Less than four-and-a-half years after technology company Highcon Systems (TASE: HICN) was floated on the Tel Aviv Stock Exchange at a valuation of over NIS 500 million, it now has a market cap of just NIS 4 million, and appears to have come to the end of the road.
Yavne-based Highcon Systems is a developer of digital die cutting and creasing systems for post print processes in the folding carton and corrugated carton industry. It was one of several technology companies, some of them fairly immature, that were floated on the local exchange in 2020-2021, and that have yielded extremely disappointing returns. Highcon has wiped off 99.9% of its value for investors.
The company came to the Tel Aviv Stock Exchange in December 2020 with high expectations. Its chairperson, Shlomo Nimrodi, told “Globes” in 2021 that the company had developed a disruptive technology and that he believed in its ability to revolutionize the global packaging manufacturing industry. It also had some prominent investors, among them serial entrepreneur Benny Landa, who has vast experience in printing technology, and Erel Margalit’s venture capital firm JVP. Landa currently holds 9.2% of Highcon, and JVP 8.9%.
Last week, Highcon reported to the stock exchange: “Following a decision by the company’s board of directors, and in the light of the company’s position, the company has decided to lay off most of its employees and consultants. At this stage, it has been decided to keep twenty employees and consultants for continued operation of the company at a minimal level, in order to preserve its activity as a ‘going concern.’ At the same time, the company is preparing to file a request for a stay of proceedings in order to formulate a debt settlement.” Highcon’s share price shot up by more than 60% yesterday, but it has fallen back by about 20% so far today.
Highcon laid off a large proportion of its workforce over a year ago, and at the end of last year it employed 85 people, after laying off 65.
“Significant cash flow difficulties”
Last week’s notification states that Highcon “has run into significant cash flow difficulties because of a combination of external and business factors.” It mentions orders amounting to $10 million that have been postponed to later on in the year, which has prevented it from securing the required finance and meeting its financial commitments. In addition, the company says, “The war in the region has created considerable uncertainty, leading to deferral of commitments from existing and potential customers.”
Another factor that the company says has affected it is the global economic slowdown and also “the effects of the tariff war recently initiated by the US,” which it says has caused growing fear of large investments and slower decision making by important market players.
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The company adds that a going concern qualification appended to its financial statements damaged the confidence of potential customers. “All these factors, together with the fact that the company has for some time been operating in very restrictive cash flow conditions, have led to an undermining of its financial equilibrium and to a worsening of its economic distress.”
Annual financial statements for 2024 have yet to be released, but Highcon warns that “it would appear that there is a fear that the company has a capital deficit.” The latest reports that the company has published are for the first half of 2024, in which its auditors state that it incurred losses totaling $4.9 million and had negative cash flow of $3.9 million in the six months to the end of June 2024, and that it had a deficit on shareholders’ equity of $7.2 million in June 2024, leading them to attach a going concern qualification to the financial statements.
In those statements, the company presented growth in revenue from $3.4 million in the first half of 2023 to $9.9 million in the first half of 2024, and a 57.5% narrower loss, of $4.9 million as mentioned. The company has accumulated losses of $271 million since its founding in 2009.
Published by Globes, Israel business news – en.globes.co.il – on March 31, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
