and marketing
|
(70 | ) | (92 | ) | (205 | ) | (268 | ) | ||||||||
General and administrative
|
(339 | ) | (345 | ) | (945 | ) | (1,078 | ) | ||||||||
Operating loss
|
(323 | ) | (339 | ) | (834 | ) | (1,024 | ) | ||||||||
Financing expenses and foreign currency translation, net
|
(9 | ) | (149 | ) | (191 | ) | (332 | ) | ||||||||
Other expenses, net
|
(89 | ) | (1 | ) | (101 | ) | (2 | ) | ||||||||
Benefit Reduction for Loan *
|
- | - | (1,296 | ) | - | |||||||||||
Loss before taxes on income
|
(421 | ) | (489 | ) | (2,422 | ) | (1,358 | ) | ||||||||
Provision for income taxes
|
- | (1 | ) | - | (1 | ) | ||||||||||
Net loss
|
(421 | ) | (490 | ) | (2,422 | ) | (1,359 | ) | ||||||||
Basic and diluted net loss per share
|
(0.002 | ) | (0.005 | ) | (0.019 | ) | (0.015 | ) | ||||||||
Number of shares used in
computing basic and diluted net loss per share
|
199,950,602 | 89,453,364 | 127,639,909 | 89,453,364 |
For the Nine Months Ended
|
||||||||
2011
|
||||||||
(Unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(2,422 | ) | (1,359 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Capital loss
|
86 | - | ||||||
Depreciation and amortization
|
450 | 517 | ||||||
Increase in accrued severance pay, net
|
2 | 6 | ||||||
Interest and linkage differences in regard to related parties and subsidiaries
|
(17 | ) | (19 | ) | ||||
Financial expenses for the benefit component in converting a loan into shares
|
1,296 | - | ||||||
Benefit component in loans amortization
|
56 | - | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease (Increase) in inventories
|
30 | (84 | ) | |||||
Increase in trade receivables
|
(122 | ) | (101 | ) | ||||
Related parties, net
|
35 | (1 | ) | |||||
Decrease (Increase) in other accounts receivable
|
(10 | ) | 69 | |||||
Increase (Decrease) in trade payables
|
(94 | ) | 184 | |||||
Increase in accounts payable and accrued expenses
|
61 | 72 | ||||||
Net cash used in operating activities
|
(649 | ) | (716 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
89 | 80 | ||||||
Purchases and production of property and equipment
|
(279 | ) | (470 | ) | ||||
Short-term bank deposits, net
|
- | 5 | ||||||
Net cash used ininvesting activities
|
(190 | ) | (385 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from (payments to) related parties, net
|
479 | (59 | ) | |||||
Proceeds from long term loans from others, net
|
164 | 828 | ||||||
Net cash provided by financing activities
|
643 | 769 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(1 | ) | 32 | |||||
Decrease in cash and cash equivalents
|
(197 | ) | (300 | ) | ||||
Cash and cash equivalents at the beginning of the period
|
291 | 709 | ||||||
Cash and cash equivalents at the end of the period
|
94 | 409 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
For the Nine Months Ended September 30,
|
|||||||
2011
|
||||||||
(Unaudited)
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment on short-term credit
|
270 | 52 | ||||||
Conversion of loan into shares
|
2,000 | - | ||||||
Receivables in regard to property and equipment
|
89 | 79 | ||||||
Cash paid during the period for interest
|
194 | 270 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products. The HOMI® 336 (the "System"), a novel, computerized minibar system designed to increase the accuracy of the automatic billing and reduce the cost of operating the minibars. Further, the HOMI® 330 system, a smaller version of the HOMI® 336, is currently in production.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
September 30,
|
||||||||
2011
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.256 | $ | 0.262 | ||||
Euro (EU)
|
$ | 1.295 | $ | 1.292 | ||||
Australian Dollar (AU$)
|
$ | 1.045 | $ | 1.015 | ||||
Pound Sterling (GBP)
|
$ | 1.622 | $ | 1.542 | ||||
Canadian Dollar (CAN$)
|
$ | 1.021 | $ | 0.979 | ||||
Consumer Price Index ("CPI")
|
122.93 | 120.38 | ||||||
Nine Months Ended
September 30,
|
||||||||
Increase (Decrease) in Rate of Exchange:
|
2012 | 2011 | ||||||
NIS
|
(2.4 | )% | (4.6 | )% | ||||
EU
|
0.2 | % | 1.8 | % | ||||
AU$
|
3.0 | % | (2.5 | ) % | ||||
GBP
|
5.2 | % | 0.9 | % | ||||
CAN$
|
4.3 | % | (2.6 | ) % | ||||
Consumer Price Index ("CPI")
|
2.1 | % | 1.1 | % |
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
30.09.2012 | 30.09.2011 | |||||||
HOMI Israel Ltd. (1), (3)
|
Israel
|
4,455 | 4,279 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (1), (3)
|
U.S.A. and
Canada
|
3,289 | 4,187 | |||||||
HOMI Europe (1), (2), (3)
|
Europe
|
1,499 | 1,499 | |||||||
9,243 | 9,965 |
HOMI U.S.A.
|
HOMI
Israel Ltd.
|
Europe
|
Total
|
||||
Number of minibars
|
1,620
|
2,341
|
1,499
|
5,460
|
HOMI U.S.A.
|
HOMI
Israel Ltd.
|
Europe
|
Total
|
||||
Number of minibars
|
246
|
708
|
0
|
954
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
|
|||||||||||||||
2011
|
2012
|
2011
|
||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Directors' Fees and Liability Insurance
|
9 | 8 | 27 | 28 | ||||||||||||
Consulting and Management Fees
|
89 | 141 | 291 | 435 | ||||||||||||
Financial Expenses
|
37 | 18 | 119 | 54 | ||||||||||||
Total
|
135 | 167 | 437 | 517 |
a.
|
On October 5, 2010, HOMI Industries Ltd, (hereinafter- HOMI Industries) which is a wholly owned subsidiary of HOMI, entered into a loan agreement with Tomwood Limited, a BVI company. Pursuant to this agreement, HOMI Industries received $ 2,000.
|
b.
|
On July 12, 2012, HOMI received two new loans from shareholders amounting to $ 300, bearing 8% annual interest. Each loan is for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreements, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loans by issuing shares of HOMI’s common stock, to the lenders, at the same price per share as in the rights offering.
|
c.
|
On January 8, 2012 and December 15, 2011, HOMI entered into loan agreements with a related company which is a company owned by HOMI's Chairman, the related party loaned HOMI NIS 850 and NIS 1,125 respectively. HOMI has paid interest on these loans, but not any principal.
|
(1)
|
An amount of NIS 1,660 approximately ($ 412) out of the above mentioned loans ,was recycled into 3 loan agreements with HOMI Industries Ltd, pursuant to which the related party shall receive a portion of the revenue from minibar systems operated by HOMI subsidiaries in three hotels.
|
(2)
|
As a result, approximately NIS 315 ($ 78) of principal, remains outstanding and payable under the December 15, 2011 loan and in accordance with its terms.
|
a.
|
On October 15, 2012, HOMI received a new loan from a shareholder amounting to $ 200, bearing 8% annual interest. The loan is for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreements, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loan by issuing shares of HOMI’s common stock, to the lender, at the same price per share as in the rights offering.
|
b.
|
At the Annual Meeting of Shareholders held on October 10, 2012, it was resolved to execute a one -for- hundred reverse split of all of HOMI’s shares of common stock. Accordingly, following the reverse split, the number of outstanding shares of common stock will decrease from approximately 200,000,000 to 2,000,000 par value per share $ 0.001. The corporation shall issue no fractional shares of common stock and fractional shares resulting from the reverse split will be rounded up to the nearest whole share.
|
Page
|
|||
Report of Independent Registered Public Accounting Firm
|
F-2 | ||
Consolidated Balance Sheets
|
F-3 - F-4 | ||
Consolidated Statements of Comprehensive Loss
|
F-5 | ||
Consolidated Statement of Changes in Shareholders' Equity
|
F-6 | ||
Consolidated Statements of Cash Flows
|
F-7 - F-8 | ||
Notes to the Consolidated Financial Statements
|
F-9 - F-26 |
December 31,
|
|||||||||||
Note
|
2012
|
2011
|
|||||||||
ASSETS
|
|||||||||||
CURRENT ASSETS:
|
|||||||||||
Cash and cash equivalents
|
195 | 291 | |||||||||
Short-term bank deposits
|
26 | 54 | |||||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of December 31, 2012 and 2011)
|
453 | 436 | |||||||||
Other accounts receivable
|
3 | 140 | 240 | ||||||||
Inventories
|
350 | 355 | |||||||||
TOTAL CURRENT ASSETS
|
1,164 | 1,376 | |||||||||
PROPERTY AND EQUIPMENT, NET:
|
4 | ||||||||||
Minibars and related equipment
|
3,857 | 3,964 | |||||||||
Other property and equipment
|
22 | 13 | |||||||||
3,879 | 3,977 | ||||||||||
OTHER ASSETS:
|
5 | ||||||||||
Deferred expenses, net
|
10 | 17 | |||||||||
Intangible assets
|
44 | 47 | |||||||||
54 | 64 | ||||||||||
TOTAL ASSETS
|
5,097 | 5,417 |
December 31,
|
|||||||||||
Note
|
2012
|
2011
|
|||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||||||
CURRENT LIABILITIES:
|
|||||||||||
Current maturities of long-term loans from related parties
|
6 | 234 | 133 | ||||||||
Current maturities of long-term loans from others
|
7 | 333 | 228 | ||||||||
Trade payables
|
583 | 555 | |||||||||
Accrued expenses and other current liabilities
|
8 | 601 | 389 | ||||||||
TOTAL CURRENT LIABILITIES
|
1,751 | 1,305 | |||||||||
LONG-TERM LIABILITIES:
|
|||||||||||
Long-term loans from related parties, net of current maturities
|
6 | 1,435 | 557 | ||||||||
Long-term loans from others, net of current maturities
|
7 | 505 | 2,341 | ||||||||
Accrued severance pay, net
|
47 | 38 | |||||||||
TOTAL LONG-TERM LIABILITIES
|
1,987 | 2,936 | |||||||||
COMMITMENTS, CONTINGENT LIABILITIES, LIENS
AND COVENANTS
|
9 | ||||||||||
SHAREHOLDERS' EQUITY:
|
10 | ||||||||||
Share capital -
|
|||||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of December 31, 2012 and 2011;
|
- | - | |||||||||
Common stock of $ 0.001 par value –
200,000,000 shares authorized; 199,950,602 shares issued and outstanding as of December 31, 2012 and 89,453,364 as of December 31, 2011.
|
200 | 89 | |||||||||
Additional paid-in capital
|
12,074 | 10,185 | |||||||||
Capital Reserve
|
1,414 | 300 | |||||||||
Accumulated other comprehensive income
|
21 | 62 | |||||||||
Accumulated deficit
|
(12,350 | ) | (9,460 | ) | |||||||
TOTAL SHAREHOLDERS' EQUITY
|
1,359 | 1,176 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
|
5,097 | 5,417 |
Year ended December 31,
|
|||||||||||
Note
|
2012
|
2011
|
|||||||||
Revenues
|
11 | 3,315 | 3,326 | ||||||||
Cost of revenues:
|
|||||||||||
Depreciation
|
(587 | ) | (705 | ) | |||||||
Other
|
(2,187 | ) | (2,078 | ) | |||||||
Gross profit
|
541 | 543 | |||||||||
Operating expenses:
|
|||||||||||
Research and development
|
(137 | ) | (109 | ) | |||||||
Selling and marketing
|
(273 | ) | (341 | ) | |||||||
General and administrative
|
(1,279 | ) | (1,408 | ) | |||||||
Operating loss
|
(1, 148 | ) | (1, 315 | ) | |||||||
Financial expenses and foreign currency translation, net
|
12 | (218 | ) | (365 | ) | ||||||
Other expenses
|
13 | (167 | ) | (65 | ) | ||||||
Benefit Reduction for Loans
|
6h,10b | (1,357 | ) | - | |||||||
Net Loss
|
(2,890 | ) | (1,745 | ) | |||||||
Basic and diluted net loss per share
|
(0.02 | ) | (0.02 | ) | |||||||
Weighted average number of shares used in computing basic and diluted loss per share
|
144,701,963 | 89,453,364 | |||||||||
Other Comprehensive Loss:
|
|||||||||||
Net Loss
|
(2,890 | ) | (1,745 | ) | |||||||
Foreign currency translation adjustments
|
(41 | ) | (1 | ) | |||||||
Comprehensive Loss
|
(2,931 | ) | (1,746 | ) | |||||||
Number of
Shares of Common
Stock
|
Common Stock Par Value
|
Additional paid-in capital
|
Capital reserve
|
Accumulated other comprehensive income
|
Accumulated
deficit
|
Total
|
||||||||||||||||||||||
Balance as of December 31, 2010
|
89,453,364 | 89 | 10,185 | - | 63 | (7,715 | ) | 2,622 | ||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | (1 | ) | - | (1 | ) | |||||||||||||||||||
Loss for the year
|
- | - | - | - | - | (1,745 | ) | (1,745 | ) | |||||||||||||||||||
Capital Reserve from transactions with Related Parties*
|
- | - | - | 300 | - | - | 300 | |||||||||||||||||||||
Balance as of December 31, 2011
|
89,453,364 | 89 | 10,185 | 300 | 62 | (9,460 | ) | 1,176 | ||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | (41 | ) | - | (41 | ) | |||||||||||||||||||
Loss for the year
|
- | - | - | - | - | (2,890 | ) | (2,890 | ) | |||||||||||||||||||
Share issuing**
|
110,497,238 | 111 | 1,889 | 1,296 | - | - | 3,296 | |||||||||||||||||||||
Capital Reserve from transactions with Related Parties*
|
- | - | - | (182 | ) | - | - | (182 | ) | |||||||||||||||||||
Balance as of December 31, 2012
|
199,950,602 | 200 | 12,074 | 1,414 | 21 | (12,350 | ) | 1,359 |
Year ended December 31,
|
||||||||
2011
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(2,890 | ) | (1,745 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Capital loss
|
152 | 64 | ||||||
Depreciation and amortization
|
605 | 732 | ||||||
Increase (decrease) in accrued severance pay, net
|
9 | (11 | ) | |||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
(127 | ) | 19 | |||||
Benefit component
|
1,357 | - | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease (increase) in inventories
|
7 | (56 | ) | |||||
Decrease (increase) in trade receivables
|
(15 | ) | 12 | |||||
Increase (decrease) in related parties
|
56 | (13 | ) | |||||
Decrease in other accounts receivable
|
3 | 90 | ||||||
Increase (decrease) in trade payables
|
(125 | ) | 96 | |||||
Increase (decrease) in accrued expenses and other current liabilities
|
142 | (24 | ) | |||||
Net cash used in operating activities
|
(826 | ) | (836 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases and production of property and equipment
|
(497 | ) | (607 | ) | ||||
Proceeds from sales of property and equipment
|
111 | 111 | ||||||
Short-term bank deposits, net
|
28 | 9 | ||||||
Net cash used in investing activities
|
(358 | ) | (487 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from related parties, net
|
827 | 111 | ||||||
Proceeds from long-term loans from others, net
|
263 | 793 | ||||||
Net cash provided by financing activities
|
1,090 | 904 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(2 | ) | 2 | |||||
Decrease in cash and cash equivalents
|
(96 | ) | (417 | ) | ||||
Cash and cash equivalents at the beginning of the year
|
291 | 708 | ||||||
Cash and cash equivalents at the end of the year
|
195 | 291 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
Year ended December 31,
|
|||||||
2011
|
||||||||
Cash paid during the year for interest
|
219 | 230 | ||||||
Cash paid during the period for income taxes
|
- | 2 | ||||||
Acquisition of property and equipment on short-term credit
|
153 | 154 | ||||||
Receivables in regard to property and equipment
|
73 | 168 | ||||||
Conversion of loan into shares
|
2,000 | - |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries, as identified in Note 4d below, are engaged in thedistribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
Hereinafter, HOMI and its subsidiaries will be referred to as the "Company".
