Israeli Tech Firm Karta Sense Files for Stay of Proceedings Over Debt
Israeli tech firm Karta Sense has filed for a stay of proceedings with the Central District Court, reporting 13 million shekels in debt and 34 million shekels in accumulated losses. The supply chain monitoring pioneer aims to sell its business and IP.
Karta Sense, an Israeli technology company specializing in real-time supply chain monitoring, has filed a motion with the Central District Court requesting a stay of proceedings and the appointment of a trustee to restructure its debts. The company reported total liabilities of 13 million shekels and stated in its 2023 tax report that it is carrying forward 34 million shekels in accumulated losses into 2024. Financial statements indicate losses of 1 million shekels in 2022 and 2 million shekels in each of the subsequent two years.
Origins and Technological Evolution
Founded in 2007 by Chairman David Vismann and Yaron Kaufman, with Aviv Peled serving as CEO, Karta Sense has approximately 30 diverse shareholders. The company initially started as a manufacturer of wireless sensors and hardware before evolving into a software and artificial intelligence platform provider, offering comprehensive end-to-end supply chain visibility. It was an early pioneer in implementing Internet of Things (IoT) concepts within the logistics and cold chain sectors, utilizing low-power, long-range wireless sensor networks for the pharmaceutical, food, and logistics industries.
Cascading Financial Setbacks
According to the court filing, the company's collapse stems from a series of compounding setbacks over the past 12 years. In 2014, Karta Sense lost strategic partnerships with Zebra Technologies and ST Micro, both of which had invested 2 million dollars each the prior year. In 2017, the company failed in its venture to issue logistics-focused tokens for a proprietary blockchain application. Subsequent expansion into the Russian market in 2019 was severely disrupted by the COVID-19 pandemic and the war in Ukraine, followed by further revenue losses during the Swords of Iron war.
The final blow came in March when a court ordered the company to pay 500,000 shekels to three investors from the failed crypto venture. Consequently, active investors Vismann and Amatzia Ben-Artzi declined to inject further capital. Karta Sense has reduced its workforce to four employees, with Vismann working without a salary and subcontractors providing unpaid support.
Liabilities and Restructuring Plan
The company's debts include 8.8 million shekels owed to shareholders who covered operating expenses, led by Vismann (900,000 dollars), Shlomo Berkovitz (700,000 dollars), and Kaufman (650,000 dollars). Additional liabilities include 1.3 million shekels owed to financial services provider ERB, 900,000 shekels to the Shibolet law firm, 500,000 shekels to employees, and the court-mandated crypto settlement. Meanwhile, Karta Sense estimates the value of its patents at 30 million dollars.
Under the proposed restructuring plan, the company aims to operate over the next three months with average monthly expenses of 136,000 shekels against projected revenues of 480,000 shekels. Management believes this window will allow for the sale of its operations and intellectual property as a going concern. The petition was submitted through Attorney Yoav Ben-Porat.