The Company has been doing business since 1997 through various subsidiaries. The current corporate structure, in which it is holding company for various wholly owned subsidiaries around the world, has been in place since 2001. The Company common stock was listed on the Over-the-Counter Bulletin Board, or "OTC Bulletin Board" from February 2004 until February 2011. It now trades on the OTCQB under the symbol "HOUM.PK."
|
b.
|
During 2006, the Company commenced its own research and development program aimed at thedevelopment of a new range of products. The HOMI® 336 (the "System"), a novel, computerizedminibar system designed to increase the accuracy of the automatic billing and reduce the cost of operating the minibars. Further, the HOMI® 330 system, a smaller version of the HOMI® 336, is currently in production.
During 2012, the company finalized the research and development of an additional product,the HOMI® 226, and started its production and installation in various hotels.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels to third parties. HOMI shall manage and operate these minibars for anagreed upon management fee and profit sharing agreements.
|
%
|
||
Minibars and production equipment
|
10
|
|
Computers and electronic equipment
|
15 – 33
|
|
Office furniture and equipment
|
7
|
2.
|
Deferred expenses represent loan acquisition costs arising from the long-term loan originated in 2005 and convertible notes payable issued in 2007 and 2006.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
New Israeli Shekel (NIS)
|
$ | 0.268 | $ | 0.262 | ||||
Euro (EU)
|
$ | 1.318 | $ | 1.292 | ||||
Australian Dollar (AU$)
|
$ | 1.037 | $ | 1.015 | ||||
Pound Sterling (GBP)
|
$ | 1.617 | $ | 1.542 | ||||
Consumer Price Index ("CPI"):
|
122.12 | 120.38 | ||||||
Year Ended December 31,
|
||||||||
Change in Rate of Exchange and the Consumer Price Index ("CPI"):
|
2012 | 2011 | ||||||
NIS
|
2.3 | % | (7.1 | %) | ||||
EU
|
2.0 | % | (3.2 | %) | ||||
AU$
|
2.2 | % | (0.3 | %) | ||||
GBP
|
4.9 | % | (0.4 | %) | ||||
Change in subsequent ( "CPI")
|
1.44 | % | 2.17 | % |
2011
|
||||||||
Receivables in regard to property and equipment *
|
73 | 168 | ||||||
Prepayment and others
|
57 | 71 | ||||||
Government authorities
|
10 | 1 | ||||||
140 | 240 |
*
|
In 2010 Homi Australia ceased the operating of the Minibars in Hilton Sydney, the only hotel operated in Australia, and transferred the operation and the Minibars installed to the Hilton, for up to AU$ 435 (approx. $ 396). The amount will be repaid over maximum of 50 monthly payments which will be based on the monthly performance of the hotel as detailed in the agreement. Title of the System shall immediately pass to Hilton, after those repayments, for the nominal price of one AU$.
|
2011
|
||||||||
Cost:
|
||||||||
Minibars (d)
|
6,854 | 6,290 | ||||||
Production equipment and parts
|
295 | 411 | ||||||
Computers and electronic equipment
|
113 | 107 | ||||||
Office furniture, equipment and other
|
30 | 30 | ||||||
7,292 | 6,838 | |||||||
Accumulated depreciation:
|
||||||||
Minibars
|
3,292 | 2,737 | ||||||
Computers and electronic equipment
|
118 | 122 | ||||||
Office furniture, equipment and other
|
3 | 2 | ||||||
3,413 | 2,861 | |||||||
Depreciated cost
|
3,879 | 3,977 |
a.
|
Depreciation expenses amounted to $ 595 and $ 719 for the years ended December 31, 2012 and 2011, respectively.
|
b.
|
Balance includes minibars at depreciated cost of $ 139, as of December 31, 2012, identified against a loan based on a refinancing agreement, see also Note 6c.
|
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
31.12.2012 | 31.12.2011 | |||||||
HOMI Israel Ltd. (1),(3)
|
Israel
|
4,692 | 4,361 | |||||||
HOMI USA, Inc. and HOMI Canada, Inc. (1),(3)
|
U.S.A. and Canada
|
3,289 | 4,187 | |||||||
HOMI Europe SARL (1), (2) ,(3)
|
Europe
|
1,499 | 1,499 | |||||||
9,480 | 10,047 |
(1)
|
A quantity of minibars are owned by HOMI Industries, which is a wholly owned subsidiary ("HOMI Industries") and rented to other subsidiaries.
|
HOMI U.S.A.
|
HOMI
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,620 | 2,593 | 1,499 | 5,712 |
(3)
|
Including HOMI® 232 shared operated minibars. As of December 31, 2012 located as follows, see note 9f:
|
HOMI U.S.A.
|
HOMI
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
246 | 333 | 0 | 579 |
2011
|
||||||||
a. Intangible assets-
|
||||||||
Intellectual property (Net of accumulated amortization of $ 11 and $ 8 of December 31, 2012 and 2011, respectively) (1)
|
44 | 47 | ||||||
b. Deferred expenses -
|
||||||||
Cost
|
116 | 116 | ||||||
Accumulated amortization (2)
|
(106 | ) | (99 | ) | ||||
10 | 17 | |||||||
54 | 64 |
(2)
|
Deferred expenses in regard to loans received are amortized over the loan period of nine years (see Note 7 c (1)).
|
2011
|
||||||||
Long- term liability (see c-j below)
|
1,435 | 557 | ||||||
Current maturities of long- term liability
|
234 | 133 | ||||||
1,669 | 690 |
b.
|
Aggregate maturities of long-term loans for years subsequent to December 31, 2012 are as follows:
|
Year
|
Amount
|
|||
2013
|
234 | |||
2014
|
363 | |||
2015
|
578 | |||
2016
|
363 | |||
2017 and thereafter
|
131 | |||
1,669 |
c.
|
1. On July 20, 2009, HOMI Israel Ltd (“HOMI Israel”) signed a Refinancing Agreement with a related company (owned 45.45% by a related party) (the “Related Company”). Pursuant to this agreement, HOMI Israel sold 470 HOMI® 336 used minibars installed at the Dan Panorama Hotel in Tel Aviv (The “Hotel”) to the Related Company at a price of $ 450 (in dollars) per minibar for a total of $ 211.5. It was agreed that the minibars will remain at the Hotel and HOMI Israel shall continue to operate and maintain these minibars in accordance with its existing outsource operation agreement with the Hotel. The title to the minibars now rests with the Related Company.
|
2.
|
On February 7, 2012, HOMI Industries, entered into a loan agreement with the Related Company. Pursuant to this agreement, the Related Company agreed to loan to HOMI Industries the sum of $90. HOMI Industries agreed to encumber computerized minibar systems, including 288 computerized minibars, a central unit and a license to HOMI® software, which HOMI’s Affiliate agreed to install at the Carlton Tel-Aviv Hotel.
|
d.
|
1. On January 28, 2010, HOMI’s President loaned HOMI $ 100, at an agreed interest rate of 8% per annum. During the years 2011 and 2012, HOMI paid interest on this loan, but no principal. According to the terms of the agreement, HOMI was to commence payment of principal at the end of the first quarter of 2012.
|
2.
|
On July 12, 2012, HOMI entered into an additional loan agreement with HOMI's President, pursuant to which HOMI’s President loaned HOMI the sum of $50 bearing 8% annual interest. The loan is for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreement, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loan by issuing shares of HOMI’s common stock to its president at the same price per share as in the rights offering.
|
e.
|
On February 18, 2010, HOMI Industries entered into a loan agreement with a related party pursuant to which HOMI Industries received a loan of $ 140 for the installation of 280 HOMI® minibars at the Wyndham Hotel in New York, USA.
|
f.
|
On June 14, 2010, HOMI Industries entered into a second loan agreement with the above mentioned related party, pursuant to which HOMI Industries received a loan of NIS 671,550 (approximately $ 173 when received) for the installation of 363 HOMI® minibars at the Royal Beach Hotel in Eilat, Israel.
|
g.
|
On October 26 2011, HOMI Industries entered into an additional loan agreement with the above mentioned related party, pursuant to which HOMI Industries received a loan of $ 108 for the installation of 270 HOMI® minibars at the Herods Hotel in Jerusalem, Israel.
|
(1)
|
An amount of approximately NIS 1,660,000 ($ 412) out of the above mentioned loans ,was recycled into 3 loan agreements with HOMI Industries Ltd, pursuant to which the related party shall receive a portion of the revenue from minibar systems operated by HOMI subsidiaries in three hotels as detailed below.
|
(2)
|
An amount of approximately NIS 315,000 ($ 78) of principal remains outstanding and payable under the December 15, 2011 loan, in accordance with its terms.
|
i.
|
In December 2011, HOMI received three additional loans from shareholders and directors, amounting to $ 80 in total. Each loan is for a period of four years, with quarterly repayments, including two years’ grace on the principal, and with each lender being entitled during such grace period to convert each loan into shares of HOMI’s common stock at 3 cents per share or the price per share in a rights offering if HOMI conducts a rights offering prior to full repayment of these loans. These loans are all in US Dollars and bear 8% annual interest.
|
j.
|
On July 12, October 15, January 1, 2013, HOMI entered into three new loan agreements with the majority shareholder in HOMI. Pursuant to these loan agreements, the shareholder agreed to loan HOMI the sums of $ 250, $ 200 and $ 70, respectively, bearing 8% annual interest.
The loans are for a period of four years, including two years’ grace on the principal. Pursuant to the loans agreements, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loans by issuing shares of HOMI’s common stock to the shareholder at the same price per share as in the rights offering.
|
2011
|
||||||||
Long- term liability
|
505 | 2,341 | ||||||
Current maturities of long-term liability
|
333 | 228 | ||||||
838 | 2,569 |
b.
|
Aggregate maturities of long-term loans for years subsequent to December 31, 2012 are as follows:
|
Year
|
Amount
|
|||
2013
|
333 | |||
2014
|
176 | |||
2015
|
105 | |||
2016
|
86 | |||
2017 and
thereafter
|
138 | |||
838 |
(1)
|
In March and June, 2005, HOMI and the subsidiary in the U.S. received from Horizon Challenges Investment Company Ltd. (“Horizon”) loans in the total amount of $ 1.1 million, which Horizon undertook to provide to the Company (“the Financing”), pursuant to a Financing Agreement, dated as of March 1, 2005, as amended on May 17, 2005. The loans bear interest at the rate of 11.67% and are to be repaid in monthly installments for nine years. The loans are secured by a lien on all minibars in respect of which the loan was received, and a security interest and assignment of a portion of HOMI and its subsidiaries’ monthly revenues from those minibars, in the
amount required to pay each month’s repayments on all outstanding loans, principal plus interest. Total liabilities for the years ended December 31, 2012 and 2011 amounted to approximately $ 257 and $ 415, respectively.
|
(2)
|
HOMI Industries, entered into two loan agreements with Moise Laurent Elkrief and Sonia Elkrief (“Elkrief”).
|
(3)
|
HOMI Industries, entered into two loan agreements with Sparta Technical Solutions LTD ("Sparta").
|
(4)
|
On May 31, 2012, HOMI Industries entered into a loan agreement with GPF S.A ("GPF), pursuant to which GPF lent HOMI Industries $ 55 (the “Loan”).
|
(5)
|
HOMI Industries entered into two loan agreements with Troy Creative Solutions LTD ("Troy"), signed on July 30, 2012 and November 12, 2012 respectively. Pursuant to these agreements, Troy lent HOMI Industries $ 100 and $ 65 (the “Loans”).
|
(6)
|
On October 5, 2010, HOMI Industries, entered into a loan agreement with Tomwood Limited, a BVI company ("Tomwood"). Pursuant to this agreement, HOMI Industries received $ 2,000.
|
2011
|
||||||||
Employees and payroll accruals
|
189 | 150 | ||||||
Accrued expenses
|
182 | 145 | ||||||
Advances from customer
|
75 | - | ||||||
Related parties
|
58 | 5 | ||||||
Government authorities
|
52 | 52 | ||||||
Other
|
45 | 37 | ||||||
601 | 389 |
a.
|
HOMI and its affiliates have contractual obligations towards hotels with regard to the operation of minibars in hotel rooms.
|
b.
|
HOMI Industries has registered fixed charges over certain of its assets, including certain minibars and the rights to receivables generated by such minibars , in favor of third parties, as security for loans which were given to HOMI by such third parties, or to secure profit sharing payments which HOMI undertook to pay to such parties. Total liabilities secured by these fixed charges as of December 31, 2012 are in the amount of approximately $ 1,000. See also Notes 9f, 7c (2-5) and 6(e-h).
|
Rent commitments:
|
|||
Future minimum lease commitments under non-cancelable operating leases are as follows:
|
|||
First year
|
34
|
||
Total
|
34
|
d.
|
The Company received notice that the US Internal Revenue Service imposed on the Company automated late filing penalties for delay in filing a certain information schedule on foreign holdings. The Company has filed an appeal for full abatement of the penalties according to procedures of the IRS. Based on common practice and the nature of reasoning for the delay, Company advisors believe there is a good reason to believe that the abatement would be approved. Accordingly, no provision was recorded on the Company books of account.
|
e.
|
HOMI Industries subsequently entered into exclusive license agreements with HOMI Europe S.A.R.L. (for the territory of Europe), HOMI USA, Inc. (for the United States and Canada) and HOMI Israel Ltd. (for Israel). HOMI Europe (S.A.R.L.) granted a sub-license to HOMI UK Limited (for the United Kingdom, Spain and Ireland), and HOMI USA, Inc. granted a sub-license to HOMI Canada, Inc. (for Canada). All of the aforementioned companies are subsidiaries of HOMI.
|
f.
|
During March to June, 2010, HOMI Industries and Best Bar Services Ltd. ("Best Bar"), began to implement the cooperation pursuant to the Memorandum of Understanding they entered into as of 23 September 2009 ("the MOU”), in relation to Best Bar’s Open Display, Open Access Computerized Minibars. HOMI has included the Best Bar minibar in its catalogue of minibars, represented as the “HOMI® 232” model. During 2011 HOMI installed the HOMI® 232 Minibar in 3 hotels in Israel and one hotel in the USA.
|
b.
|
On June 29, 2012, a loan in the amount of $2,000 received from Tomwood with a conversion at a price per share of $ 0.06 was converted and Tomwood received an allocation of 110,497,238 Company shares in the price of $ 0.0181 per share.
|
c.
|
At the Annual Meeting of Shareholders held on October 10, 2012, it was resolved to execute a one -for- hundred reverse split of all of HOMI’s shares of common stock. Accordingly, following the reverse split, the number of outstanding shares of common stock will decrease from approximately 200,000,000 to 2,000,000 par value per share $ 0.001. The corporation shall issue no fractional shares of common stock and fractional shares resulting from the reverse split will be rounded up to the nearest whole share.
|
Year ended December 31,
|
||||||||
2011
|
||||||||
Customer A
|
12.4 | % | 12.8 | % | ||||
Customer B
|
7.9 | % | 8.5 | % | ||||
Customer C
|
6.0 | % | 6.4 | % | ||||
Customer D
|
4.7 | % | 5.9 | % | ||||
Customer E
|
4.1 | % | 4.5 | % | ||||
Customer F
|
3.7 | % | 4.4 | % |
Year ended December 31,
|
||||||||
2011
|
||||||||
Israel
|
59 | % | 57 | % | ||||
USA
|
31 | % | 35 | % | ||||
ROW
|
10 | % | 8 | % | ||||
Total
|
100 | % | 100 | % |
c.
|
As of December 31, 2012, $ 2,444 of the consolidated long-lived assets were located in Israel, $ 838 in the USA and $ 597 in ROW. As of December 31, 2011, $ 2,215 of the consolidated long-lived assets were located in Israel; $ 1,119 in the USA; and $ 643 in ROW.
|
Year ended December 31,
|
||||||||
2011
|
||||||||
Interest on long-term loans (1)
|
(270 | ) | (393 | ) | ||||
Linkage difference and others, net
|
52 | 28 | ||||||
(218 | ) | (365 | ) |
Year ended December 31,
|
||||||||
2011
|
||||||||
Dismantling of Minibars
|
(127 | ) | (65 | ) | ||||
Termination contract with Best Bar see Note 9f
|
(40 | ) | - | |||||
(167 | ) | (65 | ) |
b.
|
The subsidiary in the USA is subject to both federal and state tax. The federal tax is determined according to taxable income, for the first $ 50 taxable income the rate is 15%. In addition, a 8.84% California state tax is applicable.
|
$ | ||||
HOMI USA Inc. *
|
3,467 | |||
HOMI Israel Ltd.
|
1,740 | |||
HOMI Industries Ltd.
|
3,199 | |||
HOMI Europe SARL
|
1,111 | |||
HOMI Inc.
|
320 | |||
HOMI UK LTD.
|
724 | |||
HOMI Australia PTY.
|
340 | |||
HOMI France
|
145 | |||
11,046 |
*
|
Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization
|
2011
|
||||||||
Deferred Tax assets-Operating loss carryforwards
|
2,789 | 2,258 | ||||||
Deferred Tax Liabilities-Temporary differences in regard to expenses and property
|
(51 | ) | (59 | ) | ||||
Net deferred tax asset before valuation allowance
|
2,738 | 2,199 | ||||||
Valuation allowance
|
(2,738 | ) | (2,199 | ) | ||||
Net deferred tax
|
- | - |
Year Ended December 31,
|
||||||||
2011
|
||||||||
Israel
|
1,044 | 1,171 | ||||||
USA
|
1,628 | 379 | ||||||
ROW
|
218 | 195 | ||||||
2,890 | 1,745 |
f.
|
The main items for reconciliation between the statutory tax rate of the Company and the effective tax rate are the non-recognition of tax benefits from accumulated net operating losses carry forward among the various subsidiaries worldwide due to uncertainty of the realization of such tax benefits.
|
Year ended December 31,
|
||||||||
2011
|
||||||||
Directors' fees
|
12 | 15 | ||||||
Directors' liability insurance
|
30 | 24 | ||||||
Consulting and management fees
|
378 | 531 | ||||||
Interest Expense
|
101 | 67 | ||||||
521 | 637 |
a.
|
On January 10, 2013, HOMI Industries Ltd, entered into a new loan agreement with a related company, owned and managed by the President of HOMI.
|
b.
|
On January 10, 2013, HOMI Industries Ltd, entered into a new loan agreement Troy Creative solutions.
|
c.
|
As of March 6, 2013, HOMI Industries Ltd entered into a new loan agreement with a related party, pursuant to which Lender agreed to loan $109 to HOMI Industries.
|
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1 – CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
||
Balance Sheets -
|
||
F-2-F-3
|
||
Statements of Comprehensive Loss -
|
||
Three months ended March 31, 2013 and 2012
|
F-4
|
|
Statements of Cash Flows -
|
||
Three months ended March 31, 2013 and 2012
|
F-5-F-6
|
|
Notes to Financial Statements
|
F-7-F-11
|
As of
March 31,
|
As of
|
|||||||
2012
|
||||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
160 | 195 | ||||||
Short-term bank deposits
|
21 | 26 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of March 31, 2013 and December 31, 2012)
|
525 | 453 | ||||||
Other accounts receivable
|
155 | 140 | ||||||
Inventories
|
330 | 350 | ||||||
TOTAL CURRENT ASSETS
|
1,191 | 1,164 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
3,694 | 3,857 | ||||||
Other property and equipment
|
25 | 22 | ||||||
TOTAL PROPERTY AND EQUIPMENT
|
3,719 | 3,879 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
10 | 10 | ||||||
Intangible assets
|
43 | 44 | ||||||
TOTAL OTHER ASSETS
|
53 | 54 | ||||||
TOTAL
|
4,963 | 5,097 |
As of
March 31,
|
As of
|
|||||||
2012
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
Unaudited
|
Audited
|
||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of long term loans from related parties
|
111 | 234 | ||||||
Current maturities of long-term loans from others
|
285 | 333 | ||||||
Trade payables
|
775 | 583 | ||||||
Accrued expenses and other current liabilities
|
529 | 601 | ||||||
TOTAL CURRENT LIABILITIES
|
1,700 | 1,751 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties, net of current maturities
|
1,714 | 1,435 | ||||||
Long-term loans from others ,net of current maturities
|
529 | 505 | ||||||
Accrued severance pay, net
|
34 | 47 | ||||||
TOTAL LONG-TERM LIABILITIES
|
2,277 | 1,987 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of March 31, 2013 and as of December 31, 2012.
|
- | - | ||||||
Common stock of $ 0.001 par value –
200,000,000 shares authorized; 1,999,506 shares issued and outstanding as of March 31, 2013 and as of December 31, 2012.
|
2 | 2 | ||||||
Additional paid-in capital
|
12,272 | 12,272 | ||||||
Capital Reserve
|
1,414 | 1,414 | ||||||
Accumulated other comprehensive income
|
60 | 21 | ||||||
Accumulated deficit
|
(12,762 | ) | (12,350 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
986 | 1,359 | ||||||
TOTAL
|
4,963 | 5,097 |
For the Three Months Ended
|
||||||||
2012
|
||||||||
Unaudited
|
||||||||
Revenues
|
982 | 858 | ||||||
Cost of revenues:
|
||||||||
Depreciation
|
(156 | ) | (145 | ) | ||||
Other
|
(646 | ) | (530 | ) | ||||
Gross profit
|
180 | 183 | ||||||
Operating expenses:
|
||||||||
Research and development
|
(15 | ) | (34 | ) | ||||
Selling and marketing
|
(68 | ) | (62 | ) | ||||
General and administrative
|
(323 | ) | (309 | ) | ||||
Operating loss
|
(226 | ) | (222 | ) | ||||
Financing expenses and foreign currency translation, net
|
(107 | ) | (84 | ) | ||||
Other expenses, net
|
(74 | ) | (11 | ) | ||||
Benefit reduction for Loans
|
(5 | ) | - | |||||
Net loss
|
(412 | ) | (317 | ) | ||||
Basic and diluted net loss per share
|
(0.0002 | ) | (0.0004 | ) | ||||
Weighted average number of shares used in computing basic and diluted loss per share
|
1,999,506 | 894,534 | ||||||
Other Comprehensive Loss:
|
||||||||
Net Loss
|
(412 | ) | (317 | ) | ||||
Foreign currency translation adjustments
|
(39 | ) | 27 | |||||
Comprehensive Loss
|
(451 | ) | (290 | ) |
|
For the Three Months Ended March 31,
|
|||||||
2012
|
||||||||
Unaudited
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(412 | ) | (317 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
159 | 150 | ||||||
Capital loss
|
74 | - | ||||||
Increase (Decrease ) in accrued severance pay, net
|
(13 | ) | 6 | |||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
34 | 8 | ||||||
Benefit component
|
5 | - | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease (Increase) in inventories
|
17 | (24 | ) | |||||
Increase in trade receivables
|
(75 | ) | (167 | ) | ||||
Increase in related parties
|
18 | 28 | ||||||
Increase in other accounts receivable
|
(36 | ) | (55 | ) | ||||
Increase (Decrease) in trade payables
|
74 | (44 | ) | |||||
Increase (Decrease) in accounts payable and accrued expenses
|
(91 | ) | 33 | |||||
Net cash used in operating activities
|
(246 | ) | (382 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
223 | 26 | ||||||
Purchases and production of property and equipment
|
(140 | ) | (37 | ) | ||||
Short-term bank deposits, net
|
5 | (1 | ) | |||||
Net cash provided from (used in) investing activities
|
88 | (12 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from related parties
|
178 | 275 | ||||||
Payments of long- term loans to related parties
|
(29 | ) | (16 | ) | ||||
Payments of long-term loans to others
|
(56 | ) | (51 | ) | ||||
Proceeds from others
|
32 | - | ||||||
Net cash provided by financing activities
|
125 | 208 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(2 | ) | (4 | ) | ||||
Decrease in cash and cash equivalents
|
(35 | ) | (190 | ) | ||||
Cash and cash equivalents at the beginning of the period
|
195 | 291 | ||||||
Cash and cash equivalents at the end of the period
|
160 | 101 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
For the Three Months Ended March 31,
|
|||||||
2012
|
||||||||
Unaudited
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of propertyand equipment on short-term credit
|
118 | 288 | ||||||
Receivables in regard to property and equipment
|
34 | 26 | ||||||
Cash paid during the period for interest
|
38 | 77 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
March 31,
|
||||||||
2012
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.274 | $ | 0.268 | ||||
Euro (EU)
|
$ | 1.278 | $ | 1.318 | ||||
Australian Dollar (AU$)
|
$ | 1.043 | $ | 1.037 | ||||
Pound Sterling (GBP)
|
$ | 1.517 | $ | 1.617 | ||||
Consumer Price Index ("CPI")*:
|
122.12 | 122.12 | ||||||
Three Months Ended March 31,
|
||||||||
Increase in Rate of Exchange:
|
2013 | 2012 | ||||||
NIS
|
2.24 | % | 2.86 | % | ||||
EU
|
(3.03 | )% | 3.17 | % | ||||
AU$
|
0.58 | % | 2.36 | % | ||||
GBP
|
(6.18 | %) | 3.70 | % | ||||
Consumer Price Index ("CPI")*:
|
0.0 | % | 0. 0 | % | ||||
*Based on the Year 2002 average rate
|
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
31.03.2013 | 31.03.2012 | |||||||
HOMI Israel Ltd. (1),(3)
|
Israel
|
4,780 | 4,390 | |||||||
HOMI USA, Inc. and HOMI Canada, Inc. (1),(3)
|
U.S.A. and Canada
|
2,865 | 3,386 | |||||||
HOMI Europe SARL (1), (2) ,(3)
|
Europe
|
1,499 | 1,499 | |||||||
9,144 | 9,275 |
(1)
|
A quantity of minibars are owned by HOMI Industries, which is a wholly owned subsidiary ("HOMI Industries") and rented to other subsidiaries.
|
HOMI
U.S.A.
|
HOMI
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,620 | 2,791 | 1,499 | 5,910 |
HOMI
U.S.A.
|
HOMI
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
246 | 333 | 0 | 579 |
Three Months Ended March 31,
|
||||||||
2012
|
||||||||
Unaudited
|
||||||||
Directors' Fees and Liability Insurance
|
9 | 9 | ||||||
Consulting and Management Fees
|
104 | 96 | ||||||
Financial Expenses
|
31 | 20 | ||||||
Benefit Reduction for loan
|
5 | 19 | ||||||
149 | 144 |
a.
|
On January 28, 2013 the Company executed a reverse split of one -for- hundred of all of HOMI’s shares of common stock. Following the reverse split, the number of outstanding shares of common stock decreased from approximately 200,000,000 to 2,000,000. The corporation issued no fractional shares of common stock and fractional shares resulting from the reverse split were rounded up to the nearest whole share.
|
b.
|
On April 5, 2013, HOMI entered into a new loan agreement with the majority shareholder in HOMI. Pursuant to this loan agreement, the shareholder agreed to loan HOMI the sum of $ 100, bearing 8% annual interest. The loan is for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreement, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loan by issuing shares of HOMI’s common stock to the shareholder at the same price per share as in the rights offering.
The loan fund pursuant to the loan agreement, was made available to HOMI on March 26, 2013.
|
b.
|
On April 26, 2013 HOMI entered into two loan agreements with a related party (15%) and two other parties per agreement (85%). The loans were for $ 165 and $ 133 .As security and collateral for repayment of the Loans, HOMI will encumber in the lender's favor computerized minibar systems, including 313 and 280 HOMI® 226 computerized minibars, a central unit and a license to HOMI® software, which HOMI’s affiliate will install at the Sheraton Tel Aviv and Dan Tel Aviv, Israel, respectively, and will operate for the hotel under an outsource operation agreement which HOMI’s affiliate signed with the hotel.
|
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1 –CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
||
Balance Sheets -
|
||
F-2-F-3
|
||
Statements of Comprehensive Loss -
|
||
Six and three months ended June 30, 2013 and 2012
|
F-4
|
|
Statements of Cash Flows -
|
||
Six months ended June 30, 2013 and 2012
|
F-5-F-6
|
|
Notes to the Financial Statements
|
F-7-F-11
|
As of
June 30,
|
As of
|
|||||||
2012
|
||||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
218 | 195 | ||||||
Short-term bank deposits
|
21 | 26 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of June 30, 2013 and December 31,2012)
|
398 | 453 | ||||||
Other accounts receivable
|
130 | 140 | ||||||
Inventories
|
351 | 350 | ||||||
TOTAL CURRENT ASSETS
|
1,118 | 1,164 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
3,795 | 3,857 | ||||||
Other property and equipment
|
27 | 22 | ||||||
TOTAL PROPERTY AND EQUIPMENT
|
3,822 | 3,879 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
10 | 10 | ||||||
Intangible assets
|
43 | 44 | ||||||
TOTAL OTHER ASSETS
|
53 | 54 | ||||||
TOTAL
|
4,993 | 5,097 |
As of
June 30,
|
As of
|
|||||||
2012* | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
(Unaudited)
|
(Audited)
|
||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of long-term loans from related parties
|
56 | 141 | ||||||
Current maturities of long-term loans from others
|
296 | 426 | ||||||
Trade payables
|
941 | 583 | ||||||
Accrued expenses and other current liabilities
|
481 | 601 | ||||||
TOTAL CURRENT LIABILITIES
|
1,774 | 1,751 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties ,net of current maturities
|
1,436 | 1,232 | ||||||
Long-term loans from others ,net of current maturities
|
1,122 | 708 | ||||||
Accrued severance pay, net
|
67 | 47 | ||||||
TOTAL LONG-TERM LIABILITIES
|
2,625 | 1,987 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; no shares issued or outstanding as of June 30, 2013 and as of December 31, 2012.
|
- | - | ||||||
Common stock of $ 0.001 par value –
200,000,000 shares authorized; 1,999,506 shares issued and outstanding as of June 30, 2013 and as of December 31, 2012.
|
2 | 2 | ||||||
Additional paid-in capital
|
12,272 | 12,272 | ||||||
Capital reserve
|
1,414 | 1,414 | ||||||
Accumulated other comprehensive income
|
125 | 21 | ||||||
Accumulated deficit
|
(13,219 | ) | (12,350 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
594 | 1,359 | ||||||
TOTAL
|
4,993 | 5,097 |
For the Three
|
For the Six
|
|||||||||||||||
|
Months Ended June 30,
|
Months Ended June 30,
|
||||||||||||||
2012
|
2013
|
2012
|
||||||||||||||
(Unaudited)
|
||||||||||||||||
Revenues
|
765 | 870 | 1,747 | 1,728 | ||||||||||||
Costs of revenues:
|
||||||||||||||||
Depreciation
|
(121 | ) | (145 | ) | (277 | ) | (290 | ) | ||||||||
Other
|
(552 | ) | (613 | ) | (1,198 | ) | (1,143 | ) | ||||||||
Gross profit
|
92 | 112 | 272 | 295 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
(14 | ) | (32 | ) | (29 | ) | (66 | ) | ||||||||
Selling and marketing
|
(102 | ) | (72 | ) | (170 | ) | (134 | ) | ||||||||
General and administrative
|
(329 | ) | (297 | ) | (652 | ) | (606 | ) | ||||||||
Operating loss
|
(353 | ) | (289 | ) | (579 | ) | (511 | ) | ||||||||
Financing expenses and foreign currency translation, net
|
(100 | ) | (98 | ) | (207 | ) | (182 | ) | ||||||||
Other expenses, net
|
- | (1 | ) | (74 | ) | (12 | ) | |||||||||
Benefit reduction for loans
|
(4 | ) | (1,296 | ) | (9 | ) | (1,296 | ) | ||||||||
Net Loss
|
(457 | ) | (1,684 | ) | (869 | ) | (2,001 | ) | ||||||||
Basic and diluted net loss per share
|
(0.0002 | ) | (0.0019 | ) | (0.0004 | ) | (0.022 | ) | ||||||||
Weighted average number of shares used in computing basic and diluted loss per share
|
1,999,506 | 906,811 | 1,999,506 | 900,672 | ||||||||||||
Other Comprehensive Loss:
|
||||||||||||||||
Net Loss
|
(457 | ) | (1,684 | ) | (869 | ) | (2,001 | ) | ||||||||
Foreign currency translation adjustments
|
(65 | ) | 9 | (104 | ) | 18 | ||||||||||
Comprehensive Loss
|
(522 | ) | (1,675 | ) | (973 | ) | (1,983 | ) |
For the Six Months Ended June 30,
|
||||||||
2012
|
||||||||
(Unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(869 | ) | (2,001 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
281 | 302 | ||||||
Capital gain
|
70 | - | ||||||
Increase in accrued severance pay, net
|
20 | 8 | ||||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
101 | (21 | ) | |||||
Financial expenses for the benefit component in converting a loan into shares
|
- | 1,296 | ||||||
Benefit component
|
9 | 37 | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease (Increase) in inventories
|
(4 | ) | 4 | |||||
Decrease (Increase) in trade receivables
|
53 | (118 | ) | |||||
Increase in related parties
|
- | 33 | ||||||
Increase in other accounts receivable
|
(54 | ) | (24 | ) | ||||
Increase in trade payables
|
142 | 49 | ||||||
Decrease in other payable and accrued expenses
|
(128 | ) | (22 | ) | ||||
Net cash used in operating activities
|
(379 | ) | (457 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
340 | 60 | ||||||
Purchases and production of property and equipment
|
(332 | ) | (132 | ) | ||||
Short-term bank deposits, net
|
5 | - | ||||||
Net cash provided by (Used in) investing activities
|
13 | (72 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from related parties, net
|
6 | 30 | ||||||
Proceeds from long term loans from others, net
|
286 | 129 | ||||||
Proceeds from long-term loans from shareholders, net
|
100 | 220 | ||||||
Net cash provided by financing activities
|
392 | 379 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(3 | ) | (1 | ) | ||||
Decrease ( Increase ) in cash and cash equivalents
|
23 | (151 | ) | |||||
Cash and cash equivalents at the beginning of the period
|
195 | 291 | ||||||
Cash and cash equivalents at the end of the period
|
218 | 140 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
For the Six Months Ended June 30,
|
|||||||
2012
|
||||||||
(Unaudited)
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment on short-term credit
|
217 | 460 | ||||||
Receivables in regard to property and equipment
|
73 | 51 | ||||||
Conversion of loan into shares
|
- | 2,000 | ||||||
Cash paid during the year for interest
|
65 | 151 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
June 30,
|
||||||||
2012
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.276 | $ | 0.268 | ||||
Euro (EU)
|
$ | 1.305 | $ | 1.318 | ||||
Australian Dollar (AU$)
|
$ | 0.925 | $ | 1.037 | ||||
Pound Sterling (GBP)
|
$ | 1.526 | $ | 1.617 | ||||
Canadian Dollar (CAN$)
|
$ | 0.954 | $ | 1.044 | ||||
Consumer Price Index ("CPI"):
|
122.99 | 122.12 |
Six Months Ended June 30,
|
||||||||
Increase (Decrease) in Rate of Exchange and the Consumer Price Index ("CPI") in Israel:
|
2013 | 2012 | ||||||
NIS
|
2.98 | % | (2.67 | %) | ||||
EU
|
(0.1 | )% | (2.70 | %) | ||||
AU$
|
- | % | 0.20 | % | ||||
GBP
|
(5.63 | )% | 1.36 | % | ||||
CAN$
|
(2.15 | )% | 0.00 | % | ||||
Consumer Price Index ("CPI")*:
|
0.71 | % | 1.25 | % |
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
30.06.2013 | 30.06.2012 | |||||||
HOMI Industries Ltd. (1)
|
Israel
|
|||||||||
HOMI Israel Ltd. (1), (3)
|
Israel
|
4,974 | 4,347 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (1), (3)
|
U.S.A. and
Canada
|
2,219 | 3,516 | |||||||
HOMI Europe S.A.R.L. (1), (2), (3)
|
Europe
|
1,499 | 1,499 | |||||||
8,692 | 9,362 |
U.S.A.
|
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,620 | 2,791 | 1,499 | 5,910 |
U.S.A.
|
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
246 | 333 | 0 | 579 |
For the Three Months Ended
June 30,
|
For the Six Months Ended
|
|||||||||||||||
2012
|
2013
|
2012
|
||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Directors' fees and liability insurance
|
8 | 9 | 17 | 18 | ||||||||||||
Consulting and management fees
|
131 | 106 | 237 | 202 | ||||||||||||
Financial expenses
|
26 | 19 | 52 | 32 | ||||||||||||
Benefit reduction for loan
|
4 | 1,296 | 9 | 1,296 | ||||||||||||
169 | 1,430 | 315 | 1,548 |
a.
|
On January 28, 2013 the Company executed a reverse split of one -for- hundred of all of HOMI’s shares of common stock. Following the reverse split, the number of outstanding shares of common stock decreased from approximately 200,000,000 to 2,000,000. The corporation issued no fractional shares of common stock and fractional shares resulting from the reverse split were rounded up to the nearest whole share.
|
b.
|
On April 5, 2013, HOMI entered into a new loan agreement with the majority shareholder. Pursuant to this loan agreement, the shareholder agreed to loan HOMI the sum of $ 100, bearing 8% annual interest. The loan was for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreement, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI would have the right to repay all or part of the loan by issuing shares of HOMI’s common stock to the shareholder at the same price per share as in the rights offering.
|
PART I - FINANCIAL INFORMATION
|
PAGE
|
|
Item 1 CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
||
Balance Sheets -
|
||
F-2-F-3
|
||
Statements of Comprehensive Loss -
|
||
Nine and three months ended September 30, 2013 and 2012
|
F-4
|
|
Statements of Cash Flows -
|
||
Nine months ended September 30, 2013 and 2012
|
F-5-F-6
|
|
Notes to Financial Statements
|
F-7-F-12
|
As of
September 30,
|
As of
|
|||||||
2012
|
||||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
135 | 195 | ||||||
Short-term bank deposits
|
22 | 26 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of September 30, 2013 and December 31, 2012)
|
409 | 453 | ||||||
Other accounts receivable
|
111 | 140 | ||||||
Inventories
|
322 | 350 | ||||||
TOTAL CURRENT ASSETS
|
999 | 1,164 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
4,059 | 3,857 | ||||||
Other property and equipment
|
26 | 22 | ||||||
TOTAL PROPERTY AND EQUIPMENT
|
4,085 | 3,879 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
4 | 10 | ||||||
Intangible assets
|
42 | 44 | ||||||
TOTAL OTHER ASSETS
|
46 | 54 | ||||||
TOTAL
|
5,130 | 5,097 |
As of
September 30,
|
As of
|
|||||||
2012* | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
(Unaudited)
|
(Audited)
|
||||||
CURRENT LIABILITIES:
|
||||||||
Current maturities of loans from related parties
|
73 | 170 | ||||||
Current maturities of long-term loans from others
|
360 | 459 | ||||||
Trade payables
|
1,173 | 567 | ||||||
Accrued expenses and other current liabilities
|
373 | 555 | ||||||
TOTAL CURRENT LIABILITIES
|
1,979 | 1,751 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties, net of current maturities
|
557 | 1,232 | ||||||
Long-term loans from others, net of current maturities
|
1,493 | 708 | ||||||
Accrued severance pay, net
|
70 | 47 | ||||||
TOTAL LONG-TERM LIABILITIES
|
2,120 | 1,987 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of September 30, 2013 and December 31, 2012;
|
- | - | ||||||
Common stock of $ 0.001 par value–
200,000,000 shares authorized, 2,903,984 shares issued and outstanding as of September 30, 2013 and 1,999,506 as of December 31, 2012;
|
3 | 2 | ||||||
Additional paid-in capital
|
13,175 | 12,272 | ||||||
Capital Reserve
|
1,414 | 1,414 | ||||||
Accumulated other comprehensive income
|
77 | 21 | ||||||
Accumulated deficit
|
(13,638 | ) | (12,350 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
1,031 | 1,359 | ||||||
TOTAL
|
5,130 | 5,097 |
For the Three
|
For the Nine
|
|||||||||||||||
Months Ended September 30,
|
Months Ended September 30,
|
|||||||||||||||
2012
|
2013
|
2012
|
||||||||||||||
(Unaudited)
|
||||||||||||||||
Revenues
|
754 | 780 | 2,501 | 2,509 | ||||||||||||
Costs of revenues:
|
||||||||||||||||
Depreciation
|
(112 | ) | (146 | ) | (389 | ) | (436 | ) | ||||||||
Other
|
(550 | ) | (504 | ) | (1,748 | ) | (1,647 | ) | ||||||||
Gross profit
|
92 | 130 | 364 | 426 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
(10 | ) | (44 | ) | (39 | ) | (110 | ) | ||||||||
Selling and marketing
|
(97 | ) | (70 | ) | (267 | ) | (205 | ) | ||||||||
General and administrative
|
(365 | ) | (339 | ) | (1,017 | ) | (945 | ) | ||||||||
Operating loss
|
(380 | ) | (323 | ) | (959 | ) | (834 | ) | ||||||||
Financing income (expenses) and foreign currency translation, net
|
14 | (9 | ) | (193 | ) | (191 | ) | |||||||||
Other expenses
|
(6 | ) | (89 | ) | (80 | ) | (101 | ) | ||||||||
Benefit Reduction for Loan
|
(47 | ) | - | (56 | ) | (1,296 | ) | |||||||||
Net loss
|
(419 | ) | (421 | ) | (1,288 | ) | (2,422 | ) | ||||||||
Basic and diluted net loss per share
|
(0.0002 | ) | (0.0002 | ) | (0.0006 | ) | (0.0019 | ) | ||||||||
Weighted average number of shares used in computing basic and diluted loss per share
|
2,753,238 | 1,999,506 | 2,250,750 | 1,276,399 |
Other Comprehensive Loss:
|
||||||||||||||||
Net Loss
|
(419 | ) | (421 | ) | (1,288 | ) | (2,422 | ) | ||||||||
Foreign currency translation adjustments
|
(48 | ) | (32 | ) | 56 | (50 | ) | |||||||||
Comprehensive Loss
|
(467 | ) | (459 | ) | (1,232 | ) | (2,427 | ) |
For the Nine Months Ended
|
||||||||
2012
|
||||||||
(Unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(1,288 | ) | (2,422 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Capital loss
|
74 | 86 | ||||||
Depreciation and amortization
|
402 | 450 | ||||||
Increase in accrued severance pay, net
|
23 | 2 | ||||||
Interest and linkage differences in regard to related parties and subsidiaries
|
60 | (17 | ) | |||||
Financial expenses for the benefit component in converting a loan into shares
|
- | 1,296 | ||||||
Benefit component in loans amortization
|
56 | 56 | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease in inventories
|
25 | 30 | ||||||
Decrease (increase) in trade receivables
|
44 | (122 | ) | |||||
Related parties, net
|
31 | 35 | ||||||
Increase in other accounts receivable
|
(42 | ) | (10 | ) | ||||
Increase (decrease) in trade payables
|
165 | (94 | ) | |||||
Increase (decrease )in accounts payable and accrued expenses
|
(176 | ) | 61 | |||||
Net cash used in operating activities
|
(626 | ) | (649 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
351 | 89 | ||||||
Purchases and production of property and equipment
|
(493 | ) | (279 | ) | ||||
Short-term bank deposits, net
|
4 | - | ||||||
Net cash used ininvesting activities
|
(138 | ) | (190 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from (payments to) related parties, net
|
245 | 543 | ||||||
Proceeds from long term loans from others, net
|
461 | 100 | ||||||
Net cash provided by financing activities
|
706 | 643 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
(2 | ) | (1 | ) | ||||
Decrease in cash and cash equivalents
|
(60 | ) | (197 | ) | ||||
Cash and cash equivalents at the beginning of the period
|
195 | 291 | ||||||
Cash and cash equivalents at the end of the period
|
135 | 94 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
For the Nine Months Ended September 30,
|
|||||||
2012
|
||||||||
(Unaudited)
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment on short-term credit
|
445 | 270 | ||||||
Conversion of loans into shares
|
904 | 2,000 | ||||||
Receivables in regard to property and equipment
|
87 | 89 | ||||||
Cash paid during the period for interest
|
80 | 194 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
Hereinafter, HOMI and its subsidiaries will be referred to as the "Company."
The Company has been doing business since 1997 through various subsidiaries. The current corporate structure, in which it is holding company for various wholly owned subsidiaries around the world, has been in place since 2001. The Company common stock was listed on the Over-the-Counter Bulletin Board, or "OTC Bulletin Board" from February 2004 until February 2011. It now trades on the OTCQB under the symbol "HOUM”.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
d.
|
As of September 30, 2013, the Company had $ 157 in cash, including short term deposits. The Company continues to incur losses ($ 1,288 in the nine months ended September 30, 2013) and has a negative cash flow from operations amounting to approximately $ 626 for this period. In order to implement the Company's basic business plan for completion of the installation of additional minibars, the Company will need additional funds.
|
a.
|
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013. The accompanying interim consolidated financial statements and the notes thereto should be read in conjunction with the
Company's audited consolidated financial statements as of and for the year ended December 31, 2012 included in the Company's Form 10-K filed April 15, 2013.
|
September 30,
|
||||||||
2012
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.282 | $ | 0.268 | ||||
Euro (EU)
|
$ | 1.350 | $ | 1.318 | ||||
Australian Dollar (AU$)
|
$ | 0.933 | $ | 1.037 | ||||
Pound Sterling (GBP)
|
$ | 1.613 | $ | 1.617 | ||||
Canadian Dollar (CAN$)
|
$ | 0.970 | $ | 1.044 | ||||
Consumer Price Index ("CPI")
|
124.57 | 122.12 | ||||||
Nine Months Ended
September 30,
|
||||||||
Increase (Decrease) in Rate of Exchange:
|
2013 | 2012 | ||||||
NIS
|
5.2 | % | (2.4 | ) % | ||||
EU
|
2.4 | % | 0.2 | % | ||||
AU$
|
(11.1 | ) % | 3.0 | % | ||||
GBP
|
0 | % | 5.2 | % | ||||
CAN$
|
(7.6 | ) % | 4.3 | % | ||||
Consumer Price Index ("CPI")*
|
2.0 | % | 2.1 | % |
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
30.09.2013 | 30.09.2012 | |||||||
HOMI Industries Ltd. (1)
|
Israel
|
|||||||||
HOMI Israel Ltd. (1), (3)
|
Israel
|
5,430 | 4,455 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (1)
|
U.S.A.
and Canada
|
2,104 | 3,289 | |||||||
HOMI Europe S.A.R.L. (1), (2)
|
Europe
|
1,499 | 1,499 | |||||||
9,033 | 9,243 |
U.S.A.
|
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,614 | 2,888 | 1,499 | 6,001 |
For the Three Months Ended
September 30,
|
For the Nine Months Ended
|
|||||||||||||||
2012
|
2013
|
2012
|
||||||||||||||
Unaudited
|
Unaudited
|
|||||||||||||||
Directors' fees and liability Insurance
|
8 | 9 | 25 | 27 | ||||||||||||
Consulting and management Fees
|
123 | 89 | 360 | 291 | ||||||||||||
Financial expenses
|
9 | 37 | 61 | 119 | ||||||||||||
Benefit reduction for loan
|
47 | - | 56 | 1,296 | ||||||||||||
187 | 135 | 502 | 1,733 |
a.
|
On January 28, 2013 the Company executed a reverse split of one -for- hundred of all of HOMI’s shares of common stock. Following the reverse split, the number of outstanding shares of common stock decreased from approximately 200,000,000 to 2,000,000. The corporation issued no fractional shares of common stock and fractional shares resulting from the reverse split were rounded up to the nearest whole share.
|
b.
|
On September 9, 2013, HOMI closed a rights offering, pursuant to which HOMI raised an amount of approximately $ 904. In consideration, HOMI issued 904,478 shares of its common stock at a price of $ 1.00 per share.
|
c.
|
On January 10, 2013, HOMI Industries entered into a loan agreement with a related party owned and operated by the President of HOMI. Pursuant to this loan agreement the related party agreed to loan HOMI Industries the sum of $45.5.
On July 28, 2013, HOMI agreed to the related party’s request to cancel this loan, and the related party authorized HOMI to apply the full loan amount toward payment for shares purchased by the related party in HOMI’s shareholders rights offering mentioned in b above, declared effective by the United States Securities and Exchange Commission on July 12, 2013.
For technical reasons, HOMI did not issue such shares to the President in the context of the rights offering, but intends to issue them in the near future, at the same price per share that was applied in the rights offering.
|
d.
|
On October 9, 2013, HOMI entered into two new loan agreements, with the President and with the majority shareholder of HOMI, respectively, pursuant to which they agreed to loan HOMI $ 50 and $50 respectively, bearing 8% annual interest. The loans are for a period of four years, including two years’ grace on the principal. HOMI received the loan funds in September, 2013. Pursuant to these loan agreements, within thirty days of closing an equity investment of $600 or more, HOMI may elect to repay all or any portion of the outstanding loans and/or accrued interest in shares of HOMI common stock which shares shall be valued at the same price per share as in the corresponding equity investment.
|
a.
|
On October 2, 2013, a director of HOMI tendered his resignation as a director, effective November 8, 2013, and notified HOMI, that he will not stand for re-election as a director. In addition, this director has resigned from his position as a director of HOMI USA, Inc., a wholly owned subsidiary of HOMI, and all other HOMI subsidiaries, effective immediately. By mutual consent of that director the HOMI subsidiaries, his management position as Chief Executive Officer of HOMI USA, Inc., and his management positions in all HOMI subsidiaries will terminate, as of December
31, 2013. Those resignations are unrelated to HOMI’s operations, policies or practices.
|
b.
|
On October 2, 2013, by mutual consent of the Chief Executive Officer and HOMI and its subsidiaries, it was agreed that his management position as Chief Executive Officer and Chief Financial Officer of HOMI, and his management positions in all HOMI subsidiaries, will terminate, as of December 31, 2013. In addition, he will resign from all director positions he currently holds with HOMI subsidiaries effective December 31, 2013. He shall remain a director of HOMI. Those resignations are unrelated to HOMI’s operations, policies
or practices.
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets
|
F-3 - F-4
|
Consolidated Statements of Comprehensive Loss
|
F-5
|
Consolidated Statement of Changes in Shareholders' Equity
|
F-6
|
Consolidated Statements of Cash Flows
|
F-7 - F-8
|
Notes to the Consolidated Financial Statements
|
F-9 - F-26
|
December 31,
|
||||||||||||
2013
|
2012
|
|||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
81 | 195 | ||||||||||
Short-term bank deposits
|
47 | 26 | ||||||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of December 31, 2013 and 2012)
|
444 | 453 | ||||||||||
Other accounts receivable
|
3 | 66 | 140 | |||||||||
Inventories
|
283 | 350 | ||||||||||
TOTAL CURRENT ASSETS
|
921 | 1,164 | ||||||||||
PROPERTY AND EQUIPMENT, NET:
|
4 | |||||||||||
Minibars and related equipment
|
3,817 | 3,857 | ||||||||||
Other property and equipment
|
30 | 22 | ||||||||||
3,847 | 3,879 | |||||||||||
OTHER ASSETS:
|
5 | |||||||||||
Deferred expenses, net
|
3 | 10 | ||||||||||
Intangible assets
|
41 | 44 | ||||||||||
44 | 54 | |||||||||||
TOTAL ASSETS
|
4,812 | 5,097 |
December 31,
|
||||||||||||
2013
|
2012* | |||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||||||
CURRENT LIABILITIES:
|
||||||||||||
Current maturities of long-term loans from related parties
|
6 | 100 | 170 | |||||||||
Current maturities of long-term loans from others
|
7 | 446 | 459 | |||||||||
Trade payables
|
818 | 567 | ||||||||||
Accrued expenses and other current liabilities
|
8 | 598 | 555 | |||||||||
TOTAL CURRENT LIABILITIES
|
1,962 | 1,751 | ||||||||||
LONG-TERM LIABILITIES:
|
||||||||||||
Long-term loans from related parties, net of current maturities
|
6 | 675 | 1,232 | |||||||||
Long-term loans from others, net of current maturities
|
7 | 1,516 | 708 | |||||||||
Accrued severance pay, net
|
78 | 47 | ||||||||||
TOTAL LONG-TERM LIABILITIES
|
2,269 | 1,987 | ||||||||||
COMMITMENTS, CONTINGENT LIABILITIES, LIENS AND COVENANTS
|
9 | |||||||||||
SHAREHOLDERS' EQUITY:
|
10 | |||||||||||
Share capital -
|
||||||||||||
Preferred stock of $ 0.001 par value – 5,000,000 shares authorized; zero shares issued and outstanding as of December 31, 2013 and 2012;
|
- | - | ||||||||||
Common stock of $ 0.001 par value – 200,000,000 shares authorized; 2,949,484 shares issued and outstanding as of December 31, 2013 and 1,999,506 as of December 31, 2012.
|
3 | 2 | ||||||||||
Additional paid-in capital
|
13,221 | 12,272 | ||||||||||
Capital Reserve
|
1,414 | 1,414 | ||||||||||
Accumulated other comprehensive income
|
74 | 21 | ||||||||||
Accumulated deficit
|
(14,131 | ) | (12,350 | ) | ||||||||
TOTAL SHAREHOLDERS' EQUITY
|
581 | 1,359 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
|
4,812 | 5,097 |
Year ended December 31,
|
||||||||||||
Note
|
2013
|
2012
|
||||||||||
Revenues
|
11 | 3,338 | 3,315 | |||||||||
Cost of revenues:
|
||||||||||||
Depreciation
|
(528 | ) | (587 | ) | ||||||||
Other
|
(2,270 | ) | (2,187 | ) | ||||||||
Gross profit
|
540 | 541 | ||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
(75 | ) | (137 | ) | ||||||||
Selling and marketing
|
(387 | ) | (273 | ) | ||||||||
General and administrative
|
(1,392 | ) | (1,279 | ) | ||||||||
Operating loss
|
(1, 314 | ) | (1, 148 | ) | ||||||||
Financial expenses and foreign currency translation, net
|
12 | (222 | ) | (218 | ) | |||||||
Other expenses
|
13 | (189 | ) | (167 | ) | |||||||
Benefit Reduction for Loans
|
10b | (56 | ) | (1,357 | ) | |||||||
Net Loss
|
(1,781 | ) | (2,890 | ) | ||||||||
Basic and diluted net loss per share
|
(0.80 | ) | (2.00 | ) | ||||||||
Weighted average number of shares used in computing basic and diluted loss per share
|
2,237,001 | 1,447,020 | ||||||||||
Other Comprehensive Loss:
|
||||||||||||
Net Loss
|
(1,781 | ) | (2,890 | ) | ||||||||
Foreign currency translation adjustments
|
53 | (41 | ) | |||||||||
Comprehensive Loss
|
(1,728 | ) | (2,931 | ) |
Number of
Shares of
Common
Stock
|
Common
Stock Par
Value
|
Additional
paid-in
capital
|
Capital
reserve
|
Accumulated
other
comprehensive
income
|
Accumulated
deficit
|
Total
|
||||||||||||||||||||||
Balance as of December 31, 2011
|
894,534 | 1 | 10,273 | 300 | 62 | (9,460 | ) | 1,176 | ||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | (41 | ) | - | (41 | ) | |||||||||||||||||||
Loss for the year
|
- | - | - | - | - | (2,890 | ) | (2,890 | ) | |||||||||||||||||||
Share issuing**
|
1,104,972 | 1 | 1,999 | 1,296 | - | - | 3,296 | |||||||||||||||||||||
Capital Reserve from transactions with Related Parties*
|
- | - | - | (182 | ) | - | - | (182 | ) | |||||||||||||||||||
Balance as of December 31, 2012
|
1,999,506 | 2 | 12,272 | 1,414 | 21 | (12,350 | ) | 1,359 | ||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | 47 | - | 47 | |||||||||||||||||||||
Liquidation of investment in a foreign entity****
|
- | - | - | - | 6 | - | 6 | |||||||||||||||||||||
Loss for the year
|
- | - | - | - | - | (1,781 | ) | (1,781 | ) | |||||||||||||||||||
Share issuing***
|
949,978 | 1 | 949 | - | - | - | 950 | |||||||||||||||||||||
Balance as of December 31, 2013
|
2,949,484 | 3 | 13,221 | 1,414 | 74 | (14,131 | ) | 581 |
Year ended December 31,
|
||||||||
2012
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(1,781 | ) | (2,890 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Capital loss
|
167 | 152 | ||||||
Depreciation and amortization
|
545 | 605 | ||||||
Increase in accrued severance pay, net
|
32 | 9 | ||||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
50 | (127 | ) | |||||
Benefit component
|
56 | 1,357 | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease in inventories
|
64 | 7 | ||||||
Decrease (increase) in trade receivables
|
10 | (15 | ) | |||||
Increase in related parties
|
35 | 56 | ||||||
Decrease in other accounts receivable
|
2 | 3 | ||||||
Increase (decrease) in trade payables
|
14 | (125 | ) | |||||
Increase in accrued expenses and other current liabilities
|
45 | 142 | ||||||
Net cash used in operating activities
|
(761 | ) | (826 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases and production of property and equipment
|
(700 | ) | (497 | ) | ||||
Proceeds from sales of property and equipment
|
366 | 111 | ||||||
Short-term bank deposits, net
|
(21 | ) | 28 | |||||
Net cash used in investing activities
|
(355 | ) | (358 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from related parties, net
|
436 | 827 | ||||||
Proceeds from long-term loans from others, net
|
566 | 263 | ||||||
Net cash provided by financing activities
|
1,002 | 1,090 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
- | ( 2 | ) | |||||
Decrease in cash and cash equivalents
|
(114 | ) | (96 | ) | ||||
Cash and cash equivalents at the beginning of the year
|
195 | 291 | ||||||
Cash and cash equivalents at the end of the year
|
81 | 195 |
Appendix A -
|
||||||||
Supplemental disclosure of non-cash investing and financing activities and cash flow information:
|
Year ended December 31,
|
|||||||
2012
|
||||||||
Cash paid during the year for interest
|
108 | 219 | ||||||
Acquisition of property and equipment on short-term credit
|
241 | 153 | ||||||
Receivables in regard to property and equipment
|
89 | 73 | ||||||
Conversion of loans into shares
|
950 | 2,000 |
NOTE 1:- | GENERAL | |
a. |
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
|
Hereinafter, HOMI and its subsidiaries will be referred to as the "Company."
|
||
The Company has been doing business since 1997 through various subsidiaries. The current corporate structure, in which it is holding company for various wholly owned subsidiaries around the world, has been in place since 2001. The Company common stock was listed on the Over-the-Counter Bulletin Board, or "OTC Bulletin Board" from February 2004 until February 2011. It now trades on the OTCQB under the symbol "HOUM”.
|
||
b. |
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products.
|
|
Currently the HOMI® 330, a "sealed-access" type wireless Computerized Minibar system and the newer HOMI® 226, an "Open-Access" type wireless Computerized Minibar system, are both being produced and installed.
|
||
c. |
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
|
d.
|
As of 21 August 2013, HOMI France S.A.S., which had been a fully, indirectly owned subsidiary of HOMI was dissolved, with voluntary liquidation procedures having been completed as of 25 June 2013. Operations previously handled by HOMI France were transferred to HOMI UK Limited, which is another fully, indirectly owned subsidiary of HOMI.
|
|
HOMI Australia, a subsidiary of HOMI, began the process of deregistration to close down the company, which process was completed as of 6 February 2014.
|
||
e. |
See also Note 16b.
|
|
f. |
As of December 31, 2013, the Company had $ 128 in cash, including short term deposits. The Company continues to incur losses ($ 1,781 in 2013) and has a negative cash flow from operations amounting to approximately $ 761 in 2013.
In order to implement the Company's basic business plan for completion of the installation of additional minibars and it’s activity, the Company will need additional funds from shareholders or others.
The financial statements have been prepared assuming that the Company will continue as a "going concern". The Company has suffered recurring losses from operations and has a net working capital deficiency that raises substantial doubt about its ability to continue as "going concern" .The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
|
|
The continuation of the company as a going concern is dependent upon implementation of management's plans as well as raising additional funds from shareholders or other. The Company's preferred method is the new business model, described in item c. above.
|
||
On February 5, 2014 HOMI entered into two loan agreements with related parties. The related parties lent HOMI $ 300 and $ 200, respectively, See also Note 16a.
|
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES | |
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("US GAAP").
|
||
a. |
Use of estimates:
|
|
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions management is required to make. Estimates that are critical to the accompanying consolidated financial statements relate principally to depreciation and recoverability of long lived assets. The markets for the Company’s products are characterized by intense price competition, rapid technological development, evolving standards and short product life cycles; all of which could impact the future realization of its assets. Estimates and
assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. It is at least reasonably possible that management’s estimates could change in the near term with respect to these matters.
|
||
b. |
Financial statements in U.S. dollars:
The currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar (hereinafter: "dollar"); thus, the dollar is the functional currency of the Company.
The Company's transactions and balances denominated in dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to dollars. All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.
|
|
c. |
Consolidation:
Inter-company transactions and balances, including profits from inter-company sales not yet realized outside the group, have been eliminated in consolidation.
|
|
d.
|
Cash and cash equivalents:
The Company considers all highly liquid investments originally purchased with maturities of three months or less at the date acquired to be cash equivalents.
|
|
e. |
Short-term bank deposits:
The Company classifies bank deposits with maturities of more than three months and less than one year as short-term deposits. Short-term deposits are presented at cost, including accrued interest.
|
|
f. | Inventory: | |
Inventories are stated at the lower of cost or market value. Inventory write-offs are provided to cover risks arising from slow moving items. Cost is determined using the "first-in, first-out" method. Inventories are composed of the food products.
|
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (cont.) | |
g. |
Property and equipment:
|
|
Property and equipment are stated at cost net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, at the following annual rates:
|
%
|
||||
Minibars and production equipment
|
10 | |||
Computers and electronic equipment
|
15 – 33 | |||
Office furniture and equipment
|
7 |
h. |
Other assets:
|
|
1.
|
Intangible assets -
Intellectual properties registered in several countries worldwide are capitalized and are amortized over the life span of the asset (twenty years).
|
i. |
Impairment of long-lived assets:
The Company's long-lived assets and certain identifiable intangibles are reviewed and evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. As of December 31, 2013, management believes that all of the Company’s long-lived assets are recoverable.
|
|
j.
|
Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts:
Revenues from minibars operation and product sales derived from outsource activity (minibar's content) under the exclusive long-term revenue sharing agreements with hotels, net of the hotel’s portion and/or other participation of, or payments due from the hotel, are recognized when delivery has occurred, persuasive evidence of an arrangement exists, the vendor’s fee is fixed or determinable and collectability is probable.
Revenues from rental of minibars are recognized over the lease term.
Revenues from sales of minibars are recognized in accordance with compliance with the conditions as abovementioned.
Sales of minibars that are classified as refinancing arrangements are shown as a long-term loan to be repaid.
The Company’s payment terms are normally net 15 to 30 days from invoicing.
|
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (cont.) | |
j. |
Revenue Recognition, Accounts Receivable and Allowance for Doubtful Accounts (cont.):
|
|
The Company evaluates its allowance for doubtful accounts on a regular basis through periodic reviews of the collectability of the receivables in light of historical experience, adverse situations that may affect its customers’ ability to repay, and prevailing economic conditions. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available.
The Company performs ongoing credit evaluations of its customers and generally does not require collateral because (1) management believes it has certain collection measures in-place to limit the potential for significant losses, and (2) the nature of customers comprising the Company’s customer base. Accounts receivable are determined to be past due based on how recently payments have been received and bad debts are charged in the form of an allowance account in the period the receivables are deemed uncollectible. Receivables are written off when the Company abandons its collection efforts.
To date, the Company has not experienced any material losses. An allowance for doubtful accounts is provided with respect to those amounts that the Company has determined to be doubtful of collection. No allowance was deemed necessary as of December 31, 2013 and 2012.
|
||
k. |
Research and Development costs:
Research and Development costs are charged to the statement of operations as incurred. Costs and acquisitions related to pre-production, production support, tools and molds are charged to property and equipment.
|
|
l. |
Income taxes:
The Company accounts for income taxes using the asset and liability method whereby deferred tax assets and liability account balances are determined based on differences between financial statement carrying values of existing assets and liabilities and their respective income tax bases. Deferred tax assets (temporary differences), liabilities and losses carried forward are measured using the enacted tax rates and laws that will be in effect when the temporary differences are expected to reverse. The Company provides a valuation allowance, if necessary to reduce the amount of deferred tax assets to their estimated realizable value.
|
|
m.
|
Severance pay:
The Company's liability for severance pay is calculated pursuant to the local law applicable in certain countries where the Company operates.
|
|
n. |
Concentrations of Credit Risk and Fair Value of Financial Instruments:
The financial instruments of the Company consist mainly of cash and cash equivalents, short-term bank deposits, trade receivables, other accounts receivable, trade payables, other accounts payable and notes payable to shareholders and others.
In view of their short term nature, the fair value of the financial instruments included in working capital of the Company is usually identical, or close, to their carrying values. The fair values of long-term notes payable also approximates their carrying values, since such notes bear interest at rates that management believes is approximately the same as prevailing market rates.
|
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (cont.) | |
n. |
Concentrations of Credit Risk and Fair Value of Financial Instruments (cont.):
|
|
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, and trade receivables. The majority of the Company's cash and cash equivalents are invested in interest bearing NIS and U.S. dollar-linked instruments with major Israeli, U.S. bank.
Management believes that minimal credit risk exists with respect to these investments. Trade receivables potentially expose the company to credit risk.
The Company has no off-balance sheet concentration of credit risk, such as foreign exchange contracts or other foreign currency hedging arrangements.
The Company monitors the amount of credit it allows each of its customers' using the customers prior payment history to determine how much credit it will aloe or whether any credit should be given at all. As a result of its monitoring of the outstanding credit allowed for each customer, as well as the fact that the majority of the Company's sales are to customers whose satisfactory credit and payment record has been established over a long period of time, the company believes that its account receivable credit risk has been reduced. However the company
acknowledges that as of the date these financial statements the poor economic climate globally, has increased the chances of customers and financial institutions defaulting on their obligations.
|
||
o. |
Basic and Diluted Net Income (Loss) per Share:
Basic net income (loss) per share is computed based on the weighted average number of common shares outstanding during each year. Diluted loss per share is computed based on the weighted average number of common shares outstanding during each year and include the dilutive potential common shares considered outstanding during the year.
|
|
p. |
Exchange rates:
Exchange and linkage differences are charged or credited to operations as incurred.
Exchange rates and the Consumer Price Index ("CPI"):
|
December 31,
|
||||||||
2013
|
2012
|
|||||||
New Israeli Shekel (NIS)
|
$ | 0.288 | $ | 0.268 | ||||
Euro (EU)
|
$ | 1.377 | $ | 1.318 | ||||
Australian Dollar (AU$)
|
$ | 0.894 | $ | 1.037 | ||||
Pound Sterling (GBP)
|
$ | 1.654 | $ | 1.617 | ||||
Canadian Dollar (CAD $)
|
$ | 0.940 | $ | 1.004 | ||||
Consumer Price Index ("CPI"):
|
124.45 | 122.12 | ||||||
Year Ended December 31,
|
||||||||
Change in Rate of Exchange and the Consumer Price Index ("CPI"):
|
2013 | 2012 | ||||||
NIS
|
9.3 | % | 2.3 | % | ||||
EU
|
4.5 | % | 2.0 | % | ||||
AU$
|
(16.0 | )% | 2.2 | % | ||||
GBP
|
2.3 | % | 4.9 | % | ||||
Canadian Dollar (CAD $)
|
(6.8 | )% | (7.6 | )% | ||||
Change in subsequent ( "CPI")
|
1.91 | % | 1.44 | % |
NOTE 2:- | SIGNIFICANT ACCOUNTING POLICIES (cont.) | |
q. |
Selling and Marketing Costs:
Selling and marketing costs are charged to the statements of operations as incurred.
|
|
r. |
Implementation of new accounting Standards:
In June 2011, the FASB issued guidance on presentation of "other comprehensive income". The new guidance require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of change shareholders' equity. The standard does not change the items that must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. This standard is effective for the Company as of January 1, 2012. Because this ASU impacts presentation only, it has no effect on the
Company's financial condition, results of operation, or cashflows.
|
NOTE 3:- | OTHER ACCOUNTS RECEIVABLE |
2012
|
||||||||
Prepayment and others
|
57 | 57 | ||||||
Government authorities
|
9 | 10 | ||||||
Receivables in regard to property and equipment *
|
- | 73 | ||||||
66 | 140 |
* |
In 2010 Homi Australia ceased the operating of the Minibars in Hilton Sydney, the only hotel operated in Australia, and transferred the operation and the Minibars installed to the Hilton, for up to AU$ 435 (approx. $ 396). The amount was repaid over maximum of 50 monthly payments which were based on the monthly performance of the hotel as detailed in the agreement. Title of the System passed to Hilton, after those repayments, for the nominal price of one AU$.
|
NOTE 4:- | PROPERTY AND EQUIPMENT, NET |
2012
|
||||||||
Cost:
|
||||||||
Minibars (d)
|
5,500 | 6,854 | ||||||
Production equipment and parts
|
479 | 295 | ||||||
Computers and electronic equipment
|
122 | 113 | ||||||
Office furniture, equipment and other
|
31 | 30 | ||||||
6,132 | 7,292 | |||||||
Accumulated depreciation:
|
||||||||
Minibars
|
2,162 | 3,292 | ||||||
Computers and electronic equipment
|
120 | 118 | ||||||
Office furniture, equipment and other
|
3 | 3 | ||||||
2,285 | 3,413 | |||||||
Depreciated cost
|
3,847 | 3,879 |
NOTE 4:- | PROPERTY AND EQUIPMENT, NET (cont.) | |
Additional Information:
|
||
a. |
Depreciation expenses amounted to $ 535 and $ 595 for the years ended December 31, 2013 and 2012, respectively.
|
|
b. |
Balance includes minibars at depreciated cost of $ 118 and 139 for the years ended December 31, 2013 and 2012, identified against a loan based on a refinancing agreement from a related party (Globetrip LTD.), see also Note 6d.
|
|
c. |
As for liens, see Note 9b.
|
|
d. |
Number of minibars
|
|
The consolidated financial statements include the accounts and minibars of HOMI and its active subsidiaries listed below, which are owned by HOMI:
|
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
31.12.2013 | 31.12.2012 | |||||||
HOMI Industries Ltd. (1)
|
Israel
|
|||||||||
HOMI Israel Ltd. (1), (3)
|
Israel
|
5,294 | 4,692 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (1)
|
U.S.A. and
Canada
|
1,605 | 3,289 | |||||||
HOMI Europe S.A.R.L. (1), (2)
|
Europe
|
1,615 | 1,499 | |||||||
8,514 | 9,480 |
(1) |
A quantity of minibars are owned by HOMI Industries and rented to the subsidiaries.
As of December 31, 2013 the minibars are located as follows:
|
U.S.A.
|
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,605 | 3,497 | 1,615 | 6,717 |
(2) |
Through subsidiaries in France and the U.K (including a branch in Spain).
|
|
(3) | Including 333 HOMI® 232 shared operated minibars. As of December 31, 2013 located in Israel. |
NOTE 5:- | OTHER ASSETS |
2012
|
||||||||
a. Intangible assets-
|
||||||||
Intellectual property (Net of accumulated amortization of $ 14 and $ 11 of December 31, 2013 and 2012, respectively) (1)
|
41 | 44 | ||||||
b. Deferred expenses -
|
||||||||
Cost
|
116 | 116 | ||||||
Accumulated amortization (2)
|
(113 | ) | (106 | ) | ||||
3 | 10 | |||||||
44 | 54 |
|
(2)
|
Deferred expenses in regard to loans received are amortized over the loan period of nine years (see Note 7 c (1)).
|
NOTE 6:- | LOANS FROM RELATED PARTIES |
a.
|
Composed as follows:
|
2012* | ||||||||
Long- term liability (see c-f below)
|
675 | 1,232 | ||||||
Current maturities of long- term liability
|
100 | 170 | ||||||
775 | 1,402 | |||||||
*Reclassified.
|
b.
|
Aggregate maturities of long-term loans for years subsequent to December 31, 2013 are as follows:
|
Year
|
Amount
|
|||
2014
|
100 | |||
2015
|
402 | |||
2016
|
69 | |||
2017
|
62 | |||
2018 and thereafter
|
142 | |||
775 |
c.
|
Additional Information:
HOMI entered into a loan agreement with a related company dated January 8, 2012. The related company loaned HOMI NIS 850,000 (approximately $ 220 when received), index linked to Israel’s Consumer Price Index and bearing interest at a rate of 6% per annum.
On September 1, 2012, the related company agreed to HOMI’s request to recycle a previous loan agreement with the related company for NIS 1,125,000 and NIS 850,000, respectively, as follows:
|
|
1.
|
An amount of approximately NIS 1,660,000 ($ 412) out of the above mentioned loans ,was recycled into 3 loan agreements with HOMI Industries Ltd, pursuant to which the related party shall receive a portion of the revenue from minibar systems operated by HOMI subsidiaries in three hotels as detailed below.
|
|
2.
|
An amount of approximately NIS 315,000 ($ 78) of principal remains outstanding and payable under the December 15, 2011 loan, in accordance with its terms.
Of the NIS 850,000, January 8, 2012 loan, NIS 809,000 ($201) was recycled into a loan agreement with HOMI Industries Ltd, pursuant to which the lender shall receive a portion of the revenue from a minibar system operated by a HOMI subsidiary in the Hilton Olympia Hotel in London (the “Hilton Agreement”). In 2013 the loan was assigned to a non related party.
NIS 41,000 ($10) was recycled into a loan agreement between the lender and HOMI Industries Ltd, pursuant to which the lender shall receive a portion of the revenues generated by a minibar system operated by a HOMI subsidiary in the Leonardo Rehovot Hotel (the “Leonardo Agreement”).
Of the NIS 1,125,000 December 12, 2011 loan, NIS 178,836 ($44) was recycled under the Leonardo Agreement.
NIS 631,643 ($156.8) was recycled into a loan agreement between lender and HOMI Industries Ltd, pursuant to which lender shall receive a portion of the revenues generated by a minibar system operated by a HOMI subsidiary in the Sheraton Salobre Grand Canary Islands Hotel (the “Sheraton Agreement”).
|
NOTE 6:- | LOANS FROM RELATED PARTIES (cont.) | |
In respect of the above mentioned loans recycling, during 2012, an amount of $ 182 was charged to capital.
|
||
d. |
Information in regard to loans with operation agreements:
HOMI entered into loans as detailed below.
As security and collateral for repayment of the loans, HOMI encumbered in lender's favor the computerized minibar system, including HOMI® computerized minibars, a central unit and a license to HOMI® software, which HOMI’s affiliate installed at the hotels and operates for the hotels under an outsource operation agreement which HOMI’s affiliate signed with the hotel.
Repayments of these loans are computed on the basis of the specified minibar system’s revenues net of operational payments, allocated amongst the parties, in accordance with the terms detailed in the loan agreements.
|
Date of the loan
|
Lender
|
Amount
|
Hotel | Location |
No. of Minibars encumbered
|
||||||||
July 7,2009
|
Globetrip Ltd.
|
$ | 211 |
Dan Panorama
|
Tel Aviv, Israel
|
470 | |||||||
February 7,2012
|
Globetrip Ltd.
|
$ | 90 |
Carlton
|
Tel Aviv, Israel
|
288 | |||||||
September 1,2012
|
Bahry Business and Finance (1994) LTD
|
$ | 55 |
Leonardo
|
Rechovot, Israel
|
116 | |||||||
September 1,2012
|
Bahry Business and Finance (1994) LTD
|
$ | 157 |
Sheraton Salobre
|
Spain
|
313 |
e.
|
Information in regard to loans converted during 2013:
|
|
1.
|
On January 28, 2010, HOMI’s President loaned HOMI $ 100, at an agreed interest rate of 8% per annum. During the years 2011 and 2012, HOMI paid interest on this loan, but no principal. According to the terms of the agreement, HOMI was to commence payment of principal at the end of the first quarter of 2012.
|
|
2.
|
In December 2011, HOMI received three additional loans from shareholders and directors, amounting to $ 80 in total. Each loan is for a period of four years, with quarterly repayments, including two years’ grace on the principal.
|
|
3.
|
On July 12, 2012, HOMI entered into an additional loan agreement with HOMI's President, pursuant to which HOMI’s President loaned HOMI the sum of $50 bearing 8% annual interest. The loan is for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreement, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loan by issuing shares of HOMI’s common stock to its president at the same price per share as in the rights offering.
|
NOTE 6:- | LOANS FROM RELATED PARTIES (cont.) |
|
4.
|
On July 12, October 15, January 1, 2013, HOMI entered into three new loan agreements with the majority shareholder in HOMI. Pursuant to these loan agreements, the shareholder agreed to loan HOMI the sums of $ 250, $ 200 and $ 70, respectively, bearing 8% annual interest. The loans are for a period of four years, including two years’ grace on the principal.
|
|
5.
|
On January 10, 2013, HOMI Industries entered into a loan agreement with a related party owned and operated by the President of HOMI. Pursuant to this loan agreement the related party agreed to loan HOMI Industries the sum of $45.5.
|
|
6.
|
On April 5, 2013, HOMI entered into a new loan agreement with the majority shareholder in HOMI. Pursuant to this loan agreement, the shareholder agreed to loan HOMI the sum of $ 100, bearing 8% annual interest. The loan is for a period of four years, including two years’ grace on the principal. Pursuant to the loan agreement, HOMI stated its intention to perform a rights offering. In the event of such rights offering, HOMI will have the right to repay all or part of the loan by issuing shares of HOMI’s common stock to the shareholder at the same price per share as in the rights offering.
On September 2013 the loans detailed in 1-6 above were converted, in the rights offering, to shares at the price of one dollar per share. See also Note 10d.
|
f.
|
On October 9, 2013 and December 7,2013 HOMI entered into two new loan agreements, with the President and with the majority shareholder of HOMI, respectively, pursuant to which they agreed to loan HOMI the total amounts of $ 100 and $200 respectively, bearing 8% annual interest. The loans are for a period of four years, including two years grace on the principal. Pursuant to these loan agreements, within thirty days of closing an equity investment of $600 or more, HOMI may elect to repay all or any portion of the outstanding loans and/or accrued interest in shares of HOMI common stock which shares shall be valued at the same price per share as in the corresponding equity investment.
|
NOTE 7:- | LONG-TERM LOANS FROM OTHERS |
a.
|
Composed as follows:
|
2012* | ||||||||
Long- term liability
|
1,516 | 708 | ||||||
Current maturities of long-term liability
|
446 | 459 | ||||||
1,962 | 1,167 |
b.
|
Aggregate maturities of long-term loans for years subsequent to December 31, 2013 are as follows:
|
Year
|
Amount
|
|||
2014
|
446 | |||
2015
|
219 | |||
2016
|
205 | |||
2017
|
214 | |||
2018 and thereafter
|
878 | |||
1,962 |
c.
|
Additional information:
|
|
(1)
|
In March and June, 2005, HOMI and the subsidiary in the U.S. received from Horizon Challenges Investment Company Ltd. (“Horizon”) loans in the total amount of $ 1.1 million, which Horizon undertook to provide to the Company (“the Financing”), pursuant to a Financing Agreement, dated as of March 1, 2005, as amended on May 17, 2005. The loans bear interest at the rate of 11.67% and are to be repaid in monthly installments for nine years. The loans are secured by a lien on all minibars in respect of which the loan was received, and a security interest and assignment of a portion of HOMI and its subsidiaries’ monthly revenues from those minibars, in the
amount required to pay each month’s repayments on all outstanding loans, principal plus interest. Total liabilities for the years ended December 31, 2013 and 2012 amounted to approximately $ 129 and $ 257, respectively.
|
|
(2)
|
HOMI Industries entered into loans as detailed below.
As security and collateral for repayment of the loans, HOMI Industries encumbered in lender's favor the computerized minibar system, including HOMI® computerized minibars, a central unit and a license to HOMI® software, which HOMI’s affiliate installed at the hotels and operates for the hotels under an outsource operation agreement which HOMI’s affiliate signed with the hotel.
|
NOTE 7:- |
LONG-TERM LOANS FROM OTHERS (cont.)
|
Date of the loan
|
Lender |
Amount
|
Hotel | Location |
No. of Minibars
Encumbered
|
||||||
October25,2009
|
Moise and Sonia Elkrief
|
$ | 93 |
Leonardo Ramat Hachayal
|
Tel Aviv, Israel
|
166 | |||||
October25,2009
|
Moise and Sonia Elkrief
|
$ | 99 |
Strand
|
New York, USA
|
177 | |||||
February 18,2010
|
Oded Yeoshoua
Amir Schechtman
Ilan Bahry
|
$ | 140 |
Wyndham
|
New York, USA
|
280 | |||||
June 14,2010
|
Oded Yeoshoua
Amir Schechtman
Ilan Bahry
|
NIS 672 ($174when received)
|
Royal Beach
|
Eilat, Israel
|
363 | ||||||
October 26,2011
|
Oded Yeoshoua
Amir Schechtman
Ilan Bahry
|
$ | 108 |
Herods
|
Jerusalem, Israel
|
270 | |||||
May 31,2012
|
GPF S.A
|
$ | 55 |
Breshit
|
Mitzpe Ramon, Israel
|
110 | |||||
July 12,2012
|
Troy Creative Solutions LTD
|
$ | 99 |
Dan Accadia
|
Hertzeliya, Israel
|
210 | |||||
December 24,2012
|
Sparta Technical Solutions Ltd.
|
$ | 67 |
Comfort Inn Chicago Hotel
|
Chicago, USA
|
130 | |||||
December 24,2012
|
Sparta Technical Solutions Ltd.
|
$ | 166 |
Dan
|
Eilat, Israel
|
375 | |||||
January 10,2013
|
Troy Creative Solutions LTD
|
$ | 109 |
Waldorf
|
Jerusalem, Israel
|
230 | |||||
March 3,2013
|
Uri Avraham
Amir Schechtman
Ilan bahry
|
$ | 109 |
Royal Beach
|
Tel Aviv, Israel
|
230 | |||||
April 9,2013
|
Francisec Kobri
Amir Schechtman
Evyatar Hacohen
Ilan Bahry
|
$ | 133 |
Dan
|
Tel Aviv, Israel
|
280 | |||||
April 14,2013
|
Or Saada
Amir Schechtman
Ilan Bahry
|
$ | 165 |
Sheraton
|
Tel Aviv, Israel
|
313 | |||||
May 22,2013
|
Izak Asif Consulting & Management LTD
Amir Schechtman
Ilan bahry
|
$ | 71 |
Cramim
|
Jerusalem, Israel
|
150 | |||||
June 6,2013
|
Alon Morduch
Assigned from Bahry Business & Finance (1994) LTD. Signed September 1,2012.
Ilan Bahry
|
$ | 201 |
Hilton Olympia
|
London, UK
|
401 | |||||
July 1,2013
|
Hotel Outsource Investment LTD
|
$ | 128 |
Mela
|
New York, USA
|
231 | |||||
Hotel Outsource Investment LTD
|
$ | 45 |
Indigo
|
Ramat Gan, Israel
|
91 | ||||||
August 21,2013
|
Troy Creative Solutions LTD
|
$ | 35 |
Dan
|
Jerusalem, Israel
|
77 | |||||
August 21,2013
|
Troy Creative Solutions LTD
|
$ | 30 |
Adiv
|
Tel Aviv, Israel
|
66 | |||||
September 20,2013
|
Antonio Perez
|
€ 35
($48 when received)
|
Mama Shelter
|
Bordeaux, France
|
97 |
NOTE 8:- |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
2012
|
||||||||
Accrued expenses
|
313 | 182 | ||||||
Employees and payroll accruals
|
208 | 189 | ||||||
Government authorities
|
43 | 52 | ||||||
Other
|
30 | 45 | ||||||
Related parties
|
4 | 12 | ||||||
Advances from customer
|
- | 75 | ||||||
598 | 555 |
NOTE 9:- |
COMMITMENTS, CONTINGENT LIABILITIES, LIENS AND COVENANTS
|
a.
|
HOMI and its affiliates have contractual obligations towards hotels with regard to the operation of minibars in hotel rooms.
|
|
HOMI and its affiliates own most of these minibars. Several hotels have a contractual purchase option granted which enables them to purchase the minibars at a price which results in a profit for the Company, and the agreement with the hotel is then terminated. To date, no hotel has exercised such an option.
|
||
b. |
HOMI Industries has registered fixed charges over certain of its assets, including certain minibars and the rights to receivables generated by such minibars , in favor of third parties, as security for loans which were given to HOMI by such related parties and third parties, or to secure profit sharing payments which HOMI undertook to pay to such parties. Total liabilities secured by these fixed charges as of December 31, 2013 are in the amount of approximately $ 2,200. See also Notes, 7c (2) and 6d.
|
|
c. |
Rent expenses -
The Company’s operations are based primarily at hotels where its outsource operations are conducted. Most of the hotels allow the Company to utilize office space free of charge.
In addition, the Company’s U.S. counsel (who is also a shareholder) allows the Company to use its office as their corporate headquarters at no charge. No amounts have been reflected as rent expense in the accompanying consolidated statements of operations for the value of this rent due to its insignificance
In addition, the Company rents space under various month to month arrangements for certain facilities. The Company rents office space in Herzliya, Israel, primarily for HOMI’s finance department, its technical support and as the headquarters of HOMI Israel and HOMI Industries. During the years ended December 31, 2013 and 2012, rent expenses amounted to $ 48 and $ 45, respectively.
|
|
Rent commitments:
|
||
Future minimum lease commitments under non-cancelable operating leases are as follows:
|
First year
|
37 | |||
Second year
|
3 | |||
Total
|
40 |
NOTE 9:- |
COMMITMENTS, CONTINGENT LIABILITIES, LIENS AND COVENANTS (cont.)
|
d.
|
The Company received notice that the US Internal Revenue Service imposed on the Company automated late filing penalties for delay in filing a certain information schedule on foreign holdings. The Company has filed an appeal for full abatement of the penalties according to procedures of the IRS. Based on common practice and the nature of reasoning for the delay. Company management believes there is a good reason to believe that the abatement would be approved. Accordingly, no provision was recorded on the Company books of account.
|
|
e. |
HOMI Industries subsequently entered into exclusive license agreements with HOMI Europe S.A.R.L. (for the territory of Europe), HOMI USA, Inc. (for the United States and Canada) and HOMI Israel Ltd. (for Israel). HOMI Europe (S.A.R.L.) granted a sub-license to HOMI UK Limited (for the United Kingdom, Spain and France), and HOMI USA, Inc. granted a sub-license to HOMI Canada, Inc. (for Canada). All of the aforementioned companies are subsidiaries of HOMI.
|
|
f. |
During March to June, 2010, HOMI Industries and Best Bar Services Ltd. ("Best Bar"), began to implement the cooperation pursuant to the Memorandum of Understanding they entered into as of 23 September 2009 ("the MOU”), in relation to Best Bar’s Open Display, Open Access Computerized Minibars. HOMI has included the Best Bar minibar in its catalogue of minibars, represented as the “HOMI® 232” model. During 2011 HOMI installed the HOMI® 232 Minibar in 3 hotels in Israel and one hotel in the USA.
Pursuant to the MOU, the agreed price of each HOMI® 232 is $ 350, but HOMI will purchase the HOMI® 232 from Best Bar for half that price, namely, $ 175. HOMI then shares its operating profits from HOMI® 232 installations, with Best Bar (operating profits are computed as HOMI’s collection from the hotels, less cost of goods, labor and 8% of the collection as a HOMI management fee), with 60% being retained by HOMI and 40% being paid to Best Bar.
However, HOMI is not satisfied with the performance of the HOM®I232 and decided to replace them with the new HOM®I226 minibars.
HOMI already removed the HOMI®232 minibars from 2 Hotels in Israel in 2012 and from one hotel in the USA, in 2013 and replaced them with the new HOM®I226.
Best Bar purchased these minibars back from HOMI Industries at a reduced price. During 2013, this transaction created a loss of $30 ($40 during 2012).
|
NOTE 10:- |
SHAREHOLDERS’ EQUITY
|
a.
|
Shareholders’ Rights:
The common shares confer upon the holders the right to receive a notice to participate and vote in the general meetings of the Company and to receive dividends, if and when declared. Preferred share rights are yet to be determined. No preferred shares are issued and outstanding.
|
|
b. |
On June 29, 2012, a loan in the amount of $2,000 received from Tomwood with a conversion right at a price per share of $ 0.06 was converted and Tomwood received an allocation of 110,497,238 Company shares in the price of $ 0.0181 per share.
As a result of the conversion, Tomwood is now the major shareholder of the Company's issued share capital.
Value of the costed benefit component of this transaction in the amount of approximately $ 1,296 was charged to capital and offset against benefit reduction expenses. Any and all liens on HOMI assets used as security for the Tomwood loan were removed.
|
NOTE 10:-
|
SHAREHOLDERS’ EQUITY (cont.)
|
c.
|
On January 28, 2013 the Company executed a reverse split of one -for- hundred of all of HOMI’s shares of common stock. Following the reverse split, the number of outstanding shares of common stock decreased from approximately 200,000,000 to 2,000,000. The corporation issued no fractional shares of common stock and fractional shares resulting from the reverse split were rounded up to the nearest whole share.
|
|
d. |
On September 9, 2013, HOMI closed a rights offering, pursuant to which HOMI converted shareholders loans in an amount of approximately $ 950. In consideration, HOMI issued 949,978 shares of its common stock at a price of $ 1.00 per share ,see also Note 6e.
|
NOTE 11:-
|
CUSTOMERS AND GEOGRAPHIC INFORMATION
|
The Company manages its business on a basis of one reportable segment (see Note 1 for a brief description of the Company’s business). | ||
a. |
Major customers’ data as a percentage of total sales to unaffiliated customers:
|
Year ended December 31,
|
||||||||
2012
|
||||||||
Customer A
|
10.4 | % | 12.4 | % | ||||
Customer B
|
8.1 | % | 7.9 | % | ||||
Customer C
|
4.6 | % | 6.0 | % | ||||
Customer D
|
3.9 | % | 4.7 | % | ||||
Customer E
|
3.5 | % | 4.1 | % | ||||
Customer F
|
3.6 | % | 3.7 | % |
b. |
Breakdown of Consolidated Sales to unaffiliated Customers according to Geographic Regions:
|
Year ended December 31,
|
||||||||
2012
|
||||||||
Israel
|
70 | % | 59 | % | ||||
USA
|
20 | % | 31 | % | ||||
ROW
|
10 | % | 10 | % | ||||
Total
|
100 | % | 100 | % |
c. |
As of December 31, 2013, $ 2,743 of the consolidated long-lived assets were located in Israel, $ 549 in the USA and $ 555 in ROW. As of December 31, 2012, $ 2,444 of the consolidated long-lived assets were located in Israel; $ 838 in the USA; and $ 597 in ROW.
|
NOTE 12:-
|
FINANCIAL AND FOREIGN CURRENCY TRANSLATION EXPENSES, NET
|
Year ended December 31,
|
||||||||
2012
|
||||||||
Interest on long-term loans (1)
|
(169 | ) | (270 | ) | ||||
Linkage difference and others, net
|
(53 | ) | 52 | |||||
(222 | ) | (218 | ) | |||||
(1) As for financial expenses to shareholders, see Note 15a. |
NOTE 13:-
|
OTHER EXPENSES
|
Year ended December 31,
|
||||||||
2012
|
||||||||
Dismantling of Minibars
|
(153 | ) | (127 | ) | ||||
Termination contract with Best Bar see Note 9f
|
(30 | ) | (40 | ) | ||||
Exchange rate differences due to reserve capital adjustmen
|
(6 | ) | - | |||||
(189 | ) | (167 | ) |
NOTE 14:-
|
TAXES ON INCOME
|
a. |
Corporate tax structure:
Taxable income of Israeli companies is subject to tax at the rate of 25% for the years 2013 and 2012 and 26.5% for the year 2014.
The subsidiary in the USA is subject to a 15% -35% corporate tax rate. Subsidiaries in Europe are subject to 20% - 35% corporate tax rate.
|
b. |
The subsidiary in the USA is subject to both federal and state tax. The federal tax is determined according to taxable income, for the first $ 50 taxable income the rate is 15%. In addition, a 8.84% California state tax is applicable.
|
c. |
As of December 31, 2013, loss carry forwards are approximately:
|
$ | ||||
HOMI USA Inc. *
|
3,198 | |||
HOMI Israel Ltd.
|
1,834 | |||
HOMI Industries Ltd.
|
2,206 | |||
HOMI Europe SARL
|
1,288 | |||
HOMI UK Ltd.
|
866 | |||
HOMI Inc.
|
714 | |||
10,106 |
*
|
Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization | |
d. |
Deferred income taxes:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:
|
2012
|
||||||||
Deferred Tax assets-Operating loss carryforwards
|
2,541 | 2,789 | ||||||
Deferred Tax Liabilities-Temporary differences in regard to expenses and property
|
(33 | ) | (51 | ) | ||||
Net deferred tax asset before valuation allowance
|
2,508 | 2,738 | ||||||
Valuation allowance
|
(2,508 | ) | (2,738 | ) | ||||
Net deferred tax
|
- | - |
NOTE 14:-
|
TAXES ON INCOME (cont.)
|
As of December 31, 2013, the Company had provided valuation allowances of $ 2,508 in respect of deferred tax assets resulting from tax loss and temporary differences. Management currently believes that it is more likely than not that the deferred tax regarding the loss carryforwards and other temporary differences will not be realized in the foreseeable future. The valuation allowance decrease by approximately $ 230 during the year ended December 31, 2013 and increased by approximately $ 539 during the year ended December 31, 2012.
|
e. |
Breakdown of losses (profits) before taxes:
|
Year Ended December 31,
|
||||||||
2012
|
||||||||
Israel
|
1,175 | 1,044 | ||||||
USA
|
930 | 1,628 | ||||||
ROW
|
(324 | ) | 218 | |||||
1,781 | 2,890 |
f. |
The main items for reconciliation between the statutory tax rate of the Company and the effective tax rate are the non-recognition of tax benefits from accumulated net operating losses carry forward among the various subsidiaries worldwide due to uncertainty of the realization of such tax benefits.
|
NOTE 15:-
|
RELATED PARTY TRANSACTIONS
|
a.
|
The following transactions with related parties are included in the financial statements:
|
Year ended December 31,
|
||||||||
2012
|
||||||||
Directors' fees
|
7 | 12 | ||||||
Directors' liability insurance
|
27 | 30 | ||||||
Consulting and management fees
|
497 | 378 | ||||||
Interest Expense
|
77 | * 68 | ||||||
608 | 488 | |||||||
*Reclassified
|
b.
|
As for balances and loans as of December 31, 2013 and 2012 - see Note 6.
|
c.
|
As for Benefit on conversion – see Note 10b.
|
|
d.
|
On October 2, 2013, a director of HOMI tendered his resignation as a director, effective November 8, 2013, and notified HOMI, that he will not stand for re-election as a director. In addition, this director has resigned from his position as a director of HOMI USA, Inc., a wholly owned subsidiary of HOMI, and all other HOMI subsidiaries, effective immediately. By mutual consent of that director the HOMI subsidiaries, his management position as Chief Executive Officer of HOMI USA, Inc., and his management positions in all HOMI subsidiaries will terminate,
as of December 31, 2013.
|
|
e.
|
On October 2, 2013, by mutual consent of the Chief Executive Officer and HOMI and its subsidiaries, it was agreed that his management position as Chief Executive Officer and Chief Financial Officer of HOMI, and his management positions in all HOMI subsidiaries, will terminate, as of December 31, 2013. In addition, he will resign from all director positions he currently holds with HOMI subsidiaries effective December 31, 2013. He shall remain a director of HOMI. |
NOTE 16:-
|
EVENTS SUBSEQUENT TO BALANCE SHEET DATE
|
a. |
On February 5, 2014, HOMI Industries Ltd entered into two new loan agreements, with, the President of HOMI and the beneficial owner of a majority of HOMI’s shares. Pursuant to which they agreed to loan HOMI $ 300 and $ 200 respectively, bearing 8% annual interest. Some of the funds were wired to HOMI in January 2014 and the balance during February 2014. The principal and all accrued interest shall be repaid in a single payment, on or before July 14, 2014.
|
b. |
On March 25, 2014, HOMI entered into an agreement with HOMI Industries, the President, and the beneficial owner of the HOMI shares held by the majority shareholder of HOMI. The agreement is contingent upon receipt of the approval by the holders of a majority of HOMI’s issued and outstanding shares that are not held directly or beneficially by the purchasers.
Pursuant to the agreement, there will be a restructuring of HOMI’s subsidiaries such that all of its operations subsidiaries, namely, Industries, HOMI Israel Ltd., HOMI UK Limited, HOMI USA, Inc., HOMI Canada Inc. and HOMI Florida, LLC, will be wholly owned subsidiaries of HOMI Industries. In return for payment of $1.00 (one US Dollar) and in return for assuming (via HOMI Industries) approximately $900 thousand of HOMI's debts and approximately $3,200 of the subsidiaries’ debts, the purchasers will acquire HOMI Industries, with all of such subsidiaries
and debt.
The impact of the abovementioned transaction shall be a capital loss amounting to $4.2 million The purchasers have also agreed to indemnify HOMI in respect of certain liabilities.
|
|
HOMI’s Board of Directors is now considering other possible business opportunities. | ||
c. |
See Note 1d.
|
|
PAGE
|
||
PART I - FINANCIAL INFORMATION
|
|||
Item 1 – CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|||
Balance Sheets -
|
|||
F-2-F-3 | |||
Statements of Comprehensive Loss -
|
|||
Three months ended March 31, 2014 and 2013
|
F-4 | ||
Statements of Cash Flows -
|
|||
Three months ended March 31, 2014 and 2013
|
F-5-F-6 | ||
Notes to Financial Statements
|
F-7-F-10 |
As of
March 31,
2014
|
As of
|
|||||||
Unaudited
|
Audited
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
144 | 81 | ||||||
Short-term bank deposits
|
47 | 47 | ||||||
Trade receivables (net of allowance for doubtful accounts of $ zero as of March 31, 2014 and December 31, 2013)
|
324 | 444 | ||||||
Other accounts receivable
|
115 | 66 | ||||||
Inventories
|
266 | 283 | ||||||
TOTAL CURRENT ASSETS
|
896 | 921 | ||||||
PROPERTY AND EQUIPMENT, NET:
|
||||||||
Minibars and related equipment
|
3,703 | 3,817 | ||||||
Other property and equipment
|
30 | 30 | ||||||
TOTAL PROPERTY AND EQUIPMENT
|
3,733 | 3,847 | ||||||
OTHER ASSETS:
|
||||||||
Deferred expenses, net
|
3 | 3 | ||||||
Intangible assets
|
41 | 41 | ||||||
TOTAL OTHER ASSETS
|
44 | 44 | ||||||
TOTAL
|
4,673 | 4,812 |
As of
March 31,
|
As of
|
|||||||
2013
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
Unaudited
|
Audited
|
||||||
CURRENT LIABILITIES:
|
||||||||
Short-term loans from related parties
|
600 | - | ||||||
Current maturities of long term loans from related parties
|
96 | 100 | ||||||
Current maturities of long-term loans from others
|
409 | 446 | ||||||
Trade payables
|
613 | 818 | ||||||
Accrued expenses and other current liabilities
|
562 | 598 | ||||||
TOTAL CURRENT LIABILITIES
|
2,280 | 1,962 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loans from related parties, net of current maturities
|
653 | 675 | ||||||
Long-term loans from others ,net of current maturities
|
1,470 | 1,516 | ||||||
Accrued severance pay, net
|
76 | 78 | ||||||
TOTAL LONG-TERM LIABILITIES
|
2,199 | 2,269 | ||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
|
||||||||
Preferred stock of $ 0.001 par value –
5,000,000 shares authorized; zero shares issued and outstanding as of March 31, 2014 and as of December 31, 2013.
|
- | - | ||||||
Common stock of $ 0.001 par value –
200,000,000 shares authorized; 2,949,484 shares issued and outstanding as of March 31, 2014 and as of December 31, 2013.
|
3 | 3 | ||||||
Additional paid-in capital
|
13,221 | 13,221 | ||||||
Capital Reserve
|
1,414 | 1,414 | ||||||
Accumulated other comprehensive income
|
72 | 74 | ||||||
Accumulated deficit
|
(14,516 | ) | (14,131 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
|
194 | 581 | ||||||
TOTAL
|
4,673 | 4,812 |
For the Three Months Ended
|
||||||||
2013
|
||||||||
Unaudited
|
||||||||
Revenues
|
642 | 982 | ||||||
Cost of revenues:
|
||||||||
Depreciation
|
(114 | ) | (156 | ) | ||||
Other
|
(427 | ) | (646 | ) | ||||
Gross profit
|
101 | 180 | ||||||
Operating expenses:
|
||||||||
Research and development
|
(11 | ) | (15 | ) | ||||
Selling and marketing
|
(41 | ) | (68 | ) | ||||
General and administrative
|
(375 | ) | (323 | ) | ||||
Operating loss
|
(326 | ) | (226 | ) | ||||
Financing expenses and foreign currency translation, net
|
(59 | ) | (107 | ) | ||||
Other expenses, net
|
- | (74 | ) | |||||
Benefit reduction for Loans
|
- | (5 | ) | |||||
Net loss
|
(385 | ) | (412 | ) | ||||
Basic and diluted net loss per share
|
(0.13 | ) | (0.21 | ) | ||||
Weighted average number of shares used in computing basic and diluted loss per share
|
2,949,484 | 1,999,506 | ||||||
Other Comprehensive Loss:
|
||||||||
Net Loss
|
(385 | ) | (412 | ) | ||||
Foreign currency translation adjustments
|
(2 | ) | (39 | ) | ||||
Comprehensive Loss
|
(387 | ) | (451 | ) |
|
For the Three Months Ended
|
|||||||
2013
|
||||||||
Unaudited
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
(385 | ) | (412 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
116 | 159 | ||||||
Capital loss
|
- | 74 | ||||||
Decrease in accrued severance pay, net
|
(2 | ) | (13 | ) | ||||
Interest and linkage differences in regard to shareholders and subsidiaries
|
(5 | ) | 34 | |||||
Benefit component
|
- | 5 | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease in inventories
|
17 | 17 | ||||||
Decrease (Increase) in trade receivables
|
120 | (75 | ) | |||||
Increase in related parties
|
13 | 18 | ||||||
Increase in other accounts receivable
|
(47 | ) | (36 | ) | ||||
Increase (Decrease) in trade payables
|
- | 74 | ||||||
Decrease in accounts payable and accrued expenses
|
(48 | ) | (91 | ) | ||||
Net cash used in operating activities
|
(221 | ) | (246 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from sale of property and equipment
|
7 | 223 | ||||||
Purchases and production of property and equipment
|
(214 | ) | (140 | ) | ||||
Short-term bank deposits, net
|
- | 5 | ||||||
Net cash provided from (used in) investing activities
|
(207 | ) | 88 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from related parties
|
600 | 178 | ||||||
Payments of long- term loans to related parties
|
(26 | ) | (29 | ) | ||||
Payments of long-term loans to others
|
(83 | ) | (56 | ) | ||||
Proceeds from others
|
- | 32 | ||||||
Net cash provided by financing activities
|
491 | 125 | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
- | (2 | ) | |||||
Increase (Decrease) in cash and cash equivalents
|
63 | (35 | ) | |||||
Cash and cash equivalents at the beginning of the period
|
81 | 195 | ||||||
Cash and cash equivalents at the end of the period
|
144 | 160 |
Appendix A -
Supplemental disclosure of non-cash investing and financing activities and cash flow information: |
For the Three Months Ended
|
|||||||
2013
|
||||||||
Unaudited
|
||||||||
Non-cash investing and financing activities:
|
||||||||
Acquisition of property and equipment on short-term credit
|
- | 118 | ||||||
Receivables in regard to property and equipment
|
- | 34 | ||||||
Cash paid during the period for interest
|
8 | 38 |
a.
|
Hotel Outsource Management International, Inc. ("HOMI") was incorporated in Delaware on November 9, 2000. HOMI and its subsidiaries are engaged in the distribution, marketing and operation of computerized minibars in hotels located in the United States, Europe, Israel and Canada.
|
b.
|
During 2006, the Company commenced its own research and development program aimed at the development of a new range of products.
|
c.
|
Commencing 2009, HOMI has begun to implement a new business model. Under the new business model, the Company sells or receives loans against HOMI minibars, installed or to be installed in various hotels. Under this model, HOMI shall continue to manage and operate these minibars in return for a management fee and profit sharing arrangements.
|
d.
|
As of 21 August 2013, HOMI France S.A.S., which had been a fully, indirectly owned subsidiary of HOMI was dissolved, with voluntary liquidation procedures having been completed as of 25 June 2013. Operations previously handled by HOMI France were transferred to HOMI UK Limited, which is another fully, indirectly owned subsidiary of HOMI.
|
e.
|
On March 25, 2014, HOMI entered into an agreement with HOMI Industries, the President, and the beneficial owner of the HOMI shares held by the majority shareholder of HOMI.
|
March 31,
|
||||||||
2013
|
||||||||
New Israeli Shekel (NIS)
|
$ | 0.287 | $ | 0.288 | ||||
Euro (EU)
|
$ | 1.380 | $ | 1.377 | ||||
Australian Dollar (AU$)
|
$ | 0.923 | $ | 0.894 | ||||
Pound Sterling (GBP)
|
$ | 1.665 | $ | 1.654 | ||||
Canadian Dollar (CAN$)
|
$ | 0.906 | $ | 0.940 | ||||
Consumer Price Index ("CPI")
|
123.60 | 124.45 | ||||||
Three Months Ended
|
||||||||
|
2014 | 2013 | ||||||
Increase (Decrease) in Rate of Exchange:
|
||||||||
NIS
|
(0.35 | )% | 2.24 | % | ||||
EU
|
0.20 | % | (3.03 | )% | ||||
AU$
|
3.20 | % | 0.58 | % | ||||
GBP
|
0.67 | % | (6.18 | )% | ||||
CAN$
|
(3.60 | )% | 4.1 | % | ||||
Consumer Price Index ("CPI")*
|
(0.68 | )% | 0.0 | % |
Number of Minibars Operated
|
||||||||||
Subsidiary Name
|
Area
|
31.03.2014 | 31.03.2013 | |||||||
HOMI Industries Ltd. (1)
|
Israel
|
|||||||||
HOMI Israel Ltd. (1), (3)
|
Israel
|
5,099 | 4,780 | |||||||
HOMI USA, Inc. and
HOMI Canada, Inc. (1)
|
U.S.A. and
Canada
|
1,620 | 2,865 | |||||||
HOMI Europe S.A.R.L. (1), (2)
|
Europe
|
1,596 | 1,499 | |||||||
8,315 | 9,144 |
U.S.A.
|
Israel
|
Europe
|
Total
|
|||||||||||||
Number of minibars
|
1,620 | 3,359 | 1,499 | 6,478 |
For the Three Months Ended
|
||||||||
2013
|
||||||||
Unaudited
|
||||||||
Directors' fees and liability Insurance
|
10 | 9 | ||||||
Consulting and management Fees
|
56 | 104 | ||||||
Financial expenses
|
26 | 31 | ||||||
Benefit reduction for loan
|
- | 5 | ||||||
92 | 149 |
|
a.
|
On February 5, 2014, HOMI Industries Ltd entered into two new loan agreements, with, the President of HOMI and the beneficial owner of a majority of HOMI’s shares. Pursuant to which they agreed to loan HOMI $300 and $200 respectively, bearing 8% annual interest. Some of the funds were wired to HOMI in January 2014 and the balance during February 2014. The principal and all accrued interest shall be repaid in a single payment, on or before July 14, 2014. An additional amount of $100 was wired during March 2014, an agreement was not yet signed.
|
This ‘PRER14C’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/31/14 | ||||
Filed on: | 7/22/14 | |||
7/14/14 | ||||
6/30/14 | 10-Q, 10-Q/A | |||
5/28/14 | ||||
4/9/14 | PRE 14C | |||
4/1/14 | ||||
3/31/14 | 10-K, 10-Q | |||
3/25/14 | 8-K | |||
3/20/14 | ||||
2/5/14 | 8-K | |||
12/31/13 | 10-K, 10-K/A | |||
11/8/13 | ||||
10/9/13 | 8-K | |||
10/2/13 | 8-K | |||
9/30/13 | 10-Q | |||
9/20/13 | ||||
9/9/13 | ||||
8/26/13 | ||||
8/21/13 | ||||
8/7/13 | ||||
7/28/13 | 8-K | |||
7/12/13 | ||||
7/1/13 | ||||
6/30/13 | 10-Q | |||
6/6/13 | S-1/A | |||
5/22/13 | ||||
4/26/13 | 8-K | |||
4/15/13 | 10-K | |||
4/14/13 | ||||
4/9/13 | ||||
4/5/13 | 8-K | |||
3/31/13 | 10-Q | |||
3/26/13 | ||||
3/6/13 | ||||
3/3/13 | ||||
1/28/13 | ||||
1/10/13 | 8-K | |||
1/1/13 | ||||
12/31/12 | 10-K, NT 10-K | |||
12/24/12 | ||||
11/12/12 | ||||
10/15/12 | 8-K | |||
10/10/12 | DEF 14C, PRE 14C | |||
9/30/12 | 10-Q, NT 10-Q | |||
9/1/12 | ||||
7/30/12 | ||||
7/12/12 | 8-K | |||
6/30/12 | 10-Q, 10-Q/A, NT 10-Q | |||
6/29/12 | 8-K | |||
5/31/12 | ||||
3/31/12 | 10-Q | |||
3/30/12 | 10-K | |||
2/7/12 | ||||
1/8/12 | 8-K | |||
1/1/12 | ||||
12/31/11 | 10-K, 10-K/A | |||
12/15/11 | ||||
12/12/11 | ||||
10/26/11 | ||||
9/30/11 | 10-Q, NT 10-Q | |||
6/30/11 | 10-Q, 10-Q/A, NT 10-Q | |||
6/15/11 | ||||
3/31/11 | 10-Q | |||
12/31/10 | 10-K | |||
12/15/10 | ||||
10/5/10 | 8-K | |||
6/14/10 | 8-K | |||
2/18/10 | ||||
1/28/10 | 8-K | |||
10/25/09 | ||||
7/20/09 | 8-K | |||
5/17/05 | 8-K | |||
3/1/05 | 8-K | |||
11/9/00 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 7/31/14 SEC UPLOAD¶ 9/20/17 1:41K Sky Resort International Ltd. |